{"id":518486,"date":"2021-07-27T16:18:43","date_gmt":"2021-07-27T20:18:43","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/matador-resources-company-reports-record-second-quarter-2021-operating-and-financial-results-and-announces-an-additional-100-million-in-borrowings-repaid\/"},"modified":"2021-07-27T16:18:43","modified_gmt":"2021-07-27T20:18:43","slug":"matador-resources-company-reports-record-second-quarter-2021-operating-and-financial-results-and-announces-an-additional-100-million-in-borrowings-repaid","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/matador-resources-company-reports-record-second-quarter-2021-operating-and-financial-results-and-announces-an-additional-100-million-in-borrowings-repaid\/","title":{"rendered":"Matador Resources Company Reports Record Second Quarter 2021 Operating and Financial Results and Announces an Additional $100 Million in Borrowings Repaid"},"content":{"rendered":"

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Matador Resources Company Reports Record Second Quarter 2021 Operating and Financial Results and Announces an Additional $100 Million in Borrowings Repaid<\/b><\/p>\n

DALLAS–(BUSINESS WIRE<\/a>)–
\nMatador Resources Company (NYSE: MTDR) (\u201cMatador\u201d or the \u201cCompany\u201d) today reported financial and operating results for the second quarter of 2021. A short slide presentation summarizing the highlights of Matador\u2019s second quarter 2021 earnings release is also included on the Company\u2019s website at www.matadorresources.com<\/a><\/span> on the Events and Presentations page under the Investor Relations tab.\n<\/p>\n

Second Quarter 2021 Management Summary Comments<\/b><\/p>\n

\nJoseph Wm. Foran, Matador\u2019s Chairman and CEO, commented, \u201cOn both our website and the webcast planned for tomorrow\u2019s earnings conference call is a set of six slides identified as \u2018Chairman\u2019s Remarks\u2019 (Slides A through F<\/b>) to add color and detail to my remarks. We invite you to review these slides in conjunction with my comments below, which are intended to provide context for the second quarter of 2021 compared to Matador\u2019s goals for the year.\n<\/p>\n

Record Results in Second Quarter 2021<\/span><\/p>\n

\n\u201cThe second quarter of 2021 was an outstanding quarter for Matador highlighted by record operational and financial achievements (see Slide A)<\/b>, including a significant increase in net income and all-time quarterly highs for oil and natural gas production, oil and natural gas revenues, Adjusted EBITDA and adjusted free cash flow. San Mateo also delivered record results in the second quarter highlighted by all-time quarterly highs for third-party midstream revenues, net income, Adjusted EBITDA and adjusted free cash flow (see Slide B<\/b>). The Board and I would like to acknowledge and express our sincere appreciation to both the Matador and San Mateo teams for their strong execution once again in the second quarter.\n<\/p>\n

\n\u201cNet cash provided by operating activities in the second quarter was $258.2 million, a 52% sequential increase, leading to second quarter 2021 adjusted free cash flow of $156.3 million, a sequential increase of 145% and an all-time quarterly high. This adjusted free cash flow included $16.3 million in performance incentives received by Matador from our midstream joint venture partner Five Point associated with turning the first 13 Voni wells to sales in the Stateline asset area in the second quarter. Given this strong free cash flow, Matador repaid $100 million in borrowings outstanding in the second quarter of 2021. Matador has now reduced the borrowings outstanding under its reserves-based revolving credit facility by $235 million, or essentially half of the prior borrowings outstanding, during the past three quarters. As a result, Matador\u2019s leverage ratio under the reserves-based credit facility has now declined to 1.8x (see Slide C<\/b>), which marks the lowest leverage ratio in two years, dating back to the second quarter of 2019. Matador expects to use a significant portion of its free cash flow in future periods to continue reducing the borrowings outstanding under its reserves-based credit facility and paying quarterly dividends to shareholders.\n<\/p>\n

Operations Tracking Key 2021 Milestones, Including Strong Well Results and Improved Capital Efficiency<\/span><\/p>\n

\n\u201cMatador\u2019s 2021 priorities and milestones are shown in Slide D<\/b>, and we continue to be on schedule, or even slightly ahead, of this operating and capital efficiency plan for 2021. During the second quarter of 2021, we achieved our second key operational milestone when we turned to sales in April the first 13 Voni wells in the Stateline asset area. Just recently, we achieved our third key operational milestone when we turned to sales four wells, all two-mile, Second Bone Spring completions, in the Greater Stebbins Area. We remain very pleased with the continued better-than-expected well performance being achieved all across our acreage position in the Delaware Basin, but we are particularly excited by the better-than-expected well performance we continue to achieve in the Stateline asset area and in the Rodney Robinson wells in the western portion of the Antelope Ridge asset area. In fact, the first six Rodney Robinson wells turned to sales in late March 2020, in aggregate, achieved payout in approximately one year, and the first 13 Boros wells turned to sales in September 2020, in aggregate, achieved payout in approximately nine months, all despite being turned to sales in 2020 during periods of significantly lower oil and natural gas prices than we enjoy today. Further, we currently expect the initial 13 Voni wells, in aggregate, to achieve payout even quicker than the first 13 Boros wells.\n<\/p>\n

\n\u201cMatador\u2019s drilling and completion costs and operating efficiencies continue to improve. Drilling and completion costs averaged $615 per completed lateral foot in the second quarter of 2021, an all-time quarterly low, and $655 per completed lateral foot in the first six months of 2021, approximately 4% below expectations (see Slide E<\/b>). This improvement in capital efficiency through our transition to drilling and completing longer laterals has been and continues to be a high priority for Matador. Matador expects that 98% of the wells it turns to sales this year should have completed lateral lengths of two miles or longer.\n<\/p>\n

Looking Ahead<\/span><\/p>\n

\n\u201cWe are today announcing two important modifications to our anticipated operated and non-operated activities for the second half of 2021. First, as the operations team continues to reduce drilling times for wells in the Stateline asset area, we are now expecting to advance completion operations for the next 11 Voni wells currently being drilled entirely into the fourth quarter of 2021, as opposed to completing most of those wells in the first quarter of 2022. Accelerating these completions should allow us to make more capital-efficient use of two stimulation crews during the fall of 2021 and into early 2022, which should enable us to turn this next group of Voni wells to sales two to three months earlier in 2022 than previously anticipated, but will defer some of our expected fourth quarter 2021 production until after the first of next year. Second, we now expect to participate in approximately 2.3 net fewer non-operated well opportunities during 2021 as a result of certain of Matador\u2019s operating partners deferring activity from 2021 into 2022. Given the cost savings in operated D\/C\/E capital expenditures Matador has achieved thus far in 2021, the capital efficiency this change provides us and the anticipated savings from fewer non-operated well opportunities during the remainder of 2021, we believe we can accelerate completion operations on the 11 new Voni wells in the fourth quarter of 2021 without increasing<\/span> our total estimated D\/C\/E capital expenditures for full year 2021. Further, given our strong start during the first two quarters of 2021, we also expect to achieve our full year 2021 production guidance despite the loss of production resulting from fewer non-operated wells being turned to sales in the second half of 2021 and the deferral of production in the Stateline asset area from the fourth quarter into the first quarter of 2022 as currently producing wells are expected to be shut in during completion operations on the next 11 Voni wells. Additional details on these modifications to our operating plan and updates to our third and fourth quarter production estimates are provided in more detail later in this earnings release (see Slide F<\/b>).\n<\/p>\n

\n\u201cWe are also pleased to announce that San Mateo has recently secured several new midstream opportunities with new and existing customers in Eddy County, New Mexico. We salute the San Mateo team for their successful business development efforts and look forward to these new natural gas, oil and water volumes being connected to San Mateo\u2019s system. As a result, we have increased our anticipated full year 2021 midstream capital expenditures by approximately $15 million to connect these new midstream volumes and to be ready for first production from Matador\u2019s next 11 Voni wells in early 2022. We expect San Mateo to continue to generate free cash flow in the second half of 2021 and have increased our estimates for San Mateo\u2019s Adjusted EBITDA by approximately $10 million for full year 2021.\n<\/p>\n

\n\u201cWe believe the second half of 2021 will continue to be exciting for Matador and its stakeholders as we work to generate additional free cash flow, lower costs, reduce debt, pay dividends to our shareholders and grow the value of our oil and natural gas and midstream assets. We look forward to finishing 2021 in a capital efficient manner to set up even stronger value creation for Matador stakeholders in 2022 and beyond.\u201d\n<\/p>\n

Second Quarter 2021 Financial and Operational Highlights <\/b><\/p>\n

Net Cash Provided by Operating Activities and Adjusted Free Cash Flow<\/span><\/p>\n