MTDR Matador Resources Company

Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today reported record financial and operating results for the second quarter of 2024. A short slide presentation summarizing the highlights of Matador’s second quarter 2024 earnings release is also included on the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab.

Full-Year 2024 Guidance Update

Effective July 23, 2024, Matador increased its full-year 2024 guidance range for total oil and natural gas equivalent production, oil production and natural gas production as set forth in the table below. This increased production guidance does not yet include any expected production from Matador’s anticipated acquisition of a subsidiary of Ameredev II Parent, LLC (“Ameredev”). The Ameredev acquisition is expected to close late in the third quarter of 2024, subject to customary closing conditions, including regulatory approval.

Production

Prior Full-Year 2024

Guidance Range

New Full-Year 2024

Guidance Range(1)

Difference(2)

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

+4.8%

(1)

Does not include any production associated with the pending Ameredev acquisition that is expected to close late in the third quarter of 2024, subject to customary closing conditions, including regulatory approval.

(2)

The midpoint of guidance provided on July 23, 2024 as compared to the midpoint of guidance provided on February 20, 2024.

For highlights of Matador’s second quarter 2024 operational and financial results, please see “Second Quarter 2024 Matador Operational and Financial Highlights” on page 4 of this earnings release. For comparisons of our second quarter 2024 operational and financial results to prior periods, please see “Operational and Financial Update” beginning on page 4 of this earnings release. For a description of certain selected financial and operating items, please see “Selected Financial and Operating Items” on page 9 of this earnings release.

Management Commentary

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “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 (subject to customary closing adjustments), which is expected to close late in the third quarter of 2024. When added to our usual brick-by-brick acquisition efforts, the Ameredev acquisition is expected to increase Matador’s acreage position in the core of the northern Delaware Basin to 191,900 net acres (see Slide A). We also anticipate that the Ameredev acquisition (once closed) will have the effect of adding significantly to our currently existing 10 to 15 years or more of high-quality inventory (see Slide B), continue our history of profitable and consistent growth at a measured pace (see Slide C) and increase our total proved reserves to over 600 million barrels of oil and natural gas equivalent (‘BOE’) (see Slide D). We are further encouraged that Matador’s stock has been the top performer among our peer group for the last month-and-a-half following the announcement of the proposed Ameredev acquisition (see Slide E). Given these developments, our Board, executive team and staff are increasingly excited about the outlook for the remainder of 2024 and beyond, as we continue to work together to build the value of Matador for our shareholders, staff, vendors, stakeholders and other friends from its original capitalization of $270,000 to its present market capitalization of approximately $8 billion.

Pending Ameredev Acquisition

“We believe Matador’s recent acquisitions of various oil and natural gas properties are unique and value-creating opportunities as Matador continues to build its asset base in the northern Delaware Basin. Ameredev, for example, comes with 33,500 net acres of high-quality rock, strong existing production expected to average 25,500 BOE per day in the third quarter of 2024, over 117 million BOE of reserves, high-quality inventory with 371 net locations and a complimentary investment in a midstream business with an approximate 19% equity interest in Piñon Midstream (see Slide F). The equity and debt securities offerings we completed earlier this year, together with the exceptional support of our bank group led by PNC Bank, have provided us with the financial flexibility and strength to acquire these and other high-quality assets. In fact, our careful management of the balance sheet has allowed us to end the second quarter of 2024 with only $95 million outstanding on our current $1.5 billion revolving credit agreement. We fully repaid the remaining outstanding balance in July 2024, and as of July 23, 2024 have no debt outstanding under our revolving credit agreement with our bank group.

“Matador expects Ameredev to continue operating its one drilling rig on its acreage prior to closing. Matador added a ninth drilling rig late in the second quarter of 2024 in order to help facilitate a smooth transition upon closing of the Ameredev acquisition. Until then, Matador’s ninth drilling rig will work on other Matador properties, and we will rely on Ameredev to operate its current drilling rig to drill its planned wells until closing. We are pleased that even though Matador added a ninth drilling rig late in the second quarter of 2024, we still expect Matador’s full-year 2024 drilling, completing and equipping (‘D/C/E’) capital expenditures to be between the midpoint and high end of our previously expected and announced range of $1.10 to $1.30 billion.

“Similar to the acquisition of Advance in 2023, our operations team expects to implement operational efficiencies such as ‘simul-frac’ and ‘trimul-frac’ completion operations, dual fuel technologies and other operational efficiencies on the Ameredev properties after closing. We anticipate providing additional detail regarding our expectations and plans for the remainder of 2024 on a combined basis with the Ameredev properties after the acquisition has closed. To this point, we have greatly appreciated the professional and continuous work of the Ameredev staff in administering and operating these properties until the anticipated closing of the acquisition, which is expected to occur late in the third quarter of 2024, subject to customary closing conditions, including regulatory approval.

Record Production and Wells Turned to Sales

“During the second quarter of 2024, Matador achieved record average total production of 160,305 BOE per day, which was 2% better than our expectation of an average of 157,250 BOE per day for the quarter. Matador’s record average oil production of 95,488 barrels of oil per day during the second quarter of 2024 was 3% better than our expected average of 93,000 barrels of oil per day for the quarter. The record production in the second quarter of 2024 does not include any production associated with the proposed Ameredev acquisition, as no production from Ameredev will be included in Matador’s results until after the expected closing of the acquisition late in the third quarter of 2024, subject to customary closing conditions, including regulatory approval. Matador’s record production in the second quarter of 2024 was due in part to the record 47 gross (38.6 net) operated horizontal wells turned to sales during the second quarter of 2024, which was the most in Matador’s history. We successfully delivered strong well results throughout our asset areas in the northern Delaware Basin, including the 21 gross (19 net) Dagger Lake South wells in our Antelope Ridge asset area that were acquired as part of the Advance acquisition last year (see Slide G). These wells have exceeded our expectations with 24-hour initial production test results averaging 1,728 BOE per day (83% oil). We are pleased with the teamwork of our production and midstream teams that worked together to provide flow assurance by using the Pronto-to-San Mateo natural gas connector pipeline installed in the first quarter of this year. This connector allowed the Dagger Lake South wells and Margarita wells acquired in the Advance acquisition to produce without any constraints during the second quarter of 2024.

Continued Operational Efficiencies and Teamwork

“In addition to record production performance, Matador also achieved lower-than-expected costs during the second quarter of 2024. D/C/E capital expenditures during the second quarter of 2024 were $314.5 million, which was $25.5 million, or 8%, better than our expectation of $340 million for the quarter. Approximately $10 million of this capital expenditure savings represent operational efficiencies and cost savings while the remaining decrease is due to timing of operations. In addition, our operations team set 20 drilling records during the second quarter of 2024 that saved an estimated $6 million. We are pleased with the continued excellent execution by the operations team that has now set a total of almost 300 drilling records with an estimated savings of approximately $50 million since the inception of our 24-hour MaxCom Operations Center in 2018 (see Slide H).

“One example of the innovation and operational efficiencies by Matador’s teams is the drilling of U-Turn wells. We drilled our first two U-Turn wells in 2023 in our Wolf asset area. These two wells continue to exceed our expectations and are producing similar to traditional two-mile lateral wells but with better per-foot costs than typical one-mile wells. We expect to turn to sales five additional U-Turn wells during the second half of 2024 with drilling savings exceeding $3 million per U-Turn well, or $15 million in the aggregate, as compared to drilling ten one-mile lateral length wells (see Slide I). During the second quarter of 2024, we drilled and cased the first and second of these five additional U-Turn wells. Two additional U-Turn wells were being drilled as of June 30, 2024 and our fifth U-Turn well for 2024 was spud in early July. We are excited to continue drilling and completing U-Turn wells throughout our northern Delaware position as appropriate opportunities present themselves.

“Matador also successfully performed its first ‘trimul-frac’ completion during the second quarter of 2024. We estimate that ‘trimul-frac’ completions save approximately $350,000 per well as compared to conventional ‘zipper-frac’ operations. For the remainder of 2024, Matador expects to complete its second ‘trimul-frac’ completion next month and has identified its first ‘remote trimul-frac’ test later in the third quarter of 2024. Matador’s improved operational efficiencies, together with our expectation of an increasingly competitive oilfield services market in the second half of 2024, have enabled us to revise our full-year 2024 expected drilling and completion costs down to $960 per completed lateral foot, which is an 11% decrease as compared to full-year 2023 drilling and completion costs of $1,075 per completed lateral foot.

40th Annual Meeting and Looking Ahead

“Matador held its 40th Annual Meeting of Shareholders on June 13, 2024. We were pleased to see so many of you there and appreciate your support as each of the proposals passed with nearly 90% support or better. Even though we are one of the top 10 oil and natural gas producers in New Mexico with a current market capitalization of approximately $8 billion, we still remember our humble beginnings over 40 years ago when Matador was founded with $270,000 from family and friends. Many of these original shareholders or their families remain shareholders today. We are grateful for their continued support as well as the support and friendship of all of our shareholders over these many years. The Board, management team and I would also like to especially thank our staff, shareholders, banks, bondholders and other friends, including our long-time vendors, that have helped us develop Matador into its present size and competence. We anticipate a strong finish to 2024 as we look forward to the various drilling and acquisition opportunities in front of us in 2025. Going forward under these circumstances, we like our chances to meet these targets.”

Second Quarter 2024 Matador Operational and Financial Highlights (for comparisons to prior periods, please see the remainder of this press release)

• Average production of 160,305 BOE per day (95,488 barrels of oil per day)
• Net cash provided by operating activities of $592.9 million
• Adjusted free cash flow of $167.0 million
• Net income of $228.8 million, or $1.83 per diluted common share
• Adjusted net income of $255.9 million, or adjusted earnings of $2.05 per diluted common share
• Adjusted EBITDA of $578.1 million
• San Mateo net income of $38.3 million
• San Mateo Adjusted EBITDA of $58.0 million
• D/C/E capital expenditures of $314.5 million
• Midstream capital expenditures of $45.3 million

All references to Matador’s net income, adjusted net income, Adjusted EBITDA and adjusted free cash flow reported throughout this earnings release are those values attributable to Matador Resources Company shareholders after giving effect to any net income, adjusted net income, Adjusted EBITDA or adjusted free cash flow, respectively, attributable to third-party non-controlling interests, including in San Mateo Midstream, LLC (“San Mateo”). Matador owns 51% of San Mateo. For a definition of adjusted net income, adjusted earnings per diluted common share, Adjusted EBITDA and adjusted free cash flow and reconciliations of such non-GAAP financial metrics to their comparable GAAP metrics, please see “Supplemental Non-GAAP Financial Measures” below.

Operational and Financial Update

Second Quarter 2024 Record Oil, Natural Gas and Total Oil and Natural Gas Equivalent Production

Matador’s total oil and natural gas production averaged 160,305 BOE per day in the second quarter of 2024, which was a 7% sequential production increase from an average of 149,760 BOE per day in the first quarter of 2024 and a 23% year-over-year increase from an average of 130,683 BOE per day in the second quarter of 2023. Matador’s year-over-year increase in total average production is due not only to the Advance acquisition that closed in April 2023 but also to increased production from new wells drilled by Matador on its existing assets and undeveloped acreage. In fact, Matador’s total oil and natural gas production during the second quarter of 2024 exceeded Matador’s guidance expectations by 2% and grew sequentially by 7%. On a year-to-year basis, Matador grew its total oil and natural gas production by 23% as summarized in the table below.

Production

Q2 2024

Average Daily

Volume

Q2 2024

Guidance

Range(1)

Difference(2)

Sequential(3)

YoY(4)

Total, BOE per day

160,305

156,500 to 158,000

+2% Better than Guidance

+7%

+23%

Oil, Bbl per day

95,488

92,500 to 93,500

+3% Better than Guidance

+13%

+25%

Natural Gas, MMcf per day

388.9

384.0 to 387.0

+1% Better than Guidance

Flat

+19%

(1)

Production range previously projected, as provided on April 23, 2024.

(2)

As compared to midpoint of guidance provided on April 23, 2024.

(3)

Represents sequential percentage change from the first quarter of 2024.

(4)

Represents year-over-year percentage change from the second quarter of 2023.

 

Second Quarter 2024 Realized Commodity Prices

The following table summarizes Matador’s realized commodity prices during the second quarter of 2024, as compared to the first quarter of 2024 and the second quarter of 2023.

 

Sequential (Q2 2024 vs. Q1 2024)

 

YoY (Q2 2024 vs. Q2 2023)

Realized Commodity Prices

Q2 2024

 

Q1 2024

 

Sequential

Change(1)

 

Q2 2024

 

Q2 2023

 

YoY

Change(2)

 

 

 

 

 

 

 

 

 

 

 

 

Oil Prices, per Bbl

$81.20

 

$77.58

 

+5%

 

$81.20

 

$73.46

 

+11%

Natural Gas Prices, per Mcf

$2.00

 

$2.96

 

-32%

 

$2.00

 

$2.61

 

-23%

(1)

Second quarter 2024 as compared to first quarter 2024.

(2)

Second quarter 2024 as compared to second quarter 2023.

 

Second Quarter 2024 Operating Expenses

Matador’s lease operating expenses (“LOE”) decreased 3% sequentially from $5.60 per BOE in the first quarter of 2024 to $5.42 per BOE in the second quarter of 2024. This decrease is due in part to increased production volumes in the second quarter of 2024, partially offset by increased compression and equipment rental expenses. The second quarter 2024 LOE of $5.42 per BOE was consistent with Matador’s expected full-year 2024 LOE range of $5.25 to $5.75 per BOE.

Matador’s general and administrative (“G&A”) expenses decreased 12% sequentially from $2.18 per BOE in the first quarter of 2024 to $1.91 per BOE in the second quarter of 2024, which was a record low for Matador. This decrease is due in part to increased production volumes and a decrease in the value of certain employee stock awards that are settled in cash, which are measured at each quarterly reporting period. The value of these cash-settled stock awards decreased due to the 11% decrease in Matador’s share price from $66.77 at the end of the first quarter of 2024 to $59.60 at the end of the second quarter of 2024. Matador expects full-year 2024 G&A expenses to be between the midpoint and the low end of its previous expected and announced range of $2.00 to $2.50 per BOE.

Second Quarter 2024 Capital Expenditures

Matador’s D/C/E capital expenditures of $314.5 million for the second quarter of 2024 were approximately $25 million lower than expected, of which approximately $10 million represents realized D/C/E capital expenditure cost savings. Midstream capital expenditures of $45.3 million for the second quarter of 2024 were below Matador’s expectations of $60 million in total midstream capital expenditures for the quarter, as approximately $15 million in capital expenditures was deferred due to the timing of Pronto’s midstream projects.

Q2 2024 Capital Expenditures

($ millions)

Actual

Guidance(1)

Difference vs. Guidance(2)

D/C/E

$314.5

$340.0

-8%

Midstream

$45.3

$60.0

-25%

(1)

Midpoint of guidance as provided on April 23, 2024.

(2)

As compared to the midpoint of guidance provided on April 23, 2024.

 

Midstream Update

San Mateo’s operations in the second quarter of 2024 were highlighted by better-than-expected operating and financial results. These strong results primarily reflect better-than-expected volumes delivered by third party customers into the San Mateo system. San Mateo’s net income of $38.3 million and Adjusted EBITDA of $58.0 million were each better than expected.

The table below sets forth San Mateo’s throughput volumes, as compared to the first quarter of 2024 and the second quarter of 2023.

 

Sequential (Q2 2024 vs. Q1 2024)

 

YoY (Q2 2024 vs. Q2 2023)

San Mateo Throughput Volumes

Q2 2024

 

Q1 2024

 

Change(1)

 

Q2 2024

 

Q2 2023

 

Change(2)

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas gathering, MMcf per day

393

 

425

 

-8%

 

393

 

331

 

+19%

Natural gas processing, MMcf per day

355

 

399

 

-11%

 

355

 

373

 

-5%

Oil gathering and transportation, Bbl per day

46,300

 

48,800

 

-5%

 

46,300

 

41,400

 

+12%

Produced water handling, Bbl per day

429,800

 

435,800

 

-1%

 

429,800

 

335,000

 

+28%

(1)

Second quarter 2024 as compared to first quarter 2024.

(2)

Second quarter 2024 as compared to second quarter 2023.

 

Third Quarter 2024 Estimates

Third Quarter 2024 Estimated Oil, Natural Gas and Total Oil Equivalent Production Growth

As noted in the table below, Matador anticipates its average daily oil equivalent production of 160,305 BOE per day in the second quarter of 2024 to grow by 2% to a midpoint of approximately 164,000 BOE per day in the third quarter of 2024.

 

Q2 and Q3 2024 Production Comparison

Period

Average Daily

Total Production,

BOE per day

Average Daily

Oil Production,

Bbl per day

Average Daily

Natural Gas Production,

MMcf per day

% Oil

Q2 2024

160,305

95,488

388.9

60%

Q3 2024E

163,000 to 165,000

96,500 to 97,500

399.0 to 405.0

59%

 

Third Quarter 2024 Estimated Wells Turned to Sales

At July 23, 2024, Matador expects to turn to sales 32 gross (26.5 net) operated horizontal wells in the Delaware Basin during the third quarter of 2024, consisting of seven gross (7.0 net) wells in the Antelope Ridge asset area, ten gross (8.0 net) wells in the Arrowhead asset area, four gross (4.0 net) wells in the Ranger asset area and 11 gross (7.5 net) wells in the Rustler Breaks asset area.

Third Quarter 2024 Estimated Capital Expenditures

Matador is currently operating nine drilling rigs in the Delaware Basin and expects to operate nine drilling rigs for the remainder of 2024. Matador expects that this ninth drilling rig will add an incremental four gross (3.9 net) operated wells turned to sales in late December 2024, which is expected to add approximately 40,000 BOE to 2024 forecasted production. At July 23, 2024, Matador expects D/C/E capital expenditures for the third quarter of 2024 will be approximately $330 to $370 million, which is an 11% increase as compared to $314.5 million for the second quarter of 2024. Matador expects full-year 2024 D/C/E capital expenditures to be between the midpoint and the high end of its previous expected range of $1.10 to $1.30 billion. Matador estimates its proportionate share of midstream capital expenditures to be approximately $45 to $65 million in the third quarter of 2024, which is a 21% increase as compared to $45.3 million in the second quarter of 2024, primarily due to the timing of Pronto’s 2024 midstream projects. These capital expenditure estimates for the third quarter of 2024 do not include capital expenditures associated with the Ameredev properties.

Third Quarter 2024 Estimated Cash Taxes

Matador continues to expect to make cash tax payments of approximately 5 to 10% of pre-tax book net income for the year ended December 31, 2024. The Company’s cash tax payments will be dependent upon a variety of factors that will impact taxable income that cannot be calculated at this time, including commodity prices, weather, allowable tax deductions and any state or federal legislative changes thereon, the Ameredev transaction and other acquisitions, activity of offset operators and pipeline restrictions as well as any deductions or tax credits generated and earned that would offset tax liabilities in 2024.

Conference Call Information

The Company will host a live conference call on Wednesday, July 24, 2024, at 10:00 a.m. Central Time to review its second quarter 2024 operational and financial results. To access the live conference call by phone, you can use the following link https://register.vevent.com/register/BI99e8d92f0e8649da9231bc26e8812ede and you will be provided with dial in details. To avoid delays, it is recommended that participants dial into the conference call 15 minutes ahead of the scheduled start time.

The live conference call will also be available through the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab. The replay for the event will be available on the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab for one year.

About Matador Resources Company

Matador is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Its current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, Matador conducts midstream operations in support of its exploration, development and production operations and provides natural gas processing, oil transportation services, natural gas, oil and produced water gathering services and produced water disposal services to third parties.

For more information, visit Matador Resources Company at www.matadorresources.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking statements” are statements related to future, not past, events. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “could,” “believe,” “would,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “should,” “continue,” “plan,” “predict,” “potential,” “project,” “hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements include, but are not limited to, statements about the consummation and timing of the Ameredev acquisition, the anticipated benefits, opportunities and results with respect to the acquisition, including any expected value creation, reserves additions, midstream opportunities and other anticipated impacts from the Ameredev acquisition, as well as other aspects of the transaction, guidance, projected or forecasted financial and operating results, future liquidity, the payment of dividends, results in certain basins, objectives, project timing, expectations and intentions, regulatory and governmental actions and other statements that are not historical facts. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, the ability of the parties to consummate the Ameredev acquisition in the anticipated timeframe or at all; risks related to the satisfaction or waiver of the conditions to closing the Ameredev acquisition in the anticipated timeframe or at all; risks related to obtaining the requisite regulatory approvals for the Ameredev acquisition; disruption from the Company’s acquisitions, including the Ameredev acquisition, making it more difficult to maintain business and operational relationships; significant transaction costs associated with the Company’s acquisitions, including the Ameredev acquisition; the risk of litigation and/or regulatory actions related to the Company’s acquisitions, including the Ameredev acquisition, as well as the following risks related to financial and operational performance: general economic conditions; the Company’s ability to execute its business plan, including whether its drilling program is successful; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and natural gas liquids; its ability to replace reserves and efficiently develop current reserves; the operating results of the Company’s midstream oil, natural gas and water gathering and transportation systems, pipelines and facilities, the acquiring of third-party business and the drilling of any additional salt water disposal wells; costs of operations; delays and other difficulties related to producing oil, natural gas and natural gas liquids; delays and other difficulties related to regulatory and governmental approvals and restrictions; impact on the Company’s operations due to seismic events; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions, including the Ameredev acquisition; availability of sufficient capital to execute its business plan, including from future cash flows, available borrowing capacity under its revolving credit facilities and otherwise; the operating results of and the availability of any potential distributions from our joint ventures; weather and environmental conditions; and the other factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. For further discussions of risks and uncertainties, you should refer to Matador’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section of Matador’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Matador undertakes no obligation to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except as required by law, including the securities laws of the United States and the rules and regulations of the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

   

Selected Financial and Operating Items

Sequential and year-over-year quarterly comparisons of selected financial and operating items are shown in the following table:

 

 

Three Months Ended

 

June 30,

2024

 

March 31,

2024

 

June 30,

2023

 

Net Production Volumes:(1)

 

 

 

 

 

 

Oil (MBbl)(2)

 

8,689

 

 

7,715

 

 

6,947

 

 

Natural gas (Bcf)(3)

 

35.4

 

 

35.5

 

 

29.7

 

 

Total oil equivalent (MBOE)(4)

 

14,588

 

 

13,628

 

 

11,892

 

 

Average Daily Production Volumes:(1)

 

 

 

 

 

 

Oil (Bbl/d)(5)

 

95,488

 

 

84,777

 

 

76,345

 

 

Natural gas (MMcf/d)(6)

 

388.9

 

 

389.9

 

 

326.0

 

 

Total oil equivalent (BOE/d)(7)

 

160,305

 

 

149,760

 

 

130,683

 

 

Average Sales Prices:

 

 

 

 

 

 

Oil, without realized derivatives (per Bbl)

$

81.20

 

$

77.58

 

$

73.46

 

 

Oil, with realized derivatives (per Bbl)

$

81.20

 

$

77.58

 

$

73.46

 

 

Natural gas, without realized derivatives (per Mcf)(8)

$

2.00

 

$

2.96

 

$

2.61

 

 

Natural gas, with realized derivatives (per Mcf)

$

2.11

 

$

2.97

 

$

2.51

 

 

Revenues (millions):

 

 

 

 

 

 

Oil and natural gas revenues

$

776.3

 

$

703.5

 

$

587.9

 

 

Third-party midstream services revenues

$

32.7

 

$

32.4

 

$

30.1

 

 

Realized gain (loss) on derivatives

$

3.8

 

$

0.3

 

$

(3.1

)

 

Operating Expenses (per BOE):

 

 

 

 

 

 

Production taxes, transportation and processing

$

5.27

 

$

5.15

 

$

5.21

 

 

Lease operating

$

5.42

 

$

5.60

 

$

5.13

 

 

Plant and other midstream services operating

$

2.55

 

$

2.91

 

$

2.58

 

 

Depletion, depreciation and amortization

$

15.49

 

$

15.58

 

$

14.93

 

 

General and administrative(9)

$

1.91

 

$

2.18

 

$

2.25

 

 

Total(10)

$

30.64

 

$

31.42

 

$

30.10

 

 

Other (millions):

 

 

 

 

 

 

Net sales of purchased natural gas(11)

$

11.0

 

$

10.0

 

$

4.8

 

 

 

 

 

 

 

 

 

Net income (millions)(12)

$

228.8

 

$

193.7

 

$

164.7

 

 

Earnings per common share (diluted)(12)

$

1.83

 

$

1.61

 

$

1.37

 

 

Adjusted net income (millions)(12)(13)

$

255.9

 

$

206.2

 

$

170.1

 

 

Adjusted earnings per common share (diluted)(12)(14)

$

2.05

 

$

1.71

 

$

1.42

 

 

Adjusted EBITDA (millions)(12)(15)

$

578.1

 

$

505.4

 

$

423.3

 

 

Net cash provided by operating activities (millions)(16)

$

592.9

 

$

468.6

 

$

449.0

 

 

Adjusted free cash flow (millions)(12)(17)

$

167.0

 

$

28.6

 

$

77.7

 

 

 

 

 

 

 

 

 

San Mateo net income (millions)(18)

$

38.3

 

$

39.7

 

$

25.4

 

 

San Mateo Adjusted EBITDA (millions)(15)(18)

$

58.0

 

$

58.2

 

$

42.7

 

 

San Mateo net cash provided by operating activities (millions)(18)

$

48.1

 

$

54.0

 

$

17.3

 

 

San Mateo adjusted free cash flow (millions)(16)(17)(18)

$

35.2

 

$

34.7

 

$

20.6

 

 

 

 

 

 

 

 

 

D/C/E capital expenditures (millions)

$

314.5

 

$

350.7

 

$

309.6

 

 

Midstream capital expenditures (millions)(19)

$

45.3

 

$

79.3

 

$

11.7

 

 

(1)

Production volumes reported in two streams: oil and natural gas, including both dry and liquids-rich natural gas.

(2)

One thousand barrels of oil.

(3)

One billion cubic feet of natural gas.

(4)

One thousand barrels of oil equivalent, estimated using a conversion ratio of one barrel of oil per six thousand cubic feet of natural gas.

(5)

Barrels of oil per day.

(6)

Millions of cubic feet of natural gas per day.

(7)

Barrels of oil equivalent per day, estimated using a conversion ratio of one barrel of oil per six thousand cubic feet of natural gas.

(8)

Per thousand cubic feet of natural gas.

(9)

Includes approximately $0.40, $0.21 and $0.33 per BOE of non-cash, stock-based compensation expense in the second quarter of 2024, the first quarter of 2023 and the second quarter of 2023, respectively.

(10)

Total does not include the impact of purchased natural gas or immaterial accretion expenses.

(11)

Net sales of purchased natural gas reflect those natural gas purchase transactions that the Company periodically enters into with third parties whereby the Company purchases natural gas and (i) subsequently sells the natural gas to other purchasers or (ii) processes the natural gas at either the San Mateo or Pronto cryogenic natural gas processing plants and subsequently sells the residue natural gas and natural gas liquids to other purchasers. Such amounts reflect revenues from sales of purchased natural gas of $46.3 million, $49.4 million and $31.9 million less expenses of $35.2 million, $39.4 million and $27.1 million in the second quarter of 2024, the first quarter of 2023 and the second quarter of 2023, respectively.

(12)

Attributable to Matador Resources Company shareholders.

(13)

Adjusted net income is a non-GAAP financial measure. For a definition of adjusted net income and a reconciliation of adjusted net income (non-GAAP) to net income (GAAP), please see “Supplemental Non-GAAP Financial Measures.”

(14)

Adjusted earnings per diluted common share is a non-GAAP financial measure. For a definition of adjusted earnings per diluted common share and a reconciliation of adjusted earnings per diluted common share (non-GAAP) to earnings per diluted common share (GAAP), please see “Supplemental Non-GAAP Financial Measures.”

(15)

Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA (non-GAAP) to net income (GAAP) and net cash provided by operating activities (GAAP), please see “Supplemental Non-GAAP Financial Measures.”

(16)

As reported for each period on a consolidated basis, including 100% of San Mateo’s net cash provided by operating activities.

(17)

Adjusted free cash flow is a non-GAAP financial measure. For a definition of adjusted free cash flow and a reconciliation of adjusted free cash flow (non-GAAP) to net cash provided by operating activities (GAAP), please see “Supplemental Non-GAAP Financial Measures.”

(18)

Represents 100% of San Mateo’s net income, Adjusted EBITDA, net cash provided by operating activities or adjusted free cash flow for each period reported.

(19)

Includes Matador’s share of estimated capital expenditures for San Mateo and other wholly-owned midstream projects, including projects completed by Pronto.

   

Matador Resources Company and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

 

(In thousands, except par value and share data)

June 30,

2024

 

December 31,

2023

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash

$

15,242

 

 

$

52,662

 

 

 

Restricted cash

 

48,661

 

 

 

53,636

 

 

 

Accounts receivable

 

 

 

 

 

Oil and natural gas revenues

 

294,019

 

 

 

274,192

 

 

 

Joint interest billings

 

204,931

 

 

 

163,660

 

 

 

Other

 

29,090

 

 

 

35,102

 

 

 

Derivative instruments

 

5,590

 

 

 

2,112

 

 

 

Lease and well equipment inventory

 

38,046

 

 

 

41,808

 

 

 

Prepaid expenses and other current assets

 

102,861

 

 

 

92,700

 

 

 

Total current assets

 

738,440

 

 

 

715,872

 

 

 

Property and equipment, at cost

 

 

 

 

 

Oil and natural gas properties, full-cost method

 

 

 

 

 

Evaluated

 

10,376,411

 

 

 

9,633,757

 

 

 

Unproved and unevaluated

 

1,478,247

 

 

 

1,193,257

 

 

 

Midstream properties

 

1,448,343

 

 

 

1,318,015

 

 

 

Other property and equipment

 

41,995

 

 

 

40,375

 

 

 

Less accumulated depletion, depreciation and amortization

 

(5,667,208

)

 

 

(5,228,963

)

 

 

Net property and equipment

 

7,677,788

 

 

 

6,956,441

 

 

 

Other assets

 

 

 

 

 

Derivative instruments

 

2,030

 

 

 

558

 

 

 

Other long-term assets

 

100,133

 

 

 

54,125

 

 

 

Total other assets

 

102,163

 

 

 

54,683

 

 

 

Total assets

$

8,518,391

 

 

$

7,726,996

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

96,241

 

 

$

68,185

 

 

 

Accrued liabilities

 

388,353

 

 

 

365,848

 

 

 

Royalties payable

 

195,795

 

 

 

161,983

 

 

 

Amounts due to affiliates

 

19,576

 

 

 

28,688

 

 

 

Derivative instruments

 

14,704

 

 

 

—

 

 

 

Advances from joint interest owners

 

56,439

 

 

 

19,954

 

 

 

Other current liabilities

 

85,433

 

 

 

40,617

 

 

 

Total current liabilities

 

856,541

 

 

 

685,275

 

 

 

Long-term liabilities

 

 

 

 

 

Borrowings under Credit Agreement

 

95,000

 

 

 

500,000

 

 

 

Borrowings under San Mateo Credit Facility

 

512,000

 

 

 

522,000

 

 

 

Senior unsecured notes payable

 

1,374,596

 

 

 

1,184,627

 

 

 

Asset retirement obligations

 

93,952

 

 

 

87,485

 

 

 

Deferred income taxes

 

673,955

 

 

 

581,439

 

 

 

Other long-term liabilities

 

56,742

 

 

 

38,482

 

 

 

Total long-term liabilities

 

2,806,245

 

 

 

2,914,033

 

 

 

Shareholders’ equity

 

 

 

 

 

Common stock - $0.01 par value, 160,000,000 shares authorized; 124,885,730 and 119,478,282 shares issued; and 124,811,349 and 119,458,674 shares outstanding, respectively

 

1,249

 

 

 

1,194

 

 

 

Additional paid-in capital

 

2,483,075

 

 

 

2,133,172

 

 

 

Retained earnings

 

2,150,292

 

 

 

1,776,541

 

 

 

Treasury stock, at cost, 74,381 and 19,608 shares, respectively

 

(2,990

)

 

 

(45

)

 

 

Total Matador Resources Company shareholders’ equity

 

4,631,626

 

 

 

3,910,862

 

 

 

Non-controlling interest in subsidiaries

 

223,979

 

 

 

216,826

 

 

 

Total shareholders’ equity

 

4,855,605

 

 

 

4,127,688

 

 

 

Total liabilities and shareholders’ equity

$

8,518,391

 

 

$

7,726,996

 

 

 

 

 

 

 

 

   

Matador Resources Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 

(In thousands, except per share data)

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Oil and natural gas revenues

$

776,279

 

 

$

587,917

 

 

$

1,479,819

 

 

$

1,090,826

 

 

 

Third-party midstream services revenues

 

32,651

 

 

 

30,075

 

 

 

65,008

 

 

 

56,586

 

 

 

Sales of purchased natural gas

 

46,265

 

 

 

31,898

 

 

 

95,711

 

 

 

66,152

 

 

 

Realized gain (loss) on derivatives

 

3,770

 

 

 

(3,148

)

 

 

4,045

 

 

 

521

 

 

 

Unrealized loss on derivatives

 

(11,829

)

 

 

(8,659

)

 

 

(9,754

)

 

 

(15,726

)

 

 

Total revenues

 

847,136

 

 

 

638,083

 

 

 

1,634,829

 

 

 

1,198,359

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

Production taxes, transportation and processing

 

76,812

 

 

 

61,991

 

 

 

146,965

 

 

 

117,477

 

 

 

Lease operating

 

79,030

 

 

 

61,043

 

 

 

155,325

 

 

 

105,450

 

 

 

Plant and other midstream services operating

 

37,258

 

 

 

30,657

 

 

 

76,881

 

 

 

61,702

 

 

 

Purchased natural gas

 

35,240

 

 

 

27,103

 

 

 

74,672

 

 

 

55,551

 

 

 

Depletion, depreciation and amortization

 

225,934

 

 

 

177,514

 

 

 

438,245

 

 

 

303,839

 

 

 

Accretion of asset retirement obligations

 

1,329

 

 

 

792

 

 

 

2,602

 

 

 

1,491

 

 

 

General and administrative

 

27,913

 

 

 

26,715

 

 

 

57,566

 

 

 

49,148

 

 

 

Total expenses

 

483,516

 

 

 

385,815

 

 

 

952,256

 

 

 

694,658

 

 

 

Operating income

 

363,620

 

 

 

252,268

 

 

 

682,573

 

 

 

503,701

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

Net loss on impairment

 

—

 

 

 

(202

)

 

 

—

 

 

 

(202

)

 

 

Interest expense

 

(35,986

)

 

 

(34,229

)

 

 

(75,548

)

 

 

(50,405

)

 

 

Other (expense) income

 

(2,121

)

 

 

16,564

 

 

 

(1,544

)

 

 

16,903

 

 

 

Total other expense

 

(38,107

)

 

 

(17,867

)

 

 

(77,092

)

 

 

(33,704

)

 

 

Income before income taxes

 

325,513

 

 

 

234,401

 

 

 

605,481

 

 

 

469,997

 

 

 

Income tax provision (benefit)

 

 

 

 

 

 

 

 

 

Current

 

30,104

 

 

 

(4,929

)

 

 

47,376

 

 

 

—

 

 

 

Deferred

 

47,882

 

 

 

62,235

 

 

 

97,388

 

 

 

113,978

 

 

 

Total income tax provision

 

77,986

 

 

 

57,306

 

 

 

144,764

 

 

 

113,978

 

 

 

Net income

 

247,527

 

 

 

177,095

 

 

 

460,717

 

 

 

356,019

 

 

 

Net income attributable to non-controlling interest in subsidiaries

 

(18,758

)

 

 

(12,429

)

 

 

(38,219

)

 

 

(28,223

)

 

 

Net income attributable to Matador Resources Company shareholders

$

228,769

 

 

$

164,666

 

 

$

422,498

 

 

$

327,796

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

Basic

$

1.83

 

 

$

1.38

 

 

$

3.46

 

 

$

2.75

 

 

 

Diluted

$

1.83

 

 

$

1.37

 

 

$

3.45

 

 

$

2.73

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

124,786

 

 

 

119,183

 

 

 

122,253

 

 

 

119,109

 

 

 

Diluted

 

124,896

 

 

 

119,842

 

 

 

122,438

 

 

 

119,856

 

 

 

 

 

 

 

 

 

 

 

 

   

Matador Resources Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

 

(In thousands)

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

Operating activities

 

 

 

 

 

 

 

 

 

Net income

$

247,527

 

 

$

177,095

 

 

$

460,717

 

 

$

356,019

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

 

 

 

 

Unrealized loss on derivatives

 

11,829

 

 

 

8,659

 

 

 

9,754

 

 

 

15,726

 

 

 

Depletion, depreciation and amortization

 

225,934

 

 

 

177,514

 

 

 

438,245

 

 

 

303,839

 

 

 

Accretion of asset retirement obligations

 

1,329

 

 

 

792

 

 

 

2,602

 

 

 

1,491

 

 

 

Stock-based compensation expense

 

2,974

 

 

 

3,931

 

 

 

5,812

 

 

 

6,221

 

 

 

Deferred income tax provision

 

47,882

 

 

 

62,235

 

 

 

97,388

 

 

 

113,978

 

 

 

Amortization of debt issuance cost and other debt-related costs

 

4,942

 

 

 

2,057

 

 

 

9,586

 

 

 

2,895

 

 

 

Other non-cash changes

 

(331

)

 

 

(15,682

)

 

 

(664

)

 

 

(15,682

)

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

Accounts receivable

 

433

 

 

 

15,501

 

 

 

(55,086

)

 

 

56,407

 

 

 

Lease and well equipment inventory

 

(5,336

)

 

 

(2,814

)

 

 

(7,380

)

 

 

(7,237

)

 

 

Prepaid expenses and other current assets

 

1,794

 

 

 

(7,607

)

 

 

320

 

 

 

(24,124

)

 

 

Other long-term assets

 

(410

)

 

 

2,037

 

 

 

(156

)

 

 

2,072

 

 

 

Accounts payable, accrued liabilities and other current liabilities

 

19,646

 

 

 

11,639

 

 

 

14,832

 

 

 

(28,232

)

 

 

Royalties payable

 

17,289

 

 

 

9,709

 

 

 

33,811

 

 

 

10,085

 

 

 

Advances from joint interest owners

 

18,714

 

 

 

4,826

 

 

 

36,485

 

 

 

(4,979

)

 

 

Income taxes payable

 

(2,179

)

 

 

(2,400

)

 

 

13,846

 

 

 

(1,677

)

 

 

Other long-term liabilities

 

890

 

 

 

1,519

 

 

 

1,377

 

 

 

1,709

 

 

 

Net cash provided by operating activities

 

592,927

 

 

 

449,011

 

 

 

1,061,489

 

 

 

788,511

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

Drilling, completion and equipping capital expenditures

 

(375,076

)

 

 

(315,367

)

 

 

(611,715

)

 

 

(539,511

)

 

 

Acquisition of Advance

 

—

 

 

 

(1,528,427

)

 

 

—

 

 

 

(1,608,427

)

 

 

Acquisition of Ameredev

 

(95,250

)

 

 

—

 

 

 

(95,250

)

 

 

—

 

 

 

Acquisition of oil and natural gas properties

 

(53,846

)

 

 

(32,034

)

 

 

(256,110

)

 

 

(55,897

)

 

 

Midstream capital expenditures

 

(52,115

)

 

 

(18,730

)

 

 

(157,201

)

 

 

(32,871

)

 

 

Expenditures for other property and equipment

 

(545

)

 

 

(709

)

 

 

(771

)

 

 

(2,478

)

 

 

Proceeds from sale of assets

 

—

 

 

 

—

 

 

 

900

 

 

 

451

 

 

 

Net cash used in investing activities

 

(576,832

)

 

 

(1,895,267

)

 

 

(1,120,147

)

 

 

(2,238,733

)

 

 

Financing activities

 

 

 

 

 

 

 

 

 

Repayments of borrowings under Credit Agreement

 

(790,000

)

 

 

(2,190,000

)

 

 

(1,720,000

)

 

 

(2,190,000

)

 

 

Borrowings under Credit Agreement

 

625,000

 

 

 

2,750,000

 

 

 

1,315,000

 

 

 

2,750,000

 

 

 

Repayments of borrowings under San Mateo Credit Facility

 

(71,000

)

 

 

(53,000

)

 

 

(136,000

)

 

 

(108,000

)

 

 

Borrowings under San Mateo Credit Facility

 

57,000

 

 

 

38,000

 

 

 

126,000

 

 

 

103,000

 

 

 

Cost to amend credit facilities

 

(132

)

 

 

—

 

 

 

(11,424

)

 

 

(8,645

)

 

 

Proceeds from issuance of senior unsecured notes

 

900,000

 

 

 

494,800

 

 

 

900,000

 

 

 

494,800

 

 

 

Cost to issue senior unsecured notes

 

(15,621

)

 

 

(8,255

)

 

 

(15,621

)

 

 

(8,255

)

 

 

Purchase of senior unsecured notes

 

(699,191

)

 

 

—

 

 

 

(699,191

)

 

 

—

 

 

 

Proceeds from issuance of common stock

 

—

 

 

 

—

 

 

 

344,663

 

 

 

—

 

 

 

Cost to issue equity

 

(2,513

)

 

 

—

 

 

 

(2,566

)

 

 

—

 

 

 

Dividends paid

 

(24,889

)

 

 

(17,917

)

 

 

(48,747

)

 

 

(35,685

)

 

 

Contributions related to formation of San Mateo

 

8,750

 

 

 

—

 

 

 

10,250

 

 

 

14,700

 

 

 

Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries

 

11,760

 

 

 

24,500

 

 

 

19,110

 

 

 

24,500

 

 

 

Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries

 

(24,451

)

 

 

(25,333

)

 

 

(50,176

)

 

 

(44,443

)

 

 

Taxes paid related to net share settlement of stock-based compensation

 

(925

)

 

 

(3,881

)

 

 

(14,440

)

 

 

(22,790

)

 

 

Other

 

(306

)

 

 

(248

)

 

 

(595

)

 

 

(452

)

 

 

Net cash (used in) provided by financing activities

 

(26,518

)

 

 

1,008,666

 

 

 

16,263

 

 

 

968,730

 

 

 

Change in cash and restricted cash

 

(10,423

)

 

 

(437,590

)

 

 

(42,395

)

 

 

(481,492

)

 

 

Cash and restricted cash at beginning of period

 

74,326

 

 

 

503,428

 

 

 

106,298

 

 

 

547,330

 

 

 

Cash and restricted cash at end of period

$

63,903

 

 

$

65,838

 

 

$

63,903

 

 

$

65,838

 

 

 

 

 

 

 

 

 

 

 

 

   

Supplemental Non-GAAP Financial Measures

Adjusted EBITDA

This press release includes the non-GAAP financial measure of Adjusted EBITDA. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as securities analysts, investors, lenders and rating agencies. “GAAP” means Generally Accepted Accounting Principles in the United States of America. The Company believes Adjusted EBITDA helps it evaluate its operating performance and compare its results of operations from period to period without regard to its financing methods or capital structure. The Company defines, on a consolidated basis and for San Mateo, Adjusted EBITDA as earnings before interest expense, income taxes, depletion, depreciation and amortization, accretion of asset retirement obligations, property impairments, unrealized derivative gains and losses, non-recurring transaction costs for certain acquisitions, certain other non-cash items and non-cash stock-based compensation expense and net gain or loss on asset sales and impairment. Adjusted EBITDA is not a measure of net income or net cash provided by operating activities as determined by GAAP. All references to Matador’s Adjusted EBITDA are those values attributable to Matador Resources Company shareholders after giving effect to Adjusted EBITDA attributable to third-party non-controlling interests, including in San Mateo.

Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or net cash provided by operating activities as determined in accordance with GAAP or as an indicator of the Company’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components of understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure. Adjusted EBITDA may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDA in the same manner. The following table presents the calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income and net cash provided by operating activities, respectively, that are of a historical nature. Where references are pro forma, forward-looking, preliminary or prospective in nature, and not based on historical fact, the table does not provide a reconciliation. The Company could not provide such reconciliation without undue hardship because such Adjusted EBITDA numbers are estimations, approximations and/or ranges. In addition, it would be difficult for the Company to present a detailed reconciliation on account of many unknown variables for the reconciling items, including future income taxes, full-cost ceiling impairments, unrealized gains or losses on derivatives and gains or losses on asset sales and impairment. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.

 

Adjusted EBITDA – Matador Resources Company

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

(In thousands)

 

2024

 

 

 

2024

 

 

 

2023

 

 

Unaudited Adjusted EBITDA Reconciliation to Net Income:

 

 

 

 

 

 

Net income attributable to Matador Resources Company shareholders

$

228,769

 

 

$

193,729

 

 

$

164,666

 

 

Net income attributable to non-controlling interest in subsidiaries

 

18,758

 

 

 

19,461

 

 

 

12,429

 

 

Net income

 

247,527

 

 

 

213,190

 

 

 

177,095

 

 

Interest expense

 

35,986

 

 

 

39,562

 

 

 

34,229

 

 

Total income tax provision

 

77,986

 

 

 

66,778

 

 

 

57,306

 

 

Depletion, depreciation and amortization

 

225,934

 

 

 

212,311

 

 

 

177,514

 

 

Accretion of asset retirement obligations

 

1,329

 

 

 

1,273

 

 

 

792

 

 

Unrealized loss (gain) on derivatives

 

11,829

 

 

 

(2,075

)

 

 

8,659

 

 

Non-cash stock-based compensation expense

 

2,974

 

 

 

2,838

 

 

 

3,931

 

 

Net loss on impairment

 

—

 

 

 

—

 

 

 

202

 

 

Expense (income) related to contingent consideration and other

 

2,933

 

 

 

—

 

 

 

(15,577

)

 

Consolidated Adjusted EBITDA

 

606,498

 

 

 

533,877

 

 

 

444,151

 

 

Adjusted EBITDA attributable to non-controlling interest in subsidiaries

 

(28,425

)

 

 

(28,507

)

 

 

(20,900

)

 

Adjusted EBITDA attributable to Matador Resources Company shareholders

$

578,073

 

 

$

505,370

 

 

$

423,251

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

(In thousands)

 

2024

 

 

 

2024

 

 

 

2023

 

 

Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities:

 

 

 

 

 

 

Net cash provided by operating activities

$

592,927

 

 

$

468,562

 

 

$

449,011

 

 

Net change in operating assets and liabilities

 

(50,841

)

 

 

12,792

 

 

 

(32,410

)

 

Interest expense, net of non-cash portion

 

31,044

 

 

 

34,918

 

 

 

32,172

 

 

Current income tax provision (benefit)

 

30,104

 

 

 

17,272

 

 

 

(4,929

)

 

Other non-cash and non-recurring expense

 

3,264

 

 

 

333

 

 

 

307

 

 

Adjusted EBITDA attributable to non-controlling interest in subsidiaries

 

(28,425

)

 

 

(28,507

)

 

 

(20,900

)

 

Adjusted EBITDA attributable to Matador Resources Company shareholders

$

578,073

 

 

$

505,370

 

 

$

423,251

 

 

 

 

 

 

 

 

 

Adjusted EBITDA – San Mateo (100%)

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

(In thousands)

2024

 

2024

 

2023

 

Unaudited Adjusted EBITDA Reconciliation to Net Income:

 

 

 

 

 

 

Net income

$

38,285

 

$

39,718

 

$

25,365

 

Depletion, depreciation and amortization

 

9,237

 

 

9,170

 

 

8,675

 

Interest expense

 

9,189

 

 

9,193

 

 

8,533

 

Accretion of asset retirement obligations

 

99

 

 

97

 

 

80

 

Non-recurring expense

 

1,200

 

 

—

 

 

—

 

Adjusted EBITDA

$

58,010

 

$

58,178

 

$

42,653

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

(In thousands)

2024

 

2024

 

2023

 

Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities:

 

 

 

 

 

 

Net cash provided by operating activities

$

48,052

 

 

$

54,005

 

 

$

17,326

 

Net change in operating assets and liabilities

 

(154

)

 

 

(4,746

)

 

 

17,043

 

Interest expense, net of non-cash portion

 

8,912

 

 

 

8,919

 

 

 

8,284

 

Non-recurring expense

 

1,200

 

 

 

—

 

 

 

—

 

Adjusted EBITDA

$

58,010

 

 

$

58,178

 

 

$

42,653

 

 

 

 

 

 

 

 

 

Adjusted Net Income and Adjusted Earnings Per Diluted Common Share

This press release includes the non-GAAP financial measures of adjusted net income and adjusted earnings per diluted common share. These non-GAAP items are measured as net income attributable to Matador Resources Company shareholders, adjusted for dollar and per share impact of certain items, including unrealized gains or losses on derivatives, the impact of full cost-ceiling impairment charges, if any, and non-recurring transaction costs for certain acquisitions or other non-recurring income or expense items, along with the related tax effect for all periods. This non-GAAP financial information is provided as additional information for investors and is not in accordance with, or an alternative to, GAAP financial measures. Additionally, these non-GAAP financial measures may be different than similar measures used by other companies. The Company believes the presentation of adjusted net income and adjusted earnings per diluted common share provides useful information to investors, as it provides them an additional relevant comparison of the Company’s performance across periods and to the performance of the Company’s peers. In addition, these non-GAAP financial measures reflect adjustments for items of income and expense that are often excluded by securities analysts and other users of the Company’s financial statements in evaluating the Company’s performance. The table below reconciles adjusted net income and adjusted earnings per diluted common share to their most directly comparable GAAP measure of net income attributable to Matador Resources Company shareholders.

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

 

2024

 

2024

 

2023

 

(In thousands, except per share data)

 

 

 

 

 

 

Unaudited Adjusted Net Income and Adjusted Earnings Per Share Reconciliation to Net Income:

 

 

 

 

 

 

Net income attributable to Matador Resources Company shareholders

$

228,769

 

$

193,729

 

 

$

164,666

 

 

Total income tax provision

 

77,986

 

 

66,778

 

 

 

57,306

 

 

Income attributable to Matador Resources Company shareholders before taxes

 

306,755

 

 

260,507

 

 

 

221,972

 

 

Less non-recurring and unrealized charges to income before taxes:

 

 

 

 

 

 

Unrealized loss (gain) on derivatives

 

11,829

 

 

(2,075

)

 

 

8,659

 

 

Net loss on impairment

 

—

 

 

—

 

 

 

202

 

 

Expense (income) related to contingent consideration and other

 

5,359

 

 

2,580

 

 

 

(15,577

)

 

Adjusted income attributable to Matador Resources Company shareholders before taxes

 

323,943

 

 

261,012

 

 

 

215,256

 

 

Income tax expense(1)

 

68,028

 

 

54,813

 

 

 

45,204

 

 

Adjusted net income attributable to Matador Resources Company shareholders (non-GAAP)

$

255,915

 

$

206,199

 

 

$

170,052

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

124,786

 

 

119,721

 

 

 

119,183

 

 

Dilutive effect of options and restricted stock units

 

110

 

 

532

 

 

 

659

 

 

Weighted average common shares outstanding - diluted

 

124,896

 

 

120,253

 

 

 

119,842

 

 

Adjusted earnings per share attributable to Matador Resources Company shareholders (non-GAAP)

 

 

 

 

 

 

Basic

$

2.05

 

$

1.72

 

 

$

1.43

 

 

Diluted

$

2.05

 

$

1.71

 

 

$

1.42

 

 

 

 

 

 

 

 

 

 

(1) Estimated using federal statutory tax rate in effect for the period.

 

   

Adjusted Free Cash Flow

This press release includes the non-GAAP financial measure of adjusted free cash flow. This non-GAAP item is measured, on a consolidated basis for the Company and for San Mateo, as net cash provided by operating activities, adjusted for changes in working capital and cash performance incentives that are not included as operating cash flows, less cash flows used for capital expenditures, adjusted for changes in capital accruals. On a consolidated basis, these numbers are also adjusted for the cash flows related to non-controlling interest in subsidiaries that represent cash flows not attributable to Matador shareholders. Adjusted free cash flow should not be considered an alternative to, or more meaningful than, net cash provided by operating activities as determined in accordance with GAAP or an indicator of the Company’s liquidity. Adjusted free cash flow is used by the Company, securities analysts and investors as an indicator of the Company’s ability to manage its operating cash flow, internally fund its D/C/E capital expenditures, pay dividends and service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. Additionally, this non-GAAP financial measure may be different than similar measures used by other companies. The Company believes the presentation of adjusted free cash flow provides useful information to investors, as it provides them an additional relevant comparison of the Company’s performance, sources and uses of capital associated with its operations across periods and to the performance of the Company’s peers. In addition, this non-GAAP financial measure reflects adjustments for items of cash flows that are often excluded by securities analysts and other users of the Company’s financial statements in evaluating the Company’s cash spend.

The table below reconciles adjusted free cash flow to its most directly comparable GAAP measure of net cash provided by operating activities. All references to Matador’s adjusted free cash flow are those values attributable to Matador shareholders after giving effect to adjusted free cash flow attributable to third-party non-controlling interests, including in San Mateo.

 

Adjusted Free Cash Flow - Matador Resources Company

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

(In thousands)

 

2024

 

 

 

2024

 

 

 

2023

 

 

Net cash provided by operating activities

$

592,927

 

 

$

468,562

 

 

$

449,011

 

 

Net change in operating assets and liabilities

 

(50,841

)

 

 

12,792

 

 

 

(32,410

)

 

San Mateo discretionary cash flow attributable to non-controlling interest in subsidiaries(1)

 

(23,470

)

 

 

(24,137

)

 

 

(16,841

)

 

Performance incentives received from Five Point

 

8,750

 

 

 

1,500

 

 

 

—

 

 

Total discretionary cash flow

 

527,366

 

 

 

458,717

 

 

 

399,760

 

 

 

 

 

 

 

 

 

Drilling, completion and equipping capital expenditures

 

375,076

 

 

 

236,639

 

 

 

315,367

 

 

Midstream capital expenditures

 

52,115

 

 

 

105,086

 

 

 

18,730

 

 

Expenditures for other property and equipment

 

545

 

 

 

226

 

 

 

709

 

 

Net change in capital accruals

 

(61,168

)

 

 

95,342

 

 

 

(5,985

)

 

San Mateo accrual-based capital expenditures related to non-controlling interest in subsidiaries(2)

 

(6,220

)

 

 

(7,138

)

 

 

(6,752

)

 

Total accrual-based capital expenditures(3)

 

360,348

 

 

 

430,155

 

 

 

322,069

 

 

Adjusted free cash flow

$

167,018

 

 

$

28,562

 

 

$

77,691

 

 

 

 

 

 

 

 

 

(1)

Represents Five Point Energy LLC’s (“Five Point”) 49% interest in San Mateo discretionary cash flow, as computed below.

(2)

Represents Five Point’s 49% interest in accrual-based San Mateo capital expenditures, as computed below.

(3)

Represents drilling, completion and equipping costs, Matador’s share of San Mateo capital expenditures plus 100% of other midstream capital expenditures not associated with San Mateo.

 

Adjusted Free Cash Flow - San Mateo (100%)

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

(In thousands)

2024

 

2024

 

2023

 

Net cash provided by San Mateo operating activities

$

48,052

 

 

$

54,005

 

 

$

17,326

 

Net change in San Mateo operating assets and liabilities

 

(154

)

 

 

(4,746

)

 

 

17,043

 

Total San Mateo discretionary cash flow

 

47,898

 

 

 

49,259

 

 

 

34,369

 

 

 

 

 

 

 

 

San Mateo capital expenditures

 

11,215

 

 

 

23,211

 

 

 

12,006

 

Net change in San Mateo capital accruals

 

1,479

 

 

 

(8,644

)

 

 

1,774

 

San Mateo accrual-based capital expenditures

 

12,694

 

 

 

14,567

 

 

 

13,780

 

San Mateo adjusted free cash flow

$

35,204

 

 

$

34,692

 

 

$

20,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723803037/en/

Mac Schmitz Senior Vice President - Investor Relations (972) 371-5225 investors@matadorresources.com