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Charts Highlighting Various Aspects Of Matador's Growth On A Sequential Six-month Basis. (Graphic: Business Wire)

Stocks in this article: MTDR

Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”), 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 and with a current focus on its Eagle Ford operations in South Texas and its Permian Basin operations in Southeast New Mexico and West Texas, today reported financial and operating results for the three and six months ended June 30, 2014. Headlines include:

For the quarter ended June 30, 2014:

  • Record average daily oil equivalent production of 15,424 BOE, or barrels of oil equivalent, per day, consisting of 8,809 Bbl of oil per day and 39.7 MMcf of natural gas per day, a year-over-year BOE increase of 46% from 10,582 BOE per day, consisting of 4,916 Bbl of oil per day and 34.0 MMcf of natural gas per day, for the quarter ended June 30, 2013, and a sequential increase of 30% from 11,904 BOE per day, consisting of 7,344 Bbl of oil per day and 27.4 MMcf of natural gas per day, for the quarter ended March 31, 2014.
  • Record quarterly oil production of 802,000 Bbl, a year-over-year increase of 79% from 447,000 Bbl produced in the quarter ended June 30, 2013, and a sequential increase of 21% from 661,000 Bbl produced in the quarter ended March 31, 2014.
  • Record oil and natural gas revenues of $99.1 million, a year-over-year increase of 70% from $58.2 million reported for the quarter ended June 30, 2013, and a sequential increase of 25% from $78.9 million reported for the quarter ended March 31, 2014.
  • Record Adjusted EBITDA, or earnings before interest, taxes, depletion, depreciation, amortization and other items, of $69.5 million, a year-over-year increase of 70% from $40.8 million reported for the quarter ended June 30, 2013, and a sequential increase of 23% from $56.3 million reported for the quarter ended March 31, 2014.

For the six months ended June 30, 2014:

  • Record average daily oil equivalent production of 13,673 BOE per day, consisting of 8,080 Bbl of oil per day and 33.6 MMcf of natural gas per day, a year-over-year BOE increase of 27% from 10,739 BOE per day, consisting of 5,015 Bbl of oil per day and 34.3 MMcf of natural gas per day, for the six months ended June 30, 2013, and a sequential increase of 7% from 12,723 BOE per day, consisting of 6,658 Bbl of oil per day and 36.4 MMcf of natural gas per day, for the six months ended December 31, 2013.
  • Record total oil production of 1,463,000 Bbl, a year-over-year increase of 61% from 908,000 Bbl produced in the six months ended June 30, 2013, and a sequential increase of 19% from 1,225,000 Bbl produced in the six months ended December 31, 2013.
  • Record oil and natural gas revenues of $178.0 million, a year-over-year increase of 51% from $117.5 million reported for the six months ended June 30, 2013, and a sequential increase of 17% from $151.5 million reported for the six months ended December 31, 2013.
  • Record Adjusted EBITDA of $125.8 million, a year-over-year increase of 54% from $81.4 million reported for the six months ended June 30, 2013, and a sequential increase of 14% from $110.3 million reported for the six months ended December 31, 2013.

Additional Highlights:

  • Total proved oil and natural gas reserves of 57.2 million BOE at June 30, 2014, including 18.6 million Bbl of oil and 231.4 Bcf of natural gas, with a PV-10 of $826.0 million (Standardized Measure of $723.0 million). Total proved oil and natural gas reserves increased 47% from 38.9 million BOE at June 30, 2013 and 11% from 51.7 million BOE at December 31, 2013. PV-10 increased 58% from $522.3 million at June 30, 2013 and 26% from $655.2 million at December 31, 2013. Proved oil reserves increased 54% to 18.6 million Bbl at June 30, 2014, as compared to 12.1 million Bbl at June 30, 2013, and increased 14%, as compared to 16.4 million Bbl at December 31, 2013.
  • On July 30, 2014, Matador announced the results of two of its most recent wells completed, tested and placed on production in the Delaware Basin.
    • In the Wolf prospect area in Loving County, Texas, the Norton Schaub #1H well, a Wolfcamp “A” test, flowed 1,026 BOE per day, consisting of 706 Bbl of oil per day and 1,922 Mcf of natural gas per day (69% oil) at 3,000 psi flowing surface pressure on a 22/64 th inch choke during a 24-hour initial potential test in mid-July.
    • In the Ranger prospect area in Lea County, New Mexico, the Pickard State 20-18-34 #1H well, a Second Bone Spring sand test, flowed 592 BOE per day, including 535 Bbl of oil per day and 340 Mcf of natural gas per day (90% oil) at 750 psi flowing surface pressure on a 22/64 th inch choke during a 24-hour initial potential test in late July.
  • Added approximately 23,200 gross (17,200 net) acres in the Permian Basin primarily in Loving County, Texas and Lea and Eddy Counties, New Mexico between January 1 and August 6, 2014, bringing the Company’s total acreage position in the Permian Basin to approximately 94,000 gross (62,000 net) acres.
  • In May 2014, Matador completed a public offering of 7.5 million shares of common stock, raising net proceeds of approximately $181.3 million.
  • Reaffirmed its 2014 guidance metrics as revised upwards on May 6 and May 22, 2014, including (1) estimated capital expenditures of $570 million, (2) estimated natural gas production of 16.0 to 17.5 Bcf, (3) estimated oil and natural gas revenues of $380 to $400 million and (4) estimated Adjusted EBITDA of $270 to $290 million. Further, the Company reaffirmed its guidance to the high end of its 2014 estimated oil production range of 2.8 to 3.1 million Bbl.

Second Quarter and Year-to-Date 2014 Operating and Financial Results

Joseph Wm. Foran, Matador’s Chairman and CEO, commented, “This quarter has been an exciting and a productive one for us. The Matador staff again delivered record operating and financial results during the three and six months ended June 30, 2014. Our total oil equivalent production, oil production, oil and natural gas revenues and Adjusted EBITDA were all the best results in our Company’s history during both respective periods. During the second quarter of 2014, specifically, our average daily oil equivalent production was 15,424 BOE per day, consisting of 8,809 Bbl of oil per day and 39.7 MMcf of natural gas per day, a year-over-year BOE increase of 46% from 10,582 BOE per day during the second quarter of 2013 and a sequential increase of 30% from 11,904 BOE per day during the first quarter of 2014. Our quarterly oil production of 802,000 Bbl, averaging 8,809 Bbl of oil per day, increased 79% year-over-year, as compared to 447,000 Bbl, averaging 4,916 Bbl of oil per day, during the second quarter of 2013, and increased 21% sequentially, as compared to 661,000 Bbl, averaging 7,344 Bbl of oil per day, during the first quarter of 2014. These record production results are directly attributable not only to the continued execution of our Eagle Ford development program but also to the positive, better-than-expected results from our initial wells in the Permian Basin. Notably, these results were achieved despite having as much as 10 to 15% of our total production capacity shut in or restricted at various times during the second quarter while offsetting wells were drilled and completed and pipeline connections were being made.

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