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Matador (MTDR) Up 15.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Matador Resources (MTDR - Free Report) . Shares have added about 15.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Matador due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Matador Q2 Earnings Beat Estimates on Upstream Strength
Matador Resources reported second-quarter 2023 adjusted earnings of $1.42 per share, beating the Zacks Consensus Estimate of $1.28. However, the bottom line significantly declined from the year-ago quarter’s earnings of $3.47 per share.
Total quarterly revenues of $638 million missed the Zacks Consensus Estimate of $641 million. The top line also declined from the year-ago level of $944 million.
Since MTDR is a leading upstream player, having a strong foothold on prolific oil and natural gas shale and other unconventional plays, an improvement in oil equivalent production has led to better-than-expected earnings. However, declining realized commodity prices offset the positive.
Upstream Business in Q2
Being engaged in oil and gas exploration and production activities, the fate of Matador’s overall business primarily depends on the oil and gas pricing scenario. Majority of the company’s production comprises oil (58.4% of total production in the second quarter), making this commodity price the prime factor in determining MTDR’s earnings.
Let’s have a fresh look at Matador Resources’ average sales prices of commodities along with production.
Declining Average Sales Prices of Commodities
MTDR reported second-quarter 2023 average sales price for oil (without realized derivatives) at $73.46 per barrel, declining significantly from $111.06 in the year-ago period. However, the commodity price was higher than our projected price of $72.35 per barrel. Price of natural gas was recorded at $2.61 per thousand cubic feet (Mcf), which slipped from $9.57 per Mcf in a year-ago quarter and missed our estimate of $3.28.
Notably, our estimate for oil and gas prices and the company reported figures were significantly lower year over year in the second quarter, possibly due to worries over a recession and economic slowdown.
Increasing Production
Matador Resources reported second-quarter 2023 oil production at 76,345 barrels per day, increasing from 64,339 barrels per day in the prior-year quarter and also beating our estimate of 75,712.5 barrels per day. Natural gas production was recorded at 326 million cubic feet per day (MMcf/D), increasing from 278.5 MMcf/D a year ago and surpassing our estimate of 306.1 MMcf/D.
Significant success in MTDR’s drilling program in 2022 and 2023 primarily contributed to higher-than-expected production. Thus, total oil equivalent production in the June quarter was reported at 130,683 BoE/D, which not only jumped from the year-ago quarter’s 110,750 BoE/D, but also surpassed our projection of 126,730.9 BoE/D.
Operating Expenses
MTDR’s plant and other midstream services’ operating expenses increased to $2.58 per barrel of oil equivalent (Boe) from the year-earlier figure of $2.18 and our expected figure of $2.3. Also, lease operating costs increased from $3.95 per Boe in second-quarter 2022 to $5.13 but missed our projection of $5.20. Yet, production taxes, transportation and processing costs declined to $5.21 per Boe from $8.50 in the year-ago quarter and our projected figure of $6.30.
Total operating expenses per Boe were $30.10, higher than the prior-year figure of $28.96 and marginally beat our expectation of $30.90.
Balance Sheet & Capital Spending
As of Jun 30, 2023, Matador had cash and restricted cash of $65.8 million. Long-term debt was $2,202.7 million. The company spent $315.4 million for the drilling, completing and equipping (D/C/E) of wells in the second quarter.
Outlook
For 2023, Matador expects its total oil equivalent production to be 45.8 million BoE to 47.5 million BoE, suggesting a year-over-year improvement of 21%. The recent guidance reflects an upward revision from the prior projection of 44.35-46.25 million Boe.
MTDR revised downward its total D/C/E and midstream capital spending for this year to $1,250-$1,420 million from the prior guidance of $1,330-$1,520 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.78% due to these changes.
VGM Scores
At this time, Matador has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Matador has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Matador (MTDR) Up 15.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Matador Resources (MTDR - Free Report) . Shares have added about 15.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Matador due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Matador Q2 Earnings Beat Estimates on Upstream Strength
Matador Resources reported second-quarter 2023 adjusted earnings of $1.42 per share, beating the Zacks Consensus Estimate of $1.28. However, the bottom line significantly declined from the year-ago quarter’s earnings of $3.47 per share.
Total quarterly revenues of $638 million missed the Zacks Consensus Estimate of $641 million. The top line also declined from the year-ago level of $944 million.
Since MTDR is a leading upstream player, having a strong foothold on prolific oil and natural gas shale and other unconventional plays, an improvement in oil equivalent production has led to better-than-expected earnings. However, declining realized commodity prices offset the positive.
Upstream Business in Q2
Being engaged in oil and gas exploration and production activities, the fate of Matador’s overall business primarily depends on the oil and gas pricing scenario. Majority of the company’s production comprises oil (58.4% of total production in the second quarter), making this commodity price the prime factor in determining MTDR’s earnings.
Let’s have a fresh look at Matador Resources’ average sales prices of commodities along with production.
Declining Average Sales Prices of Commodities
MTDR reported second-quarter 2023 average sales price for oil (without realized derivatives) at $73.46 per barrel, declining significantly from $111.06 in the year-ago period. However, the commodity price was higher than our projected price of $72.35 per barrel. Price of natural gas was recorded at $2.61 per thousand cubic feet (Mcf), which slipped from $9.57 per Mcf in a year-ago quarter and missed our estimate of $3.28.
Notably, our estimate for oil and gas prices and the company reported figures were significantly lower year over year in the second quarter, possibly due to worries over a recession and economic slowdown.
Increasing Production
Matador Resources reported second-quarter 2023 oil production at 76,345 barrels per day, increasing from 64,339 barrels per day in the prior-year quarter and also beating our estimate of 75,712.5 barrels per day. Natural gas production was recorded at 326 million cubic feet per day (MMcf/D), increasing from 278.5 MMcf/D a year ago and surpassing our estimate of 306.1 MMcf/D.
Significant success in MTDR’s drilling program in 2022 and 2023 primarily contributed to higher-than-expected production. Thus, total oil equivalent production in the June quarter was reported at 130,683 BoE/D, which not only jumped from the year-ago quarter’s 110,750 BoE/D, but also surpassed our projection of 126,730.9 BoE/D.
Operating Expenses
MTDR’s plant and other midstream services’ operating expenses increased to $2.58 per barrel of oil equivalent (Boe) from the year-earlier figure of $2.18 and our expected figure of $2.3. Also, lease operating costs increased from $3.95 per Boe in second-quarter 2022 to $5.13 but missed our projection of $5.20. Yet, production taxes, transportation and processing costs declined to $5.21 per Boe from $8.50 in the year-ago quarter and our projected figure of $6.30.
Total operating expenses per Boe were $30.10, higher than the prior-year figure of $28.96 and marginally beat our expectation of $30.90.
Balance Sheet & Capital Spending
As of Jun 30, 2023, Matador had cash and restricted cash of $65.8 million. Long-term debt was $2,202.7 million. The company spent $315.4 million for the drilling, completing and equipping (D/C/E) of wells in the second quarter.
Outlook
For 2023, Matador expects its total oil equivalent production to be 45.8 million BoE to 47.5 million BoE, suggesting a year-over-year improvement of 21%. The recent guidance reflects an upward revision from the prior projection of 44.35-46.25 million Boe.
MTDR revised downward its total D/C/E and midstream capital spending for this year to $1,250-$1,420 million from the prior guidance of $1,330-$1,520 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.78% due to these changes.
VGM Scores
At this time, Matador has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Matador has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.