Matador Resources Company (NYSE: MTDR) capped off the third quarter of 2025 with record-breaking production, strong financial results, and another dividend increase—cementing its position as one of the most efficient and disciplined mid-cap operators in the Permian Basin.
Wells Drilled Last 12 Months in Delaware Basin
Includes: Account, Well Name, Locations, Contractor and Rig….
Record Production Driven by Operational Efficiency
Matador produced an all-time high of 209,184 barrels of oil equivalent (BOE) per day, exceeding the midpoint of its July guidance by 5% and marking a 22% year-over-year increase.
Oil output averaged 119,556 barrels per day (+19% YoY), while natural gas production reached 537.8 million cubic feet (MMcf) per day, up 26% from Q3 2024.
CEO Joseph Wm. Foran credited these results to Matador’s “brick-by-brick” strategy and execution in the field:
“The Board’s decision to increase the dividend is based on our positive outlook going forward — including strong liquidity, free cash flow generation, and growth in our midstream asset.”
Matador’s operational performance benefited from continued use of trimul-frac and remote frac operations, which boosted completion efficiency by 20% compared to 2024. Drilling and completion costs dropped to $855 per lateral foot, well below the prior midpoint guidance of $880.
Financial Highlights: Growth with Discipline
Matador’s integrated upstream and midstream business generated strong cash flow and earnings momentum:
- Net income: $176 million
- Adjusted EBITDA: $567 million
- Adjusted Free Cash Flow: $93 million
- Operating cash flow: $722 million (+44% QoQ)
- Leverage ratio: Below 1.0x
- Available liquidity: $2 billion
The company used free cash flow to pay down $105 million in debt, reducing total borrowings under its reserves-based loan (RBL) to $285 million. Over the first nine months of 2025, Matador retired $311 million in debt, reinforcing one of the sector’s most conservative balance sheets.
Dividend Raised 20%, Share Buybacks Continue
Matador’s Board of Directors approved a 20% dividend increase, raising the annual payout from $1.25 to $1.50 per share (or $0.375 quarterly). Based on current share prices, this equates to an approximate 3.5% annualized yield.
In addition, the company repurchased 1.3 million shares for $55 million at an average price of $41 per share. CEO Joseph Foran noted that Matador’s executives and directors are also “regular purchasers” of company stock, underscoring confidence in long-term performance.
Over 95% of Matador employees continue to participate in the Employee Share Purchase Plan (ESPP), aligning staff and shareholder interests.
San Mateo Midstream: The Quiet Growth Engine
Matador’s midstream subsidiary, San Mateo, continues to strengthen the company’s integration strategy.
During Q3 2025, San Mateo reported:
- Net income: $50 million
- Adjusted EBITDA: $74 million
- Natural gas processing: 533 MMcf/day (+10% QoQ)
- Oil gathering: 58,400 Bbl/day (+16% QoQ)
Recent infrastructure expansions are already paying off. The Ranger North Compressor Station came online in September and is expandable to 70 MMcf/day, with the capability to handle sour gas—opening new commercial opportunities in Lea County, New Mexico.
Meanwhile, the Marlan Plant expansion, completed earlier this year, has lifted total throughput to record levels. San Mateo is now projected to deliver annual Adjusted EBITDA of $285–$295 million in 2025.
Matador continues to believe the market undervalues San Mateo’s contribution and is evaluating strategies to unlock greater shareholder value.
Strategic Acreage Expansion and Inventory Depth
Matador’s disciplined land strategy remains a key differentiator. In Q3, the company invested $125 million in Delaware Basin transactions, focusing on undeveloped acreage and working interest increases in existing wells.
These targeted acquisitions have expanded Matador’s net acreage to over 200,000 and extended its inventory to 10+ years of engineered drilling locations—each capable of ~50% returns even at $50 oil.
2025–2026 Outlook: Capital Efficiency and Sustainable Growth
Matador raised its 2025 production guidance from 200,000–205,000 BOE/day to 205,500–206,500 BOE/day, with a corresponding increase in completed wells from 106.3 to 118.3 net operated wells.
At the same time, it expects 2026 capital spending to decline 8–12% while maintaining similar lateral footage — a sign of deepening efficiency and scale.
Looking ahead, Matador forecasts ~210,000 BOE/day in 2026, with oil production growing 2–5% organically. The company also plans to continue strengthening its balance sheet, growing reserves, and expanding midstream capabilities.
Closing Thoughts
“The combined achievements of our planning, reservoir, land, operations, and midstream teams have helped solidify our asset base and our growth strategy as we head into 2026,” said Foran.
“We remain confident in our outlook despite occasional headwinds — and grateful to our staff, shareholders, and partners for helping us close out what should be a record year.”
With record production, operational excellence, and rising shareholder returns, Matador Resources stands out as a model of disciplined growth in the Permian Basin. The company’s integrated approach—pairing upstream efficiency with midstream optionality—continues to deliver sustainable value through market cycles.
Sources: Matador Resources Company Q3 2025 Earnings Release, Business Wire (October 21, 2025)
