Matador Resources (MTDR) Tops Independent Oil & Gas on Analyst Upgrade

Michael Teague  |

Matador Resources (MTDR) was trading higher than all other independent oil and gas companies on Thursday after the company’s stock was upgraded to “strong buy” by Zacks.

The upgrade follows in the wake of the $1.15 billion Dallas, TX company’s impressive earnings report released the previous week that blew past the average $0.30 per share estimates with an EPS of $0.45, as well as showing a substantial improvement on the prior year’s loss of $0.17 per share. Perhaps even more impressive, the increase in earnings was the result of jump of over 150 percent in revenue.

Matador’s stunning performance during the recently ended period can be attributed to it’s having more than doubled production volume to 617,000 barrels, primarily thanks to the company’s operations in Texas’s Eagle Ford Shale that allowed the company to tap into both greater demand and higher oil and natgas prices throughout the period.

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During last week’s earnings call with shareholders, CEO Joseph Foran said “Our average daily oil production and average daily oil equivalent production for the third quarter were the best quarterly figures in the company’s history...We produced 13,482 barrels of oil equivalent per day, including 6,703 barrels of oil per day and $40.7 million cubic feet of natural gas per day, an increase of more than 50% compared to the third quarter of 2012.”

The drastically improved year-over-year performance was further reinforced by Matador’s outlook for 2014. The company has been aggressively expanding its drilling operations, more than quadrupling its gross-acreage in New Mexico and Texas at the beginning of 2013 to nearly 65,000 acres at present, with plans to continue the trend into the next year.

Indeed, Matador has set aside between $425 and $450 million in capital expenditures, the majority of which it says will be invested into further drilling in the Permian Basin undergirding the southeastern portion of New Mexico and the western portion of Texas.

Shares had advanced nearly 9.5 percent by midday after the upgrade, sending the company’s stock-price to a 52-week high of $22.59.

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