Sign in

You're signed outSign in or to get full access.

MR

Matador Resources Co (MTDR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered record production at 209,184 BOE/d (+22% YoY) with oil at 119,556 Bbl/d and gas at 537.8 MMcf/d, helped by outperformance of operated wells and six non-op Haynesville wells; adjusted EPS was $1.36 and adjusted EBITDA $566.5M .
  • Management raised FY2025 production guidance and lowered D&C cost per foot, but increased total CapEx given accelerated activity; dividend was raised 20% to $0.375/share quarterly and $55M of stock repurchased YTD .
  • Q4 outlook: oil volumes expected to rise with larger batches, gas to dip given Waha curtailments (0.9 Bcf gas, 45,000 Bbl oil shut-ins in Oct); D/C/E CapEx guided down 21% sequentially .
  • Versus Street: Q3 adjusted EPS beat, while revenue was modestly below SPGI consensus; recurring EPS beats may drive estimate revisions despite revenue normalization on SPGI basis (ex-purchased gas/hedges) [GetEstimates*].
  • Catalysts: strategic gas marketing (Hugh Brinson firm transport, LNG exposure) and midstream performance (San Mateo record processing and fee-based stability) support cash flow resilience amid Permian takeaway dynamics .

What Went Well and What Went Wrong

  • What Went Well

    • “Record production of 209,184 BOE/d… +22% YoY,” exceeding guidance midpoints for BOE, oil, and gas; completion efficiency improved ~20% vs 2024 average, lowering costs per foot .
    • Dividend increased 20% and $105M RBL paydown in Q3, with leverage <1.0x and ~$2B liquidity; adjusted FCF of $93M despite elevated D/C/E spend .
    • Midstream: San Mateo processed record 533 MMcf/d, quarterly net income $50M and Adjusted EBITDA $74M; fee-based model and new sour-gas compressor expand optionality .

  • What Went Wrong

    • Q3 D/C/E CapEx of $429.9M was ~$95M above guidance midpoint due to accelerated activity and non-op spend; midstream CapEx $42.8M in range but total CapEx rose .
    • Q4 gas expected lower due to negative Waha pricing maintenance curtailments and Haynesville decline; 0.9 Bcf gas and 45,000 Bbl oil deferred from October .
    • Realized oil price down YoY ($64.91 vs $75.67), and LOE/G&A per BOE rose slightly vs Q2 (LOE $5.58; G&A $1.91), pressuring margins despite efficiency gains .

Financial Results

Headline P&L and Cash Metrics

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$899.8 $1,014.0 $895.3 $939.0
Oil & Natural Gas Revenues ($USD Millions)$770.2 $909.9 $815.8 $810.2
Third-Party Midstream Revenues ($USD Millions)$38.3 $33.5 $42.0 $43.8
Diluted EPS (GAAP) ($USD)$1.99 $1.92 $1.21 $1.42
Adjusted EPS (Diluted) ($USD)$1.89 $1.99 $1.53 $1.36
Adjusted EBITDA ($USD Millions)$574.5 $644.2 $594.2 $566.5
Net Cash Provided by Operating Activities ($USD Millions)$610.4 $727.9 $501.0 $721.7
Adjusted Free Cash Flow ($USD Millions)$196.1 $141.9 $132.7 $93.4

Volumes and Prices

MetricQ1 2025Q2 2025Q3 2025
Total Production (BOE/d)198,631 209,013 209,184
Oil (Bbl/d)115,030 122,875 119,556
Natural Gas (MMcf/d)501.6 516.8 537.8
Realized Oil Price ($/Bbl)$72.38 $64.34 $64.91
Realized Gas Price ($/Mcf)$3.56 $2.05 $1.95

CapEx and Wells

MetricQ1 2025Q2 2025Q3 2025
D/C/E CapEx ($USD Millions)$394.4 $345.3 $429.9
Midstream CapEx ($USD Millions)$46.4 $56.2 $42.8
Net Operated Wells Turned to Sales (net)33.5 22.8 34.5

Segment and Midstream KPIs

MetricQ2 2025Q3 2025
San Mateo Net Income ($USD Millions)$65.6 $49.5
San Mateo Adjusted EBITDA ($USD Millions)$85.5 $74.1
Gas Processing (MMcf/d)486 533
Oil Gathering (Bbl/d)50,300 58,400
Produced Water Handling (Bbl/d)414,400 413,700

Street vs Actual (SPGI Basis)

MetricQ1 2025Q2 2025Q3 2025
EPS Consensus Mean* ($)1.7831.4131.225
EPS Actual* ($)1.991.531.36
Revenue Consensus Mean* ($USD)956,571,900910,773,690865,333,720
Revenue Actual* ($USD)933,973,000861,178,000852,517,000
Primary EPS – # of Estimates*181718
Revenue – # of Estimates*889

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Production (BOE/d)FY2025200,000–205,000 205,500–206,500 Raised
Oil (Bbl/d)FY2025117,500–119,500 119,250–119,750 Raised
Natural Gas (MMcf/d)FY2025495–513 517.5–520.5 Raised
D/C/E CapExFY2025$1.18–$1.37B $1.47–$1.55B Raised
Midstream CapExFY2025$120–$180M $155–$175M Raised
Total CapExFY2025$1.30–$1.55B $1.625–$1.725B Raised
D&C Cost per FootFY2025$865–$895 $835–$855 Lowered
Organic ProductionFY2026—~210,000 BOE/d; oil +2–5% YoY New Outlook
Total CapEx vs 2025FY2026—8–12% lower with similar lateral footage New Outlook
Q4 Production (BOE/d)Q4 2025—205,000–208,000 (oil 119,000–121,000; gas 516–522 MMcf/d) New Quarter Guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Efficiency & D&C CostQ1 guided $880/ft; Q2 achieved ~$825/ft and lowered costs via simul/trim-frac Further reduce to $835–$855/ft; completion efficiency +20% vs 2024 Improving
Midstream StrategyMarlan expansion “on-time/on-budget” increasing capacity to 720 MMcf/d (Q2 record EBITDA) Record 533 MMcf/d; exploring value-unlock options; fee-based stability Strengthening
Gas Price & TakeawayHedging and Waha basis collars, optionality communicated (Q2) October Waha curtailments; natural gas marketing deal (Hugh Brinson, LNG exposure) Proactively Managed
Inventory & LateralsQ1 first 3-mile laterals; deep inventory with >50% returns Planning 3.4-mile laterals at AmeriDev; maintain high EURs Longer Laterals
Tax/Regulatory (OBBBA)Cash taxes reduced to 0–5% of pre-tax income; no CAMT in 2026 Current tax benefit recognized in Q3 (negative current tax) Favorable
Capital ReturnsQ2 repurchases; base dividend $0.3125 [22]Dividend ↑20% to $0.375; $55M repurchases YTD; leverage <1x Increasing

Management Commentary

  • CEO: “Anytime you get to raise the dividend… we are number one in profit per employee… we would still spend this money… setting up next year [to] be one of the most fruitful years” .
  • COO: “12 additional wells… in excess of a 50% rate of return… revised D&C cost per foot to $835–$855… 13.6 net wells turned on in January providing positive momentum” .
  • CFO: “For the first time this quarter, over $3 billion in retained earnings… leverage ratio 0.4… about $2 billion in liquidity… hit all priorities this quarter” .
  • EVP Midstream: “Processed 533 MMcf/d; fee-based business with third-party growth… optionality to drop down wholly-owned assets ($40–$50M 2026 EBITDA)” .
  • CEO on capital discipline: “Price drops can be replaced by efficiency gains… these wells are going to produce for 30 years… we like our chances” .

Q&A Highlights

  • Capital spend vs growth: Balanced approach with optionality; efficiency gains and service cost reductions underpin 2026 flexibility; ability to flex completion cadence if macro weakens .
  • Midstream value and strategy: San Mateo fee-based resilience; exploring strategic solutions while maintaining partnership-driven flow assurance; potential drop-downs of wholly-owned assets .
  • Waha weakness and takeaway: Curtailed during maintenance, hedged downside; 2026 capacity additions (GCX expansion, Blackcomb, Hugh Brinson) expected to relieve pressure .
  • Productivity outlook: Expect same or better BOE/foot in 2026 with ~10% longer laterals; strong EUR wells (Avalon example) underpin durable returns .
  • Water handling & logistics: Investments to expand produced water gathering; recycling supports simul/trim-frac efficiency and LOE reduction .

Estimates Context

  • Q3 2025 adjusted EPS of $1.36 beat S&P Global consensus $1.23; revenue of $852.5M was below $865.3M consensus as SPGI “actual” excludes purchased gas and hedge effects, unlike company “Total revenues.” Expect Street to raise EPS estimates but keep revenue forecasts conservative on SPGI basis [GetEstimates*] .
  • Pattern: EPS beats in Q1–Q3 2025 vs consensus; revenue under consensus each quarter on SPGI basis, reflecting mix and presentation differences [GetEstimates*].

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Operational outperformance sustained: record BOE/d, efficient completions, longer laterals—supporting durable returns through cycles .
  • Shareholder returns accelerating: dividend +20%, opportunistic buybacks, and debt reduction with leverage <1x—enhancing capital flexibility .
  • Guidance raised for FY2025 volumes with lower unit costs; near-term gas curtailments are tactical and deferred volumes support later periods .
  • Midstream is a strategic asset: record throughput, fee-based resilience, and potential value-unlock options—key buffer against commodity volatility .
  • Gas marketing upgrade (Hugh Brinson) and LNG exposure provide upside to realized pricing from late-2026, mitigating Waha risk .
  • Despite higher Q3 D/C/E spend, Q4 CapEx guided down; 2026 plan targets same footage with 8–12% lower CapEx—multi-year FCF improving setup .
  • Trading lens: bias to reward EPS beats and dividend growth; watch gas basis headlines and any midstream monetization steps as stock reaction catalysts [GetEstimates*] .