Matador Beats Production Guidance, Sets Sights on 200Mboepd in 2025

Matador Resources (MTDR) kicked off the 3Q24 US E&P earnings season with better-than-expected production results, resulting in quarterly revenues of $900MM and generating $608MM in adjusted EBITDA, which eclipsed my forecasted estimate by 13%. Operational highlights from the quarter include the integration of the $1.83B acquisition of Ameredev with the first 7 wells TILed from the Ameredev asset averaging an IP rate of 1,925boepd, equating to ~31Mboepd in production to finish the quarter. As well, MTDR highlighted its optimization of trimulfrac and simulfrac completion processes, resulting in improved cycle times, particularly with its U-turn wells. As noted by MTDR’s Founder, Chairman and CEO, Joe Foran, MTDR’s ability to reduce the number of days to drill and complete a well can materially improve the capital efficiency metrics as one less D&C day equates to $100,000 in daily savings. For the quarter, MTDR estimates that its operational efficiencies generated ~$3MM in capital savings due to the technological and design advances of its U-turn wells.

4Q24 D&C Outlook

Looking ahead to 4Q24, MTDR is targeting midpoint production of 198Mboepd, with ~119Mbopd in crude oil production. D&C guidance includes 33 gross TILs (26.9 net), of which 24 gross wells are expected to be in the Antelope Ridge area and the remainder in the Rustler Breaks area. Based on my estimates, MTDR’s D&C Capex for 4Q24 is estimated at ~$300MM, alongside ~$55MM in midstream Capex allocated to the San Mateo facility.

2025 Guidance

While MTDR will formally present next year’s capital program in February, the executive team did highlight a FY25 production target of over 200Mboepd, with plans to increase its rig program to average 10 rigs. February is a ways away so let me walk you through my best guess for what MTDR intends to do for next year.

With fourth quarter production estimated at 198Mboepd, my additional assumptions include an average development well’s IP rate of ~2,725boepd, a decline rate of -35% and a FY25 oil cut of 60%; in turn, these assumptions lead to a D&C program of ~140 wells and D&C Capex of ~$1.46B. For initial midstream estimates, I anticipate MTDR to spend ~$250MM. As always, these are my forecasts and subject to future adjustments.

MTDR Financial & Operational Model Outlook

Companies Mentioned

• Matador Resources Company (MTDR)

_{Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Patrick Enwright accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Patrick Enwright makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.}