Matador Resources Company

What they do

Matador explores for, develops, produces and acquires oil and natural gas resources in the United States, primarily in the oil and liquids-rich Wolfcamp and Bone Spring plays of the Delaware Basin in Southeast New Mexico and West Texas. It also operates in the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Through San Mateo Midstream, it provides natural gas processing, oil transportation, and oil, natural gas and produced water gathering and disposal services to its own operations and to third parties.

Revenue drivers

• Oil production (exploration and production segment) — Oil revenues were $2.84 billion in 2025, or roughly 78% of total 2025 revenue of $3.66 billion. Average daily oil production was 119,723 Bbl per day in 2025, up 20% year-over-year, at a realized price of $64.99 per Bbl.
• Natural gas production and sales — Natural gas production averaged 524.1 MMcf per day in 2025, up 23% year-over-year, with oil comprising 58% of total production on a BOE basis. Total oil and natural gas revenues were $3.24 billion in 2025.
• Midstream operations (San Mateo / Pronto) — San Mateo and Pronto generate revenue by providing natural gas processing, oil transportation, and gathering and produced water disposal services to Matador and third parties, including the newly acquired Cardinal Midstream assets.
• Acquisitions and new acreage (Woodford, Paloma, Cardinal, federal lease sale) — In 2026, Matador added 5,154 net undeveloped acres in a May federal lease sale, agreed to acquire Paloma Permian (16,235 net acres, ~11,100 BOE/d estimated production), and agreed to acquire 13,600 net Woodford acres from Ridge Runner Resources for a total Woodford position of approximately 50,000 net contiguous acres at about $4,000 per acre.

Recent performance

Second quarter 2026 revenue was $1.17 billion, up from $941.6 million in the first quarter of 2026. Record average oil production was 126,106 barrels of oil per day, exceeding guidance of 123,000 to 125,000 barrels per day. Net cash provided by operating activities was $937.1 million in the second quarter of 2026, and adjusted free cash flow was $303.2 million, compared with $113.3 million in the first quarter. Total proved reserves grew 5% to a record 703 million BOE at June 30, 2026 from 667 million BOE at December 31, 2025.

Strategy

Matador's stated goal is to increase shareholder value by building reserves, production and cash flows while providing midstream services at an attractive return on invested capital. The company is executing a strategy of opportunistic acquisitions, having completed or announced four strategic transactions in the first half of 2026: a federal lease sale, the Cardinal Midstream acquisition, the Paloma acquisition and the Ridge Runner acquisition. Management expects the Paloma and Ridge Runner transactions to add roughly four years of high-quality drilling inventory based on current activity levels. It also focuses on improving operational and cost efficiencies and returning capital to shareholders through dividends.

Risks

• Commodity price volatility — Matador's success depends on oil, natural gas and NGL prices, and its 2025 oil revenues were constrained by a 14% decrease in realized oil price to $64.99 per Bbl even as production rose.
• Integration and execution of acquisitions — The company completed the Cardinal Midstream acquisition and has pending Paloma and Ridge Runner acquisitions, which carry risks related to integration, regulatory approvals and closing within anticipated timeframes.
• Reserve replacement and undeveloped reserves — Approximately 39% of total proved reserves at December 31, 2025 consisted of undeveloped and developed non-producing reserves, and the company must replace reserves as it produces them.
• Capital requirements and leverage — Matador's business requires substantial capital expenditures, which may exceed cash flows from operations and borrowings; long-term debt was $4.22 billion at June 30, 2026, and 2025 D/C/E capital expenditures were $1.53 billion.

Outlook

Management increased its full-year 2026 outlook to 7% year-over-year oil production growth from a prior expectation of 4%, following record second quarter oil production. The Paloma and Ridge Runner acquisitions are expected to close in the fourth quarter of 2026, and management expects the newly acquired inventory to compete for capital and provide depth to operating plans in 2027 and beyond. The company also expects future well costs associated with the acquisitions to benefit from capital efficiency on costs.