Executive Summary

Q1 2025 was operationally strong with 33% YoY total production growth to 198,631 BOE/d and diluted EPS of $1.92; Matador also authorized a $400M share repurchase and lowered 2025 D/C/E capex by $100M to enhance flexibility .
Versus S&P Global consensus, Adjusted EPS beat ($1.99 vs $1.78*), and Adjusted EBITDA was above expectations ($644M vs $630M*); revenue comparisons are definition-sensitive (company total revenue $1.014B vs consensus $0.957B*, while oil & gas + third‑party midstream revenues were ~$943M) .
2025 guidance was trimmed modestly on volumes (-2% at midpoint) while capex was lowered (-7%); management highlighted optionality to add/drop rigs and prioritized capital returns (dividend maintained at $0.3125) .
Near-term catalyst: expected record Q2 production (206–208 MBOE/d) as 40 wells turned to sales late in Q1 ramp through Q2; medium-term midstream upside as Marlan plant expansion lifts processing capacity to 720 MMcf/d in Q2 .

What Went Well and What Went Wrong

What Went Well
- Production and cost execution: Q1 production exceeded guidance (total +1% to 198,631 BOE/d; oil +1% to 115,030 bpd), realized prices improved sequentially (oil +2%, gas +31%), and D&C cost/ft fell 3% vs FY24 to $880/ft .
- Capital returns/optionality: $400M share repurchase authorization and capex cut of $100M; dividend maintained at $0.3125; liquidity of $1.8B provides flexibility .
- Integration and well performance: 40 operated wells turned to sales (vs 12 in Q1’24), including first 3‑mile laterals; 11 Ameredev wells averaged >1,450 BOE/d IP and added ~12 MMBOE to PDP reserves .
- Quote: “We think it’s a good buying opportunity…we wanted to emphasize how we have an alignment of interest with our shareholders…authorized a repurchase of shares” — CEO Joe Foran .
What Went Wrong
- Activity/pacing: Guidance trimmed on volumes (-2% midpoint) as rig count moves from 9→8 mid‑year; Q3 production expected below Q2 before slight Q4 uptick .
- LOE seasonality: LOE/BOE rose sequentially to $5.96 (winterization), offset by lower G&A/BOE; still within full‑year range .
- Midstream constraints/weather: Q1 faced severe weather and third‑party midstream constraints (management cited shut‑ins/maintenance) though volumes still exceeded guidance .

Financial Results

P&L and cash flow (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenues ($MM)	$899.8	$970.4	$1,014.0
Diluted EPS (GAAP)	$1.99	$1.71	$1.92
Adjusted EPS (non‑GAAP)	$1.89	$1.83	$1.99
Adjusted EBITDA ($MM)	$574.5	$640.9	$644.2
Net Cash from Ops ($MM)	$610.4	$575.0	$727.9

Production and realized prices

Metric	Q3 2024	Q4 2024	Q1 2025
Total Production (BOE/d)	171,480	201,116	198,631
Oil (bbl/d)	100,315	118,440	115,030
Gas (MMcf/d)	427.0	496.1	501.6
Realized Oil ($/bbl)	$75.67	$70.66	$72.38
Realized Gas ($/Mcf)	$1.83	$2.72	$3.56

Costs and capex

Metric	Q3 2024	Q4 2024	Q1 2025
LOE ($/BOE)	$5.50	$5.37	$5.96
G&A ($/BOE)	$1.82	$2.22	$1.89
D/C/E Capex ($MM)	$329.9	$325.5	$394.4
Midstream Capex ($MM)	$48.9	$65.2	$46.4

Revenue composition (Q1 2025)

Component	Q1 2025
Oil & natural gas revenues ($MM)	$909.9
Third‑party midstream revenues ($MM)	$33.5
Sales of purchased natural gas ($MM)	$62.8
Total revenues ($MM)	$1,013.958

Consensus vs actual (Q1 2025) — S&P Global

Metric	Consensus	Actual	Result
Adjusted EPS (Primary EPS)	$1.78 (mean, 18 ests)*	$1.99	Beat
Total Revenues	$956.6MM*	$1,013.958MM (company total); note definitional differences	Definition‑sensitive
Adjusted EBITDA	$629.7MM*	$644.2MM	Beat

Values marked with an asterisk are from S&P Global consensus. Values retrieved from S&P Global.

Note: S&P Global revenue definitions may exclude certain items (e.g., purchased gas sales, derivative items). Company-reported “oil & gas + third‑party midstream” revenue was ~$943.4MM (909.9 + 33.5); this may be closer to some sell‑side “operating revenue” constructs .

Guidance Changes

Metric	Period	Previous Guidance (2/18/25)	Current Guidance (4/23/25)	Change
Total Production (BOE/d)	FY 2025	202,000–208,000	198,000–202,000	Lowered (~-2% midpt)
Oil (bbl/d)	FY 2025	120,000–124,000	117,000–119,000	Lowered
Gas (MMcf/d)	FY 2025	492.0–504.0	486.0–498.0	Lowered
D/C/E Capex ($B)	FY 2025	$1.28–$1.47	$1.18–$1.37	Lowered
Midstream Capex ($MM)	FY 2025	$120–$180	$120–$180	Maintained
Total Capex ($B)	FY 2025	$1.40–$1.65	$1.30–$1.55	Lowered
Dividend ($/share)	Next Pay Date	$0.3125 quarterly (policy)	Declared $0.3125 payable 6/6/25	Maintained
Q2 2025 Production (BOE/d)	Q2 2025	—	206,000–208,000; oil 121,500–122,500; gas 507–513 MMcf/d	New point estimate

Earnings Call Themes & Trends

Topic	Prior Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Capital returns	Dividend increases, no sell insider track record; setup for 2025 >200 MBOE/d and strong cash gen	$400M buyback authorization; emphasize alignment (insider buys) and optionality among buybacks, debt paydown, acquisitions, dividend	Increasing focus on buybacks/returns
Activity cadence	9 rigs into 2025; flexibility to adjust with price; Q4’24 record	Drop to 8 rigs mid‑year; Q2 record, Q3 lower, Q4 slightly higher; growth measured vs price	Moderating near-term growth; optionality preserved
Midstream monetization	Marlan expansion on time; San Mateo growth and EBITDA targets	Considering IPO and other options; strong third‑party interest; capacity to 720 MMcf/d in Q2	Optionality expanding
Hedging/basis	Hedging to protect balance sheet in turbulence	Added oil collars (H1 $60/$86; H2 $52/$77) and 2026 gas collars; Waha basis swaps (2025/26)	Risk management increased
Supply chain/tariffs	Efficiency programs (simul/trimul, U‑Turn)	Secured steel inventory through Q3’25 to mitigate tariff impacts	Proactive procurement
Technology/ops	MaxCom continuous improvement; 300+ drilling records	First 3‑mile laterals online; continued efficiency gains; $880/ft D&C in Q1	Continuous enhancement

Management Commentary

Strategy and optionality: “We’re going to do what’s profitable…profitable growth at a measured pace…we paid down $190 million in debt…we’ve got the tools in the toolbox, including the share repurchase” — CEO Joe Foran .
Capital returns and alignment: “At this price, we think it’s a good buying opportunity…we wanted to emphasize…alignment…authorized a repurchase of shares” — CEO Joe Foran .
Midstream options: “IPO is always a possibility…we’re investigating all those opportunities…we should be up at 720 MMcf/d of capacity this quarter” — EVP Midstream Gregg Krug .
Buyback criteria: “Not a single metric…we will evaluate debt repayment, share repurchases, opportunistic land, midstream expansion, adding back a rig, and/or increasing the dividend” — CFO Brian Willey .

Q&A Highlights

Midstream monetization: Management reiterated optionality, including a potential IPO, supported by imminent capacity increase to 720 MMcf/d and third‑party volume interest .
Activity moderation and cadence: Rig drop to 8 mid‑year is about optionality and returns, not inventory scarcity; Q3 to dip from Q2 and Q4 slightly higher; optional to re‑accelerate if prices warrant .
Share repurchases: Buybacks will be weighed against debt paydown, inorganic opportunities, and dividend growth; no single valuation trigger — portfolio approach to capital allocation .
Hedging/basis: 2026 Waha basis swaps were added as “insurance” given capacity issues; risk management stepped up in turbulence .

Estimates Context

S&P Global consensus for Q1 2025: Adjusted/Primary EPS $1.78 (18 estimates), Revenue $956.6MM, EBITDA $629.7MM*. Actuals: Adjusted EPS $1.99, Total Revenues $1,013.958MM, Adjusted EBITDA $644.2MM — EPS and EBITDA beat; revenue is sensitive to definition (company total revenues include purchased gas sales and derivative items) .
Post‑print, estimate trajectories are likely to reflect: stronger Q2 cadence (record quarter expected) and lower full‑year capex/production midpoints; EBITDA estimates may drift higher near‑term on volumes and realized gas uplift, while FY revenue lines could be normalized for definition consistency .
Values retrieved from S&P Global.

Key Takeaways for Investors

Capital returns inflection: $400M repurchase authorization layered on a maintained dividend signals confidence and balanced returns; insider buying underscores alignment .
Operational momentum: 40 wells turned to sales (95% in 2H of Q1) set up a record Q2; early read on 3‑mile laterals is encouraging .
Discipline through volatility: Rig drop to 8 and $100M capex cut enhance FCF resilience while preserving ability to re‑accelerate if prices improve .
Midstream leverage: Marlan expansion (to 720 MMcf/d) increases flow assurance and optionality (including potential IPO), supporting upstream growth and cash flow stability .
Cost and hedge posture: D&C cost/ft at $880 and expanded oil/gas/basis hedges reduce downside risk in turbulent markets .
Guidance reset is modest: FY25 volume midpoint -2% and capex -7% maintain a path to ~17% YoY production growth vs 2024 actuals; narrative remains growth with returns .
Near‑term setup: Record Q2 production is a tangible catalyst; watch execution on cadence into Q3/Q4 and pace of buybacks vs inorganic opportunities .

Additional References and Data

8‑K and Q1 2025 earnings press release (full financials, guidance, hedges, capex) .
Q1 2025 earnings call transcript (strategy, buybacks, midstream IPO option, cadence) .
Prior quarters for trend: Q4 2024 and Q3 2024 8‑K/press releases (production records, cost trends, guidance framework) .
Dividend declaration (April 2025) .

Matador Resources Co (MTDR)·Q1 2025 Earnings Summary