Matador Resources Company Reports First Quarter 2024 Financial and Operating Results
Full-Year 2024 Guidance Update
Effective
Management Summary Comments
Better-Than-Expected Production and Cost Savings
“During the first quarter of 2024, Matador’s total oil and natural gas production averaged 149,760 barrels of oil and natural gas equivalent (‘BOE’) per day, which was 3% better than our announced guidance of an average of 145,750 BOE per day for the quarter (see Slide C). Matador’s average oil production of 84,777 barrels of oil per day during the first quarter of 2024 was 2% better than our announced guidance average of 83,500 barrels of oil per day for the quarter. This outperformance was primarily due to continued better-than-expected production from the wells in our Stateline asset area. We are pleased that, based upon this outperformance, we now expect full-year production for 2024 at the high end of our previously announced average production guidance for oil of 91,000 to 95,000 barrels of oil per day, natural gas of 370 to 386 million cubic feet of natural gas per day and total average 2024 production of 153,000 to 159,000 BOE per day.
“The third-party midstream force majeure and maintenance issues Matador experienced during the first quarter of 2024 were largely resolved by the beginning of the second quarter of 2024. Matador was pleased that the operated cryogenic natural gas processing plants owned by
“Notably, we achieved these better-than-expected production results while also reducing costs and increasing efficiencies. Matador’s drilling, completing and equipping (‘D/C/E’) capital expenditures for the first quarter of 2024 were approximately
Continued Operational Innovation and Midstream Execution
“As anticipated, we are also pleased to report during the first quarter of 2024 that the natural gas pipeline connections between Pronto and San Mateo and between Pronto and our Advance acreage were completed on time and on budget (see Slide D). Following the completion of these connections, Pronto and San Mateo now have a combined 595 miles of a three-stream pipeline system, including the midstream assets we acquired in the Advance acquisition. These connections not only help resolve the third-party midstream constraints we experienced in the first quarter of 2024 but also will be important as we gather and process the natural gas from our Dagger
“Planned construction of the expansion of Pronto’s Marlan cryogenic natural gas processing plant currently remains on time and on budget (see Slide D). The foundation work for the expansion has already started, and we expect to begin installation of structural steel and pipe racks during the second quarter of 2024. Matador continues to look forward to this expansion of the Marlan processing plant being completed during the first half of 2025. Once expanded, the Marlan processing plant will serve Matador’s growing operations as well as meet the needs of third-party producers as they expand their operations in northern Lea and Eddy Counties,
“Matador achieved approximately
Strengthened Balance Sheet
“Matador took significant strides during and shortly after the first quarter of 2024 to strengthen its balance sheet and to position itself to take advantage of both operational and strategic opportunities. First, on
“Second, on
“Third, on
“These successful transactions were made possible because of the years of teamwork and coordinated execution by our Board, staff, shareholders, bondholders, banking partners and other friends. We express our appreciation for all their extra effort and support that has put Matador in a position of operational and financial strength as we look forward to the future.”
First Quarter 2024 Matador Operational and Financial Highlights
(for comparisons to prior periods, please see the remainder of this press release)
- Average production of 149,760 BOE per day (84,777 barrels of oil per day)
-
Net cash provided by operating activities of
$468.6 million -
Adjusted free cash flow of
$28.6 million -
Net income of
$193.7 million , or$1.61 per diluted common share -
Adjusted net income of
$206.2 million , or adjusted earnings of$1.71 per diluted common share -
Adjusted EBITDA of
$505.4 million -
San Mateo net income of
$39.7 million -
San Mateo Adjusted EBITDA of
$58.2 million -
D/C/E capital expenditures of$350.7 million -
Midstream capital expenditures of
$79.3 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
Operational and Financial Update
First Quarter 2024 Oil, Natural Gas and Total Oil Equivalent Production Above Expectations
While Matador’s average daily oil and natural gas production was 149,760 BOE per day in the first quarter of 2024, which was a 3% sequential production decrease from 154,261 BOE in the fourth quarter of 2023, Matador is pleased to report a 40% year-over-year increase from 106,654 BOE per day in the first quarter of 2023. Matador’s year-over-year increase is due not only to the Advance acquisition that closed in
|
Production |
Q1 2024
|
Q1 2024
|
Difference(2) |
Sequential(3) |
YoY(4) |
|
Total, BOE per day |
149,760 |
145,000 to 146,500 |
+3% Better than Guidance |
-3% |
+40% |
|
Oil, Bbl per day |
84,777 |
83,000 to 84,000 |
+2% Better than Guidance |
-4% |
+44% |
|
Natural Gas, MMcf per day |
389.9 |
372.0 to 375.0 |
+4% Better than Guidance |
-1% |
+36% |
|
(1) Production range previously projected, as provided on |
|
(2) As compared to midpoint of guidance provided on |
|
(3) Represents sequential percentage change from the fourth quarter of 2023. |
|
(4) Represents year-over-year percentage change from the first quarter of 2023. |
First Quarter 2024 Realized Commodity Prices
The following table summarizes Matador’s realized commodity prices during the first quarter of 2024, as compared to the fourth quarter of 2023 and the first quarter of 2023.
|
|
Sequential (Q1 2024 vs. Q4 2023) |
|
YoY (Q1 2024 vs. Q1 2023) |
||||||||
|
Realized Commodity Prices |
Q1 2024 |
|
Q4 2023 |
|
Sequential Change(1) |
|
Q1 2024 |
|
Q1 2023 |
|
YoY Change(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Prices, per Bbl |
|
|
|
|
-2% |
|
|
|
|
|
+2% |
|
Natural Gas Prices, per Mcf |
|
|
|
|
-2% |
|
|
|
|
|
-25% |
|
(1) First quarter 2024 as compared to fourth quarter 2023. |
|
(2) First quarter 2024 as compared to first quarter 2023. |
First Quarter 2024 Operating Expenses
Matador’s lease operating expenses increased 11% sequentially from
Matador’s general and administrative (“G&A”) expenses increased 5% sequentially from
During the first quarter of 2024, Matador’s plant and other midstream operating expenses, which include the costs to operate San Mateo’s and Pronto’s assets, were
First Quarter 2024 Capital Expenditures
Matador’s capital expenditures were
|
Q1 2024 Capital Expenditures ($ millions) |
Actual |
Guidance(1) |
Difference vs. Guidance(2) |
|
|
|
|
-9% |
|
Midstream |
|
|
-1% |
|
(1) Midpoint of guidance as provided on |
|
(2) As compared to the midpoint of guidance provided on |
Midstream Update
San Mateo’s operations in the first 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
Operationally, San Mateo’s natural gas gathering volumes in the first quarter of 2024 were at an all-time quarterly high. The table below sets forth San Mateo’s throughput volumes, as compared to the fourth quarter of 2023 and the first quarter of 2024, in which all volume categories experienced significant increases in throughput volumes year-over-year, ranging from 13% to 27%.
|
|
Sequential (Q1 2024 vs. Q4 2023) |
|
YoY (Q1 2024 vs. Q1 2023) |
||||||||
|
San Mateo Throughput Volumes |
Q1 2024 |
|
Q4 2023 |
|
Change(1) |
|
Q1 2024 |
|
Q1 2023 |
|
Change(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas gathering, MMcf per day |
425 |
|
416 |
|
+2% |
|
425 |
|
334 |
|
+27% |
|
Natural gas processing, MMcf per day |
399 |
|
413 |
|
(3%) |
|
399 |
|
353 |
|
+13% |
|
Oil gathering and transportation, Bbl per day |
48,800 |
|
50,900 |
|
(4%) |
|
48,800 |
|
41,900 |
|
+16% |
|
Produced water handling, Bbl per day |
435,200 |
|
442,000 |
|
(2%) |
|
435,200 |
|
373,000 |
|
+17% |
|
(1) First quarter 2024 as compared to fourth quarter 2023. |
|
(2) First quarter 2024 as compared to first quarter 2023. |
Second Quarter 2024 Estimates
Second 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 149,760 BOE per day in the first quarter of 2024 to grow by 5% to a midpoint of approximately 157,250 BOE per day in the second quarter of 2024.
|
|
Q1 and Q2 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 |
|
Q1 2024 |
149,760 |
84,777 |
389.9 |
57% |
|
Q2 2024E |
156,500 to 158,000 |
92,500 to 93,500 |
384.0 to 387.0 |
59% |
Second Quarter 2024 Estimated Wells Turned to Sales
At
Second Quarter 2024 Estimated Capital Expenditures
Matador is currently operating eight drilling rigs in the
Second 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
Conference Call Information
The Company will host a live conference call on
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 is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in
For more information, visit
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 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 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; disruption from the Company’s acquisitions making it more difficult to maintain business and operational relationships; significant transaction costs associated with the Company’s acquisitions; the risk of litigation and/or regulatory actions related to the Company’s acquisitions; 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
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 |
|
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|
|
|
|
|
|
|
|||||
|
Net Production Volumes:(1) |
|
|
|
|
|
|
||||
|
Oil (MBbl)(2) |
|
7,715 |
|
|
8,157 |
|
|
|
5,305 |
|
|
Natural gas (Bcf)(3) |
|
35.5 |
|
|
36.2 |
|
|
|
25.8 |
|
|
Total oil equivalent (MBOE)(4) |
|
13,628 |
|
|
14,192 |
|
|
|
9,599 |
|
|
Average Daily Production Volumes:(1) |
|
|
|
|
|
|
||||
|
Oil (Bbl/d)(5) |
|
84,777 |
|
|
88,663 |
|
|
|
58,941 |
|
|
Natural gas (MMcf/d)(6) |
|
389.9 |
|
|
393.6 |
|
|
|
286.3 |
|
|
Total oil equivalent (BOE/d)(7) |
|
149,760 |
|
|
154,261 |
|
|
|
106,654 |
|
|
Average Sales Prices: |
|
|
|
|
|
|
||||
|
Oil, without realized derivatives (per Bbl) |
$ |
77.58 |
|
$ |
79.00 |
|
|
$ |
75.74 |
|
|
Oil, with realized derivatives (per Bbl) |
$ |
77.58 |
|
$ |
79.00 |
|
|
$ |
75.74 |
|
|
Natural gas, without realized derivatives (per Mcf)(8) |
$ |
2.96 |
|
$ |
3.01 |
|
|
$ |
3.93 |
|
|
Natural gas, with realized derivatives (per Mcf) |
$ |
2.97 |
|
$ |
2.92 |
|
|
$ |
4.07 |
|
|
Revenues (millions): |
|
|
|
|
|
|
||||
|
Oil and natural gas revenues |
$ |
703.5 |
|
$ |
753.2 |
|
|
$ |
502.9 |
|
|
Third-party midstream services revenues |
$ |
32.4 |
|
$ |
35.6 |
|
|
$ |
26.5 |
|
|
Realized gain (loss) on derivatives |
$ |
0.3 |
|
$ |
(3.1 |
) |
|
$ |
3.7 |
|
|
Operating Expenses (per BOE): |
|
|
|
|
|
|
||||
|
Production taxes, transportation and processing |
$ |
5.15 |
|
$ |
5.31 |
|
|
$ |
5.78 |
|
|
Lease operating |
$ |
5.60 |
|
$ |
5.06 |
|
|
$ |
4.63 |
|
|
Plant and other midstream services operating |
$ |
2.91 |
|
$ |
2.56 |
|
|
$ |
3.23 |
|
|
Depletion, depreciation and amortization |
$ |
15.58 |
|
$ |
15.51 |
|
|
$ |
13.16 |
|
|
General and administrative(9) |
$ |
2.18 |
|
$ |
2.08 |
|
|
$ |
2.34 |
|
|
Total(10) |
$ |
31.42 |
|
$ |
30.52 |
|
|
$ |
29.14 |
|
|
Other (millions): |
|
|
|
|
|
|
||||
|
Net sales of purchased natural gas(11) |
$ |
10.0 |
|
$ |
7.2 |
|
|
$ |
5.8 |
|
|
|
|
|
|
|
|
|
||||
|
Net income (millions)(12) |
$ |
193.7 |
|
$ |
254.5 |
|
|
$ |
163.1 |
|
|
Earnings per common share (diluted)(12) |
$ |
1.61 |
|
$ |
2.12 |
|
|
$ |
1.36 |
|
|
Adjusted net income (millions)(12)(13) |
$ |
206.2 |
|
$ |
238.4 |
|
|
$ |
180.0 |
|
|
Adjusted earnings per common share (diluted)(12)(14) |
$ |
1.71 |
|
$ |
1.99 |
|
|
$ |
1.50 |
|
|
Adjusted EBITDA (millions)(12)(15) |
$ |
505.4 |
|
$ |
552.8 |
|
|
$ |
365.2 |
|
|
Net cash provided by operating activities (millions)(16) |
$ |
468.6 |
|
$ |
618.3 |
|
|
$ |
339.5 |
|
|
Adjusted free cash flow (millions)(12)(17) |
$ |
28.6 |
|
$ |
180.5 |
|
|
$ |
57.2 |
|
|
|
|
|
|
|
|
|
||||
|
San Mateo net income (millions)(18) |
$ |
39.7 |
|
$ |
43.7 |
|
|
$ |
32.2 |
|
|
San Mateo Adjusted EBITDA (millions)(15)(18) |
$ |
58.2 |
|
$ |
61.6 |
|
|
$ |
48.7 |
|
|
San Mateo net cash provided by operating activities (millions)(18) |
$ |
54.0 |
|
$ |
45.5 |
|
|
$ |
53.6 |
|
|
San Mateo adjusted free cash flow (millions)(16)(17)(18) |
$ |
34.7 |
|
$ |
18.8 |
|
|
$ |
31.7 |
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
350.7 |
|
$ |
261.4 |
|
|
$ |
294.8 |
|
|
Midstream capital expenditures (millions)(19) |
$ |
79.3 |
|
$ |
86.2 |
|
|
$ |
8.7 |
|
|
(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 |
|
(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 |
|
(12) Attributable to |
|
(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. |
|
|
||||||||
|
(In thousands, except par value and share data) |
|
|
|
|
||||
|
ASSETS |
|
|
|
|
||||
|
Current assets |
|
|
|
|
||||
|
Cash |
$ |
23,208 |
|
|
$ |
52,662 |
|
|
|
Restricted cash |
|
51,118 |
|
|
|
53,636 |
|
|
|
Accounts receivable |
|
|
|
|
||||
|
Oil and natural gas revenues |
|
278,155 |
|
|
|
274,192 |
|
|
|
Joint interest billings |
|
207,540 |
|
|
|
163,660 |
|
|
|
Other |
|
42,778 |
|
|
|
35,102 |
|
|
|
Derivative instruments |
|
3,027 |
|
|
|
2,112 |
|
|
|
Lease and well equipment inventory |
|
39,927 |
|
|
|
41,808 |
|
|
|
Prepaid expenses and other current assets |
|
108,382 |
|
|
|
92,700 |
|
|
|
Total current assets |
|
754,135 |
|
|
|
715,872 |
|
|
|
Property and equipment, at cost |
|
|
|
|
||||
|
Oil and natural gas properties, full-cost method |
|
|
|
|
||||
|
Evaluated |
|
9,973,110 |
|
|
|
9,633,757 |
|
|
|
Unproved and unevaluated |
|
1,407,512 |
|
|
|
1,193,257 |
|
|
|
Midstream properties |
|
1,398,601 |
|
|
|
1,318,015 |
|
|
|
Other property and equipment |
|
40,901 |
|
|
|
40,375 |
|
|
|
Less accumulated depletion, depreciation and amortization |
|
(5,441,274 |
) |
|
|
(5,228,963 |
) |
|
|
Net property and equipment |
|
7,378,850 |
|
|
|
6,956,441 |
|
|
|
Other assets |
|
|
|
|
||||
|
Derivative instruments |
|
1,718 |
|
|
|
558 |
|
|
|
Other long-term assets |
|
92,626 |
|
|
|
54,125 |
|
|
|
Total other assets |
|
94,344 |
|
|
|
54,683 |
|
|
|
Total assets |
$ |
8,227,329 |
|
|
$ |
7,726,996 |
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
|
Current liabilities |
|
|
|
|
||||
|
Accounts payable |
$ |
121,823 |
|
|
$ |
68,185 |
|
|
|
Accrued liabilities |
|
419,791 |
|
|
|
365,848 |
|
|
|
Royalties payable |
|
178,506 |
|
|
|
161,983 |
|
|
|
Amounts due to affiliates |
|
13,495 |
|
|
|
28,688 |
|
|
|
Advances from joint interest owners |
|
37,725 |
|
|
|
19,954 |
|
|
|
Other current liabilities |
|
80,001 |
|
|
|
40,617 |
|
|
|
Total current liabilities |
|
851,341 |
|
|
|
685,275 |
|
|
|
Long-term liabilities |
|
|
|
|
||||
|
Borrowings under Credit Agreement |
|
260,000 |
|
|
|
500,000 |
|
|
|
Borrowings under San Mateo Credit Facility |
|
526,000 |
|
|
|
522,000 |
|
|
|
Senior unsecured notes payable |
|
1,185,567 |
|
|
|
1,184,627 |
|
|
|
Asset retirement obligations |
|
90,361 |
|
|
|
87,485 |
|
|
|
Deferred income taxes |
|
625,682 |
|
|
|
581,439 |
|
|
|
Other long-term liabilities |
|
52,216 |
|
|
|
38,482 |
|
|
|
Total long-term liabilities |
|
2,739,826 |
|
|
|
2,914,033 |
|
|
|
Shareholders’ equity |
|
|
|
|
||||
|
Common stock - |
|
1,248 |
|
|
|
1,194 |
|
|
|
Additional paid-in capital |
|
2,472,681 |
|
|
|
2,133,172 |
|
|
|
Retained earnings |
|
1,946,412 |
|
|
|
1,776,541 |
|
|
|
|
|
(2,091 |
) |
|
|
(45 |
) |
|
|
|
|
4,418,250 |
|
|
|
3,910,862 |
|
|
|
Non-controlling interest in subsidiaries |
|
217,912 |
|
|
|
216,826 |
|
|
|
Total shareholders’ equity |
|
4,636,162 |
|
|
|
4,127,688 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
8,227,329 |
|
|
$ |
7,726,996 |
|
|
|
|
|
|
|
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED |
||||||||
|
(In thousands, except per share data) |
Three Months Ended
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
Revenues |
|
|
|
|
||||
|
Oil and natural gas revenues |
$ |
703,540 |
|
|
$ |
502,909 |
|
|
|
Third-party midstream services revenues |
|
32,357 |
|
|
|
26,511 |
|
|
|
Sales of purchased natural gas |
|
49,446 |
|
|
|
34,254 |
|
|
|
Realized gain on derivatives |
|
275 |
|
|
|
3,669 |
|
|
|
Unrealized gain (loss) on derivatives |
|
2,075 |
|
|
|
(7,067 |
) |
|
|
Total revenues |
|
787,693 |
|
|
|
560,276 |
|
|
|
Expenses |
|
|
|
|
||||
|
Production taxes, transportation and processing |
|
70,153 |
|
|
|
55,486 |
|
|
|
Lease operating |
|
76,295 |
|
|
|
44,407 |
|
|
|
Plant and other midstream services operating |
|
39,623 |
|
|
|
31,045 |
|
|
|
Purchased natural gas |
|
39,432 |
|
|
|
28,448 |
|
|
|
Depletion, depreciation and amortization |
|
212,311 |
|
|
|
126,325 |
|
|
|
Accretion of asset retirement obligations |
|
1,273 |
|
|
|
699 |
|
|
|
General and administrative |
|
29,653 |
|
|
|
22,433 |
|
|
|
Total expenses |
|
468,740 |
|
|
|
308,843 |
|
|
|
Operating income |
|
318,953 |
|
|
|
251,433 |
|
|
|
Other income (expense) |
|
|
|
|
||||
|
Interest expense |
|
(39,562 |
) |
|
|
(16,176 |
) |
|
|
Other income |
|
577 |
|
|
|
339 |
|
|
|
Total other expense |
|
(38,985 |
) |
|
|
(15,837 |
) |
|
|
Income before income taxes |
|
279,968 |
|
|
|
235,596 |
|
|
|
Income tax provision (benefit) |
|
|
|
|
||||
|
Current |
|
17,272 |
|
|
|
4,929 |
|
|
|
Deferred |
|
49,506 |
|
|
|
51,743 |
|
|
|
Total income tax provision |
|
66,778 |
|
|
|
56,672 |
|
|
|
Net income |
|
213,190 |
|
|
|
178,924 |
|
|
|
Net income attributable to non-controlling interest in subsidiaries |
|
(19,461 |
) |
|
|
(15,794 |
) |
|
|
Net income attributable to |
$ |
193,729 |
|
|
$ |
163,130 |
|
|
|
Earnings per common share |
|
|
|
|
||||
|
Basic |
$ |
1.62 |
|
|
$ |
1.37 |
|
|
|
Diluted |
$ |
1.61 |
|
|
$ |
1.36 |
|
|
|
Weighted average common shares outstanding |
|
|
|
|
||||
|
Basic |
|
119,721 |
|
|
|
119,034 |
|
|
|
Diluted |
|
120,253 |
|
|
|
119,702 |
|
|
|
|
|
|
|
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED |
||||||||
|
(In thousands) |
Three Months Ended
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
Operating activities |
|
|
|
|
||||
|
Net income |
$ |
213,190 |
|
|
$ |
178,924 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
||||
|
Unrealized (gain) loss on derivatives |
|
(2,075 |
) |
|
|
7,067 |
|
|
|
Depletion, depreciation and amortization |
|
212,311 |
|
|
|
126,325 |
|
|
|
Accretion of asset retirement obligations |
|
1,273 |
|
|
|
699 |
|
|
|
Stock-based compensation expense |
|
2,838 |
|
|
|
2,290 |
|
|
|
Deferred income tax provision |
|
49,506 |
|
|
|
51,743 |
|
|
|
Amortization of debt issuance cost and other debt-related costs |
|
4,644 |
|
|
|
838 |
|
|
|
Other non-cash changes |
|
(333 |
) |
|
|
— |
|
|
|
Changes in operating assets and liabilities |
|
|
|
|
||||
|
Accounts receivable |
|
(55,519 |
) |
|
|
40,906 |
|
|
|
Lease and well equipment inventory |
|
(2,044 |
) |
|
|
(4,423 |
) |
|
|
Prepaid expenses and other current assets |
|
(1,474 |
) |
|
|
(16,517 |
) |
|
|
Other long-term assets |
|
254 |
|
|
|
35 |
|
|
|
Accounts payable, accrued liabilities and other current liabilities |
|
(4,814 |
) |
|
|
(39,871 |
) |
|
|
Royalties payable |
|
16,522 |
|
|
|
376 |
|
|
|
Advances from joint interest owners |
|
17,771 |
|
|
|
(9,805 |
) |
|
|
Income taxes payable |
|
16,025 |
|
|
|
723 |
|
|
|
Other long-term liabilities |
|
487 |
|
|
|
190 |
|
|
|
Net cash provided by operating activities |
|
468,562 |
|
|
|
339,500 |
|
|
|
Investing activities |
|
|
|
|
||||
|
Drilling, completion and equipping capital expenditures |
|
(236,639 |
) |
|
|
(224,144 |
) |
|
|
Acquisition of oil and natural gas properties |
|
(202,264 |
) |
|
|
(103,863 |
) |
|
|
Midstream capital expenditures |
|
(105,086 |
) |
|
|
(14,141 |
) |
|
|
Expenditures for other property and equipment |
|
(226 |
) |
|
|
(1,769 |
) |
|
|
Proceeds from sale of assets |
|
900 |
|
|
|
451 |
|
|
|
Net cash used in investing activities |
|
(543,315 |
) |
|
|
(343,466 |
) |
|
|
Financing activities |
|
|
|
|
||||
|
Repayments of borrowings under Credit Agreement |
|
(930,000 |
) |
|
|
— |
|
|
|
Borrowings under Credit Agreement |
|
690,000 |
|
|
|
— |
|
|
|
Repayments of borrowings under San Mateo Credit Facility |
|
(65,000 |
) |
|
|
(55,000 |
) |
|
|
Borrowings under San Mateo Credit Facility |
|
69,000 |
|
|
|
65,000 |
|
|
|
Cost to amend credit facilities |
|
(11,292 |
) |
|
|
(8,645 |
) |
|
|
Proceeds from issuance of common stock |
|
344,663 |
|
|
|
— |
|
|
|
Cost to issue equity |
|
(53 |
) |
|
|
— |
|
|
|
Dividends paid |
|
(23,858 |
) |
|
|
(17,768 |
) |
|
|
Contributions related to formation of San Mateo |
|
1,500 |
|
|
|
14,700 |
|
|
|
Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries |
|
7,350 |
|
|
|
— |
|
|
|
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries |
|
(25,725 |
) |
|
|
(19,110 |
) |
|
|
Taxes paid related to net share settlement of stock-based compensation |
|
(13,515 |
) |
|
|
(18,909 |
) |
|
|
Other |
|
(289 |
) |
|
|
(204 |
) |
|
|
Net cash provided by (used in) financing activities |
|
42,781 |
|
|
|
(39,936 |
) |
|
|
Change in cash and restricted cash |
|
(31,972 |
) |
|
|
(43,902 |
) |
|
|
Cash and restricted cash at beginning of period |
|
106,298 |
|
|
|
547,330 |
|
|
|
Cash and restricted cash at end of period |
$ |
74,326 |
|
|
$ |
503,428 |
|
|
|
|
|
|
|
|
||||
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
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 –
|
|
Three Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
Unaudited Adjusted EBITDA Reconciliation to Net Income: |
|
|
|
|
|
|
||||||
|
Net income attributable to |
$ |
193,729 |
|
|
$ |
254,539 |
|
|
$ |
163,130 |
|
|
|
Net income attributable to non-controlling interest in subsidiaries |
|
19,461 |
|
|
|
21,402 |
|
|
|
15,794 |
|
|
|
Net income |
|
213,190 |
|
|
|
275,941 |
|
|
|
178,924 |
|
|
|
Interest expense |
|
39,562 |
|
|
|
35,707 |
|
|
|
16,176 |
|
|
|
Total income tax provision |
|
66,778 |
|
|
|
57,459 |
|
|
|
56,672 |
|
|
|
Depletion, depreciation and amortization |
|
212,311 |
|
|
|
220,055 |
|
|
|
126,325 |
|
|
|
Accretion of asset retirement obligations |
|
1,273 |
|
|
|
1,234 |
|
|
|
699 |
|
|
|
Unrealized (gain) loss on derivatives |
|
(2,075 |
) |
|
|
(6,983 |
) |
|
|
7,067 |
|
|
|
Non-cash stock-based compensation expense |
|
2,838 |
|
|
|
2,884 |
|
|
|
2,290 |
|
|
|
(Income) expense related to contingent consideration and other |
|
— |
|
|
|
(3,298 |
) |
|
|
942 |
|
|
|
Consolidated Adjusted EBITDA |
|
533,877 |
|
|
|
582,999 |
|
|
|
389,095 |
|
|
|
Adjusted EBITDA attributable to non-controlling interest in subsidiaries |
|
(28,507 |
) |
|
|
(30,202 |
) |
|
|
(23,871 |
) |
|
|
Adjusted EBITDA attributable to |
$ |
505,370 |
|
|
$ |
552,797 |
|
|
$ |
365,224 |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities: |
|
|
|
|
|
|
||||||
|
Net cash provided by operating activities |
$ |
468,562 |
|
|
$ |
618,347 |
|
|
$ |
339,500 |
|
|
|
Net change in operating assets and liabilities |
|
12,792 |
|
|
|
(77,946 |
) |
|
|
28,386 |
|
|
|
Interest expense, net of non-cash portion |
|
34,918 |
|
|
|
33,656 |
|
|
|
15,338 |
|
|
|
Current income tax provision |
|
17,272 |
|
|
|
4,964 |
|
|
|
4,929 |
|
|
|
Other non-cash and non-recurring expense |
|
333 |
|
|
|
3,978 |
|
|
|
942 |
|
|
|
Adjusted EBITDA attributable to non-controlling interest in subsidiaries |
|
(28,507 |
) |
|
|
(30,202 |
) |
|
|
(23,871 |
) |
|
|
Adjusted EBITDA attributable to |
$ |
505,370 |
|
|
$ |
552,797 |
|
|
$ |
365,224 |
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA – San Mateo (100%)
|
|
Three Months Ended |
|
|||||||
|
|
|
|
|
|
|
|
|||
|
(In thousands) |
2024 |
|
2023 |
|
2023 |
|
|||
|
Unaudited Adjusted EBITDA Reconciliation to Net Income: |
|
|
|
|
|
|
|||
|
Net income |
$ |
39,718 |
|
$ |
43,682 |
|
$ |
32,232 |
|
|
Depletion, depreciation and amortization |
|
9,170 |
|
|
9,179 |
|
|
8,457 |
|
|
Interest expense |
|
9,193 |
|
|
8,683 |
|
|
7,948 |
|
|
Accretion of asset retirement obligations |
|
97 |
|
|
92 |
|
|
80 |
|
|
Adjusted EBITDA |
$ |
58,178 |
|
$ |
61,636 |
|
$ |
48,717 |
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|||||||||
|
|
|
|
|
|
|
|
|||||
|
(In thousands) |
|
2024 |
|
|
|
2023 |
|
|
2023 |
|
|
|
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities: |
|
|
|
|
|
|
|||||
|
Net cash provided by operating activities |
$ |
54,005 |
|
|
$ |
45,463 |
|
$ |
53,635 |
|
|
|
Net change in operating assets and liabilities |
|
(4,746 |
) |
|
|
7,757 |
|
|
(12,617 |
) |
|
|
Interest expense, net of non-cash portion |
|
8,919 |
|
|
|
8,416 |
|
|
7,699 |
|
|
|
Adjusted EBITDA |
$ |
58,178 |
|
|
$ |
61,636 |
|
$ |
48,717 |
|
|
|
|
|
|
|
|
|
|
|||||
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
|
|
Three Months Ended |
|
|||||||||
|
|
|
|
|
|
|
|
|||||
|
|
2024 |
|
2023 |
|
2023 |
|
|||||
|
(In thousands, except per share data) |
|
|
|
|
|
|
|||||
|
Unaudited Adjusted Net Income and Adjusted Earnings Per Share Reconciliation to Net Income: |
|
|
|
|
|
|
|||||
|
Net income attributable to |
$ |
193,729 |
|
|
$ |
254,539 |
|
|
$ |
163,130 |
|
|
Total income tax provision |
|
66,778 |
|
|
|
57,459 |
|
|
|
56,672 |
|
|
Income attributable to |
|
260,507 |
|
|
|
311,998 |
|
|
|
219,802 |
|
|
Less non-recurring and unrealized charges to income before taxes: |
|
|
|
|
|
|
|||||
|
Unrealized (gain) loss on derivatives |
|
(2,075 |
) |
|
|
(6,983 |
) |
|
|
7,067 |
|
|
Expense (income) related to contingent consideration and other |
|
2,580 |
|
|
|
(3,298 |
) |
|
|
942 |
|
|
Adjusted income attributable to |
|
261,012 |
|
|
|
301,717 |
|
|
|
227,811 |
|
|
Income tax expense(1) |
|
54,813 |
|
|
|
63,361 |
|
|
|
47,840 |
|
|
Adjusted net income attributable to |
$ |
206,199 |
|
|
$ |
238,356 |
|
|
$ |
179,971 |
|
|
|
|
|
|
|
|
|
|||||
|
Weighted average shares outstanding - basic |
|
119,721 |
|
|
|
119,192 |
|
|
|
119,034 |
|
|
Dilutive effect of options and restricted stock units |
|
532 |
|
|
|
779 |
|
|
|
668 |
|
|
Weighted average common shares outstanding - diluted |
|
120,253 |
|
|
|
119,971 |
|
|
|
119,702 |
|
|
Adjusted earnings per share attributable to shareholders (non-GAAP) |
|
|
|
|
|
|
|||||
|
Basic |
$ |
1.72 |
|
|
$ |
2.00 |
|
|
$ |
1.51 |
|
|
Diluted |
$ |
1.71 |
|
|
$ |
1.99 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|||||
|
(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
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 -
|
|
Three Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
Net cash provided by operating activities |
$ |
468,562 |
|
|
$ |
618,347 |
|
|
$ |
339,500 |
|
|
|
Net change in operating assets and liabilities |
|
12,792 |
|
|
|
(77,946 |
) |
|
|
28,386 |
|
|
|
San Mateo discretionary cash flow attributable to non-controlling interest in subsidiaries(1) |
|
(24,137 |
) |
|
|
(26,078 |
) |
|
|
(20,099 |
) |
|
|
Performance incentives received from Five Point |
|
1,500 |
|
|
|
14,500 |
|
|
|
14,700 |
|
|
|
Total discretionary cash flow |
|
458,717 |
|
|
|
528,823 |
|
|
|
362,487 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Drilling, completion and equipping capital expenditures |
|
236,639 |
|
|
|
337,332 |
|
|
|
224,144 |
|
|
|
Midstream capital expenditures |
|
105,086 |
|
|
|
90,110 |
|
|
|
14,141 |
|
|
|
Expenditures for other property and equipment |
|
226 |
|
|
|
672 |
|
|
|
1,769 |
|
|
|
Net change in capital accruals |
|
95,342 |
|
|
|
(62,957 |
) |
|
|
69,758 |
|
|
|
San Mateo accrual-based capital expenditures related to non-controlling interest in subsidiaries(2) |
|
(7,138 |
) |
|
|
(16,846 |
) |
|
|
(4,567 |
) |
|
|
Total accrual-based capital expenditures(3) |
|
430,155 |
|
|
|
348,311 |
|
|
|
305,245 |
|
|
|
Adjusted free cash flow |
$ |
28,562 |
|
|
$ |
180,512 |
|
|
$ |
57,242 |
|
|
|
|
|
|
|
|
|
|
||||||
|
(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 |
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
Net cash provided by San Mateo operating activities |
$ |
54,005 |
|
|
$ |
45,463 |
|
|
$ |
53,635 |
|
|
|
Net change in San Mateo operating assets and liabilities |
|
(4,746 |
) |
|
|
7,757 |
|
|
|
(12,617 |
) |
|
|
Total San Mateo discretionary cash flow |
|
49,259 |
|
|
|
53,220 |
|
|
|
41,018 |
|
|
|
|
|
|
|
|
|
|
||||||
|
San Mateo capital expenditures |
|
23,211 |
|
|
|
39,633 |
|
|
|
12,376 |
|
|
|
Net change in San Mateo capital accruals |
|
(8,644 |
) |
|
|
(5,253 |
) |
|
|
(3,056 |
) |
|
|
San Mateo accrual-based capital expenditures |
|
14,567 |
|
|
|
34,380 |
|
|
|
9,320 |
|
|
|
San Mateo adjusted free cash flow |
$ |
34,692 |
|
|
$ |
18,840 |
|
|
$ |
31,698 |
|
|
|
|
|
|
|
|
|
|
||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240423093451/en/
Senior Vice President - Investor Relations
(972) 371-5225
investors@matadorresources.com
Source: