By now you all should know that Matador likes to "Under-Promise and Over-Deliver" on production guidance.
First Quarter 2024 Matador Operational and Financial Highlights
Average production of 149,760 BOE per day (84,777 barrels of oil per day) < Beat my forecasts of 144,500 Boepd and 83,000 BOPD)
Net cash provided by operating activities of $468.6 million
Adjusted free cash flow of $28.6 million
Net income of $193.7 million, or $1.61 per diluted common share
Adjusted net income of $206.2 million, or adjusted earnings of $1.71 per diluted common share < Beat my forecast of $1.40 EPS.
Adjusted EBITDA of $505.4 million
San Mateo net income of $39.7 million
San Mateo Adjusted EBITDA of $58.2 million
D/C/E capital expenditures of $350.7 million
Midstream capital expenditures of $79.3 million
Full year production guidance has been increased. My valuation will be increasing. I will update my forecast/valuation model tomorrow.
Matador Resources (MTDR) Q1 Results - April 23
Matador Resources (MTDR) Q1 Results - April 23
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
Petroleum economist
- Posts: 15
- Joined: Wed Aug 23, 2023 7:01 am
- Location: The Netherlands
Re: Matador Resources (MTDR) Q1 Results - April 23
As Dan stated, Matador reported strong Q1 results. Production exceeded guidance, the balance sheet was reinforced, and profitability is good. Only shareholder returns are a bit low.
Production
Q1 production (149.8 K BoE/d) was well above the Q1 outlook (145.0-146.5 K BoE/d). The outlook for Q2 (156.5-158.0 K BoE/d) and the indication that 2024 will be at the high end of the 2024 outlook (153-159 K BoE/d) indicate that Matador can continue to grow with 2-4% per year in the near future.
Balance sheet
The balance sheet in Q1 improved, mostly as borrowing under the Credit Agreement reduced from $ 500 M to $ 260 M. Solvency increased from 53.4% (late 2023) to a good 56.4%, indicating that potentially in late 2024 or 2025 the special dividend can be reinstated.
Profitability
Matador reported a net profit of $ 194 M (eps $ 1.61). My model indicates that with WTI at $ 80-85/bbl, Matador 2024 net profit can be $ 965-1,060 M (eps = $ 7.80-8.54). PE is medium at 7.6-8.4. With higher production in 2025/2026. the PE can reduce.
I will wait for Dan’s cost model update to see if I will have to modify my model.
Unit costs of $ 34/BoE (including depreciation, interest, and administration) are a bit high. $ 2.30/BoE are due to interest payments, and this can come down over time.
Shareholder returns
Until most of the Advance Energy investment debt ($ 1.6 B) is repaid, Matador will only pay only a fixed interim dividend ($ 0.20). No special dividends were paid in Q1. Hopefully a special dividend can be reinstated in H2 or in 2025. Matador does not buy back shares. Shareholder yield in 2024 is a low 2.0% or less.
In my ranking model Matador sits at 24th place out of 72 companies. The reason for Matador not being in the top ten are: (1) medium PE, (2) highish unit cost, (3) proven reserves equivalent to only 8.4 years of 2024 production, below industry average (9.5-10 years), (4) relative high gas share in the reserves (43%) and (5) low shareholder returns. Nevertheless, Matador is an attractive share.
Production
Q1 production (149.8 K BoE/d) was well above the Q1 outlook (145.0-146.5 K BoE/d). The outlook for Q2 (156.5-158.0 K BoE/d) and the indication that 2024 will be at the high end of the 2024 outlook (153-159 K BoE/d) indicate that Matador can continue to grow with 2-4% per year in the near future.
Balance sheet
The balance sheet in Q1 improved, mostly as borrowing under the Credit Agreement reduced from $ 500 M to $ 260 M. Solvency increased from 53.4% (late 2023) to a good 56.4%, indicating that potentially in late 2024 or 2025 the special dividend can be reinstated.
Profitability
Matador reported a net profit of $ 194 M (eps $ 1.61). My model indicates that with WTI at $ 80-85/bbl, Matador 2024 net profit can be $ 965-1,060 M (eps = $ 7.80-8.54). PE is medium at 7.6-8.4. With higher production in 2025/2026. the PE can reduce.
I will wait for Dan’s cost model update to see if I will have to modify my model.
Unit costs of $ 34/BoE (including depreciation, interest, and administration) are a bit high. $ 2.30/BoE are due to interest payments, and this can come down over time.
Shareholder returns
Until most of the Advance Energy investment debt ($ 1.6 B) is repaid, Matador will only pay only a fixed interim dividend ($ 0.20). No special dividends were paid in Q1. Hopefully a special dividend can be reinstated in H2 or in 2025. Matador does not buy back shares. Shareholder yield in 2024 is a low 2.0% or less.
In my ranking model Matador sits at 24th place out of 72 companies. The reason for Matador not being in the top ten are: (1) medium PE, (2) highish unit cost, (3) proven reserves equivalent to only 8.4 years of 2024 production, below industry average (9.5-10 years), (4) relative high gas share in the reserves (43%) and (5) low shareholder returns. Nevertheless, Matador is an attractive share.