Matador Resources Company (NYSE: MTDR) has once again proven its operational and financial strength with a record-breaking second quarter in 2025. The Dallas-based independent energy company delivered exceptional performance across both its upstream and midstream segments, reaffirming its position as a leading player in the Delaware Basin.

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🔹 Record Production and Free Cash Flow

In Q2 2025, Matador reported record quarterly production of 209,013 BOE/d, including 122,875 barrels of oil per day. These volumes exceeded prior guidance, driven by outperformance from both new wells and base production. Notably, the company turned to sales 32 gross (22.8 net) operated wells, further solidifying its execution capabilities.

This production strength translated into $501 million in operating cash flow and $133 million in adjusted free cash flow, resulting in one of the highest free cash flow margins in the industry. Matador’s operational efficiency continues to shine, with drilling and completion costs averaging just $825 per completed lateral foot and lease operating expenses at $5.56 per BOE.

🔹 Midstream Expansion Powers Margin Resilience

Matador’s 51%-owned San Mateo Midstream business also posted record results, thanks to the successful expansion of its Marlan Plant. Processing capacity increased from 520 MMcf/d to 720 MMcf/d, enabling improved flow assurance for Matador and third-party producers alike.

San Mateo contributed $66 million in net income and $85.5 million in adjusted EBITDA during the quarter—both all-time highs. The strategic alignment between upstream and midstream continues to unlock margin resilience and operational flexibility.

🔹 Capital Discipline and Shareholder Returns

Even with robust growth, Matador maintained a highly disciplined approach to capital allocation. Total capital expenditures for the quarter were $402 million, and the company ended the period with over $1.8 billion in liquidity and a leverage ratio below 1.0x.

Matador continues to reward shareholders through a balanced return strategy:

Dividend: $0.3125 per share (2.5% yield annualized)
Share buybacks: 1.1 million shares repurchased at an average of $40.37 (vs. current price of $49.86)
Insider confidence: Board and executives purchased $1.6 million worth of stock in Q2
Employee Stock Plan: Over 95% participation, reflecting internal alignment

🔹 Guidance Raised – Without Spending More

Reflecting its improved operational efficiency, Matador raised its full-year 2025 production guidance from 198,000–202,000 BOE/d to 200,000–205,000 BOE/d. Importantly, this was achieved without increasing capital spending, signaling a step-change in productivity.

The company also confirmed its plan to operate eight drilling rigs by August, down from nine earlier in the year, while still planning to deliver record yearly lateral footage. Efficiency gains through simul-frac techniques and supply chain optimization continue to lower drilling times and boost output.

🔹 2025 Drilling Activity

Through the first half of 2025, Matador has drilled 84 wells across its Delaware Basin acreage, further cementing its role as one of the basin’s most efficient operators.

Highlights:

Top Counties:
- Lea County, NM led activity with 48 wells, followed by Eddy County (27), Ward County (5), and Loving County (4).
Most Active Rigs:
- Matador partnered primarily with Patterson UTI rigs, with Patterson 813 and Patterson 297 each drilling 11 wells, followed closely by Patterson 298 (10 wells) and Patterson 256 (9 wells).
Average Projected Depth:
- The average well depth across all 2025 projects is approximately 13,112 feet, reflecting a continued focus on deeper, high-return laterals.

This drilling activity sets a strong foundation for Matador to meet—and potentially exceed—its full-year production targets while maintaining capital efficiency.

Conclusion:
Matador’s Q2 2025 results showcase a well-balanced strategy focused on disciplined growth, operational excellence, and shareholder returns. With record production, an expanding midstream footprint, and a measured but aggressive drilling campaign, Matador is positioning itself for continued success through 2025 and beyond.