Matador Resources Company Reports Record Third Quarter 2024 Results, Increases Full-Year 2024 Guidance and Expects Over 200,000 BOE Per Day in 2025

DALLAS–(BUSINESS WIRE)–Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today reported financial and record operating results for the third quarter of 2024, increased full-year 2024 guidance and expects to produce over 200,000 barrels of oil and natural gas equivalent (“BOE”) per day in 2025. A short slide presentation summarizing the highlights of Matador’s third quarter 2024 earnings release is also included on the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab.

Management Commentary

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “Matador’s third quarter of 2024 was one of the best quarters in Matador’s history with record production and the closing of our largest acquisition to date. Before highlighting these record results, I wanted to take a moment and point to one of the factors that evidences the confidence Matador’s management team, staff and Board of Directors have in the Company’s continuing positive outlook over the years. Recently, The Wall Street Journal published a front-page article noting that insider purchases of company stock have significantly decreased in 2024 (see Slide A). For the public record, I wish to state clearly that Matador is not one of these companies. In fact, Matador’s executive officers and directors have purchased approximately $1,400,000 of Matador stock over just the last twelve months, and since the beginning of 2021, Matador’s executive officers have made 27 separate open market purchases totaling 50,000 shares of Matador stock for approximately $2,000,000. During that time, Matador is not only the only company among its peers where management has purchased more shares than management has sold but also Matador’s executive officers have yet to sell a single share (see Slide B). This confidence in Matador’s future extends throughout the Company, as over 95% of Matador’s employees participate in its Employee Stock Purchase Plan.

“Our confidence in Matador’s future is bolstered by the long track record of success achieved by both Matador I and Matador II. Over the last 40 years, Matador I and II have consistently grown shareholder value regardless of structure, industry cycles or volatility in commodity prices. Starting from scratch in 2003 with just $6 million in beginning equity capital, Matador II has grown to a market cap of approximately $6.5 billion. Matador now owns nearly 200,000 net acres in the Delaware Basin, which is believed by many to be the best basin in the United States. The Delaware Basin is also where we have 10 to 15 years of inventory with an average rate of return in excess of over 50% and rank among the top producers there in both size and profitability (see Slide C). During 2025, Matador expects to produce a record average amount of at least 200,000 BOE per day. Furthermore, Matador presently has over 600 million BOE in proved oil and natural gas reserves—again a record amount and a gain of nearly 150 million BOE over this same time period a year ago (see Slide D). Matador can also count on a midstream business that we estimate to be worth more than $1.5 billion net to Matador (see Slide I). Financially, Matador maintains a strong balance sheet with over $1.25 billion in liquidity as of September 30, 2024.

“All of these accomplishments are connected to the teamwork, planning and execution by Matador’s Board, management, staff, vendors, leaseholders, banks and other friends. We try to come into work with a focus on how each of us can get better each day and how we can help the team and the Company get better each day. This focus has resulted in the organizational excellence that allows me to say that our team thinks that there is still plenty of work to do but Matador’s future has truly never been brighter.

Integration of the Ameredev Acquisition

“One of the significant accomplishments during the third quarter of 2024 was the closing of the Ameredev acquisition (see Slide E). The positive benefits of this contiguous block of 33,500 net acres are already exceeding our expectations. Production from the Ameredev assets averaged 31,500 BOE per day following the closing of the acquisition on September 18, 2024. In fact, production from the first seven wells turned to sales since the effective date of the acquisition have exceeded our expectations by over 10% and averaged 1,975 BOE per day (76% oil) during 24-hour initial production tests.

“Similar to the acquisition of our Advance properties in 2023, integration of the Ameredev assets is off to a great start. We moved a drilling rig to the Ameredev acreage the weekend following closing and this quarter we expect to implement operational efficiencies such as ‘simul-frac’ and ‘trimul-frac’ completion operations, dual fuel technologies and other operational efficiencies on the Ameredev properties, which we expect to result in synergies of approximately $160 million within the next five years. Our production team is now operating the six existing Ameredev facilities and is working hard to improve the lease operating expenses elsewhere on the Ameredev assets. We expect that these efforts could result in additional operational synergies of over $1 million per month.

“The Ameredev acquisition included an approximate 19% equity interest in the parent company of Piñon Midstream. Piñon recently announced that it expects to sell to an affiliate of Enterprise Products Partners L.P. in the fourth quarter of 2024, subject to customary regulatory approvals. We currently expect to receive between $110 million and $120 million from the sale of this 19% interest. We expect to use these proceeds to repay borrowings under our revolving credit facility and help reduce our leverage ratio from the current level of 1.3 times to less than one times.

“The smooth integration of the Ameredev properties is the result of the hard work, the experience and extra efforts of many office and field personnel at Matador, Ameredev and EnCap. We are very grateful for the professionalism of the Ameredev and EnCap teams both before and after closing the acquisition. We thank them for their part in making this acquisition a true win-win for all the parties involved.

Record Production While Increasing Efficiencies and Decreasing Costs

“During the third quarter of 2024, Matador achieved record production on its existing properties while continuing to implement new ways to gain additional operational efficiencies and reduce well costs (see Slide F). Matador achieved record average total production of 171,480 BOE per day during the third quarter of 2024, which was 5% better than our guidance. Matador’s record average oil production of 100,315 barrels of oil per day during the third quarter of 2024 was 3% better than our guidance.

“Notably, in the third quarter of 2023, Matador produced an average of 135,000 BOE per day. In comparison, for the fourth quarter of 2024, a year later, Matador’s guidance is 198,000 BOE per day. Matador achieved a 32% increase in net cash provided by operating activities of $610.4 million in the third quarter of 2024, as compared to net cash provided by operating activities of $461.0 million in the third quarter of 2023. The record oil and natural gas production during the third quarter of 2024 led to a significant jump in Adjusted Free Cash Flow to $196.1 million for the third quarter of 2024, which was an increase of 36% as compared to the Adjusted Free Cash Flow of $144.6 million for the third quarter of 2023. Matador is using this Adjusted Free Cash Flow primarily to repay outstanding borrowings under our revolving credit facility as well as for payment of our dividend and our brick-by-brick acquisitions.

“Operational efficiencies, good wells and strong vendor relationships continue to drive average well costs lower. We currently estimate that full-year 2024 drilling and completion costs will be improved to between $925 and $935 per completed lateral foot, which is an 8% reduction from our original guidance of $1,010 per completed lateral foot estimated at the first of the year for calendar year 2024.

“Much of the efficiency savings achieved by Matador during 2024 were driven by embracing certain operational innovations occurring in the Delaware Basin such as U-Turn wells, remote hydraulic fracturing operations and the optimization of simul-frac and trimul-frac completion operations. For an example of our improvement in this regard, we expect to turn-in-line five new U-Turn wells during the fourth quarter of 2024. In doing so, we have successfully reduced drill cycle times on these five U-Turn wells by 30% as compared to the U-Turn wells we turned to sales in 2023. Remote simul-frac was utilized on four of the five 2024 U-Turn wells providing additional cost savings in the completing of these wells. The team estimated $3 million in cost savings per U-Turn well when compared to the alternative of drilling eight one-mile lateral length wells of equal aggregate length. The primary driver of these savings is the elimination of four vertical wellbores. Drilling four U-Turn wells only requires four vertical wellbores to drill and complete eight miles of lateral length as compared to drilling eight one-mile single-direction lateral length wells that require eight vertical wellbores to complete eight miles of lateral length (see Slide G).

“Building upon the successful trimul-frac pilot test in the second quarter of 2024, Matador successfully completed two additional trimul-frac completions in the third quarter of 2024, including its first remote trimul-frac completion. Remote hydraulic fracturing operations continue to increase simul-frac and trimul-frac opportunities, which has resulted in simul-frac and trimul-frac completions on 90 wells that otherwise would have been completed using traditional zipper-frac completion operations. Simul-frac operations result in savings of approximately $250,000 per well while trimul-frac operations result in savings of approximately $350,000 per well.

“These operational efficiencies include savings generated from the 300-plus drilling records set by our MaxCom Center assisting the operating group. When the collective savings generated by these efficiencies are added up, such efficiencies have resulted in total estimated operational savings of $135 million since 2022 (see Slide G). As a result, Matador’s tradition of drilling better wells for less money has enabled Matador to have the highest revenue per BOE and profit per BOE among our peers (see Slide H).

Midstream Assets Continue to Provide Value

“Our record results during the third quarter of 2024 were made possible by the close coordination between our upstream and midstream teams. Matador’s midstream business creates value by providing flow assurance for our production in addition to the economic benefits of owning a profitable and growing midstream business (see Slide I). San Mateo, our midstream joint venture, owns and operates the Black River Processing Plant, which has a designed inlet capacity of 460 million cubic feet of natural gas per day. Pronto, our wholly-owned midstream subsidiary, owns and operates the Marlan Processing Plant, which has a designed inlet capacity of 60 million cubic feet of natural gas per day. The Black River Processing Plant and the Marlan Processing Plant had a combined uptime of over 99% during the third quarter of 2024. This high percentage of uptime provides reliability and flow assurance to both Matador and third-party participants (see Slide J).

“San Mateo also achieved record water handling volumes of 513,000 barrels per day during the third quarter of 2024 due in part to increased volumes from our third-party participants. These record processing and water volumes led to a 66% increase in record San Mateo net income of $49.8 million during the third quarter of 2024 as compared to the third quarter of 2023, and a 45% increase in record Adjusted EBITDA of $68.5 million during the third quarter of 2024 as compared to the third quarter of 2023 (see Slide J). Pronto’s 200 million cubic feet per day expansion of the Marlan Processing Plant remains on track to be operational during the first half of 2025. This new processing plant will provide additional flow assurance and economic benefits for Matador, its shareholders and its third-party participants.

Strong Balance Sheet

“Matador completed the Ameredev acquisition and achieved record results during the third quarter of 2024 while continuing to maintain a strong balance sheet. As part of the financing of the Ameredev acquisition, we amended our credit facility to increase the elected commitment under the revolving credit facility to $2.25 billion and provide for a term loan of $250 million. Shortly after the Ameredev acquisition closed on September 18, 2024, Matador opportunistically issued $750 million of 6.25% senior notes to repay the term loan and a portion of the borrowings under the revolving credit facility (see Slide K). We believe the issuance of these notes was extremely successful as it was more than three times oversubscribed and was essentially debt neutral for Matador as it did not materially add to Matador’s debt but instead merely extended the term. At September 30, 2024, Matador had $955 million outstanding under its revolving credit facility with a leverage ratio of 1.3 times. Matador expects to return to a leverage ratio of 1.0 times or less by the middle of 2025 at current oil and natural gas prices, expected operating results and the anticipated proceeds to us from the sale of Piñon Midstream.

Dividend Increase

“Last week, in light of our progress on various fronts and our outlook going forward, our Board of Directors increased our fixed quarterly dividend by 25% to $0.25 per quarter, or $1.00 per share on an annual basis, from the prior dividend of $0.20 per quarter (see Slide L). This was the fifth dividend increase in four years and is further evidence of the confidence of the Board and our senior staff in Matador’s future. Since 2021, Matador has doubled the value of its assets and returned $230 million in dividends to its shareholders.

Looking Ahead to 2025 Operational Flexibility

“Matador expects continued records and consistently improving operational execution in 2025. We anticipate that average total production will exceed 200,000 BOE per day (60% oil) during 2025 with our current nine rig program (see Slide M). Importantly, we have positioned Matador to be able to modify our drilling program without material costs to Matador if oil prices were to substantially decrease or to increase activity if other appealing opportunities should arise. Please also see our growing and improving environmental work in our 2023 Sustainability Report, which is available on request. Nevertheless, we have hedged approximately 30% to 40% of our oil production through June 2025 to protect our balance sheet and ensure that we can continue to return value to our shareholders. Historically, Matador has often made its greatest operational progress during difficult times, and we believe we are well positioned to make such progress again if that situation occurs.

Closing Thoughts

“Matador’s Board, management and staff remain optimistic about the future of the oil and natural gas business as well as Matador’s opportunities for continued success. The quality of our acreage in the Delaware Basin, our differentiated midstream business, our experienced and proven staff, our consistent execution over 40 years and our financial stability all make Matador an inviting investment (see Slide N). We have come a long way from starting Matador I in 1983 with $270,000 in beginning equity capital and from starting Matador II in 2003 with beginning equity capital of only $6 million. According to The Dallas Morning News’ most recent list of the 50 largest public companies in Dallas, Matador has grown to be the largest exploration and production public company in Dallas and the 17^th most profitable public company across all industries in the Dallas-Fort Worth area in 2023 (see Slide O). Today, we have assets valued at over $11 billion and fully expect to continue in the coming years our history of profitable growth at a measured pace (see Slide P). Matador looks forward to finishing the year on a strong note and to delivering another year of continued strong organizational performance and results.”

Third Quarter 2024 Matador Operational and Financial Highlights

(for comparisons to prior periods, please see the remainder of this press release)

• Average production of 171,480 BOE per day (100,315 barrels of oil per day)
• Net cash provided by operating activities of $610.4 million
• Adjusted free cash flow of $196.1 million
• Net income of $248.3 million, or $1.99 per diluted common share
• Adjusted net income of $236.0 million, or adjusted earnings of $1.89 per diluted common share
• Adjusted EBITDA of $574.5 million
• San Mateo net income of $49.8 million
• San Mateo Adjusted EBITDA of $68.5 million
• Drilling, completing and equipping (“D/C/E”) capital expenditures of $329.9 million
• Midstream capital expenditures of $48.9 million

All references to Matador’s net income, adjusted net income, Adjusted EBITDA and adjusted free cash flow reported throughout this earnings release are those values attributable to Matador Resources Company shareholders after giving effect to any net income, adjusted net income, Adjusted EBITDA or adjusted free cash flow, respectively, attributable to third-party non-controlling interests, including in San Mateo Midstream, LLC (“San Mateo”). Matador owns 51% of San Mateo. For a definition of adjusted net income, adjusted earnings per diluted common share, Adjusted EBITDA and adjusted free cash flow and reconciliations of such non-GAAP financial metrics to their comparable GAAP metrics, please see “Supplemental Non-GAAP Financial Measures” below.

Full-Year 2024 Guidance Update

Effective October 22, 2024, Matador increased its full-year 2024 guidance range for total oil and natural gas equivalent production, oil production and natural gas production as set forth in the table below. This increased production guidance includes expected production from Matador’s acquisition of a subsidiary of Ameredev II Parent, LLC (“Ameredev”).

In addition, Matador’s operations team continues to reduce drilling and completion times, which has allowed Matador to advance completion operations for 11 wells on its Firethorn and Pimento acreage that was acquired in the Ameredev acquisition into the fourth quarter of 2024, as opposed to completing most of these wells in the first quarter of 2025. Accelerating these completions should allow Matador to make more capital-efficient use of its stimulation crews that will enable Matador to turn to sales these additional wells in January 2025, which is two to three months earlier than previously expected. In addition, Matador optimized its drill schedule during 2024 and now expects to turn to sales 101.9 net operated wells for full-year 2024 as compared to its prior expectation of 97.9 net operated wells turned to sales during full-year 2024. As a result of accelerating the completion of the 11 additional wells and the 4.0 additional net operated wells expected to be turned to sales in 2024, Matador increased its full-year 2024 capital expenditure guidance range by $50 million as set forth in the table below.

Production	Prior Full-Year 2024 Guidance Range	New Full-Year 2024 Guidance Range	Difference(1)
Total, BOE per day	158,500 to 163,500	167,500 to 172,500	+6%
Oil, Bbl per day	93,500 to 96,500	98,500 to 101,500	+5%
Natural Gas, MMcf per day	390.0 to 402.0	414.0 to 426.0	+6%
D/C/E CapEx(2)	$1.10 to $1.30 billion	$1.15 to $1.35 billion	+4%
Midstream CapEx(3)	$200 to $250 million	$200 to $250 million	No Change
Total CapEx	$1.30 to $1.55 billion	$1.35 to $1.60 billion	+4%

(1)	The midpoint of guidance provided on October 22, 2024 as compared to the midpoint of guidance provided on July 23, 2024.
(2)	Capital expenditures associated with drilling, completing and equipping wells.
(3)	Includes Matador’s share of estimated capital expenditures for San Mateo and other wholly-owned midstream projects, including projects competed by Pronto. Excludes the acquisition cost of Ameredev’s midstream assets.

Operational and Financial Update

Third Quarter 2024 Record Oil, Natural Gas and Total Oil and Natural Gas Equivalent Production

As summarized in the table below, Matador’s total oil and natural gas production averaged 171,480 BOE per day in the third quarter of 2024, which was a 7% sequential production increase from an average of 160,305 BOE per day in the second quarter of 2024 and a 27% year-over-year increase from an average of 135,096 BOE per day in the third quarter of 2023. The increase in total average production is due to better-than-expected initial production from new wells drilled by Matador during the third quarter of 2024 in addition to continued strong performance of our existing wells, especially the 21 gross (19 net) Dagger Lake South wells that were acquired as part of the Advance acquisition in 2023 and turned to sales in the second quarter of 2024. These factors resulted in Matador’s total oil and natural gas production during the third quarter of 2024 exceeding Matador’s guidance expectations by 5%.

Production	Q3 2024 Average Daily Volume	Q3 2024 Guidance Range(1)	Difference(2)	Sequential(3)	YoY(4)
Total, BOE per day	171,480	163,000 to 165,000	+5% Better than Guidance	+7%	+27%
Oil, Bbl per day	100,315	96,500 to 97,500	+3% Better than Guidance	+5%	+29%
Natural Gas, MMcf per day	427.0	399.0 to 405.0	+6% Better than Guidance	+10%	+24%

(1)	Production range previously projected, as provided on July 23, 2024.
(2)	As compared to midpoint of guidance provided on July 23, 2024.
(3)	Represents sequential percentage change from the second quarter of 2024.
(4)	Represents year-over-year percentage change from the third quarter of 2023.

Third Quarter 2024 Realized Commodity Prices

The following table summarizes Matador’s realized commodity prices during the third quarter of 2024, as compared to the second quarter of 2024 and the third quarter of 2023.

	Sequential (Q3 2024 vs. Q2 2024)						YoY (Q3 2024 vs. Q3 2023)
Realized Commodity Prices	Q3 2024		Q2 2024		Sequential Change(1)		Q3 2024		Q3 2023		YoY Change(2)
Oil Prices, per Bbl	$75.67		$81.20		-7%		$75.67		$82.49		-8%
Natural Gas Prices, per Mcf	$1.83		$2.00		-9%		$1.83		$3.56		-49%

(1)	Third quarter 2024 as compared to second quarter 2024.
(2)	Third quarter 2024 as compared to third quarter 2023.

Third Quarter 2024 Expenses

Matador’s lease operating expenses (“LOE”) increased 1% sequentially from $5.42 per BOE in the second quarter of 2024 to $5.50 per BOE in the third quarter of 2024. This increase is due in part to increased repair and maintenance costs in the third quarter of 2024 and costs related to operating the Ameredev properties after closing the transaction on September 18, 2024, partially offset by increased production. Due to the historically higher LOE per BOE on the Ameredev properties, Matador expects the fourth quarter 2024 LOE to be between $5.75 to $6.25 per BOE. As a result, Matador narrowed its expected range for full-year 2024 LOE to $5.55 to $5.75 per BOE from its previously expected and announced range of $5.25 to $5.75 per BOE. Matador anticipates reducing the historically higher LOE per BOE on the Ameredev properties in the fourth quarter of 2024 and into 2025.

Matador’s general and administrative (“G&A”) expenses decreased 5% sequentially from $1.91 per BOE in the second quarter of 2024 to $1.82 per BOE in the third quarter of 2024, which was a record low for Matador.

Contacts

Mac Schmitz

Senior Vice President – Investor Relations

(972) 371-5225

[email protected]

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