MTDR · Matador Resources Company

Matador Resources Company delivered a robust start to 2026, with Q1 average daily production of 207,594 BOE/d surpassing the upper end of prior guidance despite challenges like negative Waha natural gas pricing and Winter Storm Fern shut-ins. Key drivers included strong early performance from new wells adding ~2,600 bbl/d oil, flow assurance from San Mateo midstream assets, accelerated 2025 activity, and deferred third-party maintenance. Oil production hit 120,277 bbl/d and natural gas 523.9 MMcf/d, marking a 5% year-over-year increase. Realized natural gas prices fell 82% to $0.64/Mcf due to Waha collapse, prompting record $38.4 million in purchased gas sales. Management highlighted operational efficiencies like electric fracturing fleets cutting diesel use by over 90%, multi-well completions, and field gas sourcing, enabling reaffirmation of $785-$805 per completed lateral foot costs despite inflation. Inventory expansion added over 800 net locations since 2023, lowering finding costs to $10.34/BOE. San Mateo's resilience during the storm processed 20% more volumes than peers, supporting >30% recycled water usage. Balance sheet strengthened with >$350 million RBL paydown, full repayment imminent, lifting liquidity to $2.2 billion on $2.25 billion commitment. Updated 2026 production guidance reflects outperformance and pricing, with estimated adjusted free cash flow of $1.1-$1.2 billion versus $437 million in 2025. Hugh Brinson pipeline access from Q3/Q4 will mitigate Waha exposure, potentially adding $90 million annual revenue per $0.50/MMBtu Henry Hub gain. These results underscore Matador's execution, midstream integration, and long-term inventory focus amid volatility.