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Matador Reports Encouraging Initial Boros Well Results

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Matador Resources Company (MTDR - Free Report) recently announced encouraging results from the first four Boros wells, which have been completed and turned to sales in the Stateline asset area. These wells are located in the Eddy County, NM.

In September 2018, Matador acquired 2,800 gross and net acres in the Bureau of Land Management lease sale that included the Stateline asset area. On the east side of the acquired leasehold, Matador has drilled 13 Boros wells. Of these wells, the company recently turned four wells to sales. It is expected to turn the rest of the nine wells to sales over the next two weeks. Moreover, the company will likely drill at least 75 additional wells in the overall Stateline asset area.

It is using its midstream affiliate, San Mateo’s assets to gather oil, natural gas and water from these wells. Over the past few years, the company’s gross operated oil and water production gathered through the assets in the Delaware Basin has significantly increased.

Importantly, drilling costs of the wells were 20% lower than the original expectation and the initial output results were strong. With the introduction of these new wells, Matador expects a massive rise in fourth-quarter production. Earlier, it boosted its 2020 oil equivalent production guidance to 26.3-27.1 million barrels, indicating an increase from 24.2 million BOE in 2019. Total 2020 oil production is expected in the range of 15.35-15.65 million barrels, indicating an increase from the 2019 level of 14 million barrels.

Importantly, Matador expects to reach a milestone of being free cash flow positive in the fourth quarter. This can be a key achievement for the company as its free cash flows have been negative over the past few years. Especially, considering the current market uncertainties, this achievement can boost investor confidence.

Price Performance

Its shares have gained 1.8% in the past three months against 4.3% fall of the industry it belongs to.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Equinor ASA (EQNR - Free Report) , Pioneer Natural Resources Company and Concho Resources Inc. , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equinor’s bottom line for 2021 is expected to skyrocket 125% year over year.

Pioneer Natural’s bottom line for 2021 is expected to surge 180.8% year over year.

Concho Resources’ bottom line for 2020 is expected to rise 34.4% year over year.

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