Matador Resources Co. – Q1 2026 10-Q Summary
Business Context and Reporting Period
This summary covers Matador Resources Co.'s (MTDR) Form 10-Q for the quarterly period ended March 31, 2026. Matador 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 | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $671.6 million | $1,014.0 million |
| Net Income (Loss) Attributable to Matador | ($35.9) million | $240.1 million |
| Diluted EPS | ($0.29) | $1.92 |
| Operating Cash Flow | $470.5 million | $727.9 million |
| Adjusted EBITDA (Non-GAAP) | $577.2 million | $644.2 million |
| Total Debt Outstanding | $3.47 billion | $3.40 billion |
| Cash and Restricted Cash | $92.5 million | $77.5 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 34% year-over-year, primarily driven by a $255.5 million unrealized loss on derivatives and an 81% drop in natural gas revenues due to lower realized prices ($0.64/Mcf vs. $3.56/Mcf in Q1 2025).
- Production Growth: Despite price headwinds, total oil equivalent production increased 5% to 18.7 million BOE. Average daily oil production rose 5% to 120,277 Bbl/d, and natural gas production rose 4% to 523.9 MMcf/d.
- Derivative Impact: The company recorded a $14.5 million realized loss on derivatives (vs. $2.7M gain in Q1 2025) and a significant $255.5 million unrealized loss, turning a GAAP profit into a net loss.
- Debt Restructuring: Matador completed a tender offer and redemption of its $500 million 2028 Notes, incurring a $15.6 million loss on debt extinguishment. Concurrently, it issued $750 million in new 6.0% senior notes due 2034.
- Capital Expenditures: Net cash used in investing activities decreased 10% to $457.9 million, driven by lower midstream capex and acquisitions.
Guidance, Outlook, and Risks
- 2026 Capital Budget: Management estimates 2026 capital expenditures of $1.35–$1.44 billion for drilling/completion/equipping and $100–$110 million for midstream projects.
- Dividends: The Board declared a quarterly dividend of $0.375 per share, payable June 5, 2026.
- Liquidity: As of March 31, 2026, the company had approximately $2.01 billion in availability under its Credit Agreement and $166.6 million under the San Mateo Credit Facility. Post-quarter, the company repaid an additional $140 million on the Credit Agreement.
- Market Risks: Significant exposure to commodity price volatility, particularly the Waha-Henry Hub natural gas basis differential, which averaged ($5.99)/MMBtu in Q1 2026. The company utilizes costless collars and swaps to mitigate price risk.
- Regulatory: The "One Big Beautiful Bill Act of 2025" (OBBBA) contributed to a lower effective tax rate (2% vs. 26% in Q1 2025).
Investor Verification Checklist
- Derivative Valuation: Verify the magnitude of the $255.5 million unrealized derivative loss and its impact on GAAP net income versus Adjusted EBITDA.
- Debt Maturity Profile: Confirm the terms of the new 2034 Notes and the remaining balance on the 2028 Notes following the tender offer.
- Natural Gas Realized Prices: Assess the sustainability of the $0.64/Mcf realized natural gas price and the effectiveness of hedging strategies against the Waha basis differential.
- Capital Discipline: Monitor adherence to the $1.35–$1.44 billion D/C/E budget given the volatility in service costs and commodity prices.
- Contractual Commitments: Review the $2.29 billion in potential deficiency fees for firm transportation commitments if production volumes decline significantly.