Matador Resources Completes Notes Offering; Operational Advances
Matador Resources Company Announces Senior Notes Offering Closure
Matador Resources Company (NYSE: MTDR) has recently concluded its senior notes offering, marking a significant milestone for the company. This operational update reflects the company's ongoing efforts to strengthen its financial position and operational capabilities.
Details of the Senior Notes Offering
Recently, Matador successfully wrapped up its private offering of $750 million in senior unsecured notes, set to mature in 2033, at an interest rate of 6.250%. This strategic move allows Matador to repay existing debts under its credit facility, ensuring the transaction remains debt neutral while enhancing its liquidity.
Executive Insights
Brian J. Willey, the Executive Vice President and Chief Financial Officer, highlighted the importance of this week for Matador. Following a major acquisition, the company used a $1 billion increase in its credit facility to finance the all-cash purchase of Ameredev, which cost approximately $1.832 billion. Integration of the Ameredev assets into Matador's operations has begun, promising to bolster their performance significantly.
Successful Integration and Production Milestones
As part of the Ameredev integration, Matador achieved a remarkable production milestone, temporarily producing over 200,000 barrels of oil and natural gas equivalent in a single day. This achievement signifies a substantial boost in operational capacity, thanks to the quality of the new wells now part of Matador’s portfolio.
Debt Management and Financial Outlook
With expectations that the company’s debt-to-EBITDA ratio will range between 1.3 and 1.4 times shortly after the recent acquisition, Matador plans to utilize generated cash flow and proceeds from divesting non-core assets to manage its debt further. The company's goal is to reduce its leverage ratio to 1.0 times or less within the next year, solidifying a sound financial foundation for future growth.
Operational Strategies Moving Forward
The integration of Ameredev’s assets stands as a key priority for Matador in the upcoming year. Following the analytics of the successful Advance acquisition in 2023, the company plans to deploy a drilling rig on the newly acquired acreage and commence with completion operations focused on eleven wells slated for completion in early 2025.
Innovations in Delaware Basin Operations
Matador continues to pioneer innovations within the Delaware Basin, notably focusing on “U-Turn” well developments and trimul-frac completion operations. The company has successfully drilled and cased five additional “U-Turn” wells, projecting significant cost savings and efficient operations in this domain. Notably, a recent remote trimul-frac operation cut completion days by 25%, showcasing Matador's commitment to operational excellence.
Future Opportunities and Expectations
Executive Vice President and Chief Operating Officer Christopher P. Calvert expressed optimism regarding the Ameredev integration, envisioning annual synergies exceeding $160 million over five years. He emphasized the importance of discussing these efficiencies and Ameredev’s performance in upcoming communications, highlighting Matador’s commitment to transparency and strategic growth.
Company Overview
Matador Resources Company is an independent energy entity specializing in the exploration, development, and acquisition of oil and natural gas resources primarily within shale formations across the United States. The company maintains a robust focus on oil production in the Wolfcamp and Bone Spring plays located in the Delaware Basin, while also extending its operations to the Eagle Ford and Haynesville shale plays.
Furthermore, Matador engages in midstream operations that support its extensive exploration and production efforts, contributing significantly to its revenue streams through oil transportation and natural gas processing services.
Frequently Asked Questions
What is the significance of Matador's senior notes offering?
The senior notes offering allows Matador to stabilize its debt levels while improving its overall financial strength, facilitating further investments and operational efficiencies.
How did the Ameredev acquisition impact Matador's production capabilities?
The acquisition of Ameredev enabled Matador to produce over 200,000 barrels of oil and natural gas equivalent in one day, marking a historical production increase for the company.
What is the expected debt-to-EBITDA ratio for Matador post-acquisition?
Following the recent acquisition, Matador anticipates its debt-to-EBITDA ratio to be between 1.3 and 1.4 times shortly.
What operational improvements is Matador implementing with Ameredev's assets?
Matador plans to integrate various operational efficiencies such as simul-frac and dual-fuel technologies to enhance its drilling and completing operations.
How does Matador plan to manage its debt in the future?
The company is focusing on generating cash flow and selling non-core assets to manage and reduce its overall debt, aiming for a debt-to-EBITDA ratio of 1.0 times or less within the next year.
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