Matador to drop rig, cut $100 million from 2025 capex budget
Matador Resources Co., Dallas, is trimming 2025 drilling and completion plans in response to lower commodity prices. The operator will drop a rig midyear, leaving it with eight, and executives are now forecasting full-year production around 200,000 boe/d, down 5,000 boe/d from guidance 2 months ago.
“When prices get a little lower, you take a few more movements to think about what you’re doing,” Joe Foran, Matador’s founder, chairman and chief executive officer, said on an Apr. 24 conference call with analysts after the company released first-quarter results.
On the call and in Matador’s earnings statement, Foran said his team is keeping the door open to further production cuts should the economy deteriorate—but also to adding back that ninth rig late this year should the macro dust settle in coming months. The downward adjustment announced this week will cut Matador’s full-year capital spending by $100 million to a midpoint of $1.275 billion.
In this year's first quarter, Matador’s total oil and natural gas production was a little more than 198,600 boe/d, a year-over-year increase of more than 32%. The company last year acquired Delaware basin assets from Ameredev for $1.9 billion (OGJ Online, June 12, 2024). That was a tick above executives’ guidance of 195,000-197,000 boe/d and helped by teams turning to sales 40 gross (33.5 net) operated wells, including Matador's first three-mile lateral wells.
That better-than-expected performance also led to drilling and completion capex coming in at $394 million, near the top of executives’ guidance of $340-400 million. For second-quarter 2025, guidance is expected to fall to $360 million, give or take $30 million. That should translate to 21-26 net wells being turned to sales during the quarter, about two-thirds of them in New Mexico’s Eddy County.
Dan Pickering, chief investment officer of financial services firm Pickering Energy Partners, lauded the Matador team’s approach on X, writing that dropping a rig and launching a $400-million share buyback program is “exactly the right thing to do.” Pickering encouraged other exploration and production firms to follow Matador’s example and save some of their inventory during this uncertain time.
In first-quarter 2025, Matador Resources produced net profits of $240 million, an increase of 24% from the prior-year period. Revenues from the company’s oil and gas operation climbed to $910 million from about $704 million in early 2024.
Shares of Matador (Ticker: MTDR) were up slightly to $40.88 in afternoon trading Apr. 24. Over the past 6 months, shares are down more than 20%, a move that has cut the company's market capitalization to about $5.1 billion.
Geert De Lombaerde | Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.
