Matador Resources (MTDR) Update - April 19

[dan_s]

I have updated my forecast/valuation model for MTDR and I have raised my current valuation by $2 to $82.00.

Matador is an Aggressive Growth company. The hedge book is in very good shape with only 25% of oil hedged with collars with $83 ceilings. ~60% of their gas is hedged for Q2 and Q3 with collars that have ceilings of $5.57. ~40% of Q4 gas is hedged with collars that have $6.19 ceilings.

Matador's operating cash flow is on track to double YOY in 2022 to over $2 billion. This one is an amazing American success story and it is based in Dallas.

Matador reports natural gas and NGLs on a combined basis, which explains why their Q4 2021 realized gas price was $6.64/mcfe. The gas prices used in my model are net of cash settlements on their hedges and they should still get over $7.00/mcfe this year.

A reasonable 12-month price target is over $100/share if my model is correct.