Matador Resources Co. (MTDR) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended June 30, 2026. Matador Resources Co. is an independent energy company focused on the exploration, development, and production of oil and natural gas in the Delaware Basin (Wolfcamp and Bone Spring plays) and the Haynesville shale. The company also operates midstream assets through its joint venture, San Mateo Midstream, LLC.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | YTD 2026 (6 Months) |
|---|---|---|
| Total Revenues | $1.186 billion | $1.858 billion |
| Net Income (GAAP) | $413.7 million | $397.8 million |
| Net Income Attributable to Matador | $390.7 million ($3.15/share) | $354.8 million ($2.86/share) |
| Adjusted EBITDA (Non-GAAP) | $781.0 million | $1.358 billion |
| Operating Cash Flow (YTD) | $1.408 billion | |
| Total Debt Outstanding | $4.216 billion (as of June 30, 2026) | |
| Cash and Restricted Cash | $90.9 million | |
| Production (Q2 Avg Daily) | 215,631 BOE/d (58% Oil, 42% Gas) |
Material Changes vs. Prior Period
- Revenue Growth: Q2 2026 total revenues increased 33% year-over-year to $1.186 billion, driven primarily by a 57% increase in oil revenues due to higher realized prices ($98.16/Bbl vs. $64.34/Bbl) and a 3% increase in oil production.
- Profitability: Net income attributable to shareholders surged 160% in Q2 2026 compared to Q2 2025 ($390.7M vs. $150.2M). However, on a six-month basis, net income decreased 9% due to significant unrealized derivative losses.
- Derivative Impact: The company recorded a realized loss on derivatives of $72.5 million in Q2 2026 (vs. a $6.9M gain in Q2 2025) and an unrealized gain of $85.5 million (vs. a $37.3M loss). For the six months ended June 30, 2026, unrealized losses totaled $170.0 million, significantly impacting GAAP net income.
- Capital Expenditures: YTD 2026 investing cash outflows increased 104% to $2.058 billion, primarily due to a $1.16 billion acquisition of BLM leases and $745 million in drilling/completion costs.
- Debt Restructuring: The company retired its 2028 Notes ($500M principal) and issued $750M in new 2034 Notes. A loss on debt extinguishment of $15.6 million was recorded in the first half of 2026.
Guidance, Outlook, and Risks
- Capital Budget Update: On August 5, 2026, management increased the 2026 drilling, completion, and equipping (D/C/E) budget to $1.48–$1.56 billion (from $1.35–$1.44 billion) and midstream capex to $145–$165 million (from $100–$110 million).
- Acquisitions:
- Completed: BLM Acquisition ($1.16B) in May 2026; Cardinal Midstream Acquisition ($752M) by San Mateo in July 2026.
- Pending: Agreements signed for Paloma Permian ($1.275B) and Ridge Runner Resources acquisitions, expected to close in Q4 2026.
- Dividends: Quarterly dividend maintained at $0.375 per share. The Q3 dividend was declared on July 22, 2026.
- Share Repurchases: The company repurchased 225,000 shares in Q2 2026 under its $400M program, with approximately $332.3 million remaining available.
- Risks:
- Commodity Prices: Significant exposure to oil and natural gas price volatility. Natural gas prices were negative in certain periods, though hedges provided protection.
- Integration Risk: Risks associated with integrating the Paloma, Ridge Runner, and Cardinal acquisitions.
- Regulatory: Ongoing settlement discussions with the New Mexico Environment Department regarding air emissions at the Black River plant (expected cost $0.3M–$1.0M).
Investor Verification Checklist
- Verify the impact of the One Big Beautiful Bill Act of 2025 (OBBBA) on the company's effective tax rate and deferred tax provisions.
- Confirm the closing conditions and funding sources for the pending Paloma and Ridge Runner acquisitions totaling over $2.5 billion.
- Monitor the Waha-Henry Hub basis differential and its effect on natural gas realized prices, noting the recent narrowing of the differential.
- Review the derivative portfolio fair value changes, as unrealized losses significantly impacted YTD GAAP net income despite strong operational cash flow.
- Assess the company's ability to maintain its dividend and share repurchase program given the increased capital expenditure budget and acquisition pipeline.