Matador Resources (MTDR) Update - Feb 22

[dan_s]

Below are some interesting comments from Matador's Q4 press release:

2025 Additional Natural Gas Opportunity

“Matador produced 496 million cubic feet of natural gas per day in 2024, but Matador’s 2025 plan remains flexible and its undeveloped acreage is sufficiently ‘gassy’ so that Matador can adjust and produce more natural gas if market conditions warrant a modification. As of December 31, 2024, Matador has 1.5 trillion cubic feet of natural gas reserves, primarily in the Delaware Basin (see Slide H)."

“Significantly, Matador also retained its operating rights in the Cotton Valley in Northeast Louisiana, which we refer to as our ‘gas bank’ and is 100% held-by-production (see Slide R). As of December 31, 2024, the expected natural gas production from Matador’s Cotton Valley inventory is not included in its reserve report because Matador does not currently plan to drill the Cotton Valley formation in the near future unless natural gas prices improve and stabilize. Nevertheless, Matador’s reservoir engineers consider the Cotton Valley to be a proven formation."

“Matador estimates that it has 37 net horizontal locations in the Cotton Valley, which Matador’s reservoir engineers have estimated to be capable of producing up to 200 to 300 billion cubic feet of natural gas. Additionally, Matador anticipates that these operated Cotton Valley locations would have extended lateral lengths of approximately two miles, which would improve costs and provide other efficiencies. Furthermore, this Cotton Valley natural gas would have the benefit of using the same midstream infrastructure that serves the Haynesville Shale, including transportation to many of the Liquified Natural Gas (‘LNG’) terminals along the Gulf Coast."

Bottomline: Matador's December 31, 2024 reserve report is very conservative. If their Cotton Valley assets were put up for sale, they would draw significant bids.

[marc.wolin@yahoo.com]

Matador Res Plunge in Stock Price
Why is the stock price plunging on Matador (3-6-25)?
Marc Wolin

[aja57]

Marc, the entire Sweet 16 has rolled over 30-40% in the last few weeks while oil has dropped around 17%. Quite the falling knife..

[dan_s]

The oil traders have over-reacted to the OPEC decision to bring more oil to the market starting in April. OPEC's increased oil output is very small and oil demand always increases in Q2.

There is nothing wrong with MTDR. Q1 results should be very close to my forecast. Operating cash flow should be close to my forecast as higher natural gas prices will offset most of the lower oil price.