DALLAS - Matador Resources Company (NYSE:MTDR), an independent energy company, announced its intention to offer $750 million in senior unsecured notes due in 2033, subject to market conditions. The private placement, aimed at eligible purchasers, is designed to repay existing borrowings under the company's credit facility.
The Dallas-based firm stated that the proceeds from the notes offering would be used to repay all $250 million in outstanding borrowings under its term loan, among other credit facility debts. The notes, along with related guarantees, have not been registered under the Securities Act of 1933 or state securities laws, and will be offered in a private sale to qualified institutional buyers according to Rule 144A, and to non-U.S. persons outside the United States under Regulation S.
Matador is primarily involved in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It focuses on oil and liquids-rich areas of the Wolfcamp and Bone Spring plays in the Delaware Basin, as well as operations in the Eagle Ford (NYSE:F) shale in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. The company also conducts midstream operations, offering natural gas processing, oil transportation, and other related services.
The announcement includes forward-looking statements that are based on current expectations and project future financial performance. However, these are subject to market risks and uncertainties, and there is no assurance that the offering will be completed on the anticipated terms, or at all.
This news is based on a press release statement from Matador Resources Company and has not been independently verified. The company has not made any offer to sell or solicitation of an offer to buy the securities discussed, and the sale of these securities will not be conducted in any jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
In other recent news, Matador Resources has finalized its $1.83 billion acquisition of a subsidiary of Ameredev II Parent, LLC, a move that includes approximately 33,500 net acres in the Delaware Basin core. The acquisition is expected to boost production, despite a temporary decline due to natural declines and the temporary shutting-in of wells. The deal also includes a roughly 19% equity interest in the parent company of Piñon Midstream, LLC, and is expected to expand Matador's presence in the Delaware Basin to over 190,000 net acres.
On the financial front, JPMorgan (NYSE:JPM) has raised its price target for Matador Resources shares to $83.00, maintaining an Overweight rating. This adjustment is based on an anticipated increase in oil production and free cash flow (FCF) for the upcoming years. 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.
In other developments, the company 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. Lastly, the addition of Susan Ward to the board was highlighted as a significant step for the company. These are among the recent developments shaping the future of Matador Resources.
InvestingPro Insights
As Matador Resources Company (NYSE:MTDR) navigates the financial waters with its latest senior unsecured notes offering, investors may find it beneficial to consider some key metrics and insights from InvestingPro. With a market capitalization of $6.52 billion, Matador shows a robust presence in the energy sector. The company's P/E ratio stands at 6.73, indicating that its shares are trading at a multiple of its earnings, which is a common metric used to gauge a stock's valuation. Additionally, the company's revenue has shown significant growth over the last twelve months as of Q2 2024, with an increase of 16.81%.
InvestingPro Tips highlight that Matador has a track record of raising its dividend for three consecutive years, signaling a commitment to returning value to shareholders. This is further supported by a dividend yield of 1.55% as of the latest data. However, analysts have tempered their earnings expectations for the upcoming period, with six analysts revising their earnings forecasts downwards. This suggests that investors should be mindful of potential headwinds that could impact Matador's financial performance.
For those looking to delve deeper into Matador's financial health and future prospects, InvestingPro offers additional insights. Currently, there are 7 more InvestingPro Tips available, which could provide a more comprehensive understanding of the company's position and trajectory. Interested readers can access these tips by visiting InvestingPro's dedicated page for Matador Resources Company.
Understanding the full picture of Matador's financial landscape can help investors make informed decisions, especially in light of the company's recent strategic moves to manage debt and strengthen its balance sheet.
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