- Strong Balance Sheet & Debt Reduction Matador reduced leverage ratio to 1, paying down $200 million in debt in 2025.
- Reserve Growth Achieved 9% year-over-year reserve increase, driven by inventory improvements in Delaware Basin.
- CapEx Efficiency Forecasted $130 million in 2026 CapEx savings, with 10% well cost reductions and 20% completion efficiency gains.
- D&C Cost Per Foot Decline Reduced drilling and completion (D&C) cost per foot to $7.95, a 25% improvement year-over-year.
- Midstream Value & Flow Assurance Increased borrowing base from bank group and enhanced midstream capacity through San Mateo collaboration.
Operational Highlights and Guidance
The company's operational performance was marked by notable achievements, including the successful acquisition of new acreage and improvements in well productivity. The management team expressed optimism about the year ahead, citing the potential for further growth and the benefits of its midstream entity, San Mateo, in ensuring flow assurance and reducing costs. For 2026, the company is targeting free cash flow over production growth, with plans to achieve $130 million in CapEx savings and 10% improvements in well costs.
Valuation and Growth Prospects
Analysts estimate next year's revenue growth at 11.7%, indicating a positive outlook for the company's future performance. With a current P/E Ratio of 8.14 and an EV/EBITDA ratio of 3.4, the stock appears to be reasonably valued. Additionally, the company's Free Cash Flow Yield of 13.4% and ROIC of 10.97% suggest a strong potential for returns. The Net Debt / EBITDA ratio of 0.86 indicates a healthy balance sheet, further supporting the company's growth prospects.
Strategic Focus and Future Plans
Matador Resources is focused on building a solid foundation with good acreage, long-term reserve growth, and capital efficiency. The company is also exploring new opportunities, including the Woodford play, and is working to protect its balance sheet while pursuing good deals. With its strong operational and financial performance, the company is well-positioned for future growth and is expected to continue delivering value to its shareholders.