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Matador Resources (MTDR) Q4 Earnings & Sales Beat Estimates

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Matador Resources Company (MTDR - Free Report) reported fourth-quarter 2019 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate of 28 cents. Also, the bottom line rose from the year-ago figure of 37 cents per share.

Revenues of $288.7 million marginally fell from the year-ago level of $289.9 million. However, the metric beat the Zacks Consensus Estimate of $254 million.

The better-than-expected results were supported by higher oil and gas production volumes, and increased oil price realization. This was partially offset by weak natural gas price realization.

Matador Resources Company Price, Consensus and EPS Surprise

Matador Resources Company Price, Consensus and EPS Surprise

Matador Resources Company price-consensus-eps-surprise-chart | Matador Resources Company Quote

Proved Reserves

Total proved oil and gas reserves of Matador grew 17% through 2019 to 252.5 million barrels of oil equivalent (BOE). Of the total amount, 59% was oil and 92% were located in the Delaware Basin. Investors should note that 42% of the 2019 estimated proved reserves were developed.

Production Rises

In fourth-quarter 2019, total production volume averaged 6,785 thousand barrels of oil equivalent (MBOE) (comprising 57.1% oil), higher than 5,109 MBOE a year ago.

The average production volume of oil was 42,087 barrels per day (Bbls/d), up from 33,479 Bbls/d in fourth-quarter 2018. Natural gas production was 190 million cubic feet per day (MMcf/d), up from 132.3 MMcf/d a year ago.

Price Realization

Average realized price for oil (excluding realized derivatives) was $56.36 per barrel, up from $49.09 in the year-ago quarter. However, natural gas price of $2.31 per thousand cubic feet was lower than $3.47 in the prior-year quarter.

Operating Expenses

The company’s production taxes, transportation and processing costs increased to $3.88 per BOE from $3.53 in the year-ago quarter. Moreover, plant and other midstream services operating expenses rose to $1.51 per BOE in the quarter from the year-earlier number of $1.45. However, lease operating costs decreased from $4.56 per BOE in fourth-quarter 2018 to $4.43. Total operating expenses per BOE in the quarter was recorded at $27.88, higher than the year-ago level of $26.39.

Balance Sheet

As of Dec 31, 2019, Matador had cash and restricted cash of $65.1 million. Long-term debt totaled $1,582.4 million, which included $255 million of borrowings under its credit agreement. The debt-to-capitalization ratio was 44.6%.

Yearly Capital Spending

The company spent $748 million during 2019, excluding acquisitions and seismic data. Matador allocated $671 million of the total amount to drill, equip and complete wells, and $77 million toward midstream operations.

Guidance

The company expects 2020 oil equivalent production within 27-28.3 million barrels, indicating an increase from 24.2 million BOE in 2019. Notably, it expects 2019 capital expenditure for drilling, completing and equipping wells in the range of $690-$750 million, suggesting growth from the 2019 level of $671 million. San Mateo midstream capital expenditure for the year is expected in the band of $85-$105 million, implying a rise from $77 million in 2019.

Moreover, the company expects 13 wells from the Stateline asset area to come online in September, which will boost production. Additionally, in the same month, its San Mateo cryogenic natural gas processing plant is expected to start processing half billion cubic feet of natural gas per day.

Zacks Rank & Stocks to Consider

Matador Resources currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector include Marathon Oil Corporation (MRO - Free Report) , Chevron Corporation (CVX - Free Report) and Hess Corporation (HES - 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.

Marathon Oil’s earnings per share estimates of 46 cents for 2020 have witnessed seven upward revisions and one downward movement in the past 60 days.

Chevron’s bottom line for 2020 is expected to rise 12.8% year over year.

Hess’ bottom line for 2020 is expected to rise 93.7% year over year.

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