DALLAS–(BUSINESS WIRE)–Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today reported financial and operating results for the fourth quarter and full year 2024, announced an increase to Matador’s dividend and provided an update on its 2025 operating plan. A slide presentation summarizing the highlights of Matador’s fourth quarter and full year 2024 earnings release and 2025 operating plan is also included on the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab.
Management Summary Comments
In summarizing the year, Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, noted, “Before I report that 2024 was another record year for Matador, I want to express my appreciation to each of our shareholders, office and field staff, board members, management, vendors, banks, partners and other stakeholders for their continued interest, friendship and support in making these results happen. It has been a team effort. Building on our 2024 plans, our 2025 plan is again expected to yield record results. The Matador team and I are excited to discuss not only our 2024 accomplishments with you but also the opportunities we have in front of us for 2025.
Dividend Increase
“First, I am pleased to announce that Matador’s Board of Directors (the ‘Board’) has approved a 25% increase in Matador’s dividend policy, raising the dividend from $1.00 annually, or $0.25 per quarter, to $1.25 annually, or $0.3125 per quarter (see Slide A). In accordance with this new dividend policy, the Board formally declared a quarterly cash dividend of $0.3125 per share of common stock payable on March 14, 2025 to shareholders of record as of February 28, 2025. Matador believes that a steadily increasing fixed dividend is the best way to comfortably return cash to its shareholders while also continuing to build value through growing our upstream and midstream businesses. Matador has now raised its dividend six times in four years.
“Raising the dividend—and senior management buying the stock, of which there are 30 ‘buys’ since 2021 and no ‘sells’—is the sincerest way we know to express our confidence in the operational and financial outlook for Matador going forward (see Slide A and Slide T). The Board and I would now like to point out some accomplishments that support this dividend increase. These accomplishments include the successful integration of the Advance and Ameredev acquisitions, which are performing as well or better than Matador expected; the addition of 50,000 net acres to our inventory; and the combination of Pronto Midstream, LLC (‘Pronto’) with San Mateo Midstream, LLC (‘San Mateo’) in December 2024 (the ‘Pronto Transaction’), which resulted in Matador receiving $220 million in cash and the ability to earn up to $75 million in additional performance incentives. Furthermore, this dividend increase reflects the Board’s confidence in Matador’s ability to generate increased adjusted free cash flow going forward. Matador projects adjusted free cash flow will approach $1 billion in 2025 (assuming strip oil and natural gas pricing as of mid-February 2025). Meanwhile, Matador has in fact reduced—as pledged—its leverage ratio from 1.3x at the time of the Ameredev transaction in September 2024 to 1.05x at December 31, 2024.
2024 Accomplishments and 2023 Comparisons
- “In the fourth quarter of 2024, Matador achieved record quarterly average daily production of 201,116 barrels of oil and natural gas equivalent (‘BOE’) per day—the first time in Matador’s history that it has produced an average of over 200,000 BOE per day for an entire quarter. This production level is a 30% increase as compared to average daily production of 154,261 BOE per day in the fourth quarter of 2023 (see Slide B).
- “Matador also achieved in the fourth quarter of 2024 record quarterly average daily oil production of 118,440 barrels per day (an increase of 34%) and achieved record quarterly average daily natural gas production of 496.1 million cubic feet per day (an increase of 26%), compared to average daily oil production of 88,663 barrels per day and average daily natural gas production of 393.6 million cubic feet per day in the fourth quarter of 2023.
- “Matador also produced record annual average daily oil production of 99,808 barrels per day (an increase of 32%) and record annual average daily natural gas production of 425.7 million cubic feet per day (an increase of 26%) in full-year 2024, compared to average daily oil production of 75,457 barrels per day and average daily natural gas production of 338.1 million cubic feet per day in full-year 2023 (see Slide C).
- “With the assistance of its vendors, Matador decreased its cost per completed lateral foot by as much as 11% during 2024 to $910 per completed lateral foot from its original expectations of $1,010 per completed lateral foot across its operating areas, primarily as a result of increased operational efficiencies such as ‘U-Turn’ wells, ‘simul-frac’ completions and ‘trimul-frac’ completions rather than forcing price reductions from vendors (see Slide D and Slide E).
- “Matador added nearly 50,000 net acres in 2024 bringing Matador’s total acreage in the Delaware Basin to approximately 200,000 net acres, of which approximately 79% are held by existing production (see Slide F). As a result, Matador was able to further high-grade its Delaware Basin inventory to 1,869 net locations with a total net lateral length of approximately 18.3 million feet, or 3,680 miles, as of December 31, 2024, which is an increase of 22% as compared to the total net lateral length of Matador’s inventory of approximately 15.0 million feet, or 2,975 miles, as of December 31, 2023 (see Slide G).
- “Matador achieved record total proved oil and natural gas reserves of 611.5 million BOE (an increase of 33%), with a standardized measure of $7.4 billion (an increase of 21%) and a PV-10 of $9.2 billion (an increase of 19%) at December 31, 2024, as compared to proved oil and natural gas reserves of 460.1 million BOE with a standardized measure of $6.1 billion and a PV-10 of $7.7 billion at December 31, 2023 (see comparison of commodity prices on Slide H).
Balance Sheet Strength and Low Leverage
“Matador finished 2024 in the best financial shape in its history with nearly $1.6 billion in RBL liquidity; just $595.5 million in borrowings under Matador’s reserves-based lending (RBL) credit facility; and a leverage ratio of 1.05x. Current RBL borrowings represent a 38% decrease from $955 million in borrowings under Matador’s reserves-based credit facility and a reduction in Matador’s leverage ratio from 1.3x at September 30, 2024 after Matador closed the Ameredev acquisition to the 1.05x level today (see Slide I).
2024 Production and Drilling Results
“Matador’s fourth quarter 2024 production would have been even higher if it had not experienced significant third-party midstream constraints for two-to-three months in its Antelope Ridge asset area. Matador estimates that these third-party midstream constraints, primarily occurring in Lea County, New Mexico, resulted in approximately 3,000 BOE per day (67% oil) being constrained during the fourth quarter of 2024. Importantly, these midstream constraints were largely resolved by the third-party midstream providers and such production was almost all back online as of February 18, 2025. Fortunately, Matador’s controlled midstream affiliates, San Mateo and Pronto, thankfully experienced 99% uptime during this time for their natural gas processing plants and did not contribute to these constraints.
“Notably, Matador continued to advance operational efficiencies to drive production higher and average well costs lower during 2024. In fact, Matador turned to sales a record five new ‘U-Turn’ wells during the fourth quarter of 2024 (see Slide J). Matador estimates that these five U-Turn wells saved drilling days and a total of $15 million, or approximately $3 million for each U-Turn well, as compared to drilling ten vertical wellbores and ten one-mile laterals. Initial results from the five U-Turn wells indicate that these U-Turn wells are performing as good or better than traditional two-mile straight lateral wells in the same area. Capital savings realized by drilling U-Turn wells decrease project payout times and reduce oil breakeven prices by as much as 20% in certain areas. This focus on operational efficiencies and synergies, along with marketing efforts and the quality of its wells, has helped Matador lead its peer group in profitability (see Slide K and Slide L).
Ameredev Acquisition in September 2024 Contributed to Record Financial Results
“Matador’s mergers and acquisitions group continues to provide substantial value and Adjusted EBITDA growth for Matador and its shareholders. Matador’s key acquisition of Ameredev Stateline II, LLC (‘Ameredev’) in September 2024 added 33,500 net acres, 371 net locations and more than 25,000 BOE per day in production. Each of Matador’s teams has been hard at work successfully integrating the Ameredev properties (see Slide M). Matador estimates that it has already experienced at least $4 million in drilling and completion cost synergies and expects additional drilling and completion cost synergies of over $150 million over the next five years. In addition, Matador estimates that it has reduced lease operating expenses on the Ameredev acreage by 35%, or more than $2 million per month, since Matador began operating the Ameredev assets. We look forward to realizing the full value of these efficiencies and synergies over the coming years.
“For full-year 2024, Matador achieved net income of $885.3 million (an increase of 5%) and Adjusted EBITDA of $2.30 billion (an increase of 24%), compared to 2023 net income of $846.1 million and Adjusted EBITDA of $1.85 billion for full-year 2023 (see Slide N). Matador’s net cash provided by operating activities was $2.25 billion for full-year 2024, which is a 20% increase from $1.87 billion for full-year 2023. For full-year 2024, Matador’s adjusted free cash flow was $807.3 million, which is a 75% increase from $460.0 million for full-year 2023. Matador exits 2024 as a leader among its peers in free cash flow generation, and Matador is optimistic that it will generate significant free cash flow again in 2025 (see Slide O).
2024 Midstream Achievements
“Matador’s midstream team also made significant strides in 2024. As mentioned above, Matador contributed Pronto to San Mateo in December 2024, including its interest in Pronto’s existing processing plant (the ‘Marlan Plant’) with a designed inlet capacity of 60 million cubic feet per day of natural gas and the Marlan Plant expansion that adds an additional plant with a designed inlet capacity of 200 million cubic feet of natural gas per day (see Slide P). In addition to the financial benefits mentioned above, this transaction also provides increased flow assurance for Matador’s production in Lea County, New Mexico and accelerates filling up the Marlan Plant to capacity. Furthermore, the construction of Pronto’s new Marlan Plant expansion remains on time and on budget and is expected to be online in the second quarter of 2025 (see Slide Q).
2025 Outlook: Continued Record Results, Execution and Efficiencies
“While we celebrate our 2024 results and accomplishments, Matador remains focused on its continued growth, profitability and increased efficiencies going forward in 2025. Accordingly, the Matador team fully expects to produce record results again in 2025. Matador aims at increasing its average daily BOE production by 20% to an average of 205,000 BOE per day in full-year 2025, as compared to an average of 170,751 BOE per day in full-year 2024. Matador also expects to increase its yearly oil production by 22% in 2025 with average daily oil production of 122,000 barrels of oil per day in full-year 2025, as compared to an average of 99,808 barrels of oil per day in full-year 2024.
2025 Additional Natural Gas Opportunity
“Matador produced 496 million cubic feet of natural gas per day in 2024 but Matador’s 2025 plan remains flexible and its undeveloped acreage is sufficiently ‘gassy’ so that Matador can adjust and produce more natural gas if market conditions warrant a modification. As of December 31, 2024, Matador has 1.5 trillion cubic feet of natural gas reserves, primarily in the Delaware Basin (see Slide H).
“Significantly, Matador also retained its operating rights in the Cotton Valley in Northeast Louisiana, which we refer to as our ‘gas bank’ and is 100% held-by-production (see Slide R). As of December 31, 2024, the expected natural gas production from Matador’s Cotton Valley inventory is not included in its reserve report because Matador does not currently plan to drill the Cotton Valley formation in the near future unless natural gas prices improve and stabilize. Nevertheless, Matador’s reservoir engineers consider the Cotton Valley to be a proven formation.
“Matador estimates that it has 37 net horizontal locations in the Cotton Valley, which Matador’s reservoir engineers have estimated to be capable of producing up to 200 to 300 billion cubic feet of natural gas. Additionally, Matador anticipates that these operated Cotton Valley locations would have extended lateral lengths of approximately two miles, which would improve costs and provide other efficiencies. Furthermore, this Cotton Valley natural gas would have the benefit of using the same midstream infrastructure that serves the Haynesville Shale, including transportation to many of the Liquified Natural Gas (‘LNG’) terminals along the Gulf Coast.
2025 Midstream Opportunities and Flow Assurance
“Matador is pleased to report its midstream business remains a critical part of its success and is expected to continue providing value to Matador’s shareholders in 2025 (see Slide S). All of San Mateo’s three-pipe (oil, water and natural gas) systems work together to build flow assurance for Matador and other customers. Being aligned with Matador provides San Mateo the unique perspective that allows it to provide flow assurance with a producer mindset. This producer mindset has been recognized by San Mateo’s third-party customers as many of these producers are repeat customers and continue to expand their relationship with San Mateo. San Mateo expects to achieve Adjusted EBITDA of $285 million in 2025, which is an increase of 13% as compared to Adjusted EBITDA of $253.2 million in 2024.
“From an initial start in February 2017, San Mateo has grown to operate approximately 590 miles of oil, natural gas and water pipelines, 520 million cubic feet per day of designed natural gas processing capacity and 16 saltwater disposal wells with approximately 475,000 barrels per day of designed produced water disposal capacity. San Mateo anticipates its processing capacity will increase to 720 million cubic feet per day with the completion of the Marlan Plant expansion early in the second quarter of 2025.
Closing Thoughts
“While each year brings its own challenges, we like our chances and opportunities going forward. In fact, members of Matador’s senior management have made 30 separate purchases of Matador stock since 2021, and none of Matador’s senior management group have ever sold a single Matador share (see Slide T). Perhaps even more meaningful as an expression of confidence is the fact that Matador has over 95% participation (including field personnel) in its Employee Stock Purchase Plan (‘ESPP’). We also look forward to discussing these results and opportunities and answering your questions at our upcoming conference call tomorrow morning.”
Highlights
Fourth Quarter 2024 Operational and Financial Highlights
(for comparisons to prior year, please see the remainder of this press release)
- Record quarterly average production of 201,116 BOE per day (118,440 barrels of oil per day)
- Net cash provided by operating activities of $575.0 million
- Adjusted free cash flow of $415.5 million
- Net income of $214.5 million, or $1.71 per diluted common share
- Adjusted net income of $229.9 million, or $1.83 per diluted common share
- Adjusted EBITDA of $640.9 million
- San Mateo net income of $47.8 million
- San Mateo Adjusted EBITDA of $68.5 million
Full Year 2024 Operational and Financial Highlights
(for comparisons to prior year, please see the remainder of this press release)
- Record annual average production of 170,751 BOE per day (99,808 barrels of oil per day)
- Net cash provided by operating activities of $2.25 billion
- Adjusted free cash flow of $807.3 million
- Net income of $885.3 million, or $7.14 per diluted common share
- Adjusted net income of $928.0 million, or $7.48 per diluted common share
- Adjusted EBITDA of $2.30 billion
- San Mateo net income of $175.6 million
- San Mateo Adjusted EBITDA of $253.2 million
2025 Guidance Highlights
- Oil production guidance of 120,000 to 124,000 barrels per day
- Natural gas production guidance of 492.0 to 504.0 million cubic feet per day
- Total production guidance of 202,000 to 208,000 BOE per day
- Drilling, completing and equipping capital expenditures of $1.28 to $1.47 billion
- Midstream capital expenditures of $120 to $180 million
Note: 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, adjusted free cash flow and PV-10 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
Record Fourth Quarter 2024 Oil, Natural Gas and Total Oil Equivalent Production
Matador’s average daily oil and natural gas production was 201,116 BOE per day in the fourth quarter of 2024, which was the highest in Matador’s history as noted above and was a 2% increase as compared to the midpoint of Matador’s expected fourth quarter production guidance of 198,000 BOE per day. The primary drivers behind this outperformance were (i) increased production from new wells turned to sales in the third quarter of 2024 in Matador’s Rustler Breaks and Ranger asset areas and (ii) higher-than-expected production from non-operated assets. Production from the newly acquired Ameredev properties was 23,200 BOE per day, which was better than Matador’s initial expectations despite additional shut-in volumes from accelerated offset completions.
|
Production |
Q4 2024 Average Daily Volume |
Q4 2024 Guidance Range (1) |
Difference (2) |
Sequential (3) |
YoY (4) |
|
Total, BOE per day |
201,116 |
197,000 to 199,000 |
+2% Better than Guidance |
+17% |
+30% |
|
Oil, Bbl per day |
118,440 |
118,500 to 119,500 |
<-1% Less than Guidance |
+18% |
+34% |
|
Natural Gas, MMcf per day |
496.1 |
472.0 to 476.0 |
+5% Better than Guidance |
+16% |
+26% |
|
(1) Production range previously projected, as provided on October 22, 2024. |
|
(2) As compared to midpoint of guidance provided on October 22, 2024. |
|
(3) Represents sequential percentage change from the third quarter of 2024. |
|
(4) Represents year-over-year percentage change from the fourth quarter of 2023. |
Fourth Quarter 2024 Realized Commodity Prices
The following table summarizes Matador’s realized commodity prices during the fourth quarter of 2024, as compared to the third quarter of 2024 and the fourth quarter of 2023.
|
|
Sequential (Q4 2024 vs. Q3 2024) |
|
YoY (Q4 2024 vs. Q4 2023) |
||||||||
|
Realized Commodity Prices |
Q4 2024 |
|
Q3 2024 |
|
Sequential Change(1) |
|
Q4 2024 |
|
Q4 2023 |
|
YoY Change(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Prices, per Bbl |
$70.66 |
|
$75.67 |
|
Down 7% |
|
$70.66 |
|
$79.00 |
|
Down 11% |
|
Natural Gas Prices, per Mcf |
$2.72 |
|
$1.83 |
|
Up 49% |
|
$2.72 |
|
$3.01 |
|
Down 10% |
|
(1) Fourth quarter 2024 as compared to third quarter 2024. |
|
(2) Fourth quarter 2024 as compared to fourth quarter 2023. |
Fourth Quarter 2024 Operating Expenses
Matador expected increased lease operating expenses in the fourth quarter of 2024 as a result of closing the Ameredev acquisition in September 2024 and continued integration of the acquired assets. However, Matador was able to offset certain of these anticipated expense increases through savings from a range of improvements relating to the wells acquired in the Ameredev transaction, including field supervision expenses, chemical usage and reduction in produced water disposal costs. Notably, in the fourth quarter of 2024, Matador recycled approximately 1.2 million barrels of water during fracturing operations on the 11 new Firethorn and Pimento wells that were acquired as part of the Ameredev acquisition. These actions to offset the expected increase in lease operating expenses resulted in total lease operating expenses of $5.37 per BOE for the fourth quarter of 2024, which is a 2% sequential decrease from $5.50 per BOE in the third quarter of 2024, and an 11% improvement from the midpoint of Matador’s expected fourth quarter 2024 guidance range of $5.75 to $6.25 per BOE.
Matador’s general and administrative (“G&A”) expenses increased 22% sequentially from $1.82 per BOE in the third quarter of 2024 to $2.22 per BOE in the fourth quarter of 2024. This increase is due in part to the value of employee stock awards that are settled in cash, which are remeasured at each quarterly reporting period according to accounting rules. These cash-settled stock award amounts increased as Matador’s share price increased 14% from $49.42 at the end of the third quarter of 2024 to $56.26 at end of the fourth quarter of 2024. Matador’s full year 2024 G&A expenses decreased 11% from $2.29 per BOE in 2023 to $2.04 per BOE in 2024.
During the fourth quarter of 2024, Matador’s plant and other midstream services operating expenses, which include the costs to operate San Mateo’s and Pronto’s assets, were $2.75 per BOE, consistent with $2.77 per BOE in the third quarter of 2024. The fourth quarter 2024 plant and other midstream services operating expenses were also consistent with Matador’s expected fourth quarter 2024 range of $2.50 to $3.00 per BOE.
Fourth Quarter 2024 Capital Expenditures
For the fourth quarter of 2024, Matador’s capital expenditures for drilling, completing and equipping wells (“D/C/E capital expenditures”) were $325.5 million and midstream capital expenditures were $65.2 million. D/C/E capital expenditures during the fourth quarter of 2024 were higher than expected, but full-year 2024 D/C/E capital expenditures of $1.32 billion were within Matador’s expected range of $1.15 billion to $1.35 billion. D/C/E capital expenditures during the fourth quarter of 2024 were higher than expected due to costs associated with the acceleration of capital expenditures for certain non-operated properties and facility upgrades related to the Ameredev properties. These Ameredev facility upgrades contributed to the lower-than-expected lease operating expenses noted above.
Midstream capital expenditures during the fourth quarter of 2024 were higher than expected due to acceleration of costs associated with the Marlan Plant expansion, but full-year 2024 midstream capital expenditures of $238.7 million were still within Matador’s expected annual range of $200 million to $250 million. The midstream capital expenditures during the fourth quarter of 2024 included payments related to the expansion of the Marlan Plant until the closing of the Pronto Transaction on December 18, 2024.
Midstrea
Contacts
Mac Schmitz
Senior Vice President – Investor Relations
(972) 371-5225
