Matador expects small production drop next quarter, no rush to add back ninth rig

After a record second quarter, the leaders of Matador Resources Co., Dallas, lifted their full-year production target by about 1%. But they’re sticking with the capital spending targets they lowered this spring and are in no hurry to consider adding back the rig they’re about to pull from service.

Matador produced an average of 209,013 boe/d (including 122,875 b/d of oil) from its Delaware basin and northwestern Louisiana operations in the 3 months that ended June 30, which was 5% higher than in the first quarter. The operator's oil production climbed 7% from the first 3 months of this year while natural gas production rose about 3% to nearly 517 MMcfd.

The company turned to sales 32 gross (22.8 net) operated wells during the spring quarter. and the team led by Joe Foran, chairman and chief executive officer, expect that number to be 28-32 this quarter. About two-thirds of those will come online later in the period. But the executives also pushed out the possibility that they’ll reverse their April decision to release Matador ninth rig (OGJ Online, Apr. 24, 2025).

“We believe we can defer making that decision until later this year or the beginning of next year and still be able to drive relative growth in 2026 versus what we believe the industry average growth rate will be,” William Lambert, chief financial officer and head of strategy, said on a July 23 conference call discussing Matador’s second-quarter results.

After quarterly production topped guidance while requiring for capex toward the lower end of the expected range of $390-$480 million, Matador executives expect the company to step down slightly and average 116,500-118,000 boe/d of oil production in the third quarter. Gas production is expected to be about 495 MMcfd. 

Full-year output is now forecast to be 200,000-205,000 boe/d, up about 1% from leaders’ previous midpoint of 200,000 boe/d. Gas production is now expected to be more than 2% higher than in their previous estimate. Executives are sticking to their capex target range of $1.3 billion-1.55 billion.

Matador produced a net profit of $150 million in the second quarter, a drop of more than 30% from the same period of 2024, as oil and gas revenues rose 5% to $816 million but average oil sales prices slipped to $64.34/bbl from more than $81. Adjusted free cash flow was nearly $133 million versus $167 million in the prior-year quarter.

Shares of Matador (Ticker: MTDR) were down about 1.5% to $50.12 in early-afternoon trading after the earnings report and conference call. Over the past 6 months, they have lost nearly 20% of their value, a slide that has cut the company’s market capitalization to about $6.2 billion.