DALLAS - Matador Resources Company (NYSE: NYSE:MTDR) experienced a 3.1% decline in stock price following the announcement of its fourth quarter financial results. Despite surpassing analyst expectations for adjusted earnings per share (EPS), the company reported revenue that fell short of consensus estimates.
For the fourth quarter, Matador reported an adjusted EPS of $1.99, beating the analyst estimate of $1.83 by $0.16. However, revenue for the quarter was reported at $753.25 million, which did not meet the expected consensus estimate of $840.13 million.
The company's production for the quarter saw a significant increase, with an average daily production of 154,300 barrels of oil equivalent (BOE) per day, a 38% increase from the fourth quarter of the previous year. This production outperformance was primarily driven by increased production from wells in Matador's Stateline asset area and Rodney Robinson leasehold, outperformance of the Margarita wells, and land acquisitions that added approximately 1,000 BOE per day beyond expectations. Additionally, higher-than-expected production from non-operated assets contributed to the strong quarter.
Matador's focus on operational efficiencies and cost reduction was evident in the decreased lease operating expenses, which dropped 5% to $5.06 per BOE, surpassing the company's expected guidance range of $5.40 to $5.80 per BOE for the fourth quarter. These cost savings were attributed to increased use of recycled produced water for completion activities and improvements related to wells acquired from Advance Energy Partners Holdings, LLC.
Joseph Wm. Foran, Matador's Founder, Chairman, and CEO, commented on the results, stating, "Matador achieved another record quarter in the fourth quarter of 2023, which was another strong finish to yet another record year." He highlighted the company's record production, decreased costs, and better-than-expected free cash flow per share.
Looking ahead, Matador anticipates continued growth and operational efficiency improvements in 2024, with expectations of setting further records in production and reserves. The company's midstream businesses, San Mateo Midstream, LLC, and Pronto Midstream, LLC, also reported strong performances, contributing to the company's overall success.
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