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Matador Resources Company’s (MTDR - Free Report) shares declined 2.7% despite reporting strong second-quarter 2021 earnings on Jul 27. Investors are cautious since the pace of recovery in the demand for oil and gas remains highly uncertain as the pandemic is still affecting upstream businesses.
The company reported second-quarter 2021 adjusted earnings of $1.02 per share, which beat the Zacks Consensus Estimate of 72 cents per share. The bottom line improved significantly from the year-ago loss of 3 cents.
Total quarterly revenues of $357 million outpaced the Zacks Consensus Estimate of $352 million. The top line increased from the year-ago level of $147 million.
The strong quarterly results can be attributed to increased production volumes and higher realizations of commodity prices.
Matador Resources Company Price, Consensus and EPS Surprise
For second-quarter 2021, total production volume averaged 8,482 thousand barrels of oil equivalent (MBoe) (comprising 57.2% oil), higher than 6,670 MBoe a year ago.
The average production volume of oil was 53,354 barrels per day (Bbls/d), up from 43,074 Bbls/d reported in second-quarter 2020. Natural gas production was 239.1 million cubic feet per day (MMcf/d), up from 181.4 MMcf/d a year ago.
Price Realization
Average realized price for oil (excluding realized derivatives) was $64.90 per barrel, which significantly increased from $24.03 in the year-ago quarter. Moreover, the natural gas price of $4.46 per thousand cubic feet was higher than $1.49 in the prior-year quarter.
Operating Expenses
The company’s production taxes, transportation and processing costs increased to $5.17 per barrels of oil equivalent (Boe) from $2.82 in the year-ago quarter. Plant and other midstream services’ operating expenses increased to $1.62 per Boe from the year-earlier figure of $1.47. However, lease operating costs fell from $3.92 per Boe in second-quarter 2020 to $3.29.
Total operating expenses per Boe were recorded at $23.84, lower than the prior-year figure of $24.42.
Balance Sheet
As of Jun 30, 2021, Matador had cash and restricted cash of $79.2 million. Long-term debt was recorded at $1,634 million, which included $240 million of borrowings under its credit agreement. Debt to capitalization was 49%.
Capital Spending
For the drilling, completing and equipping of wells in the second quarter, the company spent $101 million, which is 20% lower than its projection. Enhanced operational efficiencies, and lower drilling and completion costs in the Delaware Basin primarily aided its performance.
Outlook
For 2021, Matador maintains its oil-equivalent production guidance of 29.9-31 million barrels. It expects total oil production of 17.2-17.8 million barrels.
The company’s 2021 capital spending guidance for drilling, completing and equipping wells is pegged at $525-$575 million. In midstream, Matador expects to spend $35-$40 million, an increase from the previous guidance of $20-$30 million. The increased capex is intended to accommodate new midstream operations in the second half of 2021.
Zacks Rank & Other Stocks to Consider
The company currently sports a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Matador (MTDR) Stock Falls 2.7% Despite Q2 Earnings Beat
Matador Resources Company’s (MTDR - Free Report) shares declined 2.7% despite reporting strong second-quarter 2021 earnings on Jul 27. Investors are cautious since the pace of recovery in the demand for oil and gas remains highly uncertain as the pandemic is still affecting upstream businesses.
The company reported second-quarter 2021 adjusted earnings of $1.02 per share, which beat the Zacks Consensus Estimate of 72 cents per share. The bottom line improved significantly from the year-ago loss of 3 cents.
Total quarterly revenues of $357 million outpaced the Zacks Consensus Estimate of $352 million. The top line increased from the year-ago level of $147 million.
The strong quarterly results can be attributed to increased production volumes and higher realizations of commodity prices.
Matador Resources Company Price, Consensus and EPS Surprise
Matador Resources Company price-consensus-eps-surprise-chart | Matador Resources Company Quote
Production
For second-quarter 2021, total production volume averaged 8,482 thousand barrels of oil equivalent (MBoe) (comprising 57.2% oil), higher than 6,670 MBoe a year ago.
The average production volume of oil was 53,354 barrels per day (Bbls/d), up from 43,074 Bbls/d reported in second-quarter 2020. Natural gas production was 239.1 million cubic feet per day (MMcf/d), up from 181.4 MMcf/d a year ago.
Price Realization
Average realized price for oil (excluding realized derivatives) was $64.90 per barrel, which significantly increased from $24.03 in the year-ago quarter. Moreover, the natural gas price of $4.46 per thousand cubic feet was higher than $1.49 in the prior-year quarter.
Operating Expenses
The company’s production taxes, transportation and processing costs increased to $5.17 per barrels of oil equivalent (Boe) from $2.82 in the year-ago quarter. Plant and other midstream services’ operating expenses increased to $1.62 per Boe from the year-earlier figure of $1.47. However, lease operating costs fell from $3.92 per Boe in second-quarter 2020 to $3.29.
Total operating expenses per Boe were recorded at $23.84, lower than the prior-year figure of $24.42.
Balance Sheet
As of Jun 30, 2021, Matador had cash and restricted cash of $79.2 million. Long-term debt was recorded at $1,634 million, which included $240 million of borrowings under its credit agreement. Debt to capitalization was 49%.
Capital Spending
For the drilling, completing and equipping of wells in the second quarter, the company spent $101 million, which is 20% lower than its projection. Enhanced operational efficiencies, and lower drilling and completion costs in the Delaware Basin primarily aided its performance.
Outlook
For 2021, Matador maintains its oil-equivalent production guidance of 29.9-31 million barrels. It expects total oil production of 17.2-17.8 million barrels.
The company’s 2021 capital spending guidance for drilling, completing and equipping wells is pegged at $525-$575 million. In midstream, Matador expects to spend $35-$40 million, an increase from the previous guidance of $20-$30 million. The increased capex is intended to accommodate new midstream operations in the second half of 2021.
Zacks Rank & Other Stocks to Consider
The company currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked players in the energy space are Eni SPA (E - Free Report) , Repsol SA (REPYY - Free Report) and Pioneer Natural Resources Company (PXD - Free Report) , each flaunting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eni’s earnings for 2021 are expected to increase 33.8% year over year.
Repsol’s earnings for 2021 are expected to rise 8.2% year over year.
Pioneer Natural’s bottom line for 2021 is expected to rise 52.5% year over year.