Matador Resources (MTDR) Valuation Update - Mar 26

[dan_s]

I've updated my forecast model for the recent balance sheet restructuring that's been discussed here. The common stock sale reduces debt / interest expense and my guess is that a few more wells will be added to this year's drilling program, causing an increase in production guidance. For now, I'm basing my forecast on the midpoint of the guidance the Company provided on 2-21-2024 (156,000 Boepd with oil of 93,000 Boepd).

At the end of March the Company will have ~125,250,000 shares outstanding, which is low for a company with this much production and a track record of more than 20% annual production growth.

Matador's production will be down ~10,000 Boepd in Q1 due to weather issues in January and the timing of well completions. After Q1, I expect production to ramp up to over 165,000 Boepd by year-end. < ~61% crude oil.

Q1 WTI oil price will be higher than the $75/bbl I'm using in all of my forecasts, so Matador is likely to beat my Q1 forecast. They have a long history of "under-promising and over-delivering" on production.

TipRanks' Q1 forecasts of $1.49 EPS and $3.80 operating CFPS are higher than what I'm modeling.

My valuation increases by $2 to $85 per share, which is 4.75 X annualized operating cash flow per share.

My updated model will be posted to the website later today.