Matador Resources (MTDR) - Update
Posted: Mon Jan 01, 2018 6:37 pm
Matador Resources is being added to the Sweet 16 on 1-1-2018. It replaces Carrizo Oil & Gas (CRZO), which is just being moved back to the Small-Cap Growth Portfolio.
I am still very high on CRZO. It is just the smallest company in the Sweet 16. Matador's market-cap is double that of CRZO.
In the last 3 months, 9 ranked analysts set 12-month price targets for MTDR. The average price target among the analysts is $31.44. Price targets range from $28 to $36.
MTDR close on December 29, 2017 at $31.13.
I have updated my forecast/valuation model for MTDR. Assuming WTI averages $50 for 2018 and 2019, my valuation is $39.00. That is $4 higher than our last profile on the company. The GOP Tax Plan will have a significant impact on Matador's reported earnings.
Things to know about Matador:
> Matador has two core areas. The Eagle Ford and the Permian Basin. They are currently focused on the Permian because most of their Eagle Ford leasehold is HBP.
> Current production is over 42,000 BOE per day (57% crude oil)
> YOY production growth in 2017 was 38%. I am assuming 30% production growth in 2018, but that may be too low. The company has not provide 2018 production guidance.
> Their 2018 oil production is hedged with collars that have $60 ceilings, so realized oil prices in 2018 should be much higher than what I am using in the forecast model.
> For more details, read the profile we sent out on 12/12/2017. You can download it from the EPG website.
I have been tracking Matador's progress for three years and I have a HIGH level of confidence in my forecast/valuation model for this company. Promotion to our Sweet 16 is recognition of the steady progress that this company has made, despite low oil prices. It is Prime Takeover Target.
I am still very high on CRZO. It is just the smallest company in the Sweet 16. Matador's market-cap is double that of CRZO.
In the last 3 months, 9 ranked analysts set 12-month price targets for MTDR. The average price target among the analysts is $31.44. Price targets range from $28 to $36.
MTDR close on December 29, 2017 at $31.13.
I have updated my forecast/valuation model for MTDR. Assuming WTI averages $50 for 2018 and 2019, my valuation is $39.00. That is $4 higher than our last profile on the company. The GOP Tax Plan will have a significant impact on Matador's reported earnings.
Things to know about Matador:
> Matador has two core areas. The Eagle Ford and the Permian Basin. They are currently focused on the Permian because most of their Eagle Ford leasehold is HBP.
> Current production is over 42,000 BOE per day (57% crude oil)
> YOY production growth in 2017 was 38%. I am assuming 30% production growth in 2018, but that may be too low. The company has not provide 2018 production guidance.
> Their 2018 oil production is hedged with collars that have $60 ceilings, so realized oil prices in 2018 should be much higher than what I am using in the forecast model.
> For more details, read the profile we sent out on 12/12/2017. You can download it from the EPG website.
I have been tracking Matador's progress for three years and I have a HIGH level of confidence in my forecast/valuation model for this company. Promotion to our Sweet 16 is recognition of the steady progress that this company has made, despite low oil prices. It is Prime Takeover Target.