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What: Shares of Matador Resources (NYSE:MTDR) sank 13.4% in June despite several bullish notes from analysts.

So what: After bottoming out in mid-January at around $13 a share, Matador Resources' stock rallied along with crude this spring before hitting a ceiling just under $25 per share in early June. That top coincided with oil leveling off at around $50 a barrel, knocking the wind out of Matador Resources' sails.

Analysts, however, think that the stock has further to run even though oil seems to be stuck around $50 a barrel. Sterne Agee CRT was the first one out the gate with a bullish report after it initiated coverage on Matador in early June, rating it a buy and setting a $29 price target. Its analysts were impressed by Matador's moderate leverage and exposure to the emerging Delaware Basin, which is why it thought the driller should trade at a premium to its peer group.

A couple of weeks later, Barclays also initiated coverage on Matador and cited similar positives for rating the stock equal weight and setting a $23 price target. That was followed a week later by an upgrade from hold to buy at Stifel, which has a $25 price target. Stifel's upgrade cited Matador's valuation, its record for generating high wellhead returns in the Permian, and its belief that the company can solve its funding gap by selling assets.

Several analysts believe that Matador Resources will sell its midstream assets before the end of the year to close its financing gap. That decision would certainly follow the pattern in the sector over the past few years. Just this week, Sanchez Energy (NYSE: SN) sold its stake in an Eagle Ford shale midstream asset for $37 million to boost its liquidity. What's noteworthy about that deal is that Sanchez had only invested $26 million in that asset to date, so it was able to unlock $11 million in created value. Before that transaction, Sanchez sold $345 million in midstream assets to raise cash last fall.

Now what: Matador Resources had a down month, but analysts see better days ahead. In particular, they expect the company to unlock the value of its midstream assets to fund its lucrative drilling program in the Permian. Such a transaction could restart the company's stock price rally even if crude prices stay static.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.