PS - Matador clears its second planned 2020 production milestone - June 24, 2020Matador Resources expects to reach four production milestones this year. The first came when the initial Rodney Robinson wells in Lea County, New Mexico, started up in March. These six wells, located on US Bureau of Land Management acreage in the western portion of the Antelope Ridge area, delivered record initial 24-hour rates totaling 15,000 bo/d and 25 MMcf/d—about 19,000 boe/d (78% oil), or 3,200 boe/d each— from three formations. As of late June, the wells continue to outperform...
Jun 24, 2020
PS - Matador clears its second planned 2020 production milestone - June 24, 2020Matador Resources expects to reach four production milestones this year. The first came when the initial Rodney Robinson wells in Lea County, New Mexico, started up in March. These six wells, located on BLM acreage in the western portion of the Antelope Ridge area, delivered record initial 24-hour rates totaling 15,000 bo/d and 25 MMcf/d—about 19,000 boe/d (78% oil), or 3,200 boe/d each— from three formations. As of late June, the wells continue to outperform expectations despite most being...
Jun 24, 2020
PS - Matador scores company bests in three formations on BLM land - May 2020In September 2018, Matador Resources made headlines when it paid $46,000 per net acre in a Bureau of Land Management lease sale in New Mexico. In total, the company picked up 8,400 net acres for $387 million. Fast forward to April, and the company has drilled and completed its first wells on the acreage. Located on the 1,200-netacre Rodney Robinson tract in the Antelope Ridge area of Lea County, the initial six wells were drilled with 2-mile laterals and targeted three formations: the Wolfcamp,...
May 13, 2020
PS - Shale operators adjust 2020 plans to weather the storm - May 2020As the oil and gas industry recovered from the last bust, the theme centered around “lower for longer.” For several years, the reality of it has been 100% true. Planned capital investments before the 2020 crash anticipated lower spending and flatto-lower activity levels. Strategies to reduce debt and achieve free cash flow over the last year have enabled many companies to be in better positions in the current sub-$30 theatre, with many wielding operational and capital cuts several times....
May 13, 2020
PS - Matador drops 50% of rigs, cuts capex by 35% - May 2020On March 6, Matador Resources announced that three of its six active drilling rigs would be dropped by the end of Q2. The first was dropped late in March and the second in late April. The initial rig released was in the Wolf area of Loving County, Texas, and Matador plans to complete and turn to sales all DUCs in the area during Q2. The second rig released had been operating in the Stebbins area drilling five wells and in the southern Arrowhead area in Eddy County, New Mexico. The five...
May 13, 2020
PS - Analyst Notes - May 13, 2020Continental Resources (CLR; $12.59-April 24; Hold) Continental has been swift in its response to try and navigate this unprecedented collapse in crude by being one of the first companies to announce curtailments of production in April and May. While the company has yet to update the market, we have attempted to capture our and the current market view by increasing the magnitude of shut-ins for the Bakken to an average of 60% in May and June as well as baking in a 30% curtailment in the...
May 13, 2020
CM - Extraordinary measures to meet extraordinary conditions - April 2020Prevailing market and social conditions have remade goals, guidance and priorities. Most companies have announced that their 2020 annual shareholders meetings will be virtual only. At two virtual meetings, holders of Chesapeake Energy (PG.3) and Nabors Industries (PG.19) common stock voted to allow their boards to reverse-split their shares by ratios of 200:1 and 50:1, respectively. Callon Petroleum (PG.4) will also reverse-split its common, and midstream fund manager Tortoise Energy...
Apr 24, 2020
CM - Matador firms up 2020 capex & opex plans, augments hedges - April 2020Matador Resources Co. said it is cutting $250 million from its drilling, completion and exploration capex to around $487 million at midpoint, a 35% reduction from the prior 2020 guidance. Operating costs will decrease by $40 million, most of them related to G&A and lease operating expenses. Matador is also scaling back management and board compensation and will use existing staff to replace contract labor. The company is expecting around $7 million in cash from pending Eagle Ford and...
Apr 24, 2020
A&D - Matador presses ahead with plans to trim non-core portfolio - April 2020In a March 11 update issued in response to current market disruptions, Matador Resources said it will continue to pursue non-core asset sales. The divestments could include leasehold and mineral interests in the Eagle Ford and the northwest Louisiana part of the Haynesville. Matador also said it would consider a potential JV or sale relating to its Delaware Basin mineral interests. The possible Eagle Ford and Haynesville sales would mark exits for the company from areas where it has been active...
Apr 07, 2020
A&D - M&A slams on the brakes as A&D market disruptions intensify - April 2020With the coronavirus outbreak accelerating in the US, we wish our readers safety and health during this difficult time. The pandemic and the Saudi-Russian price war have sent oil prices tumbling to lows not seen in over two decades. US upstream M&A activity has consequently slammed on the brakes, with only $572 million in deals with disclosed values in Q1, down a whopping 95% from 4Q19 (PG.1). Whereas major corporate consolidation followed the 2008 downturn, and companies narrowed their...
Apr 07, 2020
A&D - Matador’s gassy past giving way to oilier future - April 2020The potential sales of Matador Resources’ Eagle Ford and Haynesville portfolios would mark regional exits from areas that constituted the company’s original asset base when it was founded in 2003. However, Matador’s history goes back two decades before that. In 1983, Joe Foran and wife Nancy founded Foran Oil Co., which became part of Matador Petroleum Corp., founded in 1988, also by Foran, with assets primarily in the East Texas Haynesville and the Permian Basin. That company was...
Apr 07, 2020
PS - If you’re not cutting, you’re not trying as WTI falls into $20s - March 2020Since the end of February, the WTI front-month contract has fallen around 50% as the coronavirus pandemic leaves a trail of economic devastation across the globe. For the first time since 2009, the International Energy Agency projects global oil demand will fall YOY in 2020, dropping by 90,000 bo/d this year, according to the agency’s March oil market report. At the same time, Saudi Arabia and Russia are going head-to-head in a battle for market share, slashing prices and ramping oil...
Mar 30, 2020
PS - Matador Resources to eliminate 50% of its rigs by 2H20 - March 2020Matador Resources is taking steps to reduce its capex over the next several months and protect its balance sheet. The company is reducing its rig count to three from six before June 30, with one to be released by the end of March. In H2, the company plans to maintain those three rigs, which are operating in the Permian Basin. While Matador is still nailing down its definitive plans for the remainder of the year, it plans to suspend development activities in the Wolf area in Loving County,...
Mar 30, 2020
PS - Permian operators slash 2020 plans as oil market craters - March 18, 2020The economic implications of the novel coronavirus and the oil price war initiated between Saudi Arabia and Russia have sent oil markets on a downward spiral. WTI settled at $20.37/bbl on March 18, dropping 24% on the day and 56% in the last two weeks. Shale operators across the US have acted swiftly to adjust 2020 plans and protect balance sheets. In the Permian, everyone is cutting back. Parsley Energy revised its baseline capex assumption from $50/bbl WTI to $30- $35/bbl for the...
Mar 18, 2020
A&D - A&D News Briefs - May 1, 202088 Energy made an unsolicited takeover offer for fellow Australia-listed Alaska explorer XCD Energy. 88 Energy is offering 1.67 of its new shares for each XCD share, and 0.5 new shares for each XCD listed option held. The value of the bid is A$6.3 million ($4.03 million) after backing out an A$1.2 million working capital surplus. XCD has 195,373 acres (100% WI) on Alaska’s North Slope on trend with ConocoPhillips’ Willow oil discovery. Net mean prospective resources are 1.6 Bbbl. 88 Energy’s...
May 01, 2020