Matador Resources Company MTDR reported fourth-quarter 2024 adjusted earnings of $1.83 per share, which beat the Zacks Consensus Estimate of $1.74. The bottom line, however, declined from the year-ago quarter’s level of $1.99.
Total revenues of $970.4 million beat the Zacks Consensus Estimate of $955 million. The top line also increased from the year-ago quarter’s figure of $836.1 million.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The better-than-expected quarterly results were driven by Matador’s high total production volume, including higher contributions from its non-operated assets. However, lower commodity prices partially offset the positives.
Matador Resources Company Price, Consensus and EPS Surprise
Matador Resources Company price-consensus-eps-surprise-chart | Matador Resources Company Quote
Dividend Hike
Matador Resources announced a quarterly cash dividend of 31.25 cents per share (annualized dividend of $1.25), implying a 25% increase from the previous level of 25 cents. The dividend is payable on Mar. 14, 2025, to shareholders of record as of Feb. 28, 2025.
Upstream Business in Q4
Being primarily involved in oil and gas exploration and production activities, the fate of MTDR’s overall business depends on the oil and gas pricing environment. Most of Matador’s production comprises oil (58.9% of total production in the fourth quarter), making this commodity’s price the prime factor in determining the company’s earnings.
Matador achieved a record average daily oil production in the fourth quarter of 2024. However, the figure suggested a decline of 1% from the anticipated average.
Let us take a look at Matador’s average commodity sales price, along with production.
Average Sales Price of Commodities
MTDR reported the average sales price for oil (without realized derivatives) at $70.66 per barrel, down from $79 a year ago. The commodity price was also lower than our projection of $71.24 per barrel. The price of natural gas was $2.72 per thousand cubic feet (Mcf), down from $3.01 in the year-ago quarter. The figure also came in lower than our estimate of $2.89 Mcf.
Increasing Production
Matador reported oil production of 118,440 barrels per day (B/D), up from 88,663 B/D in the prior-year quarter. The figure, however, missed our estimate of 119,200 B/D. Natural gas production was recorded at 496.1 million cubic feet per day (MMcf/D), up from 393.6 MMcf/D recorded a year ago. The reported figure outpaced our estimate of 472.8 MMcf/D.
The rise in total average production can be attributed to higher production from the new wells drilled and brought into production in the third quarter of 2024 in MTDR’s Rustler Breaks and Ranger asset areas. The stronger-than-expected production from the company’s non-operated assets contributed to the increase. Additionally, production from Matador’s Ameredev assets exceeded expectations, driving record production volumes in the reported quarter.
Total oil equivalent production in the fourth quarter was 201,116 BOE/D, which surged from the year-ago quarter’s level of 154,261 BOE/D. This was also the first time Matador achieved an average production exceeding 200,000 BOE per day in a quarter. The figure was also above our projection of 198,007.7 BOE/D.
Operating Expenses
MTDR’s plant and other midstream services’ operating expenses increased to $2.75 per BOE from the year-earlier level of $2.56. Our estimate for the same was pinned at $2.56.
Lease operating costs increased to $5.37 per BOE from $5.06 a year ago. Our projection for the metric was pinned at $5.76 per BOE. However, production taxes, transportation and processing costs decreased to $4.70 per BOE from $5.31 in the year-ago quarter.
Total operating expenses per BOE were $30.89, higher than the prior-year figure of $30.52 but below our estimate of $30.95.
Balance Sheet & Capital Spending
As of Dec. 31, 2024, Matador had cash and restricted cash of $94.7 million and a long-term debt of $3,325.4 million. In the fourth quarter, the company spent $317.4 million on well drilling, completion and equipment.
Outlook
For 2025, Matador has guided average daily oil equivalent production at 202,000-208,000 Boe/d. This implies a 20% increase from the previous projection. The company also projects average daily total production for the first quarter of 2025 to lie in the range of 195,000 to 197,000 Boe/d.
MTDR’s Zacks Rank and Other Key Picks
MTDR currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the energysector are SM Energy SM, Equinor ASA EQNR and Archrock Inc. AROC. SM Energy currently sports a Zacks Rank #1 (Strong Buy), while Equinor and Archrock carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The increased production, combined with the favorable oil price environment, is expected to positively contribute to its bottom line.
Equinor ASA is one of the leading integrated energy companies globally and the second-largest supplier of natural gas in Europe. The company’s expansion in the renewable energy space positions it for long-term growth as more and more countries transition toward cleaner energy solutions to meet their climate goals. Its strategic pivot toward low-carbon energy solutions unlocks new revenue streams in the growing market for clean energy and carbon management solutions.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
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