Matador secures gas pipeline deals to boost pricing, reduce Waha exposure

DALLAS - Matador Resources Company (NYSE:MTDR) has entered into multiple natural gas transportation agreements to improve pricing and gain access to more profitable markets outside the Permian Basin, according to a press release statement. Trading at $39.70, the oil and natural gas producer appears undervalued according to InvestingPro analysis, with a P/E ratio of just 6.35 despite generating $3.5 billion in revenue over the last twelve months.

The company secured firm transportation on Energy Transfer’s Hugh Brinson Pipeline to move 500,000 MMBtu per day of natural gas from West Texas to Maypearl, Texas, with subsequent transport to East Texas and Gulf Coast markets. The pipeline is expected to begin operations in the fourth quarter of 2026.

Since 2024, natural gas sold at these destination markets has averaged more than $2 per MMBtu higher than prices at the Waha Hub in West Texas, where Permian Basin producers typically sell their gas.

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, said securing firm transportation out of the basin addresses growing takeaway constraints across the Permian Basin.

The company estimates that for every $0.50 per MMBtu increase in natural gas price realization achieved through these agreements, its annual revenue would increase by approximately $90 million.

Matador has also extended a separate gas transportation agreement with another pipeline company to transport a portion of its natural gas to the Southern California market, where pricing has historically exceeded that in Texas and Louisiana.

The transportation agreements are designed to give Matador access to markets with historically higher prices than the Waha Hub, including LNG export markets and other key trading hubs along the Gulf Coast.

Matador Resources Company focuses primarily on oil and natural gas production in the Delaware Basin in Southeast New Mexico and West Texas, with additional operations in the Haynesville shale and Cotton Valley plays in Northwest Louisiana.

In other recent news, Matador Resources Company reported its third-quarter 2025 earnings, which presented a mixed outcome. The company exceeded earnings per share (EPS) expectations with a result of $1.36, compared to the forecast of $1.27, representing a positive surprise of 7.09%. However, revenue figures were less favorable, with Matador reporting $810.24 million, which was below the anticipated $888.97 million, marking an 8.86% shortfall. In response to these earnings results, KeyBanc adjusted its price target for Matador Resources, lowering it from $61.00 to $52.00. Despite this reduction, KeyBanc maintained an Overweight rating on the stock, indicating a continued positive outlook. The adjustment in price target was attributed to revised EBITDA estimates following the earnings report. These developments reflect the ongoing analysis and adjustments by financial analysts in response to Matador’s recent financial performance.

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