Another oil and gas exploration company has completed the sale of its assets in one part of Texas so it can devote more efforts in the Permian Basin in West Texas.
Matador Resources Company, Dallas, announced recently the sale of its remaining Eagle Ford shale position in South Texas and provided an update on its current hedging position, the strength of its balance sheet and steps Matador has already taken in response to current circumstances.
Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “Matador is pleased to announce that we recently sold our two remaining acreage and production positions in the Eagle Ford shale in La Salle, Karnes and Atascosa Counties in South Texas in a series of transactions. Over the last two quarters, Matador received proceeds of over $30 million from these sale transactions. The Eagle Ford shale has been a productive asset for Matador and was the steppingstone for Matador as it gained experience and built its acreage position in the Delaware Basin. Matador is excited to continue its primary focus on developing its high-quality acreage in the northern Delaware Basin, which Matador believes is recognized as the most prolific basin in the United States and where Matador owns approximately 200,000 net acres, approximately 80% of which is held by production.
Debt Repayment
“Matador applied a portion of its cash flows and over $30 million in proceeds from the sale of its Eagle Ford assets to reduce the borrowings under its credit facility. In total, Matador repaid $180 million of its borrowings under its credit facility during the first quarter of 2025 and ended the quarter with $405 million outstanding under this credit facility and, based on a preliminary review of our results for the first quarter, an expected leverage ratio of one times or less as of March 31, 2025. Notably, Matador finished the first quarter of 2025 in the strongest financial position in its history with approximately $1.8 billion in liquidity.
New Oil Hedges
“In light of prior experience in turbulent times, Matador entered into additional oil hedges during the first quarter of 2025. A summary of our oil costless collars is provided in the following table:
|
Oil Costless Collars |
Volume Hedged |
Weighted Average Price Floor |
Weighted Average Price Ceiling |
|
H1 2025 |
45,000 |
$60 |
$86 |
|
H2 2025 |
70,000 |
$52 |
$77 |
Precautionary Actions for Turbulent Times
“Matador has taken other precautionary actions in preparation for these turbulent times. From experience, we believed it was prudent to fortify Matador’s balance sheet by entering into additional hedges and selling non-core assets as discussed above. Matador also structured its rig contracts with optionality to quickly decrease or increase its drilling program based upon market conditions. Furthermore, Matador expects steel prices for goods such as casing, valves and surface equipment will increase in 2025 due to recent tariffs. To protect its financial position, Matador has already secured inventory for the majority of its 2025 drilling program. Matador does not expect any recent tariffs to impact its well costs until the second half of 2025. These precautionary actions taken by Matador have helped minimize the impact of recent volatility in commodity prices on its operations.
Opportunities Ahead
“Over the past 40 years, during volatile times like the one that we are currently experiencing, Matador or its predecessors have made some of their most significant acquisitions, drilled some of their most profitable prospects and hired key individuals that have contributed significantly to Matador’s success going forward. Matador remains optimistic about its plans and drilling inventory for the remainder of 2025 and beyond. With the recent decrease in Matador’s stock price, we expect that Matador’s board of directors will consider implementing a stock repurchase program later this month at its regularly scheduled meeting if present circumstances continue. Any such stock repurchase program would be incremental to our current quarterly fixed dividend of $0.3125 per share, which remains well within our means at current commodity prices. We express our gratitude for the support of our shareholders, vendors, partners and other friends and welcome you to call us or to come visit us in Dallas anytime.”
About Matador Resources Company
Matador is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Its current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, Matador conducts midstream operations in support of its exploration, development and production operations and provides natural gas processing, oil transportation services, natural gas, oil and produced water gathering services and produced water disposal services to third parties.