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Matador (MTDR) Falls More Than 6% Despite Q3 Earnings Beat
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Matador Resources Company (MTDR - Free Report) reported third-quarter 2020 adjusted earnings of 10 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. The bottom line, however, declined from year-ago earnings of 32 cents per share.
Revenues of $203 million declined from the year-ago level of $279 million. However, the metric beat the Zacks Consensus Estimate of $190 million.
The better-than-expected quarterly results were supported by higher oil and gas production volumes as well as decreased lease operating costs. This was partially offset by weak oil price realizations.
Despite the better-than-expected results and higher production guidance, the Dallas, TX-based shale explorer’s stock price declined more than 6% since the earnings announcement on Oct 27. It seems that investors are shifting focus from oil exploration companies to stocks that are focusing on clean energies.
Matador Resources Company Price, Consensus and EPS Surprise
Third-quarter 2020 total production volume averaged 6,715 thousand barrels of oil equivalent (MBOE) (comprising 58% oil), higher than 6,407 MBOE a year ago.
The average production volume of oil was 42,340 barrels per day (Bbls/d), up from 39,776 Bbls/d in third-quarter 2019. Natural gas production was 183.9 million cubic feet per day (MMcf/d), up from 179.2 MMcf/d a year ago.
Price Realization
Average realized price for oil (excluding realized derivatives) was $38.67 per barrel, down from $54.19 in the year-ago quarter. However, natural gas price of $2.27 per thousand cubic feet was higher than $1.88 in the prior-year quarter.
Operating Expenses Decline
The company’s production taxes, transportation and processing costs decreased marginally to $3.85 per BOE from $3.86 in the year-ago quarter. Also, lease operating costs fell from $4.64 per BOE in third-quarter 2019 to $3.48. However, plant and other midstream services’ operating expenses increased to $1.40 per BOE from the year-earlier $1.38.
Notably, total operating expenses per BOE were recorded at $24.09, lower than the year-ago level of $27.50.
Balance Sheet
As of Sep 30, 2020, Matador had cash and restricted cash of $67.9 million. Long-term debt was recorded at $1,842 million, which included $475 million of borrowings under its credit agreement. The debt to capitalization was 54%.
Capital Spending
For drilling, completing and equipping wells during the third quarter, the company spent $95 million, which is 19% lower than what it had projected. The company’s enhanced operational efficiencies along with reduction in drilling and completion costs in the Delaware Basin primarily aided the performance.
Guidance
It raised its 2020 oil equivalent production guidance to 27-27.3 million barrels, indicating an increase from 24.2 million BOE in 2019. Total oil production guidance has been lifted to the range of 15.7-15.8 million barrels, indicating an increase from the 2019 level of 14 million barrels.
The company’s new 2020 capital spending guidance for drilling, completing and equipping wells is pegged in the range of $455 to $475 million, suggesting a decline of 31% year over year. Thus, even in a low pricing environment, the company expects higher production despite lower capital expenditure, strengthening its operating efficiencies.
Zacks Rank & Other Stock to Consider
The company currently has a Zacks Rank #2 (Buy). Other prospective players in the energy space include Sunoco LP (SUN - Free Report) , Cabot Oil & Gas Corporation and Antero Resources Corporation (AR - Free Report) . While Sunoco sports a Zacks Rank #1 (Strong Buy), Cabot Oil & Gas and Antero carry a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunocohas seen upward estimate revisions for its 2020 bottom line in the past 30 days.
Cabot Oil & Gashas seen upward estimate revisions for its 2020 bottom line in the past 60 days.
Anterohas seen upward estimate revisions for 2020 bottom line in the past 30 days.
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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Matador (MTDR) Falls More Than 6% Despite Q3 Earnings Beat
Matador Resources Company (MTDR - Free Report) reported third-quarter 2020 adjusted earnings of 10 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. The bottom line, however, declined from year-ago earnings of 32 cents per share.
Revenues of $203 million declined from the year-ago level of $279 million. However, the metric beat the Zacks Consensus Estimate of $190 million.
The better-than-expected quarterly results were supported by higher oil and gas production volumes as well as decreased lease operating costs. This was partially offset by weak oil price realizations.
Despite the better-than-expected results and higher production guidance, the Dallas, TX-based shale explorer’s stock price declined more than 6% since the earnings announcement on Oct 27. It seems that investors are shifting focus from oil exploration companies to stocks that are focusing on clean energies.
Matador Resources Company Price, Consensus and EPS Surprise
Matador Resources Company price-consensus-eps-surprise-chart | Matador Resources Company Quote
Production Rises
Third-quarter 2020 total production volume averaged 6,715 thousand barrels of oil equivalent (MBOE) (comprising 58% oil), higher than 6,407 MBOE a year ago.
The average production volume of oil was 42,340 barrels per day (Bbls/d), up from 39,776 Bbls/d in third-quarter 2019. Natural gas production was 183.9 million cubic feet per day (MMcf/d), up from 179.2 MMcf/d a year ago.
Price Realization
Average realized price for oil (excluding realized derivatives) was $38.67 per barrel, down from $54.19 in the year-ago quarter. However, natural gas price of $2.27 per thousand cubic feet was higher than $1.88 in the prior-year quarter.
Operating Expenses Decline
The company’s production taxes, transportation and processing costs decreased marginally to $3.85 per BOE from $3.86 in the year-ago quarter. Also, lease operating costs fell from $4.64 per BOE in third-quarter 2019 to $3.48. However, plant and other midstream services’ operating expenses increased to $1.40 per BOE from the year-earlier $1.38.
Notably, total operating expenses per BOE were recorded at $24.09, lower than the year-ago level of $27.50.
Balance Sheet
As of Sep 30, 2020, Matador had cash and restricted cash of $67.9 million. Long-term debt was recorded at $1,842 million, which included $475 million of borrowings under its credit agreement. The debt to capitalization was 54%.
Capital Spending
For drilling, completing and equipping wells during the third quarter, the company spent $95 million, which is 19% lower than what it had projected. The company’s enhanced operational efficiencies along with reduction in drilling and completion costs in the Delaware Basin primarily aided the performance.
Guidance
It raised its 2020 oil equivalent production guidance to 27-27.3 million barrels, indicating an increase from 24.2 million BOE in 2019. Total oil production guidance has been lifted to the range of 15.7-15.8 million barrels, indicating an increase from the 2019 level of 14 million barrels.
The company’s new 2020 capital spending guidance for drilling, completing and equipping wells is pegged in the range of $455 to $475 million, suggesting a decline of 31% year over year. Thus, even in a low pricing environment, the company expects higher production despite lower capital expenditure, strengthening its operating efficiencies.
Zacks Rank & Other Stock to Consider
The company currently has a Zacks Rank #2 (Buy). Other prospective players in the energy space include Sunoco LP (SUN - Free Report) , Cabot Oil & Gas Corporation and Antero Resources Corporation (AR - Free Report) . While Sunoco sports a Zacks Rank #1 (Strong Buy), Cabot Oil & Gas and Antero carry a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunocohas seen upward estimate revisions for its 2020 bottom line in the past 30 days.
Cabot Oil & Gashas seen upward estimate revisions for its 2020 bottom line in the past 60 days.
Anterohas seen upward estimate revisions for 2020 bottom line in the past 30 days.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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