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Why Is Matador (MTDR) Down 13.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Matador Resources (MTDR - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Matador due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Matador Beats Q2 Earnings & Revenues Estimates
Matador Resources 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 26.32% due to these changes.
VGM Scores
Currently, Matador has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Matador has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Matador (MTDR) Down 13.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Matador Resources (MTDR - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Matador due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Matador Beats Q2 Earnings & Revenues Estimates
Matador Resources 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 26.32% due to these changes.
VGM Scores
Currently, Matador has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Matador has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.