DALLAS - Matador Resources Company (NYSE: NYSE:MTDR), an independent energy firm engaged in the exploration and production of oil and natural gas, announced Monday that it has received approximately $113 million from the sale of its stake in Piñon Midstream, LLC. The proceeds come from the company's 19% ownership interest in the parent company of Piñon, following its acquisition by Enterprise Products Partners (NYSE:EPD) L.P.
Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, stated, "Congratulations to the Enterprise team on a smooth and successful transaction." He expressed contentment with the acquisition of the ownership interest, which was part of the Ameredev acquisition completed in September 2024. Foran also noted that the company plans to allocate the sales proceeds toward reducing its current outstanding borrowings under a $2.25 billion credit facility, which presently stands at $980 million.
Matador's operations are concentrated mainly on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin, spanning Southeast New Mexico and West Texas. The company also has a presence in the Eagle Ford (NYSE:F) shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition to its exploration and production activities, Matador conducts midstream operations, providing various services to third parties, including natural gas processing, oil transportation, and produced water disposal.
This transaction is part of Matador's broader strategy to optimize its asset portfolio and strengthen its balance sheet. The company's forward-looking statements indicate plans for future business and financial performance, alluding to the potential benefits and opportunities arising from the recent Ameredev acquisition.
The information in this article is based on a press release statement from Matador Resources Company.
In other recent news, Matador Resources showcased a strong Q3 2024 performance, largely credited to the timely integration of the Ameredev acquisition. This integration has significantly enhanced production levels and operational efficiencies. Matador's management and board have demonstrated their confidence in the company's direction by actively purchasing shares. The company plans to maintain production levels above 200,000 barrels of oil equivalent per day in 2025, with a capital expenditure plan slightly exceeding $1.25 billion.
Following the successful earnings call, Matador Resources highlighted its strategic focus on expanding undeveloped acreage inventory, which is expected to contribute to long-term growth. The company also emphasized ongoing operational efficiencies, including the use of Trimul-Frac technology and remote fracking operations.
Despite a potential slight decrease in production for Q4 due to ongoing fracturing operations, the company's leadership remains confident in the trajectory of the company. CEO Joseph Foran, recent recipient of the Legacy Award from CEO Magazine, emphasized the importance of teamwork in achieving the company's success. These are among the recent developments for Matador Resources.
InvestingPro Insights
Matador Resources Company's recent sale of its stake in Piñon Midstream for $113 million aligns well with its financial strategy and market position. According to InvestingPro data, Matador has a market capitalization of $6.32 billion and has demonstrated strong revenue growth of 23.82% over the last twelve months as of Q3 2024. This growth trajectory is complemented by a robust gross profit margin of 80.13% for the same period.
InvestingPro Tips highlight that Matador has raised its dividend for 4 consecutive years, indicating a commitment to shareholder returns. This is further supported by a dividend yield of 1.97% and an impressive dividend growth of 66.67% over the last twelve months. The company's decision to use the sale proceeds to reduce outstanding borrowings under its credit facility demonstrates prudent financial management.
Another InvestingPro Tip notes that Matador is trading at a low P/E ratio relative to its near-term earnings growth, with a current P/E ratio of 6.63. This suggests that the stock may be undervalued considering its growth prospects. The company's strong return over the last five years, as mentioned in the tips, further reinforces its solid performance track record.
For investors interested in a deeper analysis, InvestingPro offers additional tips and insights on Matador Resources Company. There are 8 more InvestingPro Tips available, providing a comprehensive view of the company's financial health and market position.
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