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Matador Completes Black River Processing Plant Expansion

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Matador Resources Company (MTDR - Free Report) and its midstream affiliate San Mateo Midstream recently announced the completion of the expansion of Black River cryogenic natural gas processing plant located in the Eddy County, NM.

Previously, the Black River processing plant had an inlet capacity of 260 million cubic feet of natural gas per day (MMcf/d). Following the completion of the expansion process, which commenced two years ago, the plant now has a capacity of 460 MMcf/d. The expansion was made within scheduled time and budget.

The existing facility processes natural gas from Matador’s Rustler Breaks asset region and other local producers. Expansion of the facility is expected to support the upstream company’s exploration and development activities in the Delaware Basin. The facility will likely gather and process natural gas from the company’s Stateline asset area and Stebbins area. It will also receive natural gas from a portion of its Arrowhead assets.

Moreover, San Mateo’s 24-mile large diameter natural gas gathering pipeline — connecting the Stateline asset area to the Black River processing plant — is nearing completion. Its 19-mile large diameter natural gas pipeline between the processing plant and Greater Stebbins area is also expected to be completed soon.

Through San Mateo Midstream, LLC, a joint venture between an affiliate of Matador and Five Point Energy LLC, the company conducts midstream businesses to support upstream operations. In addition to transporting oil, gathering natural gas, crude and salt water, Matador’s midstream operations also comprise processing natural gas. Through 2020, the company allocated $85-$105 million toward midstream operations. Importantly, in second-quarter 2020, its San Mateo operations gathered an average of 195 MMcf/d of natural gas in the Wolf and Rustler Breaks asset regions, indicating a 2% year-over-year rise.

As part of upstream development, Matador has commenced flowback operations on five Leatherneck wells located in the Greater Stebbins Area as scheduled. The company will likely start turning to sales the 13 Boros wells in the Stateline asset area this month. This process can continue till early-October.

Price Performance

Its shares have gained 5.5% in the past three months against 4% fall of the industry it belongs to.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Concho Resources Inc. (CXO - Free Report) , EOG Resources, Inc. (EOG - Free Report) and Royal Dutch Shell plc (RDS.A - Free Report) , each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Concho Resources’ bottom line for 2020 is expected to rise 34.4% year over year.

EOG Resources’ sales for 2021 are expected to rise 18.8% year over year.

Shell’s bottom line for 2021 is expected to rise 112.5% year over year.

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