Matador Resources (MTDR) Beats on Q4 Earnings, Reserves Grow

Matador Resources Company MTDR recently reported fourth-quarter 2018 adjusted earnings of 37 cents per share, beating the Zacks Consensus Estimate of 27 cents and also improving from the year-ago profit of 25 cents.

Revenues of $289.9 million rose from the year-ago quarter’s $153.6 million and beat the Zacks Consensus Estimate of $200.5 million.

Record production at the Delaware Basin backed the strong fourth-quarter results.

Production & Price Realization

During fourth-quarter 2018, total production volumes averaged 5,109 thousand barrels of oil equivalent (MBOE) (comprising 60.3% oil), higher than 4,022 MBOE recorded a year ago.

The average production volumes of oil were recorded at 33,479 barrels per day (Bbls/d), up from 24,665 Bbls/d in fourth-quarter 2017. Natural gas production was recorded at 132.3 million cubic feet per day (MMcf/d), up from 114.3 MMcf/d a year ago.

Record oil-equivalent production in the Delaware Basin aided the quarterly volumes.

Realized price for oil (including derivatives) was recorded at $50.75 per barrel, down from $52.30 in the year-ago quarter. Also, natural gas price of $3.35 per thousand cubic feet (Mcf) was lower than $4.12 in the prior-year quarter.     

Balance Sheet

As of Dec 31, 2018, the company reported cash and restricted cash of $64.6 million. Long-term debt totaled $1,297.8 million, which includes $40 million of borrowing under credit agreement. Its debt-to-capitalization ratio stands at 42.2%. 

Capital Spending

The company spent $209.7 million through the fourth quarter of 2018. Matador Resources allocated $187.8 million of the total amount to drill, equip and complete wells while $21.9 million was expended for midstream operations.

Proved Reserves Grow

As of Dec 31, 2018, the company reported total estimated proved reserves of 215.3 million barrels of oil equivalent (MMBoE), up almost 41% year over year.  

Guidance

Matador Resources expects oil production through 2019 in the band of 12.9 to 13.3 million Bbl, reflecting an increase of 18% year over year from the midpoint of this year’s projected range. Total oil equivalent production for 2019 is projected in the range of 22 to 22.8 million BOE, up 18% year over year.    

The company guided capital spending for drilling, completing and equipping wells through 2019 to be $640 to $680 million, lower by 4% year over year from the midpoint of this year’s projected range.

Zacks Rank and Key Picks

Currently, Matador Resources carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy space include Jones Energy Inc. JONE, Golar LNG Partners LP GMLP and Sunoco LP SUN. Jones and Golar LNG carry a Zacks Rank #2 (Buy), while Sunoco sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Jones Energy expects 2019 earnings growth of 19% year over year.

Golar LNG delivered average positive earnings surprise of 92.8% in the preceding four quarters.

Sunoco LP has average positive earnings surprise of 18.39% for the trailing four quarters.

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