On July 23, 2024, Matador Resources Co (MTDR, Financial) released its 8-K filing reporting record financial and operational results for the second quarter of 2024. Matador Resources Co is an independent energy company engaged in the exploration, development, production, and acquisition of oil and natural gas resources, primarily focusing on shale and other unconventional plays in the United States.
Performance and Challenges
Matador Resources Co achieved record average total production of 160,305 BOE per day, surpassing its guidance of 157,250 BOE per day by 2%. The company also reported record average oil production of 95,488 barrels per day, exceeding expectations by 3%. These results were driven by the successful operation of 47 gross (38.6 net) horizontal wells turned to sales, the highest in the company's history.
However, the company faces challenges, including the integration of its largest acquisition to date, Ameredev, for $1.905 billion. This acquisition is expected to close in the third quarter of 2024, subject to regulatory approval. The integration of Ameredev's assets will be crucial for maintaining Matador's growth trajectory.
Financial Achievements
Matador Resources Co reported net income of $228.8 million, or $1.83 per diluted common share, and adjusted net income of $255.9 million, or $2.05 per diluted common share. The company also generated adjusted EBITDA of $578.1 million and adjusted free cash flow of $167.0 million. These financial achievements are significant as they reflect the company's ability to generate substantial cash flow and profitability, which is essential for sustaining operations and funding future growth.
Key Financial Metrics
Important metrics from the earnings report include:
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Average Production (BOE per day) | 160,305 | 149,760 | 130,683 |
| Net Income ($ million) | 228.8 | NA | NA |
| Adjusted EBITDA ($ million) | 578.1 | NA | NA |
| Adjusted Free Cash Flow ($ million) | 167.0 | NA | NA |
Management Commentary
"Matador’s second quarter of 2024 was one of the most important quarters in the company’s history. Matador not only achieved record production results and substantial cost savings but also entered into an agreement to complete our largest acquisition to date – the acquisition of Ameredev for $1.905 billion," commented Joseph Wm. Foran, Matador’s Founder, Chairman, and CEO.
Operational Efficiencies
Matador Resources Co achieved lower-than-expected costs during the second quarter of 2024. Drilling, completing, and equipping (D/C/E) capital expenditures were $314.5 million, 8% better than the expected $340 million. The company also set 20 drilling records, saving an estimated $6 million. These operational efficiencies are crucial for maintaining profitability and competitive advantage in the oil and gas industry.
Midstream Operations
San Mateo, Matador's midstream subsidiary, reported net income of $38.3 million and adjusted EBITDA of $58.0 million, both exceeding expectations. These results were driven by better-than-expected volumes delivered by third-party customers into the San Mateo system.
Future Outlook
Matador Resources Co has increased its full-year 2024 production guidance. The new guidance ranges are as follows:
| Metric | Prior Guidance | New Guidance | Difference |
|---|---|---|---|
| Total, BOE per day | 153,000 to 159,000 | 158,500 to 163,500 | +3.2% |
| Oil, Bbl per day | 91,000 to 95,000 | 93,500 to 96,500 | +2.2% |
| Natural Gas, MMcf per day | 370.0 to 386.0 | 390.0 to 402.0 | +4.2% |
These updates reflect Matador's confidence in its operational capabilities and future growth prospects.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Matador Resources Co for further details.
