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Matador Receives Drilling Permits for Stateline Asset Area

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Matador Resources Company (MTDR - Free Report) recently received 14 drilling permits from the Bureau of Land Management (“BLM”) for the Stateline asset area, located in southern Eddy County of New Mexico. Including the recent ones, the company now owns a total of 24 drilling permits on federal leasehold, which it had acquired from the regulatory authority in the Oil and Gas Lease Sale of New Mexico in September 2018.

The Stateline asset area of 2,800 net acres has 74 more drilling locations. The company has plans to bring two drilling rigs in the location. While one of the rigs is expected to be operational by the end of this month, the second rig will start operations in January 2020. It intends to start drilling the location with 2-mile laterals in the Eastern side and 2.5-mile laterals on the Western side. This is in line with its aim of moving toward longer laterals, which can improve capital efficiencies. Notably, the company has applied for further drilling permits for each of the locations in the Stateline asset region.

The upstream energy company initially intends to start drilling nine wells of the recently received permits. It will use two pads for the wells, which will test several formations in the region. The company expects these nine wells to turn to sales in third-quarter 2020. In addition to the latest permit, it has received more than 100 drilling permits in other parts of its federal leasehold in Lea and Eddy Counties.

The Eddy County is vital part of the famous and prolific Permian Basin. Since 2011, the company has boosted its Permian acreage drastically. From 6,700 net acres in 2011, the company’s operation now covers 115,000 net acres in the basin. Production for 2020 might further get a boost, as these new permits came within its anticipated time frame.

Price Performance

Dallas, TX-based Matador has gained 6.8% year to date against the 20.3% decline of its industry.

Zacks Rank and Stocks to Consider

Currently, Matador carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector include CNX Resources Corporation (CNX - Free Report) , Antero Midstream Corporation (AM - Free Report) and Frank's International N.V. (FI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNX Resources’ earnings for the current year have witnessed four upward revisions in the past 60 days versus no movement in the opposite direction.

Antero Midstream’s bottom line for the current quarter is expected to skyrocket 130% year over year.

Frank's International’s bottom line for 2019 is expected to rise 23.8% year over year.

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