Matador Resources Company (NYSE: MTDR) detailed its financial outlook for 2014 on Jan. 8. A strong cash flow leading into the year has set up the company’s capex plan, as well as its hedging. Additionally, the company detailed its 2013 year-end operations and production in the Eagle Ford and Permian Basin. Fourth quarter 2013 oil and natural gas production dropped 15% to 20% because of several shut-in wells, but year-over-year (Y/Y) production guidance was higher than 2012, the company said.
This year, Matador’s cash totals $6.3 million. Of that, $200 million is in outstanding long term borrowings and $0.3 million in outstanding letters of credit, the company said. The 2014 capex plan has $440 million behind it, the company added. Matador will fund the capex from operating cash flows. It also anticipates increases in its borrowing base, the company added.
Matador had costless collars and swaps for 2014 in place at the end of 2013. These represent 80% of its anticipated oil and natural gas production, the company said. Matador said 2.4 million barrels of oil hedged at a weighted average, floor and ceiling, of $88 per barrel and $99 per barrel, respectively.
The company said 11.7 billion cubic feet (Bcf) of natural gas hedged at a weighted average, floor and ceiling, of $3.44 per million British thermal units (MMBtu) and $4.96/MMBtu, respectively.
Additionally, 7.6 million gallons of natural gas liquids (NGL) hedged at a weighted average price of $1.25 per gallon, Matador said.
Matador’s production guidance is unchanged from 2013, when it was updated Nov. 6. Estimated total oil production is roughly 2.8 to 3.1 million barrels, the company said. Estimated natural gas production ranges from 13.5 to 15/Bcf. Total revenues from both range from $325 to $355 million, the company said.
The estimated adjusted earnings before interest taxes, depreciation and amortization (EBITDA) for 2014 ranges from $235 to $265 million, Matador said.
Regarding Matador’s 2013 end-of-year operations, pad and batch drilling in the Eagle Ford continued and producing wells were shut in, while hydraulic fracturing continued on offset wells. Total oil production was 2.0 to 2.1 million barrels of oil. This is a 75% Y/Y increase from 2012’s roughly 1.2 million barrels, the company said.
The Y/Y increase, at the higher end of production guidance, was due to “better than anticipated initial performance” from several recently completed wells, including the Ranger 33 State Com #1H in Lea County, N.M., and the Lewton #5 in Dewitt County, Texas, the company said. The Ranger 33 #1H is a 4,300-ft horizontal lateral drilled in the second Bone Spring sand and completed with 18 frac stages, the company said.
Currently Matador operates three contracted drilling rigs – two in South Texas, in DeWitt and La Salle Counties, and one in Eddy County, N. M.
New Permian Basin acreage was acquired. This was roughly 38,900 net acres in Lea and Eddy counties, N.M. The company added 4,000 net acres to its total Basin assets in both New Mexico and Texas. This brings the company’s total holding to 48,800.
New assets were acquired in the Eagle Ford also, and at the Haynesville shale, the company said. Roughly 1,600 net acres and 1,190 net acres were acquired in the Eagle Ford and the Haynesville, respectively, the company added. Matador expects to continue adding to its leasehold position in each of its operating areas throughout 2014.
Matador Resources is an independent energy company that explores, develops, produces and acquires domestic shale/unconventional oil and natural gas resources. It operates in the Eagle Ford shale, the Louisiana Haynesville shale and the Wolfcamp and Bone Spring projects in the Permian Basin. It is based in Dallas.
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