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Matador (MTDR) Stock Dips Marginally Despite Q1 Earnings Beat

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·4 min read
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Matador Resources Company’s MTDR shares declined marginally 0.3% despite reporting better-than-expected first-quarter 2021 earnings on Apr 28. This shows that investors are cautious since the pandemic is still keeping the upstream business uncertain.

The company reported first-quarter 2021 adjusted earnings of 71 cents per share, which beat the Zacks Consensus Estimate of 39 cents per share. Moreover, the bottom line improved significantly from the year-ago profit of 20 cents per share.

The company also reported total quarterly revenues of $267 million, in line with the Zacks Consensus Estimate. However, the top line declined from the year-ago level of $372 million.

Notably, the better-than-expected earnings gained from higher realizations of commodity prices.

Matador Resources Company Price, Consensus and EPS Surprise

Matador Resources Company Price, Consensus and EPS Surprise
Matador Resources Company Price, Consensus and EPS Surprise

Matador Resources Company price-consensus-eps-surprise-chart | Matador Resources Company Quote

Production

For first-quarter 2021, total production volume averaged 6,658 thousand barrels of oil equivalent (MBoe) (comprising 56.1% oil), higher than 6,476 MBoe a year ago.

The average production volume of oil was 41,537 barrels per day (Bbls/d), up from 40,626 Bbls/d reported in first-quarter 2020. Natural gas production was 194.7 million cubic feet per day (MMcf/d), up from 183.2 MMcf/d a year ago.

Price Realization

Average realized price for oil (excluding realized derivatives) was $57.05 per barrel, up from $45.87 in the year-ago quarter. Moreover, natural gas price of $5.88 per thousand cubic feet was higher than $1.70 in the prior-year quarter.

Operating Expenses

The company’s production taxes, transportation and processing costs increased to $5.13 per barrels of oil equivalent (Boe) from $3.35 in the year-ago quarter. Also, plant and other midstream services’ operating expenses increased to $2.05 per Boe from the year-earlier figure of $1.54. However, lease operating costs fell from $4.77 per Boe in first-quarter 2020 to $3.90.

Total operating expenses per Boe were recorded at $25.65, lower than the year-ago level of $26.18.

Balance Sheet

As of Mar 31, 2021, Matador had cash and restricted cash of $48.3 million. Long-term debt was recorded at $1,715 million, which included $340 million of borrowings under its credit agreement. Debt to capitalization was 52%.

Capital Spending

For the drilling, completing and equipping of wells in the first quarter, the company spent $126 million, which is 11% lower than its projection. Enhanced operational efficiencies along with a reduction in drilling and completion costs in the Delaware Basin primarily aided its performance.

Outlook

For 2021, Matador maintains its previous oil equivalent production guidance of 29.9-31 million barrels. Moreover, the company expects total oil production between 17.2 million and 17.8 million barrels.

The company’s 2021 capital spending guidance for drilling, completing and equipping wells is pegged at $525-$575 million. In midstream, it expects to spend $20-$30 million.

Zacks Rank & Other Stocks to Consider

The company currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked players in the energy space are TOTAL SE TOT, Chevron Corporation CVX and Petrobras SA PBR, each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

TOTAL’s earnings for 2021 are expected to increase 11.5% year over year.

Chevron’s earnings for 2021 are expected to increase 13.9% year over year.

Petrobras’ bottom line for 2021 is expected to increase 9.9% year over year.

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