Matador Resources (MTDR) Targets $900M Free Cash Flow, Expands Footprint

Matador Resources expects to generate roughly $900 million in free cash flow in 2026 while continuing to increase production, Senior Vice President of Investor Relations Mac Schmitz said during a presentation at the Three Part Advisors Chicago conference. The company also outlined a 17,000-net-acre expansion of its Delaware Basin position and a 12% reduction in drilling and completion costs per lateral foot since 2024.

Founder and Chief Executive Officer Joe Foran still runs the business, Schmitz said. Foran launched the current Matador with $6 million in initial capital after selling a prior company in 2003, and the asset value now approaches or exceeds $10 billion, according to the presentation.

Matador is primarily a Delaware Basin operator, with almost all production and reserve value in northeast New Mexico and West Texas. It also holds legacy Haynesville and Cotton Valley assets, which Schmitz called a "gas bank" that is fully held by production and carries potential value depending on natural-gas prices.

The company has reduced drilling and completion costs per lateral foot by 12% from 2024 levels, Chief Financial Officer Chris Calvert said. He added that drilling and completion work is 10% to 15% faster year over year.

Acreage expansion

Vice President of Land Hannah Rhodes said Matador added 17,000 net acres through organic leasing, acreage trades, and acquisitions. She highlighted acreage from a Bureau of Land Management lease sale in May, along with the announced Paloma and Ridge Runner transactions. The BLM leases were contiguous with Matador's existing position, allowing the company to extend laterals, and carried royalty interests of 7.5% or 12.5%. The Ridge Runner position added exposure to the Woodford formation, and Matador has identified additional opportunities in formations including the Second Bone Spring Carbonate.

"We are very happy and very proud of our inventory base," Rhodes said. The company has replenished locations drilled in prior years through land acquisitions and geological work. Matador has not yet assigned reserves to the Woodford formation, according to Calvert.

Midstream value

Calvert emphasized the value of Matador's integrated midstream operations. The company owns 51% of San Mateo Midstream, a joint venture that provides gas gathering and processing, water disposal, and oil gathering services. Matador initially built its own gas-processing infrastructure after finding third-party service and pricing options inadequate, Calvert said. The first West Texas plant had 60 million cubic feet per day of capacity. The system has since expanded to 720 million cubic feet per day, and the Cardinal acquisition made San Mateo the largest privately held gas gatherer and processor in the Northern Delaware Basin, according to Calvert.

Matador expects the combination of San Mateo and its wholly owned midstream assets to generate nearly $400 million of EBITDA in 2026. Calvert said management believes the business is not fully reflected in Matador's valuation and is evaluating potential ways to unlock value, including debt at the entity level or a possible initial public offering.

The company also expects the Matterhorn Express Pipeline to allow it to move all of its gas away from the Waha hub, with sales at Houston Ship Channel and Henry Hub pricing, Calvert said. Matador currently produces more than half a billion cubic feet of gas per day.

Capital returns and growth

Matador reported historical oil-production growth at a 21% compound annual growth rate since 2021, with a similar rate for barrels of oil equivalent, Calvert said. The company's capital-return priorities include a fixed dividend, debt repayment, and opportunistic share repurchases. Calvert said Matador has raised its dividend seven times over five years and has repurchased approximately 1.8 million shares since April 2025 at an average price in the low-$40 range.

In response to a question about future production, Schmitz said Matador expects to remain a relative grower compared with peers, though at a measured pace. Calvert said the company had planned for roughly 3% production growth and about $500 million in free cash flow even when oil prices were in the mid-$50s to low-$60s earlier in the year. The company did not add rigs to pursue higher prices following the Iranian conflict and instead focused on ancillary work to maximize production around the margins. Matador's strategy is "profitable growth at a measured pace," he said.

Insider alignment and succession

Schmitz said Foran is Matador's largest individual shareholder and that management has recorded 86 stock purchases and no sales by Form 4 filers. More than 95% of employees participate in the company's employee stock purchase program, he said.

Asked about CEO succession planning, Calvert said Matador has not publicly disclosed a succession plan. He said Foran remains active in the business and that the company has a management team with longstanding experience at Matador, as well as a diverse board.