Matador Resources (MTDR 0.28%), a leading independent oil and natural gas producer active in the Delaware Basin, reported its Q2 2025 results on July 22, 2025. The most notable news was the company's record production and raised full-year 2025 production guidance, driven by well performance and efficient operations. However, GAAP revenue and GAAP earnings per share missed Wall Street estimates, mainly due to sharply lower realized oil prices. Second quarter total revenues were $895.3 million, under the $910.57 million GAAP consensus, while adjusted diluted EPS (non-GAAP) of $1.53 was above the $1.42 analyst estimate, but 25% below the same quarter last year (non-GAAP). Overall, the quarter showed operational strengths offset by commodity price volatility that weighed on profitability.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted EPS | $1.53 | $1.42 | $2.05 | (25.4%) |
| Revenue | $815.8 million | $910.6 million | $847.1 million | (3.7%) |
| Adjusted EBITDA | $594.2 million | $578.1 million | 2.8% | |
| Adjusted Free Cash Flow | $132.7 million | $167.0 million | (20.5%) |
Source: Matador Resources: Note: Analyst estimates provided by FactSet.
Matador Resources: Business and Success Factors
Matador Resources is primarily engaged in the exploration and production of oil and natural gas, focusing on the Delaware Basin in West Texas and southeastern New Mexico. The company has substantially grown its reserve base and scale through strategic acquisitions, including recent deals that expanded production and proved reserves by more than 30% in calendar year 2024 compared to 2023.
Key to Matador’s business model is its push for operational efficiency, such as using advanced drilling techniques and carefully managing costs per well. The company also develops and operates midstream infrastructure, including pipelines and gas processing, through its San Mateo Midstream joint venture. This not only supports its own production but generates revenue from providing third-party services. Success for Matador depends on growing its production base, containing costs, efficiently running its midstream assets, and managing commodity price risk.
Quarter Highlights: Record Output, Cost Efficiencies, and Pricing Impact
During Q2 2025, Matador turned in record average daily production of 209,013 barrels of oil equivalent (BOE). Oil volumes rose 29% year-over-year in the quarter and natural gas volumes increased 26% in 2024 compared to 2023. This performance topped management's own guidance for the quarter and was driven by steady execution at new wells and acquired properties. The company operated 32 wells and completed a major midstream expansion during the quarter, contributing to strong throughput.
The San Mateo Midstream segment started up its Marlan Plant expansion during the quarter, lifting gas processing capacity by 38% to 720 million cubic feet per day. San Mateo also reported record net income and adjusted EBITDA for the quarter, up significantly from the previous year, highlighting its importance as a margin generator. Natural gas gathering volumes in this business climbed 25% compared to Q2 2024, while gas processing increased 37% year over year. However, adjusted free cash flow in the segment was negative for the quarter due to the timing of capital spending.
Despite these operational successes, realized oil prices dropped 21% year-over-year to $64.34 per barrel in the quarter, and were down 11% sequentially from the prior quarter. Natural gas prices held steady compared to Q2 2024 but were down 42% from the preceding quarter. As a result, revenue and profit lagged expectations despite higher output. Matador’s cost control efforts were evident, with drilling and completion costs at approximately $825 per completed lateral foot—well below historical averages—and lease operating costs falling sequentially. Overall cash operating costs fell 13% compared to the previous quarter.
The company repurchased 1.1 million shares at a cost of $44 million during the quarter and declared a quarterly cash dividend of $0.3125 per share of common stock, bringing its annualized yield to 2.5%. The balance sheet remains strong with leverage below 1.0x as of June 30, 2025 and total liquidity of over $1.8 billion on June 30, 2025. Matador also benefited from reduced expected cash tax payments for FY2025 thanks to recent changes in federal legislation, lowering projected cash taxes to 0–5% of pre-tax book net income for the year ending December 31, 2025.
Product Families and Operational Spend
Matador’s main asset is its upstream oil and gas production, but its midstream segment—San Mateo Midstream—plays a growing role. This business manages natural gas processing plants, oil transportation, and water handling infrastructure that support both Matador’s wells and those of other producers in the basin. It processed record gas during the quarter.
The company’s drilling and completion programs, the backbone of its upstream production, continue to focus on “capital efficiency”—getting more production for every dollar spent. This is achieved in part through techniques like Trimul-Frac and Simul-Frac, which allow multiple well completions at once, reducing downtime and costs. Capital spending for drilling, completion, and equipping (known as D/C/E CapEx) came in below guidance midpoint for the quarter, as did investment in the midstream segment.
Looking Ahead: Guidance and Investor Watch Points
For the rest of fiscal 2025, management raised its full-year production guidance to a range of 200,000 to 205,000 BOE per day, up from a prior range of 198,000 to 202,000. Capital expenditure forecasts remain unchanged for full-year 2025, reflecting Matador’s focus on discipline and efficiency. Oil production guidance for full-year 2025 moved higher by 500 barrels per day at the midpoint. Matador expects production to dip slightly in Q3 2025 before rebounding to more than 200,000 BOE per day in Q4 2025.
Investors should keep an eye on how realized commodity prices unfold, as price swings have an outsized impact on financial metrics even when operations are strong. Other key areas to watch include the free cash flow generation from the midstream segment and capital return actions, such as future dividends or share repurchases. Execution of cost controls and integration of recent acquisitions will continue to be essential in delivering on updated guidance.
MTDR pays a quarterly dividend of $0.3125 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
