Matador Resources Company Reports Fourth Quarter and Full Year 2025 Results and Provides 2026 Operating Plan and Market Guidance

2026-02-24

NYSE - New York Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · United States

Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today reported financial and operating results for the fourth quarter and full year 2025 and provided an update on its 2026 operating plan and focus areas. A slide presentation summarizing the highlights of this release is included on the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab.

Management Summary Comments

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO and San Mateo’s Founder, noted, “2025 was another record year for Matador and San Mateo. Our team is excited to review our accomplishments as well as share the strategic priorities and expected catalysts for Matador and San Mateo in 2026, which include (i) improving capital efficiency, profitability and reduction in our reserve-based loan (RBL), (ii) midstream value realization, (iii) quality land acquisitions, reserves growth and decreased capital costs, (iv) recruiting, retaining and developing high-quality professionals and (v) maintaining a strong balance sheet.

Improving Capital Efficiency, Profitability and Decreased Finding Costs

“This year, our specific objectives are to continue to increase production, reduce capital spending and grow our midstream assets, while remaining opportunistic on acquisition opportunities that may arise. Altogether, Matador projects its drilling plans, capital efficiencies and other catalysts to drive a 2026 operating plan that grows oil production by approximately 3% to 123,000 barrels of oil per day, while reducing 2026 total capital expenditures by 11% to $1.50 billion. The ability to achieve this 3% oil production growth profile while reducing capital expenses illustrates Matador’s successful focus on operating efficiencies and inventory strength.

“In this regard, Matador anticipates its 2026 drilling and completion cost to be approximately $795 per lateral foot, a 6% reduction compared to 2025, which would enable us to continue to further increase capital efficiency and decrease capital spending as planned. The expected decrease in capital spending from 2025 to 2026 is primarily attributable to anticipated operating efficiency improvements, including a 13% reduction in timing to drill and complete a well. Meanwhile, Matador expects to deliver 3% oil production growth in 2026 compared to 2025 while still turning to sales a similar amount of net lateral footage. As evidence of these asset and operating strengths, we achieved record total proved oil and natural gas reserves of 667.0 million BOE at December 31, 2025 (an increase of 9% from 611.5 million BOE at December 31, 2024), with a standardized measure of $7.0 billion and a PV-10 of $8.2 billion. The increase to our reserves—approximately 98% of which was organic in 2025—represents a reserve replacement ratio of 173%. The reserves replacement ratio was especially notable since future finding and development costs for our proved undeveloped reserves in our audited reserve report decreased 6% from $10.98 per BOE in 2024 to $10.34 per BOE in 2025. The proved reserves estimates are prepared by the Company’s internal engineering staff and audited by an independent reservoir engineering firm, Netherland, Sewell & Associates.

“As previously reported, Matador has secured 500 MMBtu per day of firm natural gas transportation on Energy Transfer’s new Hugh Brinson pipeline. This contractual deal with Energy Transfer is expected to be one of Matador’s most important transportation and marketing arrangements going forward. Energy Transfer expects this pipeline to begin flowing gas in the third quarter of 2026 and be fully in-service in the fourth quarter of 2026. The Hugh Brinson pipeline is expected to provide direct access for Matador from the Waha hub in the Permian Basin to the historically more profitable Henry Hub markets along the Louisiana Gulf Coast. The Hugh Brinson pipeline is also expected to help Matador access other key markets, including data centers supporting Artificial Intelligence (AI) and terminals for exports of Liquified Natural Gas (LNG). During 2025, average realized pricing at Henry Hub was as much as $3 higher than realized pricing at the Waha hub. Substantial market differentials such as these prices could provide significant additional revenue, as each $0.50 per MMBtu increase in realized natural gas price would increase Matador’s estimated annual revenue by approximately $90 million.

“Matador is also pleased to report record fourth quarter 2025 production of 211,290 barrels of oil and natural equivalent (BOE) per day (121,363 barrels of oil per day), which constitutes an increase of 1% from the third quarter 2025 production of 209,184 BOE per day (119,556 barrels of oil per day). These record results were achieved despite significant market price difficulties for natural gas at the Waha hub in the fourth quarter of 2025.

Midstream Value Realization

“Matador’s midstream assets include (i) San Mateo, which is owned 51% by Matador and 49% by Five Point, and (ii) wholly-owned assets, which were largely acquired as part of the Advance acquisition in 2023 and the Ameredev acquisition in 2024. On a combined basis, San Mateo and Matador’s wholly-owned midstream assets had net income of $239 million and Adjusted EBITDA of $332 million for the full-year 2025. Through the continued operational improvements and the growth of both Matador and third-party volumes, we expect the combined Adjusted EBITDA of our midstream assets to grow 8% to $360 million in 2026. This profitability of the San Mateo assets in 2025 resulted in cash distributions to Matador of $137 million for its 51% interest in San Mateo and $13 million in performance incentives from Five Point.

“In addition to growing our midstream business, we continue to explore other strategic transactions for San Mateo. Five Point has advised us that it is in the process of moving its 49% ownership in San Mateo into a continuation vehicle, which would allow us to continue building midstream value together. We are pleased that Five Point would like to continue our long-standing partnership, and we look forward to working with Five Point on various potential strategic transactions, including the combination of Matador’s wholly-owned midstream assets with San Mateo.

Quality Land Acquisitions

“In 2025, Matador’s land team added 17,500 net acres through our ‘brick-by-brick’ strategy, increasing our Delaware Basin acreage position to approximately 212,500 net acres. These efforts largely replaced the inventory that Matador drilled during 2025. As we begin 2026, Matador remains focused on strategically adding acreage in order to maintain 10 to 15 years of high-quality inventory in the Delaware Basin. Additionally, we believe our current Delaware Basin position offers further geologic upside. For example, we have identified prospective acreage targeting the Woodford shale, and plan to test the formation in the first half of 2026.

Maintaining a Strong Balance Sheet

“Finally, at year-end 2025, Matador was able to maintain a strong financial position and achieve the production highlights noted above while still paying down approximately $200 million on our RBL credit facility and increasing our dividend for the seventh time in the past four years. Matador ended 2025 with a leverage ratio of 1.1 times and liquidity under the RBL of $1.8 billion. To further protect its balance sheet from oil-price volatility, the Company hedged approximately 50% of its projected 2026 oil production using costless collars at a weighted average floor price of approximately $53 per barrel and a weighted average ceiling price of approximately $66 per barrel.

Closing Thoughts

“Each of the above priorities and highlights demonstrate Matador’s various successful strategies based on operational excellence and profitable growth at a measured pace. Our ability to emerge stronger through volatile commodity cycles underscores the quality of our assets, the strength of our business relationships and the confidence the team has in the long-term outlook of our business and areas of interest. This outlook is further evidenced by management’s and the staff’s continued stock purchases as well as the participation by over 95% of all of our employees—field and office—in the Company’s Employee Stock Purchase Plan (ESPP). We look forward to discussing these results and answering your questions either on our conference call or in-person.”

Operational and Financial Update

Record Fourth Quarter 2025 Oil, Natural Gas and Total Oil Equivalent Production

Matador’s average oil and natural gas production was 211,290 BOE per day in the fourth quarter of 2025, which was the highest in Matador’s history and 2% better than the midpoint of Matador’s expected fourth quarter production guidance of 206,500 BOE per day. The primary drivers behind this outperformance were increased production from new wells turned to sales in Matador’s Arrowhead and Ranger asset areas. Matador achieved these record results despite shutting in ~4,000 BOE per day in the fourth quarter of 2025 due to weak natural gas pricing at the Waha hub. Most of these shut-in volumes were forecasted as part of the Company’s fourth quarter 2025 production guidance.

| Production | Q4 2025 Average Daily Volume | Q4 2025

Guidance

Range (1) | Difference (2) | Sequential | YoY | | Total, BOE per day | 211,290 | 205,000 to 208,000 | +2% Better than Guidance | +1% | +5% | | Oil, Bbl per day | 121,363 | 119,000 to 121,000 | +1% Better than Guidance | +2% | +2% | | Natural Gas, MMcf per day | 539.6 | 516.0 to 522.0 | +4% Better than Guidance | <+1% | +9% | | (1) Production range previously projected, as provided on October 21, 2025. | | | | | | | (2) As compared to midpoint of guidance provided on October 21, 2025. | | | | | |

Fourth Quarter 2025 Operating Expenses

For the fourth quarter of 2025, lease operating expenses (LOE), production taxes, transportation and processing expenses (PTTP), depletion, depreciation and amortization expense (DD&A) and general and administrative expenses (G&A) were all better than expected. Midstream operating expenses for 2025 were at the midpoint of the full-year 2025 guidance range. In total, operating expenses per BOE were 8% better than expected for the fourth quarter of 2025 and 4% better than the fourth quarter of 2024, as Matador continues to focus on efficiency and improved operating margins.

To better segregate costs between controllable costs and taxes, Matador reclassified taxes other than those related to income tax into one line for all periods presented in the income statement and will report under this new presentation going forward. This reclassification includes certain taxes previously included in lease operating and midstream operating expenses, as well as production taxes that were previously included with transportation and processing expenses.

Fourth Quarter and Full Year 2025 Capital Expenditures

For the fourth quarter of 2025, operations exceeded expectations. Matador’s capital expenditures (CapEx) for drilling, completing and equipping wells (D/C/E) were $356.1 million and midstream CapEx were $22.6 million. Matador turned to sales 30.4 net operated wells during the fourth quarter of 2025; almost three more wells than the 27.5 net operated wells expected, as they were pulled forward from the first quarter of 2026. Full-year 2025 D/C/E CapEx of $1.53 billion was within Matador’s expected range while still delivering 129.4 net wells, an increase of 8.1 net wells turned to sales as compared to initial full-year guidance provided in February 2025 while growing production 21% year-over-year.

Midstream Update

San Mateo’s operations in the fourth quarter of 2025 were highlighted by record operating and financial results. San Mateo distributed $35.7 million to Matador during the fourth quarter of 2025 to bring total distributions from San Mateo to Matador of $136.7 million for full-year 2025. The table below sets forth San Mateo’s throughput volumes, as compared to the third quarter of 2025 and the fourth quarter of 2024.

| | Sequential (Q4 2025 vs. Q3 2025) | | YoY (Q4 2025 vs. Q4 2024) | | | | | | | | | | | | San Mateo Throughput Volumes | Q4 2025 | | Q3 2025 | | Change | | Q4 2025 | | Q4 2024 | | Change | | | | | | | | | | | | | | | | | | | Natural gas gathering, MMcf per day | 559 | | 530 | | +5% | | 559 | | 454 | | +23% | | | | Natural gas processing, MMcf per day | 530 | | 533 | | -1 | % | | 530 | | 434 | | +22% | | | Oil gathering and transportation, Bbl per day | 54,100 | | 58,400 | | -7 | % | | 54,100 | | 63,000 | | -14 | % | | Produced water handling, Bbl per day | 422,600 | | 413,700 | | +2% | | 422,600 | | 470,100 | | -10 | % | |

San Mateo’s natural gas gathering volumes in the fourth quarter of 2025 were an all-time quarterly high despite Matador shutting in wells from time to time due to weak natural gas pricing at the Waha hub. The sequential and year-over-year decline in oil gathering and transportation volumes reflects more Matador activity outside of Eddy County, New Mexico and Loving County, Texas, where San Mateo’s oil assets are located. The year-over-year decline in produced water handling volumes reflects multiple large flowback projects in the fourth quarter of 2024.

Full Year 2026 Guidance Summary

Matador’s full-year 2026 guidance estimates are summarized in the table below, as compared to the actual results for 2025, which highlight a 3% increase in oil production, an 11% total D/C/E and midstream CapEx reduction and a similar amount of net lateral footage turned to sales of ~1.25 million net lateral feet.

| Guidance Metric | Actual

2025 Results | 2026 Guidance Range | % YoY

Oil, Natural Gas and Oil Equivalent Production Growth and Anticipated Cadence

Matador expects full-year 2026 production of 122,000 to 124,000 barrels of oil per day and 525 to 545 million cubic feet of natural gas per day, resulting in 209,500 to 215,000 BOE per day. This expectation is in-line with daily oil growth estimates provided in October 2025 of 3% improvement to full-year 2025 actual production, despite the impacts of the January winter weather discussed below.

Total Production,

BOE per day | Average Daily

Oil Production,

Bbl per day | Average Daily

Natural Gas Production,

MMcf per day | % Oil | | Q4 2025 | 211,290 | 121,363 | 539.6 | 57% | | Q1 2026E | 201,000 to 205,000 | 115,500 to 117,500 | 515.0 to 525.0 | 57% |

Production in the first quarter is expected to be the lowest quarter for 2026 with a significant increase expected beginning in the second quarter and then further steady increases in volumes throughout the remainder of 2026. Forecasted volumes were previously expected to be consistent from the fourth quarter of 2025 to the first quarter of 2026 due to the timing of wells being turned to sales as a result of larger batch developments of longer-lateral wells. Matador expects to turn to sales ~39 gross (34 net) operated wells during the first quarter of 2026, of which only 11 net operated wells were turned to sales by mid-February. The remaining 23 net operated wells are expected to be turned to sales in March 2026, which will contribute fully to production beginning in the second quarter of 2026. The first quarter production forecast was revised lower due to:

actual weather-related shut-in volumes during the January winter storm Fern of ~4,000 BOE per day (60% oil), expected elective shut-in of volumes due to weak Waha pricing of ~3,000 BOE per day (20% oil), and expected scheduled maintenance on a third-party treatment plant of ~2,000 BOE per day (60% oil).

D&C Costs Per Completed Lateral Foot and Operating Efficiency Improvements in 2026

Matador anticipates 2026 drilling and completion costs to be $785 to $805 per lateral foot, a 6% reduction compared to 2025. This reduction is driven by improvements in daily drilling and completion footage, which are expected to reduce average well cycle times by ~13%. These, and other facility and equipping efficiencies, contribute to the estimated $130 million D/C/E CapEx reduction in 2026 from $1.53 billion in 2025 to $1.40 billion in 2026.

Additional efficiencies will be driven in 2026 by large-scale batch developments similar to the 17-well John Callahan development brought online in third quarter 2025, as previously reported in Matador’s January 2026 press release. We expect these batch development projects to account for ~50% of our net lateral footage turned to sales, an increase from 40% from 2025. For example, we expect a batch of 13 wells, including Matador’s first 3.4-mile lateral wells, to be drilled on our Eastern Antelope Ridge acreage, acquired from Ameredev, and turned-to-sales in the first half of 2026. These wells will contribute to our ~10% expected increase in 2026 average lateral length as compared to 2025.

In addition to our anticipated 2026 operating efficiencies, Matador remains focused on inventory accretion, reserve replacement, artificial intelligence integration and improved production recoveries. These initiatives and efficiency improvements are central to our strategically balanced 2026 operating plan, which advances development across our diversified Delaware Basin portfolio and includes exploratory and extension tests such as in the Woodford shale. Matador has also conducted preliminary testing of enhanced completion surfactants in 2025. In light of these encouraging test results, Matador plans to expand the program in 2026 and 2027, with initial funding included in the 2026 capital budget. Early production results from 2025 tests showed improved recoveries in certain formations compared to the 150-day cumulative production on control wells.

Midstream Capital Expenditures

Matador estimates total 2026 midstream CapEx of $100 to $110 million. This estimate includes (i) $50 to $60 million for Matador’s 51% share of San Mateo’s 2026 estimated CapEx of $100 to $115 million and (ii) $50 to $60 million for other wholly-owned midstream projects, including infrastructure and facility expansions and upgrades associated with three-stream gathering systems in the Eastern Antelope Ridge acreage. San Mateo’s 2026 CapEx primarily includes capital required for the pipelines and related infrastructure to connect San Mateo’s three-stream pipeline system to Matador and third-party customers in Lea and Eddy Counties, New Mexico.

First Quarter 2026 Estimated Capital Expenditures and Anticipated Cadence

Matador expects D/C/E and midstream CapEx will be front-loaded in the first half of 2026 with 55 to 60% of the full-year 2026 guidance of $1.5 billion, including ~$425 million of total CapEx in the first quarter of 2026, due to an increased number of large-batch and longer-lateral completions noted above.

Shareholder Returns

During 2025, Matador returned a total of $218.9 million to shareholders through a combination of $163.1 million in fixed dividends and $55.8 million of share repurchases under its $400 million share repurchase program. At current commodity prices, Matador expects to generate significant cash flow in 2026 and be able to pay and potentially increase the dividend, allowing it to continue returning a similar amount of cash to shareholders in 2026 as in 2025.