QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page | |||||
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable | |||||||||||
Oil and natural gas revenues | |||||||||||
Joint interest billings | |||||||||||
Other | |||||||||||
Derivative instruments | |||||||||||
Lease and well equipment inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, at cost | |||||||||||
Oil and natural gas properties, full-cost method | |||||||||||
Evaluated | |||||||||||
Unproved and unevaluated | |||||||||||
Midstream properties | |||||||||||
Other property and equipment | |||||||||||
Less accumulated depletion, depreciation and amortization | ( | ( | |||||||||
Net property and equipment | |||||||||||
Other assets | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Royalties payable | |||||||||||
Amounts due to affiliates | |||||||||||
Derivative instruments | |||||||||||
Advances from joint interest owners | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities | |||||||||||
Borrowings under Credit Agreement | |||||||||||
Borrowings under San Mateo Credit Facility | |||||||||||
Senior unsecured notes payable | |||||||||||
Asset retirement obligations | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Commitments and contingencies (Note 9) | |||||||||||
Shareholders’ equity | |||||||||||
Common stock - $ and | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total Matador Resources Company shareholders’ equity | |||||||||||
Non-controlling interest in subsidiaries | |||||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues | |||||||||||
Oil and natural gas revenues | $ | $ | |||||||||
Third-party midstream services revenues | |||||||||||
Sales of purchased natural gas | |||||||||||
Realized gain (loss) on derivatives | ( | ||||||||||
Unrealized loss on derivatives | ( | ( | |||||||||
Total revenues | |||||||||||
Expenses | |||||||||||
Production taxes, transportation and processing | |||||||||||
Lease operating | |||||||||||
Plant and other midstream services operating | |||||||||||
Purchased natural gas | |||||||||||
Depletion, depreciation and amortization | |||||||||||
Accretion of asset retirement obligations | |||||||||||
General and administrative | |||||||||||
Total expenses | |||||||||||
Operating income | |||||||||||
Other income (expense) | |||||||||||
Net loss on impairment | ( | ||||||||||
Interest expense | ( | ( | |||||||||
Other income (expense) | ( | ||||||||||
Total other expense | ( | ( | |||||||||
Income before income taxes | |||||||||||
Income tax provision (benefit) | |||||||||||
Current | |||||||||||
Deferred | |||||||||||
Total income tax provision | |||||||||||
Net income | |||||||||||
Net income attributable to non-controlling interest in subsidiaries | ( | ( | |||||||||
Net income attributable to Matador Resources Company shareholders | $ | $ | |||||||||
Earnings per common share | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average common shares outstanding | |||||||||||
Basic | |||||||||||
Diluted |
Total shareholders’ equity attributable to Matador Resources Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interest in subsidiaries | Total shareholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional paid-in capital | Retained earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to employee stock compensation plan | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised, net of options forfeited in net share settlements | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock forfeited | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Contribution related to formation of San Mateo, net of tax of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Current period net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total shareholders’ equity attributable to Matador Resources Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interest in subsidiaries | Total shareholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to employee stock compensation plan | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised, net of options forfeited in net share settlements | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Restricted stock forfeited | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Contribution related to formation of San Mateo, net of tax of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Current period net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Unrealized loss on derivatives | |||||||||||
Depletion, depreciation and amortization | |||||||||||
Accretion of asset retirement obligations | |||||||||||
Stock-based compensation expense | |||||||||||
Deferred income tax provision | |||||||||||
Amortization of debt issuance cost and other debt-related costs | |||||||||||
Net loss on impairment | |||||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable | ( | ||||||||||
Lease and well equipment inventory | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Other long-term assets | |||||||||||
Accounts payable, accrued liabilities and other current liabilities | ( | ( | |||||||||
Royalties payable | |||||||||||
Advances from joint interest owners | ( | ( | |||||||||
Income taxes payable | |||||||||||
Other long-term liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Drilling, completion and equipping capital expenditures | ( | ( | |||||||||
Acquisition of oil and natural gas properties | ( | ( | |||||||||
Midstream capital expenditures | ( | ( | |||||||||
Expenditures for other property and equipment | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Repayments of borrowings under Credit Agreement | ( | ||||||||||
Borrowings under Credit Agreement | |||||||||||
Repayments of borrowings under San Mateo Credit Facility | ( | ( | |||||||||
Borrowings under San Mateo Credit Facility | |||||||||||
Cost to amend credit facilities | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Contributions related to formation of San Mateo | |||||||||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | ( | ( | |||||||||
Taxes paid related to net share settlement of stock-based compensation | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Change in cash and restricted cash | ( | ||||||||||
Cash and restricted cash at beginning of period | |||||||||||
Cash and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information (Note 10) |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues from contracts with customers | $ | $ | |||||||||
Realized gain (loss) on derivatives | ( | ||||||||||
Unrealized loss on derivatives | ( | ( | |||||||||
Total revenues | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Oil revenues | $ | $ | |||||||||
Natural gas revenues | |||||||||||
Third-party midstream services revenues | |||||||||||
Sales of purchased natural gas | |||||||||||
Total revenues from contracts with customers | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Weighted average common shares outstanding | |||||||||||
Basic | |||||||||||
Dilutive effect of options and restricted stock units | |||||||||||
Diluted weighted average common shares outstanding |
Beginning asset retirement obligations | $ | ||||
Liabilities incurred during period | |||||
Liabilities settled during period | ( | ||||
Revisions in estimated cash flows | ( | ||||
Divestitures during period | ( | ||||
Accretion expense | |||||
Ending asset retirement obligations | |||||
Less: current asset retirement obligations(1) | ( | ||||
Long-term asset retirement obligations | $ |
Commodity | Calculation Period | Notional Quantity (MMBtu) | Fixed Price ($/MMBtu) | Fair Value of Asset (Liability) (thousands) | ||||||||||||||||||||||
04/01/2023 - 12/31/2023 | $ | ( | $ | ( | ||||||||||||||||||||||
Total open basis swap contracts | $ | ( | ||||||||||||||||||||||||
Derivative Instruments | Gross amounts recognized | Gross amounts netted in the condensed consolidated balance sheets | Net amounts presented in the condensed consolidated balance sheets | |||||||||||||||||
March 31, 2023 | ||||||||||||||||||||
$ | ( | $ | $ | ( | ||||||||||||||||
Total | $ | ( | $ | $ | ( | |||||||||||||||
December 31, 2022 | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Total | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||||||||
Type of Instrument | Location in Condensed Consolidated Statement of Operations | 2023 | 2022 | |||||||||||||||||
Derivative Instrument | ||||||||||||||||||||
Oil | Revenues: Realized loss on derivatives | $ | $ | ( | ||||||||||||||||
Natural Gas | Revenues: Realized gain (loss) on derivatives | ( | ||||||||||||||||||
Realized gain (loss) on derivatives | ( | |||||||||||||||||||
Oil | Revenues: Unrealized loss on derivatives | ( | ||||||||||||||||||
Natural Gas | Revenues: Unrealized loss on derivatives | ( | ( | |||||||||||||||||
Unrealized loss on derivatives | ( | ( | ||||||||||||||||||
Total | $ | ( | $ | ( |
Fair Value Measurements at March 31, 2023 using | ||||||||||||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Assets (Liabilities) | ||||||||||||||||||||||||||
Natural gas basis swaps | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
Fair Value Measurements at December 31, 2022 using | ||||||||||||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Assets (Liabilities) | ||||||||||||||||||||||||||
Natural gas derivatives | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Accrued evaluated and unproved and unevaluated property costs | $ | $ | |||||||||
Accrued midstream properties costs | |||||||||||
Accrued lease operating expenses | |||||||||||
Accrued interest on debt | |||||||||||
Accrued asset retirement obligations | |||||||||||
Accrued partners’ share of joint interest charges | |||||||||||
Accrued payable related to purchased natural gas | |||||||||||
Other | |||||||||||
Total accrued liabilities | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash paid for interest expense, net of amounts capitalized | $ | $ | |||||||||
Increase (decrease) in asset retirement obligations related to mineral properties | $ | $ | ( | ||||||||
Increase in asset retirement obligations related to midstream properties | $ | $ | |||||||||
Increase (decrease) in liabilities for drilling, completion and equipping capital expenditures | $ | $ | ( | ||||||||
Decrease in liabilities for acquisition of oil and natural gas properties | $ | ( | $ | ( | |||||||
(Decrease) increase in liabilities for midstream properties capital expenditures | $ | ( | $ | ||||||||
Stock-based compensation expense recognized as a liability | $ | $ | |||||||||
Transfer of inventory from (to) oil and natural gas properties | $ | $ | ( | ||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash and restricted cash | $ | $ |
Exploration and Production | Consolidations and Eliminations | Consolidated Company | |||||||||||||||||||||||||||
Midstream | Corporate | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Oil and natural gas revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Midstream services revenues | ( | ||||||||||||||||||||||||||||
Sales of purchased natural gas | |||||||||||||||||||||||||||||
Realized gain on derivatives | |||||||||||||||||||||||||||||
Unrealized loss on derivatives | ( | ( | |||||||||||||||||||||||||||
Expenses(1) | ( | ||||||||||||||||||||||||||||
Operating income(2) | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Capital expenditures(3) | $ | $ | $ | $ | $ |
Exploration and Production | Consolidations and Eliminations | Consolidated Company | |||||||||||||||||||||||||||
Midstream | Corporate | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||
Oil and natural gas revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Midstream services revenues | ( | ||||||||||||||||||||||||||||
Sales of purchased natural gas | |||||||||||||||||||||||||||||
Realized loss on derivatives | ( | ( | |||||||||||||||||||||||||||
Unrealized loss on derivatives | ( | ( | |||||||||||||||||||||||||||
Expenses(1) | ( | ||||||||||||||||||||||||||||
Operating income(2) | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Capital expenditures(3) | $ | $ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Operating Data | ||||||||||||||
Revenues (in thousands)(1) | ||||||||||||||
Oil | $ | 401,777 | $ | 460,122 | ||||||||||
Natural gas | 101,132 | 166,393 | ||||||||||||
Total oil and natural gas revenues | 502,909 | 626,515 | ||||||||||||
Third-party midstream services revenues | 26,511 | 17,306 | ||||||||||||
Sales of purchased natural gas | 34,254 | 19,339 | ||||||||||||
Realized gain (loss) on derivatives | 3,669 | (22,439) | ||||||||||||
Unrealized loss on derivatives | (7,067) | (75,029) | ||||||||||||
Total revenues | $ | 560,276 | $ | 565,692 | ||||||||||
Net Production Volumes(1) | ||||||||||||||
Oil (MBbl)(2) | 5,305 | 4,820 | ||||||||||||
Natural gas (Bcf)(3) | 25.8 | 21.8 | ||||||||||||
Total oil equivalent (MBOE)(4) | 9,599 | 8,457 | ||||||||||||
Average daily production (BOE/d)(5) | 106,654 | 93,969 | ||||||||||||
Average Sales Prices | ||||||||||||||
Oil, without realized derivatives (per Bbl) | $ | 75.74 | $ | 95.45 | ||||||||||
Oil, with realized derivatives (per Bbl) | $ | 75.74 | $ | 91.68 | ||||||||||
Natural gas, without realized derivatives (per Mcf) | $ | 3.93 | $ | 7.63 | ||||||||||
Natural gas, with realized derivatives (per Mcf) | $ | 4.07 | $ | 7.43 |
Three Months Ended March 31, | ||||||||||||||
(In thousands, except expenses per BOE) | 2023 | 2022 | ||||||||||||
Expenses | ||||||||||||||
Production taxes, transportation and processing | $ | 55,486 | $ | 59,819 | ||||||||||
Lease operating | 44,407 | 33,955 | ||||||||||||
Plant and other midstream services operating | 31,045 | 19,461 | ||||||||||||
Purchased natural gas | 28,448 | 17,021 | ||||||||||||
Depletion, depreciation and amortization | 126,325 | 95,853 | ||||||||||||
Accretion of asset retirement obligations | 699 | 543 | ||||||||||||
General and administrative | 22,433 | 29,733 | ||||||||||||
Total expenses | 308,843 | 256,385 | ||||||||||||
Operating income | 251,433 | 309,307 | ||||||||||||
Other income (expense) | ||||||||||||||
Net loss on impairment | — | (198) | ||||||||||||
Interest expense | (16,176) | (16,252) | ||||||||||||
Other income (expense) | 339 | (144) | ||||||||||||
Total other expense | (15,837) | (16,594) | ||||||||||||
Income before income taxes | 235,596 | 292,713 | ||||||||||||
Income tax provision (benefit) | ||||||||||||||
Current | 4,929 | 15,409 | ||||||||||||
Deferred | 51,743 | 53,119 | ||||||||||||
Total income tax provision | 56,672 | 68,528 | ||||||||||||
Net income | 178,924 | 224,185 | ||||||||||||
Net income attributable to non-controlling interest in subsidiaries | (15,794) | (17,061) | ||||||||||||
Net income attributable to Matador Resources Company shareholders | $ | 163,130 | $ | 207,124 | ||||||||||
Expenses per BOE | ||||||||||||||
Production taxes, transportation and processing | $ | 5.78 | $ | 7.07 | ||||||||||
Lease operating | $ | 4.63 | $ | 4.01 | ||||||||||
Plant and other midstream services operating | $ | 3.23 | $ | 2.30 | ||||||||||
Depletion, depreciation and amortization | $ | 13.16 | $ | 11.33 | ||||||||||
General and administrative | $ | 2.34 | $ | 3.52 |
Three Months Ended March 31, | |||||||||||
(In thousands) | 2023 | 2022 | |||||||||
Net cash provided by operating activities | $ | 339,500 | $ | 328,954 | |||||||
Net cash used in investing activities | (343,466) | (251,896) | |||||||||
Net cash used in financing activities | (39,936) | (43,821) | |||||||||
Net change in cash and restricted cash | $ | (43,902) | $ | 33,237 | |||||||
Adjusted EBITDA attributable to Matador Resources Company shareholders(1) | $ | 365,224 | $ | 461,843 |
(In thousands) | March 31, 2023 | |||||||
Summarized Balance Sheet | ||||||||
Assets | ||||||||
Current assets | $ | 917,928 | ||||||
Net property and equipment | $ | 3,776,264 | ||||||
Other long-term assets | $ | 79,378 | ||||||
Liabilities | ||||||||
Current liabilities | $ | 576,581 | ||||||
Long-term debt | $ | 695,515 | ||||||
Other long-term liabilities | $ | 548,978 |
Three Months Ended | |||||||||||
(In thousands) | March 31, 2023 | ||||||||||
Summarized Statement of Operations | |||||||||||
Revenues | $ | 503,129 | |||||||||
Expenses | 287,001 | ||||||||||
Operating income | 216,128 | ||||||||||
Other expense | (8,071) | ||||||||||
Income tax provision | (56,672) | ||||||||||
Net income | $ | 151,385 |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2023 | 2022 | ||||||||||||
Unaudited Adjusted EBITDA Reconciliation to Net Income | ||||||||||||||
Net income attributable to Matador Resources Company shareholders | $ | 163,130 | $ | 207,124 | ||||||||||
Net income attributable to non-controlling interest in subsidiaries | 15,794 | 17,061 | ||||||||||||
Net income | 178,924 | 224,185 | ||||||||||||
Interest expense | 16,176 | 16,252 | ||||||||||||
Total income tax provision | 56,672 | 68,528 | ||||||||||||
Depletion, depreciation and amortization | 126,325 | 95,853 | ||||||||||||
Accretion of asset retirement obligations | 699 | 543 | ||||||||||||
Unrealized loss on derivatives | 7,067 | 75,029 | ||||||||||||
Non-cash stock-based compensation expense | 2,290 | 3,014 | ||||||||||||
Net loss on impairment | — | 198 | ||||||||||||
Expense related to contingent consideration and other | 942 | 356 | ||||||||||||
Consolidated Adjusted EBITDA | 389,095 | 483,958 | ||||||||||||
Adjusted EBITDA attributable to non-controlling interest in subsidiaries | (23,871) | (22,115) | ||||||||||||
Adjusted EBITDA attributable to Matador Resources Company shareholders | $ | 365,224 | $ | 461,843 |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2023 | 2022 | ||||||||||||
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities | ||||||||||||||
Net cash provided by operating activities | $ | 339,500 | $ | 328,954 | ||||||||||
Net change in operating assets and liabilities | 28,386 | 123,930 | ||||||||||||
Interest expense, net of non-cash portion | 15,338 | 15,309 | ||||||||||||
Current income tax provision | 4,929 | 15,409 | ||||||||||||
Expense related to contingent consideration and other | 942 | 356 | ||||||||||||
Adjusted EBITDA attributable to non-controlling interest in subsidiaries | (23,871) | (22,115) | ||||||||||||
Adjusted EBITDA attributable to Matador Resources Company shareholders | $ | 365,224 | $ | 461,843 |
Payments Due by Period | |||||||||||||||||||||||||||||
(In thousands) | Total | Less Than 1 Year | 1 - 3 Years | 3 - 5 Years | More Than 5 Years | ||||||||||||||||||||||||
Contractual Obligations | |||||||||||||||||||||||||||||
Borrowings, including letters of credit(1) | $ | 529,367 | $ | — | $ | — | $ | 529,367 | $ | — | |||||||||||||||||||
Senior unsecured notes(2) | 699,191 | — | — | 699,191 | — | ||||||||||||||||||||||||
Office leases | 13,459 | 4,388 | 8,706 | 365 | — | ||||||||||||||||||||||||
Non-operated drilling commitments(3) | 25,194 | 25,194 | — | — | — | ||||||||||||||||||||||||
Drilling rig contracts(4) | 16,662 | 16,662 | — | — | — | ||||||||||||||||||||||||
Asset retirement obligations(5) | 54,951 | 711 | 6,000 | 1,705 | 46,535 | ||||||||||||||||||||||||
Transportation, gathering, processing and disposal agreements with non-affiliates(6) | 524,098 | 70,743 | 142,358 | 126,566 | 184,431 | ||||||||||||||||||||||||
Transportation, gathering, processing and disposal agreements with San Mateo(7) | 277,656 | 444 | 169,746 | 107,466 | — | ||||||||||||||||||||||||
Midstream compressor contracts(8) | 21,856 | 21,856 | — | — | — | ||||||||||||||||||||||||
Total contractual cash obligations | $ | 2,162,434 | $ | 139,998 | $ | 326,810 | $ | 1,464,660 | $ | 230,966 |
Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs | ||||||||||||||||||||||
January 1, 2023 to January 31, 2023 | 653 | $ | 56.97 | — | — | |||||||||||||||||||||
February 1, 2023 to February 28, 2023 | 19,340 | $ | 62.03 | — | — | |||||||||||||||||||||
March 1, 2023 to March 31, 2023 | — | $ | — | — | — | |||||||||||||||||||||
Total | 19,993 | $ | 61.86 | — | — |
Exhibit Number | Description | ||||||||||
2.1* | |||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
3.3 | |||||||||||
3.4 | |||||||||||
4.1 | |||||||||||
10.1 | |||||||||||
10.2 | |||||||||||
22.1 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32.1 | |||||||||||
32.2 | |||||||||||
101 | The following financial information from Matador Resources Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets - Unaudited, (ii) the Condensed Consolidated Statements of Operations - Unaudited, (iii) the Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited, (iv) the Condensed Consolidated Statements of Cash Flows - Unaudited and (v) the Notes to Condensed Consolidated Financial Statements - Unaudited (submitted electronically herewith). | ||||||||||
104 | Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). | ||||||||||
* | This filing excludes certain schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request by the Commission; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules or exhibits so furnished. |
MATADOR RESOURCES COMPANY | |||||||||||
Date: April 28, 2023 | By: | /s/ Joseph Wm. Foran | |||||||||
Joseph Wm. Foran | |||||||||||
Chairman and Chief Executive Officer |
Date: April 28, 2023 | By: | /s/ Brian J. Willey | |||||||||
Brian J. Willey | |||||||||||
Chief Financial Officer, President of Midstream Operations and Executive Vice President |
BORROWER: | ||||||||
MRC ENERGY COMPANY, as Borrower | ||||||||
By: | /s/ Craig N. Adams | |||||||
Name: | Craig N. Adams | |||||||
Title: | Executive Vice President |
ADMINISTRATIVE AGENT: | ||||||||
TRUIST BANK, as Administrative Agent | ||||||||
By: | /s/ Lincoln LaCour | |||||||
Name: | Lincoln LaCour | |||||||
Title: | Vice President |
LENDERS: | ||||||||
TRUIST BANK, as a Lender | ||||||||
By: | /s/ Lincoln LaCour | |||||||
Name: | Lincoln LaCour | |||||||
Title: | Vice President |
BANK OF AMERICA, N.A., as a Lender | ||||||||
By: | /s/ Christopher Baethge | |||||||
Name: | Christopher Baethge | |||||||
Title: | Vice President |
KEYBANK NATIONAL ASSOCIATION, as a Lender | ||||||||
By: | /s/ George E. McKean | |||||||
Name: | George E. McKean | |||||||
Title: | Senior Vice President |
PNC BANK, NATIONAL ASSOCIATION, as a Lender | ||||||||
By: | /s/ Anvar Musayev | |||||||
Name: | Anvar Musayev | |||||||
Title: | Vice President |
THE BANK OF NOVA SCOTIA, HOUSTON BRANCH, as a Lender | ||||||||
By: | /s/ Joe Lattanzi | |||||||
Name: | Joe Lattanzi | |||||||
Title: | Managing Director |
ROYAL BANK OF CANADA, as a Lender | ||||||||
By: | /s/ Emilee Scott | |||||||
Name: | Emilee Scott | |||||||
Title: | Authorized Signatory |
COMERICA BANK, as a Lender | ||||||||
By: | /s/ Cassandra Lucas | |||||||
Name: | Cassandra Lucas | |||||||
Title: | Vice President |
MUFG BANK, LTD., as a Lender | ||||||||
By: | /s/ Traci Bankston | |||||||
Name: | Traci Bankston | |||||||
Title: | Authorized Signatory |
U.S. BANK NATIONAL ASSOCIATION, as a Lender | ||||||||
By: | /s/ Elizabeth Johnson | |||||||
Name: | Beth Johnson | |||||||
Title: | Senior Vice President |
ZIONS BANCORPORATION, N.A. dba Amegy Bank, as a Lender | ||||||||
By: | /s/ Jill McSorley | |||||||
Name: | Jill McSorley | |||||||
Title: | Senior Vice President – Amegy Bank Division |
FIRST HORIZON BANK, a Tennessee State Bank, as a Lender | ||||||||
By: | /s/ Moni Collins | |||||||
Name: | Moni Collins | |||||||
Title: | Senior Vice President |
BOKF, NA dba Bank of Texas, as a Lender | ||||||||
By: | /s/ Drew Krittenbrink | |||||||
Name: | Drew Krittenbrink | |||||||
Title: | Vice President |
CATHAY BANK, as a Lender | ||||||||
By: | /s/ Dale T. Wilson | |||||||
Name: | Dale T. Wilson | |||||||
Title: | Senior Vice President |
GUARANTORS: | ||||||||
MATADOR RESOURCES COMPANY | ||||||||
LONGWOOD GATHERING AND DISPOSAL SYSTEMS GP, INC. | ||||||||
MRC PERMIAN COMPANY | ||||||||
MATADOR PRODUCTION COMPANY | ||||||||
MRC ROCKIES COMPANY | ||||||||
WR PERMIAN, LLC | ||||||||
MRC PERMIAN LKE COMPANY, LLC | ||||||||
LONGWOOD MIDSTREAM HOLDINGS, LLC | ||||||||
MRC ENERGY SOUTHEAST COMPANY, LLC | ||||||||
MRC ENERGY SOUTH TEXAS COMPANY, LLC | ||||||||
DELAWARE WATER MANAGEMENT COMPANY, LLC | ||||||||
LONGWOOD MIDSTREAM DELAWARE, LLC | ||||||||
LONGWOOD MIDSTREAM SOUTHEAST, LLC | ||||||||
LONGWOOD MIDSTREAM SOUTH TEXAS, LLC | ||||||||
SOUTHEAST WATER MANAGEMENT COMPANY, LLC | ||||||||
MRC DELAWARE RESOURCES, LLC | ||||||||
By: | /s/ Craig N. Adams | |||||||
Name: | Craig N. Adams | |||||||
Title: | Executive Vice President | |||||||
LONGWOOD GATHERING AND DISPOSAL SYSTEMS, LP | ||||||||
By: | Longwood Gathering and Disposal Systems GP, Inc., its General Partner | |||||||
By: | /s/ Craig N. Adams | |||||||
Name: | Craig N. Adams | |||||||
Title: | Executive Vice President |
Name | Jurisdiction | |||||||
Delaware Water Management Company, LLC | Texas | |||||||
Longwood Gathering and Disposal Systems GP, Inc. | Texas | |||||||
Longwood Gathering and Disposal Systems, LP | Texas | |||||||
Longwood Midstream Delaware, LLC | Texas | |||||||
Longwood Midstream Holdings, LLC | Texas | |||||||
Longwood Midstream Southeast, LLC | Texas | |||||||
Longwood Midstream South Texas, LLC | Texas | |||||||
Matador Production Company | Texas | |||||||
MRC Delaware Resources, LLC | Texas | |||||||
MRC Energy Company | Texas | |||||||
MRC Energy Southeast Company, LLC | Texas | |||||||
MRC Energy South Texas Company, LLC | Texas | |||||||
MRC Permian Company | Texas | |||||||
MRC Permian LKE Company, LLC | Texas | |||||||
MRC Rockies Company | Texas | |||||||
Southeast Water Management Company, LLC | Texas | |||||||
WR Permian, LLC | Delaware |
April 28, 2023 | /s/ Joseph Wm. Foran | |||||||
Joseph Wm. Foran | ||||||||
Chairman and Chief Executive Officer (Principal Executive Officer) |
April 28, 2023 | /s/ Brian J. Willey | |||||||
Brian J. Willey Chief Financial Officer, President of Midstream Operations and Executive Vice President (Principal Financial Officer) |
April 28, 2023 | /s/ Joseph Wm. Foran | |||||||
Joseph Wm. Foran | ||||||||
Chairman and Chief Executive Officer (Principal Executive Officer) |
April 28, 2023 | /s/ Brian J. Willey | |||||||
Brian J. Willey | ||||||||
Chief Financial Officer, President of Midstream Operations and Executive Vice President (Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 |
Common stock, shares issued (in shares) | 119,232,002 | 118,953,381 |
Common stock, shares outstanding (in shares) | 119,205,783 | 118,948,624 |
Treasury stock (in shares) | 26,219 | 4,757 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.15 | $ 0.05 |
Contribution related to formation of San Mateo, net of tax | $ 3.1 | $ 4.8 |
NATURE OF OPERATIONS |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONSMatador Resources Company, a Texas corporation (“Matador” and, collectively with its subsidiaries, the “Company”), is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, the Company conducts midstream operations in support of the Company’s exploration, development and production operations and provides natural gas processing, oil transportation services, oil, natural gas and produced water gathering services and produced water disposal services to third parties. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) but do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023 (the “Annual Report”). The Company consolidates certain subsidiaries and joint ventures that are less than wholly-owned and are not involved in oil and natural gas exploration, including its midstream joint venture, San Mateo Midstream, LLC (collectively with its subsidiaries, “San Mateo”), and the net income and equity attributable to the non-controlling interest in these subsidiaries have been reported separately as required by Accounting Standards Codification, Consolidation (Topic 810). The Company proportionately consolidates certain joint ventures that are less than wholly-owned and are involved in oil and natural gas exploration. All intercompany accounts and transactions have been eliminated in consolidation. In management’s opinion, these interim unaudited condensed consolidated financial statements include all normal, recurring adjustments that are necessary for a fair presentation of the Company’s interim unaudited condensed consolidated financial statements as of March 31, 2023. Amounts as of December 31, 2022 are derived from the Company’s audited consolidated financial statements included in the Annual Report. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s interim unaudited condensed consolidated financial statements are based on a number of significant estimates, including oil and natural gas revenues, accrued assets and liabilities, stock-based compensation, valuation of derivative instruments, deferred tax assets and liabilities and oil and natural gas reserves. The estimates of oil and natural gas reserves quantities and future net cash flows are the basis for the calculations of depletion and impairment of oil and natural gas properties, as well as estimates of asset retirement obligations and certain tax accruals. While the Company believes its estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates. Revenues The following table summarizes the Company’s total revenues and revenues from contracts with customers on a disaggregated basis for the three months ended March 31, 2023 and 2022 (in thousands).
Property and Equipment The Company uses the full-cost method of accounting for its investments in oil and natural gas properties. Under this method, the Company is required to perform a ceiling test each quarter that determines a limit, or ceiling, on the capitalized costs of oil and natural gas properties based primarily on the after-tax estimated future net cash flows from oil and natural gas properties using a 10% discount rate and the arithmetic average of first-day-of-the-month oil and natural gas prices for the prior 12-month period. For each of the three months ended March 31, 2023 and 2022, the cost center ceiling was higher than the capitalized costs of oil and natural gas properties, and, as a result, no impairment charge was necessary. The Company capitalized approximately $12.6 million and $13.2 million of its general and administrative costs for the three months ended March 31, 2023 and 2022, respectively. The Company capitalized approximately $3.4 million and $3.5 million of its interest expense for the three months ended March 31, 2023 and 2022, respectively. Earnings Per Common Share The Company reports basic earnings attributable to Matador shareholders per common share, which excludes the effect of potentially dilutive securities, and diluted earnings attributable to Matador shareholders per common share, which includes the effect of all potentially dilutive securities unless their impact is anti-dilutive. The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2023 and 2022 (in thousands).
|
ASSET RETIREMENT OBLIGATIONS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS The following table summarizes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2023 (in thousands).
_______________ (1)Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at March 31, 2023.
|
DEBT |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT At March 31, 2023, the Company had (i) $699.2 million of outstanding senior notes due 2026 (the “2026 Notes”), (ii) no borrowings outstanding under its reserves-based revolving credit facility (the “Credit Agreement”) and (iii) approximately $45.4 million in outstanding letters of credit issued pursuant to the Credit Agreement. See Note 12 for a discussion of changes in the Company’s debt between March 31, 2023 and April 25, 2023. At March 31, 2023, San Mateo had $475.0 million in borrowings outstanding under its revolving credit facility (the “San Mateo Credit Facility”) and approximately $9.0 million in outstanding letters of credit issued pursuant to the San Mateo Credit Facility. Between March 31, 2023 and April 25, 2023, San Mateo repaid $20.0 million of borrowings under the San Mateo Credit Facility. Credit Agreements MRC Energy Company The borrowing base under the Credit Agreement is determined semi-annually as of May 1 and November 1 by the lenders based primarily on the estimated value of the Company’s proved oil and natural gas reserves at December 31 and June 30 of each year, respectively. The Company and the lenders may each request an unscheduled redetermination of the borrowing base once between scheduled redetermination dates. On March 31, 2023, the lenders completed their review of the Company’s proved oil and natural gas reserves, and, as a result, the Company and its lenders entered into a Second Amendment to the Fourth Amended and Restated Credit Agreement, which amended the Credit Agreement to, among other things: (i) reaffirm the borrowing base at $2.25 billion, (ii) increase the elected commitment from $775.0 million to $1.25 billion and (iii) maintain the maximum facility amount at $1.50 billion. This reaffirmation of the borrowing base constituted the regularly scheduled May 1 redetermination. The Credit Agreement matures October 31, 2026. The Credit Agreement requires the Company to maintain (i) a current ratio, which is defined as (x) total consolidated current assets plus the unused availability under the Credit Agreement divided by (y) total consolidated current liabilities less current maturities under the Credit Agreement, of not less than 1.0 to 1.0 at the end of each fiscal quarter and (ii) a debt to EBITDA ratio, which is defined as debt outstanding (net of up to $75.0 million of cash or cash equivalents), divided by a rolling four quarter EBITDA calculation, of 3.5 to 1.0 or less. The Company believes that it was in compliance with the terms of the Credit Agreement at March 31, 2023. San Mateo Midstream, LLC The San Mateo Credit Facility is non-recourse with respect to Matador and its wholly-owned subsidiaries but is guaranteed by San Mateo’s subsidiaries and secured by substantially all of San Mateo’s assets, including real property. The San Mateo Credit Facility matures December 9, 2026 and lender commitments under the revolving credit facility were $485.0 million at March 31, 2023 (subject to San Mateo’s compliance with the covenants noted below). The San Mateo Credit Facility includes an accordion feature, which provides for potential increases in lender commitments of up to $735.0 million. The San Mateo Credit Facility requires San Mateo to maintain a debt to EBITDA ratio, which is defined as total consolidated funded indebtedness outstanding (as defined in the San Mateo Credit Facility) divided by a rolling four quarter EBITDA calculation, of 5.0 or less, subject to certain exceptions. The San Mateo Credit Facility also requires San Mateo to maintain an interest coverage ratio, which is defined as a rolling four quarter EBITDA calculation divided by San Mateo’s consolidated interest expense for such period, of 2.5 or more. The San Mateo Credit Facility also restricts the ability of San Mateo to distribute cash to its members if San Mateo’s liquidity is less than 10% of the lender commitments under the San Mateo Credit Facility. The Company believes that San Mateo was in compliance with the terms of the San Mateo Credit Facility at March 31, 2023. Senior Unsecured Notes At March 31, 2023, the Company had $699.2 million of outstanding 2026 Notes, which have a 5.875% coupon rate. The 2026 Notes mature September 15, 2026, and interest is payable on the 2026 Notes semi-annually in arrears on each March 15 and September 15. The 2026 Notes are jointly and severally guaranteed on a senior unsecured basis by certain subsidiaries of the Company (the “Guarantor Subsidiaries”).
|
INCOME TAXES |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe Company recorded a current income tax provision of $4.9 million and a deferred income tax provision of $51.7 million for the three months ended March 31, 2023. The Company recorded a current income tax provision of $15.4 million and a deferred income tax provision of $53.1 million for the three months ended March 31, 2022. The Company’s effective income tax rate of 26% and 25% for the three months ended March 31, 2023 and 2022, respectively, differed from the U.S. federal statutory rate due primarily to permanent differences between book and tax income and state taxes, primarily in New Mexico. |
EQUITY |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Equity [Abstract] | |
EQUITY | EQUITY Stock-based Compensation During the three months ended March 31, 2023, the Company granted awards to certain of its employees of 90,000 service-based restricted stock units to be settled in cash, which are liability instruments, and 143,500 performance-based stock units and 133,000 service-based shares of restricted stock, which are equity instruments. The performance-based stock units vest in an amount between zero and 200% of the target units granted based on the Company’s relative total shareholder return over the three-year period ending December 31, 2025, as compared to a designated peer group. The service-based restricted stock and restricted stock units vest over a three-year period. The fair value of these awards was approximately $26.7 million on the grant date. Common Stock Dividend The Board of Directors (the “Board”) declared a quarterly cash dividend of $0.15 per share of common stock in February 2023. The dividend, which totaled $17.8 million, was paid on March 9, 2023 to shareholders of record as of February 27, 2023. In April 2023, the Board declared a quarterly cash dividend of $0.15 per share of common stock payable on June 1, 2023 to shareholders of record as of May 11, 2023. San Mateo Distributions and Contributions During the three months ended March 31, 2023, San Mateo distributed $19.9 million to the Company and $19.1 million to a subsidiary of Five Point Energy LLC (“Five Point”), the Company’s joint venture partner in San Mateo. During the three months ended March 31, 2022, San Mateo distributed $19.1 million to the Company and $18.4 million to Five Point. During each of the three months ended March 31, 2023 and 2022, there were no contributions to San Mateo by either the Company or Five Point. Performance Incentives Five Point paid to the Company $14.7 million and $22.8 million of performance incentives during the three months ended March 31, 2023 and 2022, respectively. These performance incentives are recorded when received, net of the $3.1 million and $4.8 million deferred tax impact to Matador for the three months ended March 31, 2023 and 2022, respectively, in “Additional paid-in capital” in the Company’s interim unaudited condensed consolidated balance sheets. These performance incentives for the three months ended March 31, 2023 and 2022 are also denoted as “Contributions related to formation of San Mateo” under “Financing activities” in the Company’s interim unaudited condensed consolidated statements of cash flows and changes in shareholders’ equity.
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DERIVATIVE FINANCIAL INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS At March 31, 2023, the Company had one natural gas basis swap contract open and in place to mitigate its exposure to natural gas price volatility, with a specific term (calculation period), notional quantity (volume hedged) and fixed price. At March 31, 2023, the contract was set to expire during the fourth quarter of 2023. The Company had no open contracts associated with oil or natural gas liquids prices at March 31, 2023. The following is a summary of the Company’s open basis swap contract at March 31, 2023.
The Company’s derivative financial instruments are subject to master netting arrangements, and the Company’s counterparties allow for cross-commodity master netting provided the settlement dates for the commodities are the same. The Company does not present different types of commodities with the same counterparty on a net basis in its interim unaudited condensed consolidated balance sheets. The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the interim unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 (in thousands).
The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands).
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements are classified and disclosed in one of the following categories. Level 1 Unadjusted quoted prices for identical, unrestricted assets or liabilities in active markets. Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs, including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. Level 3 Unobservable inputs that are not corroborated by market data that reflect a company’s own market assumptions. Financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of March 31, 2023 and December 31, 2022 (in thousands).
Additional disclosures related to derivative financial instruments are provided in Note 7. Other Fair Value Measurements At March 31, 2023 and December 31, 2022, the carrying values reported on the interim unaudited condensed consolidated balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, royalties payable, amounts due to affiliates, advances from joint interest owners, income taxes payable and other current liabilities approximated their fair values due to their short-term maturities. At March 31, 2023 and December 31, 2022, the carrying value of borrowings under the Credit Agreement and the San Mateo Credit Facility approximated their fair value as both are subject to short-term floating interest rates that reflect market rates available to the Company at the time and are classified at Level 2 in the fair value hierarchy. At March 31, 2023 and December 31, 2022, the fair value of the 2026 Notes was $687.6 million and $675.7 million, respectively, based on quoted market prices, which represent Level 1 inputs in the fair value hierarchy.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Processing, Transportation and Produced Water Disposal Commitments Firm Commitments From time to time, the Company enters into agreements with third parties whereby the Company commits to deliver anticipated natural gas and oil production and produced water from certain portions of its acreage for transportation, gathering, processing, fractionation, sales and disposal. The Company paid approximately $10.7 million and $11.0 million for deliveries under these agreements during the three months ended March 31, 2023 and 2022, respectively. Certain of these agreements contain minimum volume commitments. If the Company does not meet the minimum volume commitments under these agreements, it will be required to pay certain deficiency fees. If the Company ceased operations in the areas subject to these agreements at March 31, 2023, the total deficiencies required to be paid by the Company under these agreements would be approximately $524.1 million. San Mateo Commitments The Company dedicated to San Mateo its current and certain future leasehold interests in the Rustler Breaks and Wolf asset areas and acreage in the southern portion of the Arrowhead asset area (the “Greater Stebbins Area”) and the Stateline asset area pursuant to 15-year, fixed-fee oil transportation, oil, natural gas and produced water gathering and produced water disposal agreements. In addition, the Company dedicated to San Mateo its current and certain future leasehold interests in the Rustler Breaks asset area and acreage in the Greater Stebbins Area and Stateline asset area pursuant to 15-year, fixed-fee natural gas processing agreements (collectively with the transportation, gathering and produced water disposal agreements, the “Operational Agreements”). San Mateo provides the Company with firm service under each of the Operational Agreements in exchange for certain minimum volume commitments. The remaining minimum contractual obligation under the Operational Agreements at March 31, 2023 was approximately $277.7 million. Legal Proceedings The Company is a party to several legal proceedings encountered in the ordinary course of its business. While the ultimate outcome and impact on the Company cannot be predicted with certainty, in the opinion of management, it is remote that these legal proceedings will have a material adverse impact on the Company’s financial condition, results of operations or cash flows.
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SUPPLEMENTAL DISCLOSURES |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL DISCLOSURES | SUPPLEMENTAL DISCLOSURES Accrued Liabilities The following table summarizes the Company’s current accrued liabilities at March 31, 2023 and December 31, 2022 (in thousands).
Supplemental Cash Flow Information The following table provides supplemental disclosures of cash flow information for the three months ended March 31, 2023 and 2022 (in thousands).
The following table provides a reconciliation of cash and restricted cash recorded in the interim unaudited condensed consolidated balance sheets to cash and restricted cash as presented on the interim unaudited condensed consolidated statements of cash flows (in thousands).
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company operates in two business segments: (i) exploration and production and (ii) midstream. The exploration and production segment is engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States and is currently focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. The midstream segment conducts midstream operations in support of the Company’s exploration, development and production operations and provides natural gas processing, oil transportation services, oil, natural gas and produced water gathering services and produced water disposal services to third parties. The majority of the Company’s midstream operations in the Rustler Breaks, Wolf and Stateline asset areas and the Greater Stebbins Area in the Delaware Basin, which comprise most of the Company’s midstream operations, are conducted through San Mateo. In addition, at March 31, 2023, the Company operated a cryogenic gas processing plant, three compressor stations and approximately 45 miles of natural gas gathering pipelines in Lea and Eddy Counties, New Mexico through Pronto Midstream, LLC (“Pronto”), which is a wholly-owned subsidiary of the Company. Neither San Mateo nor Pronto is a guarantor of the 2026 Notes. The following tables present selected financial information for the periods presented regarding the Company’s business segments on a stand-alone basis, corporate expenses that are not allocated to a segment and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis (in thousands). On a consolidated basis, midstream services revenues consist primarily of those revenues from midstream operations related to third parties, including working interest owners in the Company’s operated wells. All midstream services revenues associated with Company-owned production are eliminated in consolidation. In evaluating the operating results of the exploration and production and midstream segments, the Company does not allocate certain expenses to the individual segments, including general and administrative expenses. Such expenses are reflected in the column labeled “Corporate.”
_____________________ (1)Includes depletion, depreciation and amortization expenses of $116.6 million and $9.4 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.3 million. (2)Includes $15.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3)Includes $23.7 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $4.6 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
_____________________ (1)Includes depletion, depreciation and amortization expenses of $87.3 million and $8.0 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million. (2)Includes $17.1 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3)Includes $41.1 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $9.3 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
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SUBSEQUENT EVENTS (Notes) |
3 Months Ended |
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Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 12, 2023, a wholly-owned subsidiary of the Company completed the acquisition of Advance Energy Partners Holdings, LLC (“Advance”) from affiliates of EnCap Investments L.P., including certain oil and natural gas producing properties, undeveloped acreage and midstream assets located primarily in Lea County, New Mexico and Ward County, Texas (the “Advance Acquisition”). The Advance Acquisition has an effective date of January 1, 2023 and an aggregate purchase price consisting of an amount in cash equal to approximately $1.60 billion (which amount is subject to certain customary post-closing adjustments) and potential additional cash consideration of $7.5 million for each month of 2023 in which the average oil price (as defined in the securities purchase agreement) exceeds $85 per barrel. The purchase price for the Advance Acquisition was funded with borrowings under the Credit Agreement and cash on hand. On April 11, 2023, the Company completed the sale of $500.0 million in aggregate principal amount of the Company’s 6.875% senior notes due 2028 (the “2028 Notes”). The 2028 Notes mature on April 15, 2028. Interest on the 2028 Notes is payable in arrears on each April 15 and October 15 and the first interest payment date for the 2028 Notes will be October 15, 2023. The 2028 Notes are guaranteed on a senior unsecured basis by the Guarantor Subsidiaries. The Company received net proceeds from the issuance and sale of the 2028 Notes of approximately $487.6 million after deducting the initial purchasers’ discounts and estimated offering expenses. Proceeds from the 2028 Notes and net cash flows from operations were used to repay $525.0 million of borrowings under the Credit Agreement leaving outstanding borrowings under the Credit Agreement at April 25, 2023 of $625.0 million. Neither San Mateo nor Pronto is a guarantor of the 2028 Notes.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates | Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) but do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023 (the “Annual Report”). The Company consolidates certain subsidiaries and joint ventures that are less than wholly-owned and are not involved in oil and natural gas exploration, including its midstream joint venture, San Mateo Midstream, LLC (collectively with its subsidiaries, “San Mateo”), and the net income and equity attributable to the non-controlling interest in these subsidiaries have been reported separately as required by Accounting Standards Codification, Consolidation (Topic 810). The Company proportionately consolidates certain joint ventures that are less than wholly-owned and are involved in oil and natural gas exploration. All intercompany accounts and transactions have been eliminated in consolidation. In management’s opinion, these interim unaudited condensed consolidated financial statements include all normal, recurring adjustments that are necessary for a fair presentation of the Company’s interim unaudited condensed consolidated financial statements as of March 31, 2023. Amounts as of December 31, 2022 are derived from the Company’s audited consolidated financial statements included in the Annual Report. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s interim unaudited condensed consolidated financial statements are based on a number of significant estimates, including oil and natural gas revenues, accrued assets and liabilities, stock-based compensation, valuation of derivative instruments, deferred tax assets and liabilities and oil and natural gas reserves. The estimates of oil and natural gas reserves quantities and future net cash flows are the basis for the calculations of depletion and impairment of oil and natural gas properties, as well as estimates of asset retirement obligations and certain tax accruals. While the Company believes its estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates.
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Property and Equipment | Property and Equipment The Company uses the full-cost method of accounting for its investments in oil and natural gas properties. Under this method, the Company is required to perform a ceiling test each quarter that determines a limit, or ceiling, on the capitalized costs of oil and natural gas properties based primarily on the after-tax estimated future net cash flows from oil and natural gas properties using a 10% discount rate and the arithmetic average of first-day-of-the-month oil and natural gas prices for the prior 12-month period. For each of the three months ended March 31, 2023 and 2022, the cost center ceiling was higher than the capitalized costs of oil and natural gas properties, and, as a result, no impairment charge was necessary.
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Earnings Per Common Share | Earnings Per Common Share The Company reports basic earnings attributable to Matador shareholders per common share, which excludes the effect of potentially dilutive securities, and diluted earnings attributable to Matador shareholders per common share, which includes the effect of all potentially dilutive securities unless their impact is anti-dilutive.
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Fair Value Measurements | The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements are classified and disclosed in one of the following categories. Level 1 Unadjusted quoted prices for identical, unrestricted assets or liabilities in active markets. Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs, including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. Level 3 Unobservable inputs that are not corroborated by market data that reflect a company’s own market assumptions. Financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following table summarizes the Company’s total revenues and revenues from contracts with customers on a disaggregated basis for the three months ended March 31, 2023 and 2022 (in thousands).
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Reconciliations of basic and diluted distributed and undistributed earnings (loss) per common share | The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2023 and 2022 (in thousands).
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ASSET RETIREMENT OBLIGATIONS (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in Company's asset retirement obligations | The following table summarizes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2023 (in thousands).
_______________ (1)Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at March 31, 2023.
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of contracts for oil and natural gas | The following is a summary of the Company’s open basis swap contract at March 31, 2023.
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Summary of gross asset balances of derivative instruments | The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the interim unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 (in thousands).
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Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands).
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the valuation of the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis | The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of March 31, 2023 and December 31, 2022 (in thousands).
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SUPPLEMENTAL DISCLOSURES (Tables) |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of current accrued liabilities | The following table summarizes the Company’s current accrued liabilities at March 31, 2023 and December 31, 2022 (in thousands).
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Supplemental disclosures of cash flow information | The following table provides supplemental disclosures of cash flow information for the three months ended March 31, 2023 and 2022 (in thousands).
The following table provides a reconciliation of cash and restricted cash recorded in the interim unaudited condensed consolidated balance sheets to cash and restricted cash as presented on the interim unaudited condensed consolidated statements of cash flows (in thousands).
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SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected financial information for segments | The following tables present selected financial information for the periods presented regarding the Company’s business segments on a stand-alone basis, corporate expenses that are not allocated to a segment and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis (in thousands). On a consolidated basis, midstream services revenues consist primarily of those revenues from midstream operations related to third parties, including working interest owners in the Company’s operated wells. All midstream services revenues associated with Company-owned production are eliminated in consolidation. In evaluating the operating results of the exploration and production and midstream segments, the Company does not allocate certain expenses to the individual segments, including general and administrative expenses. Such expenses are reflected in the column labeled “Corporate.”
_____________________ (1)Includes depletion, depreciation and amortization expenses of $116.6 million and $9.4 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.3 million. (2)Includes $15.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3)Includes $23.7 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $4.6 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
_____________________ (1)Includes depletion, depreciation and amortization expenses of $87.3 million and $8.0 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million. (2)Includes $17.1 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3)Includes $41.1 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $9.3 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | $ 563,674 | $ 663,160 |
Realized gain (loss) on derivatives | 3,669 | (22,439) |
Unrealized loss on derivatives | (7,067) | (75,029) |
Total revenues | 560,276 | 565,692 |
Oil revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 401,777 | 460,122 |
Natural gas revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 101,132 | 166,393 |
Third-party midstream services revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 26,511 | 17,306 |
Sales of purchased natural gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | $ 34,254 | $ 19,339 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Discount rate, present value of future revenue | 10.00% | |
Full-cost ceiling impairment | $ 0 | |
Deferred income tax benefit | (51,743) | $ (53,119) |
Capitalized general and administrative costs | 12,600 | 13,200 |
Interest costs capitalized | $ 3,400 | $ 3,500 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliations of Basic and Diluted Distributed and Undistributed Earnings (Loss) Per Common Share (Details) - shares shares in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Weighted average common shares outstanding | ||
Basic (in shares) | 119,034 | 117,951 |
Dilutive effect of options and restricted stock units (in shares) | 668 | 1,863 |
Diluted weighted average common shares outstanding (in shares) | 119,702 | 119,814 |
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
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Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
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Changes in the Company's asset retirement obligations | |||||
Beginning asset retirement obligations | $ 53,741 | ||||
Liabilities incurred during period | 1,425 | ||||
Liabilities settled during period | (189) | ||||
Revisions in estimated cash flows | (100) | ||||
Divestitures during period | (625) | ||||
Accretion expense | 699 | $ 543 | |||
Ending asset retirement obligations | 54,951 | ||||
Less: current asset retirement obligations | [1] | (711) | |||
Long-term asset retirement obligations | $ 54,240 | $ 52,985 | |||
|
DEBT - Borrowings (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Apr. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Line of Credit Facility [Line Items] | |||
Line of credit facility | $ 0 | $ 0 | |
Borrowings under San Mateo Credit Facility | 475,000 | $ 465,000 | |
Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility | 0 | ||
Unsecured Debt | Senior Notes Due 2026 | |||
Line of Credit Facility [Line Items] | |||
Long-term debt outstanding | 699,200 | ||
Letter of Credit | Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit | 45,400 | ||
Line of Credit | San Mateo Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit | 9,000 | ||
Borrowings under San Mateo Credit Facility | 475,000 | ||
Repayments of debt | $ 20,000 | ||
Line of Credit | San Mateo Credit Facility | Subsequent Event | |||
Line of Credit Facility [Line Items] | |||
Repayments of debt | $ 20,000 |
DEBT - Credit Agreements (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
USD ($)
|
Apr. 30, 2022
USD ($)
|
|
Revolving Credit Facility | Third Amended Credit Agreement | ||
Debt Instrument [Line Items] | ||
Increase in borrowing base | $ 2,250,000,000 | |
Maximum borrowing commitment | $ 775,000,000 | 1,250,000,000 |
Maximum facility amount | $ 1,500,000,000 | |
Line of credit facility covenant terms, current ratio | 1.0 | |
Cash and cash equivalent limit | $ 75,000,000 | |
EBITDA ratio | 3.5 | |
Line of Credit | San Mateo Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing commitment | $ 485,000,000 | |
EBITDA ratio | 5.0 | |
Line of credit, accordian feature (up to) | $ 735,000,000 | |
Consolidated interest expense, minimum | 2.5 | |
Liquidity restriction on cash distribution, percentage of lender commitments, less than | 10.00% |
DEBT - Senior Unsecured Notes (Details) - Senior Notes $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Senior Notes Due 2026 | |
Debt Instrument [Line Items] | |
Long-term debt outstanding | $ 699.2 |
2026 Notes Offering | |
Debt Instrument [Line Items] | |
Interest rate | 5.875% |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Current | $ 4,929 | $ 15,409 |
Deferred | $ 51,743 | $ 53,119 |
Effective tax rate | 2600.00% | 25.00% |
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Contracts for Oil and Natural Gas (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
bbl
$ / bbl
|
---|---|
Summary of contracts for oil and natural gas | |
Fair Value of Asset (Liability) | $ (3,136) |
Derivative Liability, Type [Extensible Enumeration] | Open Basis Swap Contracts [Member] |
Derivative Contract, Calculation Period Three | Oil Basis | |
Summary of contracts for oil and natural gas | |
Notional Quantity (MMBtu) | bbl | 13,750,000 |
Fixed Price ($/MMBtu) | $ / bbl | (1.85) |
Fair Value of Asset (Liability) | $ (3,136) |
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 3,136 | $ (3,931) |
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Gross Asset Balances of Derivative Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Asset Balances of Derivative Insruments | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Derivative Asset, Current | |
Gross amounts recognized | $ 3,931 | |
Gross amounts netted in the condensed consolidated balance sheets | 0 | |
Net amounts presented in the condensed consolidated balance sheets | 3,931 | |
Liability Balances of Derivative Instruments | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | |
Gross amounts recognized | $ (3,136) | |
Gross amounts netted in the condensed consolidated balance sheets | 0 | |
Net amounts presented in the condensed consolidated balance sheets | (3,136) | |
Total | (3,136) | 3,931 |
Total, Gross amounts netted in the condensed consolidated balance sheets | 0 | 0 |
Total, Net amounts presented in the condensed consolidated balance sheets | $ (3,136) | $ 3,931 |
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Location and Aggregate Fair Value of All Derivative Financial Instruments Recorded in the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Derivative Instrument | ||
Realized gain (loss) on derivatives | $ 3,669 | $ (22,439) |
Unrealized loss on derivatives | (7,067) | (75,029) |
Total | (3,398) | (97,468) |
Revenues | ||
Derivative Instrument | ||
Realized gain (loss) on derivatives | 3,669 | (22,439) |
Unrealized loss on derivatives | (7,067) | (75,029) |
Oil | Revenues | ||
Derivative Instrument | ||
Realized gain (loss) on derivatives | 0 | (18,166) |
Unrealized loss on derivatives | 0 | (44,999) |
Natural Gas | Revenues | ||
Derivative Instrument | ||
Realized gain (loss) on derivatives | 3,669 | (4,273) |
Unrealized loss on derivatives | $ (7,067) | $ (30,030) |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Senior Notes Due 2023 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of notes | $ 687.6 | $ 675.7 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Feb. 17, 2017 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Delivery Of Natural Gas And Oil Production To Third Parties | |||
Long-term Purchase Commitment [Line Items] | |||
Payment for volume requirement agreement | $ 10.7 | $ 11.0 | |
Volume requirement commitment | 524.1 | ||
Rustler Breaks and Wolf Asset Area | Corporate Joint Venture | San Mateo Midstream | |||
Long-term Purchase Commitment [Line Items] | |||
Term of contractual obligation | 15 years | ||
Rustler Breaks Asset Area | Corporate Joint Venture | San Mateo Midstream | |||
Long-term Purchase Commitment [Line Items] | |||
Term of contractual obligation | 15 years | ||
Operational Agreements | San Mateo Midstream | |||
Long-term Purchase Commitment [Line Items] | |||
Contractual obligation | $ 277.7 |
SUPPLEMENTAL DISCLOSURES - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
Cash paid for interest expense, net of amounts capitalized | $ 26,228 | $ 31,650 |
Increase (decrease) in liabilities for drilling, completion and equipping capital expenditures | 69,593 | (10,969) |
Decrease in liabilities for acquisition of oil and natural gas properties | (121) | (2,689) |
(Decrease) increase in liabilities for midstream properties capital expenditures | (1,099) | 7,098 |
Stock-based compensation expense recognized as a liability | 1,026 | 13,612 |
Transfer of inventory from (to) oil and natural gas properties | 433 | (190) |
Mineral Properties | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Increase in asset retirement obligations | 159 | (955) |
Midstream Properties | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Increase in asset retirement obligations | $ 352 | $ 0 |
SUPPLEMENTAL DISCLOSURES - Restricted Cash Reconciliation (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Disclosure Text Block Supplement [Abstract] | ||||
Cash | $ 448,723 | $ 505,179 | $ 63,001 | |
Restricted cash | 54,705 | 42,151 | 57,156 | |
Total cash and restricted cash | $ 503,428 | $ 547,330 | $ 120,157 | $ 86,920 |
SEGMENT INFORMATION - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
segment
compressorStation
| |
Segment Reporting Information [Line Items] | |
Number of segments | segment | 2 |
Summit Midstream | |
Segment Reporting Information [Line Items] | |
Compressor stations | compressorStation | 3 |
SUBSEQUENT EVENTS (Details) - USD ($) |
Apr. 12, 2023 |
Apr. 11, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Subsequent Event [Line Items] | ||||
Unsecured SBA loan | $ 695,515,000 | $ 695,245,000 | ||
Subsequent Event | 2028 Notes | ||||
Subsequent Event [Line Items] | ||||
Unsecured SBA loan | $ 500,000,000 | |||
Interest rate | 6.875% | |||
Proceeds from issuance of debt | $ 487,600,000 | |||
Repurchase amount | 525,000,000 | |||
Par value repurchased notes | $ 625,000,000 | |||
Subsequent Event | Advance | ||||
Subsequent Event [Line Items] | ||||
Consideration transferred | $ 1,600,000,000 | |||
Cash | $ 7,500,000 | |||
Average oil and gas prices | 85 |
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