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DALLAS - Matador Resources Company (NYSE:MTDR), an independent energy firm, has announced the pricing of a private offering of $750 million in senior unsecured notes with a 6.250% interest rate, maturing in 2033. The offering, priced at 100% of face value, is scheduled to close on September 25, 2024, pending customary closing conditions.
The proceeds from the sale of the notes are intended to repay existing borrowings under Matador's credit facility, including the full amount of the $250 million term loan currently outstanding.
These notes, along with their guarantees, have not been registered under the Securities Act of 1933, as amended, or any state securities laws. As such, they may not be offered or sold within the United States absent registration or an exemption from these requirements. The initial sale of the notes will be made to qualified institutional buyers in accordance with Rule 144A and to non-U.S. persons outside the United States under Regulation S.
Matador is primarily engaged in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. The company focuses on oil and natural gas shale and other unconventional plays, with operations centered in the Delaware Basin in Southeast New Mexico and West Texas. Matador also has a presence in the Eagle Ford (NYSE:F) shale in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, the company manages midstream operations to support its exploration and production activities, offering services such as natural gas processing and oil transportation.
The announcement includes forward-looking statements regarding expectations for future financial performance and operational plans. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
Investors are cautioned against placing undue reliance on these forward-looking statements, which are only valid as of the date of the press release. Matador does not undertake any obligation to publicly update these statements in light of new information or future events.
This news article is based on a press release statement and provides an overview of the key facts related to Matador Resources Company's recent financial maneuver.
In other recent news, Matador Resources announced plans for a $750 million private placement of senior unsecured notes due in 2033. The proceeds from this offering are intended to repay all $250 million in outstanding borrowings under its term loan, among other debts. In addition, Matador Resources completed a $1.83 billion acquisition of a subsidiary of Ameredev II Parent, LLC, which includes approximately 33,500 net acres in the Delaware Basin core and a 19% equity interest in the parent company of Piñon Midstream, LLC. These recent developments are expected to expand Matador's presence in the Delaware Basin to over 190,000 net acres.
JPMorgan has raised its price target for Matador Resources shares to $83.00, maintaining an Overweight rating. The firm projects Matador Resources to deliver fiscal year 2024 oil production of 100.5 thousand barrels of oil per day with a capital expenditure of $1.51 billion. It also anticipates that Matador Resources will generate approximately $1,080 million in free cash flow in fiscal year 2025, a 15% increase compared to the previous model.
In other company news, Matador Resources is constructing a cryogenic gas processing facility at the Marlan plant, expected to be operational in the first half of the next year. The company's midstream segment is expected to grow, maintaining flow assurance and supporting increased drilling activity. Additionally, the company welcomed Susan Ward to the board, marking a significant step for the company.
InvestingPro Insights
As Matador Resources Company (NYSE:MTDR) positions itself for future growth with the recent pricing of its senior unsecured notes, it's worth noting the company's financial metrics that may interest investors. With a market capitalization of $6.5 billion and a strong gross profit margin of 80.33% over the last twelve months as of Q2 2024, Matador demonstrates significant profitability in its operations. Additionally, the company has achieved a revenue growth of 16.81% over the same period, reflecting its expanding business activities.
InvestingPro Tips highlight that Matador has consistently raised its dividend over the past three years, signaling confidence in its financial stability and commitment to returning value to shareholders. This is further underscored by a robust dividend growth rate of 33.33% as of Q2 2024. Moreover, the company has been profitable over the last twelve months and analysts predict it will remain profitable this year, which could be a reassuring sign for investors evaluating the company’s ability to service its new debt issuance.
Investors considering Matador's stock should be aware of its current P/E ratio of 6.67, which suggests that the stock is trading at a multiple that is relatively low in the context of its earnings. However, the company's stock price has experienced volatility, and short-term obligations exceed its liquid assets, which may warrant a cautious approach.
For those interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/MTDR, providing a comprehensive look at the company's financial health and stock performance.
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