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Matador Resources Company (MTDR - Free Report) is cashing in on decade-high crude and natural gas prices. This Zacks Rank #1 (Strong Buy) is expected to double its earnings this year.
Matador is an independent exploration and production company in oil and natural gas with an emphasis on oil and natural gas shale and other unconventional plays.
Its operations are in the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas.
The company also has midstream operations, mostly through its midstream joint venture, San Mateo, which supports its exploration, development and production operations. It also provides natural gas processing, oil transportation services, natural gas, oil and produced water gathering services and produced water disposal services to third parties.
Matador Resources has a market cap of $6.8 billion.
Double Digit Increase in Production Expected in 2022
On Feb 22, 2022, Matador issued its 2022 production guidance outlook.
Oil production is expected to rise 21% to between 21 and 22 million Bbl from 17.9 million Bbl in 2021. Natural gas production is also expected to jump 16% to the range of 92 to 98 Bcf from 81.7 Bcf in 2021.
Matador was one of the few producers to raise 2022 Capex. Total capex, including midstream, is expected to be up 34% to $690 to $770 million from $544 million in 2021.
In Feb, Matador was bullish and was looking for record free cash flow in 2022. With crude prices holding over $100 a barrel in March and April, it looks likely they will achieve it.
Earnings Estimates Rise Ahead of Q1 Earnings
Matador will report first quarter earnings on Apr 26, after the close, with the conference call the next morning, on Apr 27.
The analysts are already bullish. 1 estimate has been revised higher in the last week pushing the 2022 Zacks Consensus Estimate up to $8.92 from $8.05 during that same period.
That is earnings growth of 109.8% as the company only made $4.25 last year.
Matador has an outstanding earnings surprise track record. It hasn't missed in 5 years which is an impressive record given what was happening in the oil and natural gas markets during the start of the COVID-19 pandemic.
Image Source: Zacks Investment Research
Shares Busting Out to 5-Year Highs
Matador shares have been red-hot in 2022, gaining 49.1% year-to-date.
Image Source: Zacks Investment Research
But shares are still cheap, with a forward P/E of 6.5 because the earnings continue to move higher.
The first quarter results should be outstanding due to the rise in energy prices.
Matador pays a dividend, currently yielding 0.4%, but the company said in February that it will evaluate the dividend throughout the year based on free cash flow and market conditions.
For investors looking for a mid-cap oil and natural gas exploration and production company, Matador is one to keep on your short list.
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Bull of the Day: Matador Resources (MTDR)
Matador Resources Company (MTDR - Free Report) is cashing in on decade-high crude and natural gas prices. This Zacks Rank #1 (Strong Buy) is expected to double its earnings this year.
Matador is an independent exploration and production company in oil and natural gas with an emphasis on oil and natural gas shale and other unconventional plays.
Its operations are in the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas.
The company also has midstream operations, mostly through its midstream joint venture, San Mateo, which supports its exploration, development and production operations. It also provides natural gas processing, oil transportation services, natural gas, oil and produced water gathering services and produced water disposal services to third parties.
Matador Resources has a market cap of $6.8 billion.
Double Digit Increase in Production Expected in 2022
On Feb 22, 2022, Matador issued its 2022 production guidance outlook.
Oil production is expected to rise 21% to between 21 and 22 million Bbl from 17.9 million Bbl in 2021. Natural gas production is also expected to jump 16% to the range of 92 to 98 Bcf from 81.7 Bcf in 2021.
Matador was one of the few producers to raise 2022 Capex. Total capex, including midstream, is expected to be up 34% to $690 to $770 million from $544 million in 2021.
In Feb, Matador was bullish and was looking for record free cash flow in 2022. With crude prices holding over $100 a barrel in March and April, it looks likely they will achieve it.
Earnings Estimates Rise Ahead of Q1 Earnings
Matador will report first quarter earnings on Apr 26, after the close, with the conference call the next morning, on Apr 27.
The analysts are already bullish. 1 estimate has been revised higher in the last week pushing the 2022 Zacks Consensus Estimate up to $8.92 from $8.05 during that same period.
That is earnings growth of 109.8% as the company only made $4.25 last year.
Matador has an outstanding earnings surprise track record. It hasn't missed in 5 years which is an impressive record given what was happening in the oil and natural gas markets during the start of the COVID-19 pandemic.
Image Source: Zacks Investment Research
Shares Busting Out to 5-Year Highs
Matador shares have been red-hot in 2022, gaining 49.1% year-to-date.
Image Source: Zacks Investment Research
But shares are still cheap, with a forward P/E of 6.5 because the earnings continue to move higher.
The first quarter results should be outstanding due to the rise in energy prices.
Matador pays a dividend, currently yielding 0.4%, but the company said in February that it will evaluate the dividend throughout the year based on free cash flow and market conditions.
For investors looking for a mid-cap oil and natural gas exploration and production company, Matador is one to keep on your short list.