Back to top

Matador Resources to Fund Delaware Buyout With Stock Offering

Read MoreHide Full Article

Matador Resources Company (MTDR - Free Report) expects gross proceeds from the offering of 7,000,000 stocks to be around $229.3 million. The stocks have been priced by the company and the offering will likely conclude on May 17.  

Net proceeds from the offering is expected to be utilized by Matador Resources for financing the purchase of Delaware Basin acres and normal corporate activities. The company will likely allocate part of the proceeds for the Basin’s midstream operations. The remaining proceeds, if any, are expected to be used to clear debt under revolving credit facility.

For acquiring acres near the Delaware Basin’s current foothold, Matador Resources spent roughly $30 million since the beginning of 2018. Over the first four months of 2018, the company made acquisitions of net 3,500 mineral acres.

Developments in this front will likely boost Matador Resources’ oil production further. This is highly favorable for the company’s upstream businesses given crude price is in the bullish territory. The West Texas Intermediate crude recently crossed the $70 per barrel psychological mark after President Trump announced that the United States will pull out of the Iran nuclear deal.

Headquartered in Dallas, TX, Matador Resources is primarily an upstream energy player with prime focus on shale and unconventional resources. The stock rallied 42.4% over the past year, outperforming the industry’s 9.5% growth.

The stock currently carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector are BP plc (BP - Free Report) , WildHorse Resource Development Corporation (WRD - Free Report) and W&T Offshore, Inc. (WTI - Free Report) . BP and WildHorse sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BP managed to beat the Zacks Consensus Estimate in three of the last four quarters.

WildHorse is expected to see year-over-year earnings growth of 288.4% in 2018.

W&T Offshore will likely witness earnings growth of 7.1% in 2018.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>



More from Zacks Analyst Blog

You May Like