It has been about a month since the last earnings report for Matador Resources (
MTDR Quick Quote MTDR - Free Report) . Shares have added about 1.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Matador due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Matador Beats Q3 Earnings & Revenues Estimates
Matador reported adjusted earnings of $1.25 per share, beating the Zacks Consensus Estimate of $1.02 per share. The bottom line significantly improved from the year-ago quarter’s earnings of 10 cents.
Total quarterly revenues of $472 million surpassed the Zacks Consensus Estimate of $393 million. The top line increased from the year-ago level of $203 million.
The strong quarterly results can be attributed to increased production volumes and higher commodity price realizations.
Matador announced a quarterly cash dividend of 5 cents per share, an increase from the previous dividend of 2.5 cents initiated earlier this year. The dividend will be paid out on Dec 1, 2021, to shareholders of record as of Nov 10, 2021.
For third-quarter 2021, total production volume averaged 8,283 thousand barrels of oil equivalent (MBoe) (comprising 56.4% oil), higher than 6,715 MBoe a year ago.
The average oil production volume was 50,747 barrels per day (Bbls/d), up from 42,340 Bbls/d reported in third-quarter 2020. Natural gas production was 235.7 million cubic feet per day (MMcf/d), up from 183.9 MMcf/d a year ago.
The average realized price for oil (excluding realized derivatives) was $69.73 per barrel, which significantly increased from $38.67 in the year-ago quarter. Moreover, the natural gas price of $6.27 per thousand cubic feet was higher than $2.27 in the prior-year quarter.
The company’s production taxes, transportation and processing costs increased to $5.90 per barrel of oil equivalent (Boe) from $3.85 in the year-ago quarter. Plant and other midstream services’ operating expenses increased to $2.06 per Boe from the year-earlier figure of $1.40. However, lease operating costs fell from $3.48 per Boe in third-quarter 2020 to $3.31.
Total operating expenses per Boe were recorded at $24.99, higher than the prior-year figure of $24.09.
As of Sep 30, 2021, Matador had cash and restricted cash of $107.8 million. Long-term debt was recorded at $1,520 million, including $120 million of borrowings under its credit agreement. Debt to capitalization was 44.3%.
For the drilling, completing and equipping of wells in the third quarter, the company spent $121 million, 14% lower than its projection. Enhanced operational efficiencies, and lower drilling and completion costs in the Delaware Basin primarily aided its performance.
For 2021, Matador expects oil-equivalent production of 30.7-31.2 million barrels, which increased from its previously mentioned 29.9-31 million barrels. It expects total oil production of 17.4-17.6 million barrels.
The company’s 2021 capital spending guidance for drilling, completing and equipping wells is pegged at $535-$565 million. In midstream, Matador expects to spend $35-$45 million, which has been unchanged.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 7.85% due to these changes.
At this time, Matador has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Matador has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.