Matador Resources (MTDR) Update - Mar 10

[dan_s]

We will be publishing an updated profile on Matador Resources late today. I have updated my forecast/valuation model based on WTI oil averaging $100/bbl and HH gas averaging $4.25/MMBtu in 2022. My valuation of MTDR increases by $13 to $80 per share.

Matador is an "Aggressive Growth" company that is using acquisitions and a six-rig drilling program that is expected to raise production by 18% to 20% year-over-year in 2022. Based on my forecast, the Company's free cash flow from operations should more than triple YOY to ~$1.2 billion.

The Company only has ~25% of their 2022 production hedged as of the date of this post.

All of Matador’s hedges for 2022 are collars that have ceilings of $81 to $83 per barrel for oil and $5.57 to $6.19 per MMBtu for natural gas. Also note that Matador reports natural gas and NGLs on a combined basis. None of their NGLs are hedged. Their realized natural gas + NGL price (net of cash settlements on their hedges) was $6.64/mcfe in Q4 2021.