Matador Resources Company MTDR is a leading upstream player with a solid foothold in prolific oil and natural gas shale and other unconventional plays. The company is likely to see earnings growth of almost 11% and 2.3% in 2024 and 2025, respectively.
What’s Favoring Matador Resources?
The price of West Texas Intermediate crude is trading at more than $67 per barrel, which is still advantageous for exploration and production activities. Handsome crude price is likely to aid MTDR, carrying a Zacks Rank #3 (Hold), in increasing production volumes. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company expects to produce more than 200,000 barrels of oil equivalent per day (BOE/day) in 2025, a significant milestone for the company. This growth is largely attributed to its recent Ameredev acquisition, which brought high-quality assets into its portfolio.
Also, the company has achieved an 8% reduction in drilling and completion costs per lateral foot, thanks to operational improvements like Trimul-Fracs and remote operations.
Risks to Matador Resources’ Business
However, continued investment in the midstream business, although reducing over time, could still divert funds from drilling and operational efficiency.
Also, being an upstream energy player, the company’s overall operations are exposed to extreme volatility in oil and natural gas prices. Other major exploration and production firms that are also exposed to commodity price volatility are ConocoPhillips COP, Diamondback Energy, Inc. FANG and Range Resources Corporation RRC.
ConocoPhillips has secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale.
Diamondback Energy, a leading pure-play Permian operator, has reported ongoing enhancements in the average productivity per well in the Midland Basin. Thus, the exploration and production company will likely continue witnessing increased production volumes.
Range Resources has decades of low-risk drilling inventory in Appalachia, brightening its production outlook. The company has lower well costs per lateral foot than many other upstream players.
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Matador Resources Company (MTDR) : Free Stock Analysis Report
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