For information overload check out the slides that Matador spoke from on today's Q3 conference call.
They promise free cash flow from operations going forward. If they keep that promise there is a lot of upside for us.
The stock is trading for less than 2X 2020 operating cash flow per share, which is now locked in at over $4.00/share by hedges + a nice revenue boost from rising gas prices.
Production will be up ~9% from Q3 to Q4 with an exit rate of more than 80,000 Boepd.
I have updated my forecast/valuation model for MTDR and posted it will be posted to the EPG website later today. My valuation increases by $1 to $15.
TipRanks: "In the last 3 months, 7 ranked analysts set 12-month price targets for MTDR that range from $11 to $15. The average price target among the analysts is $12.40." < Only 3 of the 7 have been update for Q3 results and fresh guidance.
Other companies releasing Q3 results today: CXO, OVV, PE, AR and AM. < If AR has a good report it will be added to the Sweet 16. CXO and PE are being dropped from the S-16 because they are merging into COP and PXD.
Matador Resources (MTDR) Update - Oct 28
Matador Resources (MTDR) Update - Oct 28
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Matador Resources (MTDR) Update - Oct 28
Stifel's take:
Matador Resources Company (MTDR, $8.16, Buy; Target $15.00)
3Q Beats, FCF in View - Michael S. Scialla
We view the release as positive. The positives include: i) 3Q EBITDA beat on production and cash costs while capex was 16% below consensus; ii) the borrowing base on the credit facility was affirmed at $700MM; iii) well costs declined 10% from 2Q20 to $790/ft; iv) rates from 9 previously unreported Stateline wells were strong although 2 WC-B wells flowed 63% and 81% natural gas. The negatives include: i) Federal acreage exposure remains an overhang on the stock given the election uncertainty.
In summary, MTDR delivered another well-rounded beat and remains on track to generate positive FCF in 4Q20 and 2021 following the San Mateo Midstream expansion.
Matador Resources Company (MTDR, $8.16, Buy; Target $15.00)
3Q Beats, FCF in View - Michael S. Scialla
We view the release as positive. The positives include: i) 3Q EBITDA beat on production and cash costs while capex was 16% below consensus; ii) the borrowing base on the credit facility was affirmed at $700MM; iii) well costs declined 10% from 2Q20 to $790/ft; iv) rates from 9 previously unreported Stateline wells were strong although 2 WC-B wells flowed 63% and 81% natural gas. The negatives include: i) Federal acreage exposure remains an overhang on the stock given the election uncertainty.
In summary, MTDR delivered another well-rounded beat and remains on track to generate positive FCF in 4Q20 and 2021 following the San Mateo Midstream expansion.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Matador Resources (MTDR) Update - Oct 28
Note from Neil Dingmann at Truist: He rates it MTDR a BUY with a price target of $15.00
Matador reported higher than Truist Securities/Street estimated 3Q20 earnings along with
slightly increasing 2020 production guidance lowering 2020 CAPEX guidance driven by
better than expected production, prices, and costs. The company appears to not only have
reached an important upstream inflection point, but San Mateo appears equally as attractive
with the combination driving FCF in most quarters going forward even with today’s relatively
weak prices and continued production growth unlike many other E&Ps. Stateline results
continued to be as strong as the first four wells previously reported with a 24hr IP >45k
boepd for the first 13 wells.
On the operational front, plans remain for Matador to complete and turn to sales 5 gross operated wells in 4Q20, all 2-
mile laterals in Rustler Breaks. Matador operated 3 rigs in the Delaware during 3Q20 and expects to continue operating
these rigs throughout the remainder of 2020 and into 2021. 2 rigs are expected to operate in the Stateline asset area
and 1 rig is expected to operate in the Rodney Robinson leasehold during 4Q20. The company also disclosed full results
from its 13 Boros wells in the Stateline area, beyond the initial 4 previously disclosed (see our note here). These wells
averaged an impressive IP24 of 3,479boepd and we continue to see these results as a notable tailwind for Matador’s
operations heading into 4Q20 and 2021.
Matador reported higher than Truist Securities/Street estimated 3Q20 earnings along with
slightly increasing 2020 production guidance lowering 2020 CAPEX guidance driven by
better than expected production, prices, and costs. The company appears to not only have
reached an important upstream inflection point, but San Mateo appears equally as attractive
with the combination driving FCF in most quarters going forward even with today’s relatively
weak prices and continued production growth unlike many other E&Ps. Stateline results
continued to be as strong as the first four wells previously reported with a 24hr IP >45k
boepd for the first 13 wells.
On the operational front, plans remain for Matador to complete and turn to sales 5 gross operated wells in 4Q20, all 2-
mile laterals in Rustler Breaks. Matador operated 3 rigs in the Delaware during 3Q20 and expects to continue operating
these rigs throughout the remainder of 2020 and into 2021. 2 rigs are expected to operate in the Stateline asset area
and 1 rig is expected to operate in the Rodney Robinson leasehold during 4Q20. The company also disclosed full results
from its 13 Boros wells in the Stateline area, beyond the initial 4 previously disclosed (see our note here). These wells
averaged an impressive IP24 of 3,479boepd and we continue to see these results as a notable tailwind for Matador’s
operations heading into 4Q20 and 2021.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group