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Matador Resources (MTDR) Q3 Earnings & Sales Beat Estimates

Matador Resources Company MTDR reported third-quarter 2019 adjusted earnings of 32 cents per share, beating the Zacks Consensus Estimate of 23 cents. However, the bottom line declined from the year-ago figure of 48 cents.

Meanwhile, revenues of $279.4 million improved from the year-ago level of $207.2 million and beat the Zacks Consensus Estimate of $231 million.

The better-than-expected results were supported by higher oil equivalent production volume and lower lease operating costs, partially offset by weak average commodity price realizations.

Matador Resources Company Price, Consensus and EPS Surprise

 

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

Production Picture

In third-quarter 2019, total production volume averaged 6,407 thousand barrels of oil equivalent (MBOE) (comprising almost 57.1% oil), higher than 5,025 MBOE a year ago.

The average production volume of oil was 39,776 barrels per day (Bbls/d), up from 32,317 Bbls/d in third-quarter 2018. Natural gas production was at 179.2 million cubic feet per day (MMcf/d), up from 133.8 MMcf/d a year ago.

Price Realization

Average realized price for oil (excluding realized derivatives) was $54.19 per barrel, down from $57.15 in the year-ago quarter. Also, natural gas price of $1.88 per thousand cubic feet was lower than $3.77 in the prior-year quarter.

Operating Expenses

The company’s production taxes, transportation and processing costs declined to $3.86 per BOE from $4.02 in the year-ago quarter. Further, lease operating costs decreased from $4.48 per BOE in third-quarter 2018 to $4.64. Moreover, plant and other midstream services operating expenses fell to $1.38 per BOE in the quarter from the year-earlier number of $1.45.

Balance Sheet

As of Sep 30, 2019, Matador had cash and restricted cash of $40.8 million. Long-term debt totaled $1,514 million, which included $215 million of borrowings under its credit agreement. Its debt-to-capitalization ratio was 44.2%.

Capital Spending

The company spent $213 million during the third quarter of 2019. Matador allocated $193 million of the total amount to drill, equip and complete wells and $20 million toward midstream operations.

Guidance

The company has updated its 2019 guidance and expects oil production of 13.625-13.675 million barrels compared with 13.3-13.45 million barrels guided earlier. Notably, it reaffirms the 2019 capital expenditure guidance for drilling, completing and equipping wells at $640-$680 million.

Zacks Rank & Stocks to Consider

Matador Resources currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include CNX Resources Corporation CNX, Contango Oil & Gas Company MCF and Noble Midstream Partners LP NBLX. All the stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.        

CNX Resources beat the Zacks Consensus Estimate in two of the prior four quarters, the average positive earnings surprise being 34.8%.

Contango Oil & Gas is likely to witness bottom-line growth of 87% in 2019.

Noble Midstream’s 2019 earnings projection has been raised over the past 30 days.

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