Matador Resources, as Wall Street Still Loves Oil
Matador Resources (NYSE: MTDR) is an independent energy company engaged in the exploration, development, production, and acquisition of oil and natural gas in the United States. The company also provides midstream services, including crude oil and produced water gathering, transportation, and disposal for third-party operators.
Matador’s core operations are concentrated in the Delaware Basin, specifically in the Wolfcamp and Bone Spring shale formations, as well as in the Eagle Ford Shale in South Texas and the Haynesville Shale in Northwest Louisiana. The majority of the company’s production comes from crude oil, which accounts for 58.9% of total output.
Recent Developments
In September 2024, Matador completed the acquisition of Ameredev II Parent, LLC for $1.832 billion. The deal included approximately 33,500 net acres in the Delaware Basin, with expected production of 25,500–26,500 barrels of oil equivalent per day (BOE/d) for the remainder of Q3 2024. Additionally, Matador secured a 19% equity interest in Piñon Midstream, LLC, strengthening its position in natural gas gathering and processing.
In December 2024, Matador announced the transfer of its wholly owned subsidiary Pronto Midstream, LLC into San Mateo Midstream, LLC, a joint venture in which Matador holds a 51% ownership stake. The transaction, valued at approximately $600 million, further reinforced Matador’s presence in the midstream segment.
Production in 2024
Matador achieved record-high production in Q4 2024, underscoring its strong operational performance.
- Total production for the quarter reached 201.1 thousand barrels of oil equivalent per day (MBOE/d), a 30% year-over-year increase.
- Crude oil output rose 34% year-over-year to 118,440 barrels per day (BOPD).
- Natural gas production grew 26% to 496.1 million cubic feet per day (MMcf/d).
For the full year 2024, production also saw substantial growth:
- Average daily crude oil production increased 32% to 99,808 BOPD.
- Average daily natural gas production climbed 26% to 425.7 MMcf/d.
These production gains were driven by operational efficiencies, optimized well completions, and the integration of newly acquired assets, including those from Ameredev II.
Financial Performance
Matador posted record-breaking financial results in 2024.
- Annual revenue reached $3.48 billion, marking a 33% year-over-year increase.
- Net income for the year grew 4.6% to $885.32 million.
- Q4 2024 revenue totaled $970.37 million, up 16% year-over-year.
- Net incomefor Q4 declined 15.7% to $214.53 million, primarily due to expenses related to acquisitions and integration.
The company continues to reward its shareholders through consistent dividend growth. In October 2024, Matador increased its quarterly dividend by 25% to $0.25 per share ($1.00 annually). In February 2025, the company further raised its base dividend by another 25%, bringing the annual payout to $1.25 per share. This move underscores Matador’s confidence in its ability to sustain free cash flow growth and production expansion.
Outlook for 2025
The acquisition of Ameredev II and the Pronto Midstream transfer into the San Mateo Midstream joint venture have significantly bolstered Matador’s position in the Delaware Basin, creating a strong foundation for further expansion. The company aims to increase its average daily crude oil production to 120,000-124,000 barrels per day by 2025 while continuing to drive cost efficiencies and operational improvements.
In addition, Matador plans to expand its natural gas production to between 492 and 504 million cubic feet per day in 2025, reaffirming its commitment to operational efficiency and cost reductions.
Investor interest in Matador remains strong. Over the past 12 months, insiders have purchased over $2 million worth of Matador stock, with the latest transaction occurring on February 26, 2025. In Q4 2024, institutional investors such as BlackRock increased their stake in Matador by 1.2 million shares, equating to $67.58 million.
Wall Street analysts maintain a bullish outlook on Matador.
- 16 out of 17 analysts rate the stock as a buy, forecasting an upside potential of 45%.
- The average price target for Matador shares stands at $74.
Risks
Despite strong financials and growth prospects, certain risks remain:
- High leverage may become a challenge if oil prices decline or if borrowing conditions tighten.
- Geological risks—newly acquired assets could underperform relative to initial projections.
Conclusion
Matador Resources continues to exhibit strong fundamentals, a robust growth trajectory, and solid investor support. With regulatory easing and a favorable policy stance toward the oil and gas sector, the company is well-positioned to sustain long-term success and enhance shareholder value in the coming years.
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