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Matador Resources (MTDR) Q1 Earnings Beat, Revenues Miss

Zacks Equity Research

Matador Resources Company MTDR reported first-quarter 2019 adjusted earnings of 19 cents per share, beating the Zacks Consensus Estimate of 16 cents. However, the bottom line declined from the year-ago profit of 36 cents.

Revenues of $173.9 million declined from the year-ago level of $191.2 million and missed the Zacks Consensus Estimate of $197.1 million due to lower commodity price realizations.

First-quarter 2019 earnings were supported by higher production volumes, partially offset by increased lease operating costs and lower commodity price realizations.

Matador Resources Company Price, Consensus and EPS Surprise

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

Production Rises

During first-quarter 2019, total production volumes averaged 5,395 thousand barrels of oil equivalent (MBOE) (comprising 57.6% oil), higher than 4,075 MBOE recorded a year ago.

The average production volumes of oil were recorded at 34,517 barrels per day (Bbls/d), up from 26,465 Bbls/d in first-quarter 2018. Natural gas production was recorded at 152.5 million cubic feet per day (MMcf/d), up from 112.9 MMcf/d a year ago. Record oil-equivalent production in the Delaware Basin aided the quarterly volumes.

Price Realization Falls

Realized price for oil (including derivatives) was recorded at $50.72 per barrel, down from $60.40 in the year-ago quarter. Also, natural gas price of $2.84 per thousand cubic feet was lower than $3.33 in the prior-year quarter.     

Operating Expenses

The company’s production taxes, transportation and processing costs declined to $3.65 per BOE from $4.37 in the year-ago quarter. Lease operating costs increased from $5.44 per BOE in first-quarter 2018 to $5.78. Plant and other midstream services operating expenses rose to $1.73 per BOE in the quarter from the year-ago period’s $1.04.

Balance Sheet

As of Mar 31, 2019, the company had cash and restricted cash of $46.7 million. Long-term debt totaled $1,398.2 million, which includes $140 million of borrowing under its credit agreement. Its debt-to-capitalization ratio stands at 43.8%. 

Capital Spending

The company spent $193 million through the first quarter of 2019. Matador Resources allocated $177 million of the total amount to drill, equip and complete wells, and $16 million toward midstream operations.

Guidance

Matador Resources expects oil production to increase 1-2% sequentially in the second quarter of the year. Moreover, it anticipates second-quarter natural gas production to decline 7-9% from the prior-year period.

Zacks Rank and Stocks to Consider

Currently, Matador Resources carries a Zacks Rank #3 (Hold). Prospective players in the energy space worth considering include Cactus, Inc. WHD, Hess Corporation HES and Chevron Corporation CVX, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

Cactus’ earnings growth is projected at 11.8% through 2019.

Hess’ earnings are expected to grow 90.5% through 2019.

Chevron’s earnings are likely to grow 3.4% on a year-over-year basis in the second quarter of 2019.

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Chevron Corporation (CVX) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
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