Matador Resources (MTDR) Valuation Update - June 8
Posted: Wed Jun 08, 2022 2:35 pm
I have updated my forecast/valuation model for MTDR to adjust for higher oil & gas prices.
MTDR was trading at $65.19 at the time of this post. I have increased my valuation by $5 to $91.00
Matador is an Aggressive Growth company, increasing production by 13.6% in 2020 YOY and another 14.6% in 2021.
Their aggressive drilling programs are going to payoff BIG for shareholders this year.
> The midpoint of their 2022 production guidance (102,200 Boepd) is year-over-year production growth of another ~19%.
> Production mix is approximately 58% crude oil and 42% natural gas + NGLs, which they report on a combined basis.
> All of their remaining oil hedges are collars with $110.49 ceilings.
> NGLs add approximately $2/mcfe to their realized natural gas price, $7.43/mcfe in Q1 2022.
> 2022 operating cash flow should be over $2.2 billion and FCF be approximately $1.5 billion.
> My valuation multiple is only 5.5 X annualized operating cash flow per share. If Q2 results and their fresh guidance confirm my model assumptions, this company will deserve a much higher valuation. I want to see what they are going to do with all of that free cash flow.
TipRanks: "Stifel Nicolaus analyst Michael Scialla maintained a Buy rating on Matador Resources (MTDR) on June 3."
MTDR was trading at $65.19 at the time of this post. I have increased my valuation by $5 to $91.00
Matador is an Aggressive Growth company, increasing production by 13.6% in 2020 YOY and another 14.6% in 2021.
Their aggressive drilling programs are going to payoff BIG for shareholders this year.
> The midpoint of their 2022 production guidance (102,200 Boepd) is year-over-year production growth of another ~19%.
> Production mix is approximately 58% crude oil and 42% natural gas + NGLs, which they report on a combined basis.
> All of their remaining oil hedges are collars with $110.49 ceilings.
> NGLs add approximately $2/mcfe to their realized natural gas price, $7.43/mcfe in Q1 2022.
> 2022 operating cash flow should be over $2.2 billion and FCF be approximately $1.5 billion.
> My valuation multiple is only 5.5 X annualized operating cash flow per share. If Q2 results and their fresh guidance confirm my model assumptions, this company will deserve a much higher valuation. I want to see what they are going to do with all of that free cash flow.
TipRanks: "Stifel Nicolaus analyst Michael Scialla maintained a Buy rating on Matador Resources (MTDR) on June 3."