Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35410 | |
Entity Registrant Name | Matador Resources Company | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 27-4662601 | |
Entity Address, Address Line One | 5400 LBJ Freeway, | |
Entity Address, Address Line Two | Suite 1500 | |
Entity Address, City or Town | Dallas, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75240 | |
City Area Code | 972 | |
Local Phone Number | 371-5200 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | MTDR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 118,118,082 | |
Entity Central Index Key | 0001520006 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 230,394 | $ 48,135 |
Restricted cash | 51,889 | 38,785 |
Accounts receivable | ||
Oil and natural gas revenues | 328,758 | 164,242 |
Joint interest billings | 102,646 | 48,366 |
Other | 26,965 | 28,808 |
Derivative instruments | 3,861 | 1,971 |
Lease and well equipment inventory | 13,179 | 12,188 |
Prepaid expenses and other current assets | 43,235 | 28,810 |
Total current assets | 800,927 | 371,305 |
Oil and natural gas properties, full-cost method | ||
Evaluated | 6,352,486 | 6,007,325 |
Unproved and unevaluated | 971,185 | 964,714 |
Midstream properties | 1,011,017 | 900,979 |
Other property and equipment | 30,871 | 30,123 |
Less accumulated depletion, depreciation and amortization | (4,261,984) | (4,046,456) |
Net property and equipment | 4,103,575 | 3,856,685 |
Other assets | ||
Other long-term assets | 59,374 | 34,163 |
Total assets | 4,963,876 | 4,262,153 |
Current liabilities | ||
Accounts payable | 39,526 | 26,256 |
Accrued liabilities | 226,306 | 253,283 |
Royalties payable | 150,898 | 94,359 |
Amounts due to affiliates | 15,476 | 27,324 |
Derivative instruments | 63,338 | 16,849 |
Advances from joint interest owners | 18,931 | 18,074 |
Income taxes payable | 38,170 | 0 |
Other current liabilities | 56,494 | 28,692 |
Total current liabilities | 609,139 | 464,837 |
Long-term liabilities | ||
Borrowings under Credit Agreement | 0 | 100,000 |
Borrowings under San Mateo Credit Facility | 420,000 | 385,000 |
Senior unsecured notes payable | 900,261 | 1,042,580 |
Asset retirement obligations | 38,392 | 41,689 |
Deferred income taxes | 235,534 | 77,938 |
Other long-term liabilities | 18,499 | 22,721 |
Total long-term liabilities | 1,612,686 | 1,669,928 |
Commitments and contingencies | ||
Shareholders’ equity | ||
Common stock - $0.01 par value, 160,000,000 shares authorized; 118,201,399 and 117,861,923 shares issued; and 118,130,068 and 117,850,233 shares outstanding, respectively | 1,182 | 1,179 |
Additional paid-in capital | 2,090,564 | 2,077,592 |
Retained earnings (accumulated deficit) | 439,780 | (171,318) |
Treasury stock, at cost, 71,331 and 11,945 shares, respectively | (2,356) | (243) |
Total Matador Resources Company shareholders’ equity | 2,529,170 | 1,907,210 |
Non-controlling interest in subsidiaries | 212,881 | 220,178 |
Total shareholders’ equity | 2,742,051 | 2,127,388 |
Total liabilities and shareholders’ equity | $ 4,963,876 | $ 4,262,153 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 |
Common stock, shares issued (in shares) | 118,201,399 | 117,861,923 |
Common stock, shares outstanding (in shares) | 118,130,068 | 117,850,233 |
Treasury stock (in shares) | 71,331 | 11,945 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||||
Revenues | $ 974,663 | $ 442,842 | $ 1,637,823 | $ 779,023 |
Realized loss on derivatives | (61,163) | (42,611) | (83,602) | (68,524) |
Unrealized gain (loss) on derivatives | 30,430 | (42,804) | (44,599) | (86,227) |
Total revenues | 943,930 | 357,427 | 1,509,622 | 624,272 |
Expenses | ||||
Production taxes, transportation and processing | 85,658 | 43,843 | 145,477 | 78,017 |
Lease operating | 39,857 | 28,752 | 73,812 | 54,691 |
Purchased natural gas | 56,440 | 9,628 | 73,461 | 12,483 |
Depletion, depreciation and amortization | 120,024 | 91,444 | 215,877 | 166,307 |
Accretion of asset retirement obligations | 517 | 511 | 1,060 | 1,011 |
General and administrative | 24,431 | 24,397 | 54,164 | 46,585 |
Total expenses | 348,941 | 212,321 | 605,326 | 386,503 |
Operating income | 594,989 | 145,106 | 904,296 | 237,769 |
Other income (expense) | ||||
Net loss on asset sales and impairment | 0 | 0 | (198) | 0 |
Interest expense | (18,492) | (17,940) | (34,744) | (37,590) |
Other (expense) income | (4,342) | 14 | (4,486) | (661) |
Total other expense | (22,834) | (17,926) | (39,428) | (38,251) |
Income before income taxes | 572,155 | 127,180 | 864,868 | 199,518 |
Income tax provision | ||||
Current | 36,261 | 0 | 51,670 | 0 |
Deferred | 99,699 | 5,349 | 152,818 | 8,189 |
Total income tax provision | 135,960 | 5,349 | 204,488 | 8,189 |
Net income | 436,195 | 121,831 | 660,380 | 191,329 |
Net income attributable to non-controlling interest in subsidiaries | (20,477) | (15,926) | (37,538) | (24,779) |
Net income attributable to Matador Resources Company shareholders | $ 415,718 | $ 105,905 | $ 622,842 | $ 166,550 |
Earnings per common share | ||||
Basic (in dollars per share) | $ 3.52 | $ 0.91 | $ 5.28 | $ 1.43 |
Basic (in shares) | 118,103 | 116,801 | 118,027 | 116,804 |
Diluted (in shares) | 119,903 | 118,993 | 119,857 | 118,617 |
Diluted (in dollars per share) | $ 3.47 | $ 0.89 | $ 5.20 | $ 1.40 |
Weighted average common shares outstanding | $ 3.52 | $ 0.91 | $ 5.28 | $ 1.43 |
Oil and natural gas revenues | ||||
Revenues | ||||
Revenues | $ 892,769 | $ 412,074 | $ 1,519,284 | $ 728,307 |
Third-party midstream services revenues | ||||
Revenues | ||||
Revenues | 21,886 | 19,850 | 39,192 | 35,288 |
Expenses | ||||
Plant and other midstream services operating | 22,014 | 13,746 | 41,475 | 27,409 |
Sales of purchased natural gas | ||||
Revenues | ||||
Revenues | $ 60,008 | $ 10,918 | $ 79,347 | $ 15,428 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED - USD ($) $ in Thousands | Total | Total shareholders’ equity attributable to Matador Resources Company | Common Stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Treasury Stock | Non-controlling interest in subsidiaries |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 116,847,000 | 2,000 | |||||
Balance at beginning of period at Dec. 31, 2020 | $ 1,513,025 | $ 1,286,530 | $ 1,169 | $ 2,027,069 | $ (741,705) | $ (3) | $ 226,495 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared | (2,913) | (2,913) | (2,913) | ||||
Issuance of common stock pursuant to employee stock compensation plan (in shares) | 3,000 | ||||||
Issuance of common stock pursuant to directors' and advisors' compensation plan (in shares) | 9,000 | ||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized | 1,477 | 1,477 | $ 1,477 | ||||
Stock options exercised, net of options forfeited in net share settlements (in shares) | 13,000 | ||||||
Restricted stock forfeited (in shares) | 219,000 | 90,000 | |||||
Restricted stock forfeited | (1,720) | (1,720) | $ (1,501) | ||||
Contribution related to formation of San Mateo | 15,376 | 15,376 | $ 15,376 | ||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | (14,210) | (14,210) | |||||
Current period net income | 69,498 | 60,645 | 60,645 | 8,853 | |||
Balance at end of period (in shares) at Mar. 31, 2021 | 116,872,000 | 92,000 | |||||
Balance at end of period at Mar. 31, 2021 | $ 1,580,533 | 1,359,395 | $ 1,169 | 2,043,703 | (683,973) | $ (1,504) | 221,138 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared (in dollars per share) | $ 0.025 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 116,847,000 | 2,000 | |||||
Balance at beginning of period at Dec. 31, 2020 | $ 1,513,025 | 1,286,530 | $ 1,169 | 2,027,069 | (741,705) | $ (3) | 226,495 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Current period net income | 191,329 | ||||||
Balance at end of period (in shares) at Jun. 30, 2021 | 117,123,000 | 130,000 | |||||
Balance at end of period at Jun. 30, 2021 | 1,702,126 | 1,479,762 | $ 1,171 | 2,061,815 | (580,981) | $ (2,243) | 222,364 |
Balance at beginning of period (in shares) at Mar. 31, 2021 | 116,872,000 | 92,000 | |||||
Balance at beginning of period at Mar. 31, 2021 | 1,580,533 | 1,359,395 | $ 1,169 | 2,043,703 | (683,973) | $ (1,504) | 221,138 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared | (2,913) | (2,913) | (2,913) | ||||
Issuance of common stock pursuant to employee stock compensation plan (in shares) | 138,000 | ||||||
Issuance of common stock pursuant to employee stock compensation plan | $ (1) | 1 | |||||
Issuance of common stock pursuant to directors' and advisors' compensation plan (in shares) | 73,000 | ||||||
Issuance of common stock pursuant to directors’ and advisors’ compensation plan | $ 1 | (1) | |||||
Stock-based compensation expense related to equity-based awards including amounts capitalized | 2,289 | 2,289 | $ 2,289 | ||||
Stock options exercised, net of options forfeited in net share settlements (in shares) | 40,000 | ||||||
Restricted stock forfeited (in shares) | 425,000 | 38,000 | |||||
Restricted stock forfeited | (1,164) | (1,164) | $ (739) | ||||
Contribution related to formation of San Mateo | 16,250 | 16,250 | $ 16,250 | ||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | (14,700) | (14,700) | |||||
Current period net income | 121,831 | 105,905 | 105,905 | 15,926 | |||
Balance at end of period (in shares) at Jun. 30, 2021 | 117,123,000 | 130,000 | |||||
Balance at end of period at Jun. 30, 2021 | $ 1,702,126 | 1,479,762 | $ 1,171 | 2,061,815 | (580,981) | $ (2,243) | 222,364 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared (in dollars per share) | $ 0.025 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 117,850,233 | 117,862,000 | |||||
Balance at beginning of period at Dec. 31, 2021 | $ 2,127,388 | 1,907,210 | $ 1,179 | 2,077,592 | (171,318) | $ (243) | 220,178 |
Treasury stock (in shares) at Dec. 31, 2021 | 12,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared | (5,866) | (5,866) | (5,866) | ||||
Issuance of common stock pursuant to employee stock compensation plan (in shares) | 205,000 | ||||||
Issuance of common stock pursuant to employee stock compensation plan | (11,534) | $ 2 | (11,536) | ||||
Issuance of common stock pursuant to employee stock compensation plan | (11,534) | ||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized | 4,344 | 4,344 | 4,344 | ||||
Stock options exercised, net of options forfeited in net share settlements | (585) | (585) | (585) | ||||
Stock options exercised, net of options forfeited in net share settlements (in shares) | 24,000 | ||||||
Restricted stock forfeited (in shares) | 12,000 | ||||||
Restricted stock forfeited | (66) | (66) | $ (66) | ||||
Contribution related to formation of San Mateo | 17,973 | 17,973 | 17,973 | ||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | (18,375) | (18,375) | |||||
Current period net income | 224,185 | 207,124 | 207,124 | 17,061 | |||
Balance at end of period (in shares) at Mar. 31, 2022 | 118,091,000 | ||||||
Balance at end of period at Mar. 31, 2022 | $ 2,337,464 | 2,118,600 | $ 1,181 | 2,087,788 | 29,940 | $ (309) | 218,864 |
Treasury stock (in shares) at Mar. 31, 2022 | 24,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared (in dollars per share) | $ 0.05 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 117,850,233 | 117,862,000 | |||||
Balance at beginning of period at Dec. 31, 2021 | $ 2,127,388 | 1,907,210 | $ 1,179 | 2,077,592 | (171,318) | $ (243) | 220,178 |
Treasury stock (in shares) at Dec. 31, 2021 | 12,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Current period net income | $ 660,380 | ||||||
Balance at end of period (in shares) at Jun. 30, 2022 | 118,130,068 | 118,201,000 | |||||
Balance at end of period at Jun. 30, 2022 | $ 2,742,051 | 2,529,170 | $ 1,182 | 2,090,564 | 439,780 | $ (2,356) | 212,881 |
Treasury stock (in shares) at Jun. 30, 2022 | 71,000 | ||||||
Balance at beginning of period (in shares) at Mar. 31, 2022 | 118,091,000 | ||||||
Balance at beginning of period at Mar. 31, 2022 | 2,337,464 | 2,118,600 | $ 1,181 | 2,087,788 | 29,940 | $ (309) | 218,864 |
Treasury stock (in shares) at Mar. 31, 2022 | 24,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared | (5,878) | (5,878) | (5,878) | ||||
Issuance of common stock pursuant to employee stock compensation plan (in shares) | 10,000 | ||||||
Issuance of common stock pursuant to directors' and advisors' compensation plan (in shares) | 25,000 | ||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized | 5,383 | 5,383 | 5,383 | ||||
Stock options exercised, net of options forfeited in net share settlements | (2,606) | (2,606) | $ (1) | (2,607) | |||
Stock options exercised, net of options forfeited in net share settlements (in shares) | 75,000 | ||||||
Restricted stock forfeited (in shares) | 47,000 | ||||||
Restricted stock forfeited | (2,047) | (2,047) | $ (2,047) | ||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | (26,460) | (26,460) | |||||
Current period net income | $ 436,195 | 415,718 | 415,718 | 20,477 | |||
Balance at end of period (in shares) at Jun. 30, 2022 | 118,130,068 | 118,201,000 | |||||
Balance at end of period at Jun. 30, 2022 | $ 2,742,051 | $ 2,529,170 | $ 1,182 | $ 2,090,564 | $ 439,780 | $ (2,356) | $ 212,881 |
Treasury stock (in shares) at Jun. 30, 2022 | 71,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends declared (in dollars per share) | $ 0.05 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividends declared (in dollars per share) | $ / shares | $ 0.05 |
Contribution related to formation of San Mateo, net of tax | $ | $ 4.8 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net income | $ 660,380 | $ 191,329 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Unrealized loss on derivatives | 44,599 | 86,227 |
Depletion, depreciation and amortization | 215,877 | 166,307 |
Accretion of asset retirement obligations | 1,060 | 1,011 |
Stock-based compensation expense | 7,077 | 2,650 |
Deferred income tax provision | 152,818 | 8,189 |
Amortization of debt issuance cost and other debt-related costs | 1,206 | 1,655 |
Net loss on asset sales and impairment | 198 | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | (211,023) | (78,900) |
Lease and well equipment inventory | (829) | (437) |
Prepaid expenses and other current assets | (14,717) | (4,483) |
Other long-term assets | 227 | 91 |
Accounts payable, accrued liabilities and other current liabilities | 30,492 | 34,345 |
Royalties payable | 56,539 | 16,207 |
Advances from joint interest owners | 857 | 2,017 |
Income taxes payable | 38,170 | 0 |
Other long-term liabilities | (7,675) | 1,387 |
Net cash provided by operating activities | 975,256 | 427,595 |
Investing activities | ||
Drilling, completion and equipping capital expenditures | (389,893) | (210,725) |
Acquisition of oil and natural gas properties | (73,114) | (15,356) |
Midstream capital expenditures | (28,310) | (25,092) |
Acquisition of midstream assets | (75,816) | 0 |
Expenditures for other property and equipment | (283) | (245) |
Proceeds from sale of assets | 46,412 | 296 |
Net cash used in investing activities | (521,004) | (251,122) |
Financing activities | ||
Purchase of senior unsecured notes | (142,404) | 0 |
Repayments of borrowings under Credit Agreement | (300,000) | (240,000) |
Borrowings under Credit Agreement | 200,000 | 40,000 |
Repayments of borrowings under San Mateo Credit Facility | (70,000) | (34,000) |
Borrowings under San Mateo Credit Facility | 105,000 | 52,500 |
Cost to amend credit facilities | 506 | 830 |
Dividends paid | (11,744) | (5,826) |
Contributions related to formation of San Mateo | 22,750 | 31,626 |
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries | (44,835) | (28,910) |
Taxes paid related to net share settlement of stock-based compensation | (16,852) | (2,884) |
Other | (298) | (324) |
Net cash used in financing activities | (258,889) | (188,648) |
Increase (decrease) in cash and restricted cash | 195,363 | (12,175) |
Cash and restricted cash at beginning of period | 86,920 | 91,383 |
Cash and restricted cash at end of period | $ 282,283 | $ 79,208 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONSMatador Resources Company, a Texas corporation (“Matador” and, collectively with its subsidiaries, the “Company”), is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, the Company conducts midstream operations in support of the Company’s exploration, development and production operations and provides natural gas processing, oil transportation services, oil, natural gas and produced water gathering services and produced water disposal services to third parties. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) but do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 28, 2022 (the “Annual Report”). The Company consolidates certain subsidiaries and joint ventures that are less than wholly-owned and are not involved in oil and natural gas exploration, including its midstream joint venture, San Mateo Midstream, LLC (collectively with its subsidiaries, “San Mateo”), and the net income and equity attributable to the non-controlling interest in these subsidiaries have been reported separately as required by Accounting Standards Codification, Consolidation (Topic 810) . The Company proportionately consolidates certain joint ventures that are less than wholly-owned and are involved in oil and natural gas exploration. All intercompany accounts and transactions have been eliminated in consolidation. In management’s opinion, these interim unaudited condensed consolidated financial statements include all normal, recurring adjustments that are necessary for a fair presentation of the Company’s interim unaudited condensed consolidated financial statements as of June 30, 2022. Amounts as of December 31, 2021 are derived from the Company’s audited consolidated financial statements included in the Annual Report. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s interim unaudited condensed consolidated financial statements are based on a number of significant estimates, including oil and natural gas revenues, accrued assets and liabilities, stock-based compensation, valuation of derivative instruments, deferred tax assets and liabilities and oil and natural gas reserves. The estimates of oil and natural gas reserves quantities and future net cash flows are the basis for the calculations of depletion and impairment of oil and natural gas properties, as well as estimates of asset retirement obligations and certain tax accruals. While the Company believes its estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates. Revenues The following table summarizes the Company’s total revenues and revenues from contracts with customers on a disaggregated basis for the three and six months ended June 30, 2022 and 2021 (in thousands). Three Months Ended Six Months Ended 2022 2021 2022 2021 Revenues from contracts with customers $ 974,663 $ 442,842 $ 1,637,823 $ 779,023 Realized loss on derivatives (61,163) (42,611) (83,602) (68,524) Unrealized gain (loss) on derivatives 30,430 (42,804) (44,599) (86,227) Total revenues $ 943,930 $ 357,427 $ 1,509,622 $ 624,272 Three Months Ended Six Months Ended 2022 2021 2022 2021 Oil revenues $ 650,233 $ 315,114 $ 1,110,355 $ 528,393 Natural gas revenues 242,536 96,960 408,929 199,914 Third-party midstream services revenues 21,886 19,850 39,192 35,288 Sales of purchased natural gas 60,008 10,918 79,347 15,428 Total revenues from contracts with customers $ 974,663 $ 442,842 $ 1,637,823 $ 779,023 Property and Equipment The Company uses the full-cost method of accounting for its investments in oil and natural gas properties. Under this method, the Company is required to perform a ceiling test each quarter that determines a limit, or ceiling, on the capitalized costs of oil and natural gas properties based primarily on the after-tax estimated future net cash flows from oil and natural gas properties using a 10% discount rate and the arithmetic average of first-day-of-the-month oil and natural gas prices for the prior 12-month period. For both the three and six months ended June 30, 2022, the cost center ceiling was higher than the capitalized costs of oil and natural gas properties, and, as a result, no impairment charge was necessary. The Company capitalized approximately $10.4 million and $9.2 million of its general and administrative costs and approximately $0.8 million and $1.9 million of its interest expense for the three months ended June 30, 2022 and 2021, respectively. The Company capitalized approximately $23.6 million and $18.7 million of its general and administrative costs and approximately $4.4 million and $2.5 million of its interest expense for the six months ended June 30, 2022 and 2021, respectively. Earnings Per Common Share The Company reports basic earnings attributable to Matador shareholders per common share, which excludes the effect of potentially dilutive securities, and diluted earnings attributable to Matador shareholders per common share, which includes the effect of all potentially dilutive securities unless their impact is anti-dilutive. The following table sets forth the computation of diluted weighted average common shares outstanding for the three and six months ended June 30, 2022 and 2021 (in thousands). Three Months Ended Six Months Ended 2022 2021 2022 2021 Weighted average common shares outstanding Basic 118,103 116,801 118,027 116,804 Dilutive effect of options and restricted stock units 1,800 2,192 1,830 1,813 Diluted weighted average common shares outstanding 119,903 118,993 119,857 118,617 |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS The following table summarizes the changes in the Company’s asset retirement obligations for the six months ended June 30, 2022 (in thousands). Beginning asset retirement obligations $ 41,959 Liabilities incurred during period 1,291 Liabilities settled during period (1,168) Divestitures during period (4,302) Accretion expense 1,060 Ending asset retirement obligations 38,840 Less: current asset retirement obligations (1) (448) Long-term asset retirement obligations $ 38,392 _______________ (1) Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at June 30, 2022. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT At June 30, 2022, the Company had (i) $906.0 million of outstanding senior notes due 2026 (the “Notes”), (ii) no borrowings outstanding under its reserves-based revolving credit facility (the “Credit Agreement”) and (iii) approximately $45.6 million in outstanding letters of credit issued pursuant to the Credit Agreement. During the first quarter of 2022, the $7.5 million unsecured U.S. Small Business Administration loan was forgiven under the terms of the loan agreement and recorded as a gain on the extinguishment of debt within “Other expense” on the unaudited condensed consolidated statement of operations. During the second quarter of 2022, the Company repaid the remaining $50.0 million of borrowings under the Credit Agreement and repurchased $144.0 million of its Notes for $142.4 million. Between June 30, 2022 and July 25, 2022, the Company repurchased an additional $14.2 million of its Notes for $13.7 million. At June 30, 2022, San Mateo had $420.0 million in borrowings outstanding under its revolving credit facility (the “San Mateo Credit Facility”) and approximately $9.0 million in outstanding letters of credit issued pursuant to the San Mateo Credit Facility. Between June 30, 2022 and July 26, 2022, San Mateo repaid $20.0 million of borrowings under the San Mateo Credit Facility. Credit Agreements MRC Energy Company The borrowing base under the Credit Agreement is determined semi-annually as of May 1 and November 1 by the lenders based primarily on the estimated value of the Company’s proved oil and natural gas reserves at December 31 and June 30 of each year, respectively. The Company and the lenders may each request an unscheduled redetermination of the borrowing base once between scheduled redetermination dates. In April 2022, the lenders completed their review of the Company’s proved oil and natural gas reserves, and, as a result, the borrowing base was increased to $2.0 billion, the borrowing commitment was increased to $775.0 million and the maximum facility amount remained $1.5 billion. In addition, the terms of the Credit Agreement were amended to increase the sublimit for issuances of letters of credit under the Credit Agreement from $50 million to $100 million and replace the London Interbank Offered Rate (“LIBOR”) interest rate benchmark with an Adjusted Term SOFR (as defined in the Credit Agreement) interest rate benchmark. After giving effect to the amendment to the Credit Agreement, the applicable interest rate margin for borrowings under the Credit Agreement ranges from 1.75% to 2.75% per annum for borrowings bearing interest with reference to the Adjusted Term SOFR and from 0.75% to 1.75% per annum for borrowings bearing interest with reference to the Alternate Base Rate (as defined in the Credit Agreement), in each case depending on the level of borrowings under the Credit Agreement. In addition, the Adjusted Term SOFR includes a credit spread adjustment of 0.10% per annum for all interest periods. This April 2022 redetermination constituted the regularly scheduled May 1 redetermination. Borrowings under the Credit Agreement are limited to the lowest of the borrowing base, the maximum facility amount and the elected commitment (subject to compliance with the covenant noted below). The Credit Agreement matures October 31, 2026. The Credit Agreement requires the Company to maintain (i) a current ratio, which is defined as (x) total consolidated current assets plus the unused availability under the Credit Agreement divided by (y) total consolidated current liabilities less current maturities under the Credit Agreement, of not less than 1.0 to 1.0 at the end of each fiscal quarter and (ii) a debt to EBITDA ratio, which is defined as debt outstanding (net of up to $75.0 million of cash or cash equivalents), divided by a rolling four quarter EBITDA calculation, of 3.5 to 1.0 or less. The Company believes that it was in compliance with the terms of the Credit Agreement at June 30, 2022. San Mateo Midstream, LLC The San Mateo Credit Facility is non-recourse with respect to Matador and its wholly-owned subsidiaries but is guaranteed by San Mateo’s subsidiaries and secured by substantially all of San Mateo’s assets, including real property. The San Mateo Credit Facility matures December 19, 2023 and lender commitments under the revolving credit facility were $450.0 million at June 30, 2022 (subject to San Mateo’s compliance with the covenants noted below). The San Mateo Credit Facility includes an accordion feature, which provides for potential increases in lender commitments to up to $700.0 million. The San Mateo Credit Facility requires San Mateo to maintain a debt to EBITDA ratio, which is defined as total consolidated funded indebtedness outstanding (as defined in the San Mateo Credit Facility) divided by a rolling four quarter EBITDA calculation, of 5.0 or less, subject to certain exceptions. The San Mateo Credit Facility also requires San Mateo to maintain an interest coverage ratio, which is defined as a rolling four quarter EBITDA calculation divided by San Mateo’s consolidated interest expense, of 2.5 or more. The San Mateo Credit Facility also restricts the ability of San Mateo to distribute cash to its members if San Mateo’s liquidity is less than 10% of the lender commitments under the San Mateo Credit Facility. The Company believes that San Mateo was in compliance with the terms of the San Mateo Credit Facility at June 30, 2022. Senior Unsecured Notes |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe Company recorded a current income tax provision of $36.3 million and $51.7 million, respectively, and a deferred income tax provision of $99.7 million and $152.8 million, respectively, for the three and six months ended June 30, 2022. The Company’s effective income tax rate of 25% for both the three and six months ended June 30, 2022 differed from the U.S. federal statutory rate due primarily to permanent differences between book and tax income and state taxes, primarily in New Mexico.The Company recorded a deferred income tax provision of $5.3 million and $8.2 million, respectively, for the three and six months ended June 30, 2021, which resulted in an effective tax rate of 5% in each period. The effective tax rate differed from amounts computed by applying the U.S. federal statutory rate to the pre-tax income due primarily to recording a net deferred tax liability for state taxes, primarily in New Mexico, and continuing to recognize a valuation allowance against the Company’s U.S. federal net deferred tax assets. As a result of the full-cost ceiling impairments recorded in 2020, the Company recognized a valuation allowance against its net deferred tax assets for the year ended December 31, 2020. Due to a variety of factors, including the Company’s significant net income during 2021, the Company’s federal valuation allowance was reversed as of September 30, 2021 as the deferred tax assets were determined to be more likely than not to be utilized. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
EQUITY | EQUITY Stock-based Compensation During the six months ended June 30, 2022, the Company granted awards to certain of its employees of 226,238 service-based restricted stock units to be settled in cash, which are liability instruments, and 230,251 performance-based stock units and 210,156 service-based shares of restricted stock, which are equity instruments. The performance-based stock units vest in an amount between zero and 200% of the target units granted based on the Company’s relative total shareholder return over the three-year period ending December 31, 2024, as compared to a designated peer group. The service-based restricted stock and restricted stock units vest over a three-year period. The fair value of these awards was approximately $34.3 million on the grant date. During the three months ended June 30, 2022, the Company’s Board of Directors (the “Board”) adopted and shareholders approved the first amendment to the 2019 Long-Term Incentive Plan, authorizing an additional 3.7 million shares of common stock for issuance to employees, directors, contractors or advisors of the Company. Employee Stock Purchase Plan During the three months ended June 30, 2022, the Board adopted and shareholders approved an Employee Stock Purchase Plan (the “ESPP”). The purpose of the ESPP is to encourage and enable the Company’s eligible employees to acquire an interest in the Company through the ownership of common stock. A maximum of 4.0 million shares of common stock may be purchased under the ESPP. Common Stock Dividend The Board declared a quarterly cash dividend of $0.05 per share of common stock in both the first and second quarters of 2022. The dividend, which totaled $5.9 million in each quarter, was paid on March 14, 2022 and June 3, 2022. In June 2022, the Board amended the Company’s dividend policy to increase the quarterly dividend to $0.10 per share of common stock. In July 2022, the Board declared a quarterly cash dividend of $0.10 per share of common stock payable on September 1, 2022 to shareholders of record as of August 17, 2022. San Mateo Distributions and Contributions During the three months ended June 30, 2022 and 2021, San Mateo distributed $27.5 million and $15.3 million, respectively, to the Company and $26.5 million and $14.7 million, respectively, to a subsidiary of Five Point Energy LLC (“Five Point”), the Company’s joint venture partner in San Mateo. During the six months ended June 30, 2022 and 2021, San Mateo distributed $46.7 million and $30.1 million, respectively, to the Company and $44.8 million and $28.9 million, respectively, to Five Point. During the three and six months ended June 30, 2022 and 2021, there were no contributions to San Mateo by either the Company or Five Point. Performance Incentives No performance incentives were paid by Five Point to the Company during the three months ended June 30, 2022. Five Point paid to the Company $16.3 million in performance incentives during the three months ended June 30, 2021. Five Point paid to the Company $22.8 million and $31.6 million in performance incentives during the six months ended June 30, 2022 and 2021, respectively. These performance incentives are recorded when received, net of the $4.8 million deferred tax impact to Matador for the six months ended June 30, 2022, in “Additional paid-in capital” in the Company’s interim unaudited condensed consolidated balance sheets. These performance incentives for the six months ended June 30, 2022 and 2021 are also denoted as “Contributions related to formation of San Mateo” under “Financing activities” in the Company’s interim unaudited condensed consolidated statements of cash flows and changes in shareholders’ equity. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS At June 30, 2022, the Company had various costless collar and swap contracts open and in place to mitigate its exposure to oil and natural gas price volatility, each with a specific term (calculation period), notional quantity (volume hedged) and price floor and ceiling for the collars and fixed price for the swaps. At June 30, 2022, each contract was set to expire at varying times during 2022. The Company had no open contracts associated with natural gas liquids (“NGL”) prices at June 30, 2022. The following is a summary of the Company’s open costless collar contracts for oil and natural gas at June 30, 2022. Commodity Calculation Period Notional Quantity (Bbl or MMBtu) Weighted Average Price Floor ($/Bbl or $/MMBtu) Weighted Average Price Ceiling ($/Bbl or $/MMBtu) Fair Value of Oil 07/01/2022 - 12/31/2022 5,400,000 $ 65.22 $ 110.49 $ (49,428) Natural Gas 07/01/2022 - 12/31/2022 31,200,000 $ 3.58 $ 7.08 (13,640) Natural Gas 01/01/2023 - 03/31/2023 2,400,000 $ 6.00 $ 14.00 3,253 Total open costless collar contracts $ (59,815) The following is a summary of the Company’s open basis swap contracts for oil at June 30, 2022. Commodity Calculation Period Notional Quantity (Bbl) Fixed Price Fair Value of Oil Basis 07/01/2022 - 12/31/2022 2,760,000 $ 0.95 $ 338 Total open basis swap contracts $ 338 At June 30, 2022, the aggregate liability value for the Company’s open derivative financial instruments was $59.5 million. The Company’s derivative financial instruments are subject to master netting arrangements, and the Company’s counterparties allow for cross-commodity master netting provided the settlement dates for the commodities are the same. The Company does not present different types of commodities with the same counterparty on a net basis in its interim unaudited condensed consolidated balance sheets. The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the interim unaudited condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 (in thousands). Derivative Instruments Gross Gross amounts Net amounts presented in the condensed June 30, 2022 Current assets $ 178,098 $ (174,237) $ 3,861 Current liabilities (237,575) 174,237 (63,338) Total $ (59,477) $ — $ (59,477) December 31, 2021 Current assets $ 215,145 $ (213,174) $ 1,971 Current liabilities (230,023) 213,174 (16,849) Total $ (14,878) $ — $ (14,878) The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands). Three Months Ended Six Months Ended Type of Instrument Location in Condensed Consolidated 2022 2021 2022 2021 Derivative Instrument Oil Revenues: Realized loss on derivatives $ (34,237) $ (42,611) $ (52,403) $ (68,686) Natural Gas Revenues: Realized (loss) gain on derivatives (26,926) — (31,199) 162 Realized loss on derivatives (61,163) (42,611) (83,602) (68,524) Oil Revenues: Unrealized gain (loss) on derivatives 10,636 (35,163) (34,363) (74,432) Natural Gas Revenues: Unrealized gain (loss) on derivatives 19,794 (7,641) (10,236) (11,795) Unrealized gain (loss) on derivatives 30,430 (42,804) (44,599) (86,227) Total $ (30,733) $ (85,415) $ (128,201) $ (154,751) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements are classified and disclosed in one of the following categories. Level 1 Unadjusted quoted prices for identical, unrestricted assets or liabilities in active markets. Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs, including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. Level 3 Unobservable inputs that are not corroborated by market data that reflect a company’s own market assumptions. Financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of June 30, 2022 and December 31, 2021 (in thousands). Fair Value Measurements at June 30, 2022 using Description Level 1 Level 2 Level 3 Total Assets (Liabilities) Oil derivatives and basis swaps $ — $ (49,090) $ — $ (49,090) Natural gas derivatives — (10,387) — (10,387) Contingent consideration related to business combination — — (13,316) (13,316) Total $ — $ (59,477) $ (13,316) $ (72,793) Fair Value Measurements at December 31, 2021 using Description Level 1 Level 2 Level 3 Total Assets (Liabilities) Oil derivatives and basis swaps $ — $ (14,727) $ — $ (14,727) Natural gas derivatives — (151) — (151) Contingent consideration related to business combination — — (8,203) (8,203) Total $ — $ (14,878) $ (8,203) $ (23,081) Additional disclosures related to derivative financial instruments are provided in Note 7. Other Fair Value Measurements At June 30, 2022 and December 31, 2021, the carrying values reported on the interim unaudited condensed consolidated balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, royalties payable, amounts due to affiliates, advances from joint interest owners, income taxes payable and other current liabilities approximated their fair values due to their short-term maturities. At June 30, 2022 and December 31, 2021, the carrying value of borrowings under the Credit Agreement and the San Mateo Credit Facility approximated their fair value as both are subject to short-term floating interest rates that reflect market rates available to the Company at the time and are classified at Level 2 in the fair value hierarchy. At June 30, 2022 and December 31, 2021, the fair value of the Notes was $869.9 million and $1.08 billion, respectively, based on quoted market prices, which represent Level 1 inputs in the fair value hierarchy. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Processing, Transportation and Produced Water Disposal Commitments Firm Commitments From time to time, the Company enters into agreements with third parties whereby the Company commits to deliver anticipated natural gas and oil production and produced water from certain portions of its acreage for transportation, gathering, processing, fractionation, sales and disposal. The Company paid approximately $12.8 million and $15.1 million for deliveries under these agreements during the three months ended June 30, 2022 and 2021, respectively, and $23.8 million and $27.7 million for deliveries under these agreements during the six months ended June 30, 2022 and 2021, respectively. Certain of these agreements contain minimum volume commitments. If the Company does not meet the minimum volume commitments under these agreements, it will be required to pay certain deficiency fees. If the Company ceased operations in the areas subject to these agreements at June 30, 2022, the total deficiencies required to be paid by the Company under these agreements would be approximately $563.3 million. San Mateo Commitments The Company dedicated to San Mateo its current and certain future leasehold interests in the Rustler Breaks and Wolf asset areas and acreage in the southern portion of the Arrowhead asset area (the “Greater Stebbins Area”) and the Stateline asset area pursuant to 15-year, fixed-fee oil transportation, oil, natural gas and produced water gathering and produced water disposal agreements. In addition, the Company dedicated to San Mateo its current and certain future leasehold interests in the Rustler Breaks asset area and acreage in the Greater Stebbins Area and Stateline asset area pursuant to 15-year, fixed-fee natural gas processing agreements (collectively with the transportation, gathering and produced water disposal agreements, the “Operational Agreements”). San Mateo provides the Company with firm service under each of the Operational Agreements in exchange for certain minimum volume commitments. The remaining minimum contractual obligation under the Operational Agreements at June 30, 2022 was approximately $315.5 million. Legal Proceedings The Company is a party to several legal proceedings encountered in the ordinary course of its business. While the ultimate outcome and impact on the Company cannot be predicted with certainty, in the opinion of management, it is remote that these legal proceedings will have a material adverse impact on the Company’s financial condition, results of operations or cash flows. |
SUPPLEMENTAL DISCLOSURES
SUPPLEMENTAL DISCLOSURES | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
SUPPLEMENTAL DISCLOSURES | SUPPLEMENTAL DISCLOSURES Accrued Liabilities The following table summarizes the Company’s current accrued liabilities at June 30, 2022 and December 31, 2021 (in thousands). June 30, December 31, Accrued evaluated and unproved and unevaluated property costs $ 75,818 $ 128,598 Accrued midstream properties costs 15,283 7,799 Accrued lease operating expenses 40,241 32,182 Accrued interest on debt 22,075 18,232 Accrued asset retirement obligations 448 270 Accrued partners’ share of joint interest charges 23,184 17,460 Accrued payable related to purchased natural gas 19,694 11,284 Other 29,563 37,458 Total accrued liabilities $ 226,306 $ 253,283 Supplemental Cash Flow Information The following table provides supplemental disclosures of cash flow information for the six months ended June 30, 2022 and 2021 (in thousands). Six Months Ended 2022 2021 Cash paid for income taxes $ 13,500 $ — Cash paid for interest expense, net of amounts capitalized $ 37,254 $ 37,517 (Decrease) increase in asset retirement obligations related to mineral properties $ (4,094) $ 395 (Decrease) increase in liabilities for drilling, completion and equipping capital expenditures $ (50,283) $ 16,072 (Decrease) increase in liabilities for acquisition of oil and natural gas properties $ (2,510) $ 245 Increase (decrease) in liabilities for midstream properties capital expenditures $ 7,226 $ (7,634) Stock-based compensation expense recognized as a liability $ 17,521 $ 15,489 Transfer of inventory to oil and natural gas properties $ (162) $ (636) The following table provides a reconciliation of cash and restricted cash recorded in the interim unaudited condensed consolidated balance sheets to cash and restricted cash as presented on the interim unaudited condensed consolidated statements of cash flows (in thousands). Six Months Ended 2022 2021 Cash $ 230,394 $ 44,632 Restricted cash 51,889 34,576 Total cash and restricted cash $ 282,283 $ 79,208 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company operates in two business segments: (i) exploration and production and (ii) midstream. The exploration and production segment is engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States and is currently focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. The midstream segment conducts midstream operations in support of the Company’s exploration, development and production operations and provides natural gas processing, oil transportation services, oil, natural gas and produced water gathering services and produced water disposal services to third parties. The majority of the Company’s midstream operations in the Rustler Breaks, Wolf and Stateline asset areas and the Greater Stebbins Area in the Delaware Basin, which comprise most of the Company’s midstream operations, are conducted through San Mateo. In addition, on June 30, 2022, an indirect wholly-owned subsidiary of the Company acquired a cryogenic gas processing plant, three compressor stations and approximately 45 miles of natural gas gathering pipelines in Lea and Eddy Counties, New Mexico through the acquisition of a wholly-owned subsidiary of Summit Midstream Partners, LP (“Summit”) that was subsequently renamed Pronto Midstream, LLC (“Pronto”). Neither San Mateo or its subsidiaries nor Pronto are guarantors of the Notes. The following tables present selected financial information for the periods presented regarding the Company’s business segments on a stand-alone basis, corporate expenses that are not allocated to a segment and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis (in thousands). On a consolidated basis, midstream services revenues consist primarily of those revenues from midstream operations related to third parties, including working interest owners in the Company’s operated wells. All midstream services revenues associated with Company-owned production are eliminated in consolidation. In evaluating the operating results of the exploration and production and midstream segments, the Company does not allocate certain expenses to the individual segments, including general and administrative expenses. Such expenses are reflected in the column labeled “Corporate.” Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Three Months Ended June 30, 2022 Oil and natural gas revenues $ 889,728 $ 3,041 $ — $ — $ 892,769 Midstream services revenues — 75,044 — (53,158) 21,886 Sales of purchased natural gas 44,532 15,476 — — 60,008 Realized loss on derivatives (61,163) — — — (61,163) Unrealized loss on derivatives 30,430 — — — 30,430 Expenses (1) 332,593 48,726 20,780 (53,158) 348,941 Operating income (2) $ 570,934 $ 44,835 $ (20,780) $ — $ 594,989 Total assets $ 3,740,111 $ 986,166 $ 237,599 $ — $ 4,963,876 Capital expenditures (3) $ 172,640 $ 92,043 $ 58 $ — $ 264,741 _____________________ (1) Includes depletion, depreciation and amortization expenses of $111.2 million and $8.3 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million. (2) Includes $20.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $29.6 million attributable to land and seismic acquisition expenditures related to the exploration and production segment, $75.0 million attributable to midstream acquisition expenditures and $8.2 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Three Months Ended June 30, 2021 Oil and natural gas revenues $ 411,134 $ 940 $ — $ — $ 412,074 Midstream services revenues — 59,691 — (39,841) 19,850 Sales of purchased natural gas 4,120 6,798 — — 10,918 Realized loss on derivatives (42,611) — — — (42,611) Unrealized loss on derivatives (42,804) — — — (42,804) Expenses (1) 199,127 30,274 22,761 (39,841) 212,321 Operating income (2) $ 130,712 $ 37,155 $ (22,761) $ — $ 145,106 Total assets $ 2,942,429 $ 803,612 $ 88,508 $ — $ 3,834,549 Capital expenditures (3) $ 107,928 $ 7,863 $ 112 $ — $ 115,903 _____________________ (1) Includes depletion, depreciation and amortization expenses of $83.0 million and $7.8 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.7 million. (2) Includes $15.9 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $6.9 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $3.8 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Six Months Ended June 30, 2022 Oil and natural gas revenues $ 1,514,521 $ 4,763 $ — $ — $ 1,519,284 Midstream services revenues — 142,435 — (103,243) 39,192 Sales of purchased natural gas 51,654 27,693 — — 79,347 Realized loss on derivatives (83,602) — — — (83,602) Unrealized loss on derivatives (44,599) — — — (44,599) Expenses (1) 570,050 91,497 47,022 (103,243) 605,326 Operating income (2) $ 867,924 $ 83,394 $ (47,022) $ — $ 904,296 Total assets $ 3,740,111 $ 986,166 $ 237,599 $ — $ 4,963,876 Capital expenditures (3) $ 412,488 $ 111,124 $ 283 $ — $ 523,895 _____________________ (1) Includes depletion, depreciation and amortization expenses of $198.4 million and $16.3 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.2 million. (2) Includes $37.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $70.7 million attributable to land and seismic acquisition expenditures related to the exploration and production segment, $75.0 million in midstream acquisition expenditures and $17.5 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Six Months Ended June 30, 2021 Oil and natural gas revenues $ 725,780 $ 2,527 $ — $ — $ 728,307 Midstream services revenues — 103,600 — (68,312) 35,288 Sales of purchased natural gas 6,582 8,846 — — 15,428 Realized loss on derivatives (68,524) — — — (68,524) Unrealized loss on derivatives (86,227) — — — (86,227) Expenses (1) 355,571 56,521 42,723 (68,312) 386,503 Operating income (2) $ 222,040 $ 58,452 $ (42,723) $ — $ 237,769 Total assets $ 2,942,429 $ 803,612 $ 88,508 $ — $ 3,834,549 Capital expenditures (3) $ 242,793 $ 17,636 $ 245 $ — $ 260,674 _____________________ (1) Includes depletion, depreciation and amortization expenses of $149.4 million and $15.6 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.3 million. (2) Includes $24.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $15.6 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $8.2 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Delaware Basin Leasehold and Mineral Acres Acquisitions | On December 14, 2021, the Company completed an acquisition of assets from a private operator. This acquisition was accounted for as a business combination in accordance with ASC Topic 805, which requires the assets acquired and liabilities assumed to be recorded at fair value as of the respective acquisition date. The Company obtained certain oil and natural gas producing properties and undeveloped acreage located in Lea and Eddy Counties, New Mexico, strategically located primarily within the Company’s existing acreage in its Ranger and Arrowhead asset areas. As consideration for the business combination, the Company paid approximately $161.7 million in cash, subject to certain customary post-closing working capital adjustments, including adjusting for production, revenues, operating expenses and capital expenditures from August 1, 2021 to closing. In addition, the Company will increase the purchase price by $5.0 million for each quarter during 2022 in which the average oil price, as defined in the purchase and sale agreement, is greater than $75.00 per barrel. The Company recorded this contingent consideration at fair value on the date of the business combination and will record the change in the fair value in future periods as “Other expense” in its unaudited condensed consolidated statements of operations. The fair value of the contingent consideration increased $10.1 million between December 31, 2021 and June 30, 2022. During the three and six months ended June 30, 2022, the Company paid $5.0 million in cash related to this contingent consideration. The estimated fair value of the remaining payments was $13.3 million as of June 30, 2022. The Company used the Monte Carlo simulation method to measure the fair value of the contingent consideration, which has unobservable inputs and is thus classified at Level 3 in the fair value hierarchy (see Note 8 for discussion of the fair value hierarchy). The preliminary allocation of the consideration given related to this business combination was as follows (in thousands). The Company anticipates that the allocation of the consideration given should be finalized during 2022 upon determination of the final customary purchase price adjustments. Consideration given Allocation Cash $ 161,680 Working capital adjustments (4,519) Fair value of contingent consideration at December 14, 2021 6,718 Total consideration given $ 163,879 Allocation of purchase price Oil and natural gas properties Evaluated $ 139,312 Unproved and unevaluated 32,185 Accrued liabilities (360) Advances from joint interest owners (6,865) Asset retirement obligations (393) Net assets acquired $ 163,879 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates | Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) but do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 28, 2022 (the “Annual Report”). The Company consolidates certain subsidiaries and joint ventures that are less than wholly-owned and are not involved in oil and natural gas exploration, including its midstream joint venture, San Mateo Midstream, LLC (collectively with its subsidiaries, “San Mateo”), and the net income and equity attributable to the non-controlling interest in these subsidiaries have been reported separately as required by Accounting Standards Codification, Consolidation (Topic 810) . The Company proportionately consolidates certain joint ventures that are less than wholly-owned and are involved in oil and natural gas exploration. All intercompany accounts and transactions have been eliminated in consolidation. In management’s opinion, these interim unaudited condensed consolidated financial statements include all normal, recurring adjustments that are necessary for a fair presentation of the Company’s interim unaudited condensed consolidated financial statements as of June 30, 2022. Amounts as of December 31, 2021 are derived from the Company’s audited consolidated financial statements included in the Annual Report. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s interim unaudited condensed consolidated financial statements are based on a number of significant estimates, including oil and natural gas revenues, accrued assets and liabilities, stock-based compensation, valuation of derivative instruments, deferred tax assets and liabilities and oil and natural gas reserves. The estimates of oil and natural gas reserves quantities and future net cash flows are the basis for the calculations of depletion and impairment of oil and natural gas properties, as well as estimates of asset retirement obligations and certain tax accruals. While the Company believes its estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates. |
Property and Equipment | Property and Equipment The Company uses the full-cost method of accounting for its investments in oil and natural gas properties. Under this method, the Company is required to perform a ceiling test each quarter that determines a limit, or ceiling, on the capitalized costs of oil and natural gas properties based primarily on the after-tax estimated future net cash flows from oil and natural gas properties using a 10% discount rate and the arithmetic average of first-day-of-the-month oil and natural gas prices for the prior 12-month period. For both the three and six months ended June 30, 2022, the cost center ceiling was higher than the capitalized costs of oil and natural gas properties, and, as a result, no impairment charge was necessary. |
Earnings Per Common Share | Earnings Per Common Share The Company reports basic earnings attributable to Matador shareholders per common share, which excludes the effect of potentially dilutive securities, and diluted earnings attributable to Matador shareholders per common share, which includes the effect of all potentially dilutive securities unless their impact is anti-dilutive. |
Fair Value Measurements | The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements are classified and disclosed in one of the following categories. Level 1 Unadjusted quoted prices for identical, unrestricted assets or liabilities in active markets. Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs, including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. Level 3 Unobservable inputs that are not corroborated by market data that reflect a company’s own market assumptions. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | The following table summarizes the Company’s total revenues and revenues from contracts with customers on a disaggregated basis for the three and six months ended June 30, 2022 and 2021 (in thousands). Three Months Ended Six Months Ended 2022 2021 2022 2021 Revenues from contracts with customers $ 974,663 $ 442,842 $ 1,637,823 $ 779,023 Realized loss on derivatives (61,163) (42,611) (83,602) (68,524) Unrealized gain (loss) on derivatives 30,430 (42,804) (44,599) (86,227) Total revenues $ 943,930 $ 357,427 $ 1,509,622 $ 624,272 Three Months Ended Six Months Ended 2022 2021 2022 2021 Oil revenues $ 650,233 $ 315,114 $ 1,110,355 $ 528,393 Natural gas revenues 242,536 96,960 408,929 199,914 Third-party midstream services revenues 21,886 19,850 39,192 35,288 Sales of purchased natural gas 60,008 10,918 79,347 15,428 Total revenues from contracts with customers $ 974,663 $ 442,842 $ 1,637,823 $ 779,023 |
Reconciliations of basic and diluted distributed and undistributed earnings (loss) per common share | The following table sets forth the computation of diluted weighted average common shares outstanding for the three and six months ended June 30, 2022 and 2021 (in thousands). Three Months Ended Six Months Ended 2022 2021 2022 2021 Weighted average common shares outstanding Basic 118,103 116,801 118,027 116,804 Dilutive effect of options and restricted stock units 1,800 2,192 1,830 1,813 Diluted weighted average common shares outstanding 119,903 118,993 119,857 118,617 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of changes in Company's asset retirement obligations | The following table summarizes the changes in the Company’s asset retirement obligations for the six months ended June 30, 2022 (in thousands). Beginning asset retirement obligations $ 41,959 Liabilities incurred during period 1,291 Liabilities settled during period (1,168) Divestitures during period (4,302) Accretion expense 1,060 Ending asset retirement obligations 38,840 Less: current asset retirement obligations (1) (448) Long-term asset retirement obligations $ 38,392 _______________ (1) Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at June 30, 2022. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of contracts for oil and natural gas | The following is a summary of the Company’s open costless collar contracts for oil and natural gas at June 30, 2022. Commodity Calculation Period Notional Quantity (Bbl or MMBtu) Weighted Average Price Floor ($/Bbl or $/MMBtu) Weighted Average Price Ceiling ($/Bbl or $/MMBtu) Fair Value of Oil 07/01/2022 - 12/31/2022 5,400,000 $ 65.22 $ 110.49 $ (49,428) Natural Gas 07/01/2022 - 12/31/2022 31,200,000 $ 3.58 $ 7.08 (13,640) Natural Gas 01/01/2023 - 03/31/2023 2,400,000 $ 6.00 $ 14.00 3,253 Total open costless collar contracts $ (59,815) The following is a summary of the Company’s open basis swap contracts for oil at June 30, 2022. Commodity Calculation Period Notional Quantity (Bbl) Fixed Price Fair Value of Oil Basis 07/01/2022 - 12/31/2022 2,760,000 $ 0.95 $ 338 Total open basis swap contracts $ 338 |
Summary of gross asset balances of derivative instruments | The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the interim unaudited condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 (in thousands). Derivative Instruments Gross Gross amounts Net amounts presented in the condensed June 30, 2022 Current assets $ 178,098 $ (174,237) $ 3,861 Current liabilities (237,575) 174,237 (63,338) Total $ (59,477) $ — $ (59,477) December 31, 2021 Current assets $ 215,145 $ (213,174) $ 1,971 Current liabilities (230,023) 213,174 (16,849) Total $ (14,878) $ — $ (14,878) |
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands). Three Months Ended Six Months Ended Type of Instrument Location in Condensed Consolidated 2022 2021 2022 2021 Derivative Instrument Oil Revenues: Realized loss on derivatives $ (34,237) $ (42,611) $ (52,403) $ (68,686) Natural Gas Revenues: Realized (loss) gain on derivatives (26,926) — (31,199) 162 Realized loss on derivatives (61,163) (42,611) (83,602) (68,524) Oil Revenues: Unrealized gain (loss) on derivatives 10,636 (35,163) (34,363) (74,432) Natural Gas Revenues: Unrealized gain (loss) on derivatives 19,794 (7,641) (10,236) (11,795) Unrealized gain (loss) on derivatives 30,430 (42,804) (44,599) (86,227) Total $ (30,733) $ (85,415) $ (128,201) $ (154,751) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of the valuation of the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis | The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of June 30, 2022 and December 31, 2021 (in thousands). Fair Value Measurements at June 30, 2022 using Description Level 1 Level 2 Level 3 Total Assets (Liabilities) Oil derivatives and basis swaps $ — $ (49,090) $ — $ (49,090) Natural gas derivatives — (10,387) — (10,387) Contingent consideration related to business combination — — (13,316) (13,316) Total $ — $ (59,477) $ (13,316) $ (72,793) Fair Value Measurements at December 31, 2021 using Description Level 1 Level 2 Level 3 Total Assets (Liabilities) Oil derivatives and basis swaps $ — $ (14,727) $ — $ (14,727) Natural gas derivatives — (151) — (151) Contingent consideration related to business combination — — (8,203) (8,203) Total $ — $ (14,878) $ (8,203) $ (23,081) |
SUPPLEMENTAL DISCLOSURES (Table
SUPPLEMENTAL DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Summary of current accrued liabilities | The following table summarizes the Company’s current accrued liabilities at June 30, 2022 and December 31, 2021 (in thousands). June 30, December 31, Accrued evaluated and unproved and unevaluated property costs $ 75,818 $ 128,598 Accrued midstream properties costs 15,283 7,799 Accrued lease operating expenses 40,241 32,182 Accrued interest on debt 22,075 18,232 Accrued asset retirement obligations 448 270 Accrued partners’ share of joint interest charges 23,184 17,460 Accrued payable related to purchased natural gas 19,694 11,284 Other 29,563 37,458 Total accrued liabilities $ 226,306 $ 253,283 |
Supplemental disclosures of cash flow information | The following table provides supplemental disclosures of cash flow information for the six months ended June 30, 2022 and 2021 (in thousands). Six Months Ended 2022 2021 Cash paid for income taxes $ 13,500 $ — Cash paid for interest expense, net of amounts capitalized $ 37,254 $ 37,517 (Decrease) increase in asset retirement obligations related to mineral properties $ (4,094) $ 395 (Decrease) increase in liabilities for drilling, completion and equipping capital expenditures $ (50,283) $ 16,072 (Decrease) increase in liabilities for acquisition of oil and natural gas properties $ (2,510) $ 245 Increase (decrease) in liabilities for midstream properties capital expenditures $ 7,226 $ (7,634) Stock-based compensation expense recognized as a liability $ 17,521 $ 15,489 Transfer of inventory to oil and natural gas properties $ (162) $ (636) The following table provides a reconciliation of cash and restricted cash recorded in the interim unaudited condensed consolidated balance sheets to cash and restricted cash as presented on the interim unaudited condensed consolidated statements of cash flows (in thousands). Six Months Ended 2022 2021 Cash $ 230,394 $ 44,632 Restricted cash 51,889 34,576 Total cash and restricted cash $ 282,283 $ 79,208 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Selected financial information for segments | The following tables present selected financial information for the periods presented regarding the Company’s business segments on a stand-alone basis, corporate expenses that are not allocated to a segment and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis (in thousands). On a consolidated basis, midstream services revenues consist primarily of those revenues from midstream operations related to third parties, including working interest owners in the Company’s operated wells. All midstream services revenues associated with Company-owned production are eliminated in consolidation. In evaluating the operating results of the exploration and production and midstream segments, the Company does not allocate certain expenses to the individual segments, including general and administrative expenses. Such expenses are reflected in the column labeled “Corporate.” Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Three Months Ended June 30, 2022 Oil and natural gas revenues $ 889,728 $ 3,041 $ — $ — $ 892,769 Midstream services revenues — 75,044 — (53,158) 21,886 Sales of purchased natural gas 44,532 15,476 — — 60,008 Realized loss on derivatives (61,163) — — — (61,163) Unrealized loss on derivatives 30,430 — — — 30,430 Expenses (1) 332,593 48,726 20,780 (53,158) 348,941 Operating income (2) $ 570,934 $ 44,835 $ (20,780) $ — $ 594,989 Total assets $ 3,740,111 $ 986,166 $ 237,599 $ — $ 4,963,876 Capital expenditures (3) $ 172,640 $ 92,043 $ 58 $ — $ 264,741 _____________________ (1) Includes depletion, depreciation and amortization expenses of $111.2 million and $8.3 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million. (2) Includes $20.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $29.6 million attributable to land and seismic acquisition expenditures related to the exploration and production segment, $75.0 million attributable to midstream acquisition expenditures and $8.2 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Three Months Ended June 30, 2021 Oil and natural gas revenues $ 411,134 $ 940 $ — $ — $ 412,074 Midstream services revenues — 59,691 — (39,841) 19,850 Sales of purchased natural gas 4,120 6,798 — — 10,918 Realized loss on derivatives (42,611) — — — (42,611) Unrealized loss on derivatives (42,804) — — — (42,804) Expenses (1) 199,127 30,274 22,761 (39,841) 212,321 Operating income (2) $ 130,712 $ 37,155 $ (22,761) $ — $ 145,106 Total assets $ 2,942,429 $ 803,612 $ 88,508 $ — $ 3,834,549 Capital expenditures (3) $ 107,928 $ 7,863 $ 112 $ — $ 115,903 _____________________ (1) Includes depletion, depreciation and amortization expenses of $83.0 million and $7.8 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.7 million. (2) Includes $15.9 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $6.9 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $3.8 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Six Months Ended June 30, 2022 Oil and natural gas revenues $ 1,514,521 $ 4,763 $ — $ — $ 1,519,284 Midstream services revenues — 142,435 — (103,243) 39,192 Sales of purchased natural gas 51,654 27,693 — — 79,347 Realized loss on derivatives (83,602) — — — (83,602) Unrealized loss on derivatives (44,599) — — — (44,599) Expenses (1) 570,050 91,497 47,022 (103,243) 605,326 Operating income (2) $ 867,924 $ 83,394 $ (47,022) $ — $ 904,296 Total assets $ 3,740,111 $ 986,166 $ 237,599 $ — $ 4,963,876 Capital expenditures (3) $ 412,488 $ 111,124 $ 283 $ — $ 523,895 _____________________ (1) Includes depletion, depreciation and amortization expenses of $198.4 million and $16.3 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.2 million. (2) Includes $37.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $70.7 million attributable to land and seismic acquisition expenditures related to the exploration and production segment, $75.0 million in midstream acquisition expenditures and $17.5 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. Exploration and Production Consolidations and Eliminations Consolidated Company Midstream Corporate Six Months Ended June 30, 2021 Oil and natural gas revenues $ 725,780 $ 2,527 $ — $ — $ 728,307 Midstream services revenues — 103,600 — (68,312) 35,288 Sales of purchased natural gas 6,582 8,846 — — 15,428 Realized loss on derivatives (68,524) — — — (68,524) Unrealized loss on derivatives (86,227) — — — (86,227) Expenses (1) 355,571 56,521 42,723 (68,312) 386,503 Operating income (2) $ 222,040 $ 58,452 $ (42,723) $ — $ 237,769 Total assets $ 2,942,429 $ 803,612 $ 88,508 $ — $ 3,834,549 Capital expenditures (3) $ 242,793 $ 17,636 $ 245 $ — $ 260,674 _____________________ (1) Includes depletion, depreciation and amortization expenses of $149.4 million and $15.6 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.3 million. (2) Includes $24.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment. (3) Includes $15.6 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $8.2 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary allocation of the consideration given related to this business combination was as follows (in thousands). The Company anticipates that the allocation of the consideration given should be finalized during 2022 upon determination of the final customary purchase price adjustments. Consideration given Allocation Cash $ 161,680 Working capital adjustments (4,519) Fair value of contingent consideration at December 14, 2021 6,718 Total consideration given $ 163,879 Allocation of purchase price Oil and natural gas properties Evaluated $ 139,312 Unproved and unevaluated 32,185 Accrued liabilities (360) Advances from joint interest owners (6,865) Asset retirement obligations (393) Net assets acquired $ 163,879 The preliminary allocation of the consideration given related to this business combination was as follows (in thousands). The Company anticipates that the allocation of the consideration given should be finalized during 2022 upon determination of the final customary purchase price adjustments. Consideration given Allocation Total cash consideration given $ 77,828 Allocation of purchase price Cash acquired $ 2,012 Property, plant & equipment 75,000 Accounts receivable 5,033 Other assets 296 Accrued liabilities (4,513) Net assets acquired $ 77,828 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues from contracts with customers | $ 974,663 | $ 442,842 | $ 1,637,823 | $ 779,023 |
Realized loss on derivatives | (61,163) | (42,611) | (83,602) | (68,524) |
Unrealized gain (loss) on derivatives | 30,430 | (42,804) | (44,599) | (86,227) |
Total revenues | 943,930 | 357,427 | 1,509,622 | 624,272 |
Oil revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contracts with customers | 650,233 | 315,114 | 1,110,355 | 528,393 |
Natural gas revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contracts with customers | 242,536 | 96,960 | 408,929 | 199,914 |
Third-party midstream services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contracts with customers | 21,886 | 19,850 | 39,192 | 35,288 |
Sales of purchased natural gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contracts with customers | $ 60,008 | $ 10,918 | $ 79,347 | $ 15,428 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Discount rate, present value of future revenue | 10% | |||
Full-cost ceiling impairment | $ 0 | $ 0 | ||
Deferred income tax benefit | (99,699) | $ (5,349) | (152,818) | $ (8,189) |
Capitalized general and administrative costs | 10,400 | 9,200 | 23,600 | 18,700 |
Interest costs capitalized | $ 800 | $ 1,900 | $ 4,400 | $ 2,500 |
Options | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Antidilutive securities (in shares) | 0.5 | 1.5 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliations of Basic and Diluted Distributed and Undistributed Earnings (Loss) Per Common Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Weighted average common shares outstanding | ||||
Basic (in shares) | 118,103 | 116,801 | 118,027 | 116,804 |
Dilutive effect of options and restricted stock units (in shares) | 1,800 | 2,192 | 1,830 | 1,813 |
Diluted weighted average common shares outstanding (in shares) | 119,903 | 118,993 | 119,857 | 118,617 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | ||
Changes in the Company's asset retirement obligations | ||||||
Beginning asset retirement obligations | $ 41,959 | |||||
Liabilities incurred during period | 1,291 | |||||
Liabilities settled during period | (1,168) | |||||
Divestitures during period | (4,302) | |||||
Accretion expense | $ 517 | $ 511 | 1,060 | $ 1,011 | ||
Ending asset retirement obligations | 38,840 | 38,840 | ||||
Less: current asset retirement obligations | [1] | (448) | (448) | |||
Long-term asset retirement obligations | $ 38,392 | $ 38,392 | $ 41,689 | |||
[1]Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at June 30, 2022. |
DEBT - Borrowings (Details)
DEBT - Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 26, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Jul. 25, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | ||||||
Line of credit facility | $ 0 | $ 0 | $ 100,000 | |||
Borrowings under San Mateo Credit Facility | 420,000 | 420,000 | $ 385,000 | |||
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility | 0 | 0 | ||||
Repayments of borrowings | 50,000 | |||||
Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Par value repurchased notes | 14,200 | 14,200 | ||||
Unsecured Debt | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Repurchase amount | $ 13,700 | |||||
Unsecured Debt | Senior Notes Due 2026 | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term debt outstanding | 906,000 | 906,000 | ||||
Par value repurchased notes | 144,000 | 144,000 | ||||
Repurchase amount | 142,400 | 142,400 | ||||
Unsecured Debt | SBA Loan, CARES Act | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term debt outstanding | $ 7,500 | |||||
Letter of Credit | Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding letters of credit | 45,600 | 45,600 | ||||
Line of Credit | San Mateo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding letters of credit | 9,000 | 9,000 | ||||
Borrowings under San Mateo Credit Facility | $ 420,000 | 420,000 | ||||
Repayments of debt | $ 20,000 | |||||
Line of Credit | San Mateo Credit Facility | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Repayments of debt | $ 20,000 |
DEBT - Credit Agreements (Detai
DEBT - Credit Agreements (Details) | 1 Months Ended | 6 Months Ended | |
Apr. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Third Amended Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Secured overnight financing rate, spread on variable rate | 0.10% | ||
Third Amended Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Third Amended Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Third Amended Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Additional interest rate | 1.75% | ||
Third Amended Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Additional interest rate | 2.75% | ||
Revolving Credit Facility | Third Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Increase in borrowing base | $ 2,000,000,000 | ||
Maximum borrowing commitment | 775,000,000 | ||
Maximum facility amount | 1,500,000,000 | ||
Line of credit facility covenant terms, current ratio | 1 | ||
Cash and cash equivalent limit | $ 75,000,000 | ||
EBITDA ratio | 3.5 | ||
Revolving Credit Facility | Third Amended Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Maximum borrowing commitment | $ 100,000,000 | $ 50,000,000 | |
Line of Credit | San Mateo Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing commitment | $ 450,000,000 | ||
EBITDA ratio | 5 | ||
Line of credit, accordian feature (up to) | $ 700,000,000 | ||
Consolidated interest expense, minimum | 2.5 | ||
Liquidity restriction on cash distribution, percentage of lender commitments, less than | 10% |
DEBT - Senior Unsecured Notes (
DEBT - Senior Unsecured Notes (Details) - Senior Notes $ in Millions | Jun. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
Par value repurchased notes | $ 14.2 |
Senior Notes Due 2026 | |
Debt Instrument [Line Items] | |
Par value repurchased notes | 144 |
Repurchase amount | 142.4 |
Long-term debt outstanding | $ 906 |
2026 Notes Offering | |
Debt Instrument [Line Items] | |
Interest rate | 5.875% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 36,261 | $ 0 | $ 51,670 | $ 0 |
Deferred | $ 99,699 | $ 5,349 | $ 152,818 | $ 8,189 |
Effective tax rate | 25% | 5% | 5% |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Dividends declared (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.05 | $ 0.025 | $ 0.025 | ||
Cash dividend | $ 5,878 | $ 5,866 | $ 2,913 | $ 2,913 | |||
Distributions | $ 26,460 | 18,375 | 14,700 | $ 14,210 | |||
Service-Based Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted in period (in shares) | 226,238 | ||||||
Performance-Based Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted in period (in shares) | 230,251 | ||||||
Vesting period | 3 years | ||||||
Number of additional shares authorized (in shares) | 3,700,000 | ||||||
Performance-Based Stock Units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting amount, percentage | 0% | ||||||
Performance-Based Stock Units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting amount, percentage | 200% | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted in period (in shares) | 210,156 | ||||||
Service-based Restricted Stock Units And Performance-Based Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of awards | $ 34,300 | ||||||
Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total shares for the plan (in shares) | 4,000,000 | ||||||
San Mateo | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance incentives earned | $ 0 | 16,300 | 22,800 | $ 31,600 | |||
Equity contribution, tax impact | $ 4,800 | ||||||
Matador Resources Company | San Mateo | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Distributions | 27,500 | 15,300 | $ 46,700 | 30,100 | |||
Matador Resources Company | Five Point | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Distributions | 44,800 | ||||||
Five Point | San Mateo | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Distributions | $ 26,500 | $ 14,700 | $ 28,900 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Contracts for Oil and Natural Gas (Details) $ in Thousands | Jun. 30, 2022 USD ($) bbl $ / bbl |
Open costless collar contracts | |
Summary of contracts for oil and natural gas | |
Fair Value of Asset (Liability) | $ | $ (59,815) |
Open Basis Swap Contracts | |
Summary of contracts for oil and natural gas | |
Fair Value of Asset (Liability) | $ | $ 338 |
Derivative Contract, Calculation Period One | Open costless collar contracts | Oil | |
Summary of contracts for oil and natural gas | |
Notional Quantity (Bbl or MMBtu) | bbl | 5,400,000 |
Weighted Average Price Floor ($/Bbl or $/MMBtu) | 65.22 |
Weighted Average Price Ceiling ($/Bbl or $/MMBtu) | 110.49 |
Fair Value of Asset (Liability) | $ | $ (49,428) |
Derivative Contract, Calculation Period One | Open costless collar contracts | Natural Gas | |
Summary of contracts for oil and natural gas | |
Notional Quantity (Bbl or MMBtu) | bbl | 31,200,000 |
Weighted Average Price Floor ($/Bbl or $/MMBtu) | 3.58 |
Weighted Average Price Ceiling ($/Bbl or $/MMBtu) | 7.08 |
Fair Value of Asset (Liability) | $ | $ (13,640) |
Derivative Contract, Calculation Period One | Open Basis Swap Contracts | Oil Basis | |
Summary of contracts for oil and natural gas | |
Notional Quantity (Bbl or MMBtu) | bbl | 2,760,000 |
Fair Value of Asset (Liability) | $ | $ 338 |
Fixed Price ($/Bbl) | 0.95 |
Derivative Contract, Calculation Period Three | Open costless collar contracts | Oil | |
Summary of contracts for oil and natural gas | |
Notional Quantity (Bbl or MMBtu) | bbl | 2,400,000 |
Weighted Average Price Floor ($/Bbl or $/MMBtu) | 6 |
Weighted Average Price Ceiling ($/Bbl or $/MMBtu) | 14 |
Fair Value of Asset (Liability) | $ | $ 3,253 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 59,477 | $ 14,878 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Gross Asset Balances of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Liability Balances of Derivative Instruments | ||
Total | $ (59,477) | $ (14,878) |
Total, Gross amounts netted in the condensed consolidated balance sheets | 0 | 0 |
Total, Net amounts presented in the condensed consolidated balance sheets | (59,477) | (14,878) |
Current assets | ||
Asset Balances of Derivative Insruments | ||
Gross amounts recognized | 178,098 | 215,145 |
Gross amounts netted in the condensed consolidated balance sheets | (174,237) | (213,174) |
Net amounts presented in the condensed consolidated balance sheets | 3,861 | 1,971 |
Current liabilities | ||
Liability Balances of Derivative Instruments | ||
Gross amounts recognized | (237,575) | (230,023) |
Gross amounts netted in the condensed consolidated balance sheets | 174,237 | 213,174 |
Net amounts presented in the condensed consolidated balance sheets | $ (63,338) | $ (16,849) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Location and Aggregate Fair Value of All Derivative Financial Instruments Recorded in the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Derivative Instrument | ||||
Realized loss on derivatives | $ (61,163) | $ (42,611) | $ (83,602) | $ (68,524) |
Unrealized gain (loss) on derivatives | 30,430 | (42,804) | (44,599) | (86,227) |
Total | (30,733) | (85,415) | (128,201) | (154,751) |
Revenues | ||||
Derivative Instrument | ||||
Realized loss on derivatives | (61,163) | (42,611) | (83,602) | (68,524) |
Unrealized gain (loss) on derivatives | 30,430 | (42,804) | (44,599) | (86,227) |
Oil | Revenues | ||||
Derivative Instrument | ||||
Realized loss on derivatives | (34,237) | (42,611) | (52,403) | (68,686) |
Unrealized gain (loss) on derivatives | 10,636 | (35,163) | (34,363) | (74,432) |
Natural Gas | Revenues | ||||
Derivative Instrument | ||||
Realized loss on derivatives | (26,926) | 0 | (31,199) | 162 |
Unrealized gain (loss) on derivatives | $ 19,794 | $ (7,641) | $ (10,236) | $ (11,795) |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of the Valuation of the Company's Financial Assets and Liabilities that were Accounted for at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets (Liabilities) | ||
Total | $ (59,477) | $ (14,878) |
Fair value on a recurring basis | ||
Assets (Liabilities) | ||
Contingent consideration related to business combination | (13,316) | (8,203) |
Total | (72,793) | (23,081) |
Fair value on a recurring basis | Oil derivatives and basis swaps | ||
Assets (Liabilities) | ||
Derivative liability | (49,090) | (14,727) |
Fair value on a recurring basis | Natural gas derivatives | ||
Assets (Liabilities) | ||
Derivative liability | (10,387) | (151) |
Fair value on a recurring basis | Level 1 | ||
Assets (Liabilities) | ||
Contingent consideration related to business combination | 0 | 0 |
Total | 0 | 0 |
Fair value on a recurring basis | Level 1 | Oil derivatives and basis swaps | ||
Assets (Liabilities) | ||
Derivative liability | 0 | 0 |
Fair value on a recurring basis | Level 1 | Natural gas derivatives | ||
Assets (Liabilities) | ||
Derivative liability | 0 | 0 |
Fair value on a recurring basis | Level 2 | ||
Assets (Liabilities) | ||
Contingent consideration related to business combination | 0 | 0 |
Total | (59,477) | (14,878) |
Fair value on a recurring basis | Level 2 | Oil derivatives and basis swaps | ||
Assets (Liabilities) | ||
Derivative liability | (49,090) | (14,727) |
Fair value on a recurring basis | Level 2 | Natural gas derivatives | ||
Assets (Liabilities) | ||
Derivative liability | (10,387) | (151) |
Fair value on a recurring basis | Level 3 | ||
Assets (Liabilities) | ||
Contingent consideration related to business combination | (13,316) | (8,203) |
Total | (13,316) | (8,203) |
Fair value on a recurring basis | Level 3 | Oil derivatives and basis swaps | ||
Assets (Liabilities) | ||
Derivative liability | 0 | 0 |
Fair value on a recurring basis | Level 3 | Natural gas derivatives | ||
Assets (Liabilities) | ||
Derivative liability | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Senior Notes Due 2023 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of notes | $ 869.9 | $ 1,080 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Feb. 17, 2017 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Delivery Of Natural Gas And Oil Production To Third Parties | |||||
Long-term Purchase Commitment [Line Items] | |||||
Payment for volume requirement agreement | $ 12.8 | $ 15.1 | $ 23.8 | $ 27.7 | |
Volume requirement commitment | 563.3 | 563.3 | |||
Rustler Breaks and Wolf Asset Area | Corporate Joint Venture | San Mateo Midstream | |||||
Long-term Purchase Commitment [Line Items] | |||||
Term of contractual obligation | 15 years | ||||
Rustler Breaks Asset Area | Corporate Joint Venture | San Mateo Midstream | |||||
Long-term Purchase Commitment [Line Items] | |||||
Term of contractual obligation | 15 years | ||||
Operational Agreements | San Mateo Midstream | |||||
Long-term Purchase Commitment [Line Items] | |||||
Contractual obligation | $ 315.5 | $ 315.5 |
SUPPLEMENTAL DISCLOSURES - Summ
SUPPLEMENTAL DISCLOSURES - Summary of Current Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | $ 226,306 | $ 253,283 |
Accrued evaluated and unproved and unevaluated property costs | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 75,818 | 128,598 |
Accrued midstream properties costs | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 15,283 | 7,799 |
Accrued lease operating expenses | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 40,241 | 32,182 |
Accrued interest on debt | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 22,075 | 18,232 |
Accrued asset retirement obligations | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 448 | 270 |
Accrued partners’ share of joint interest charges | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 23,184 | 17,460 |
Accrued payable related to purchased natural gas | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | 19,694 | 11,284 |
Other | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Total accrued liabilities | $ 29,563 | $ 37,458 |
SUPPLEMENTAL DISCLOSURES - Supp
SUPPLEMENTAL DISCLOSURES - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Cash paid for interest expense, net of amounts capitalized | $ 37,254 | $ 37,517 |
(Decrease) increase in liabilities for drilling, completion and equipping capital expenditures | (50,283) | 16,072 |
(Decrease) increase in liabilities for acquisition of oil and natural gas properties | (2,510) | 245 |
Increase (decrease) in liabilities for midstream properties capital expenditures | 7,226 | (7,634) |
Stock-based compensation expense recognized as a liability | 17,521 | 15,489 |
Transfer of inventory to oil and natural gas properties | (162) | (636) |
Income Taxes Paid | 13,500 | 0 |
Mineral Properties | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Increase in asset retirement obligations | $ (4,094) | $ 395 |
SUPPLEMENTAL DISCLOSURES - Rest
SUPPLEMENTAL DISCLOSURES - Restricted Cash Reconciliation (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Disclosure Text Block Supplement [Abstract] | ||||
Cash | $ 230,394 | $ 48,135 | $ 44,632 | |
Restricted cash | 51,889 | 38,785 | 34,576 | |
Total cash and restricted cash | $ 282,283 | $ 86,920 | $ 79,208 | $ 91,383 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 compressorStation mi segment | |
Segment Reporting Information [Line Items] | |
Number of segments | segment | 2 |
Summit Midstream | |
Segment Reporting Information [Line Items] | |
Compressor stations | compressorStation | 3 |
Oil and gas pipeline | mi | 45 |
SEGMENT INFORMATION - Selected
SEGMENT INFORMATION - Selected Financial Information for Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 974,663 | $ 442,842 | $ 1,637,823 | $ 779,023 | |
Realized loss on derivatives | (61,163) | (42,611) | (83,602) | (68,524) | |
Unrealized gain (loss) on derivatives | 30,430 | (42,804) | (44,599) | (86,227) | |
Expenses | 348,941 | 212,321 | 605,326 | 386,503 | |
Operating (loss) income | 594,989 | 145,106 | 904,296 | 237,769 | |
Total assets | 4,963,876 | 3,834,549 | 4,963,876 | 3,834,549 | $ 4,262,153 |
Capital expenditures | 264,741 | 115,903 | 523,895 | 260,674 | |
Depletion, depreciation and amortization | 120,024 | 91,444 | 215,877 | 166,307 | |
Midstream capital expenditures | 28,310 | 25,092 | |||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Realized loss on derivatives | 0 | 0 | 0 | 0 | |
Unrealized gain (loss) on derivatives | 0 | 0 | 0 | 0 | |
Expenses | 20,780 | 22,761 | 47,022 | 42,723 | |
Operating (loss) income | (20,780) | (22,761) | (47,022) | (42,723) | |
Total assets | 237,599 | 88,508 | 237,599 | 88,508 | |
Capital expenditures | 58 | 112 | 283 | 245 | |
Depletion, depreciation and amortization | 600 | 700 | 1,200 | 1,300 | |
Consolidations and Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Realized loss on derivatives | 0 | 0 | 0 | 0 | |
Unrealized gain (loss) on derivatives | 0 | 0 | 0 | 0 | |
Expenses | (53,158) | (39,841) | (103,243) | (68,312) | |
Operating (loss) income | 0 | 0 | 0 | 0 | |
Total assets | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Exploration and Production | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Realized loss on derivatives | (61,163) | (42,611) | (83,602) | (68,524) | |
Unrealized gain (loss) on derivatives | 30,430 | (42,804) | (44,599) | (86,227) | |
Expenses | 332,593 | 199,127 | 570,050 | 355,571 | |
Operating (loss) income | 570,934 | 130,712 | 867,924 | 222,040 | |
Total assets | 3,740,111 | 2,942,429 | 3,740,111 | 2,942,429 | |
Capital expenditures | 172,640 | 107,928 | 412,488 | 242,793 | |
Depletion, depreciation and amortization | 111,200 | 83,000 | 198,400 | 149,400 | |
Capital expenditures attributable to land and seismic acquisition expenditures | 29,600 | 6,900 | 70,700 | 15,600 | |
Midstream | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Realized loss on derivatives | 0 | 0 | 0 | 0 | |
Unrealized gain (loss) on derivatives | 0 | 0 | 0 | 0 | |
Expenses | 48,726 | 30,274 | 91,497 | 56,521 | |
Operating (loss) income | 44,835 | 37,155 | 83,394 | 58,452 | |
Total assets | 986,166 | 803,612 | 986,166 | 803,612 | |
Capital expenditures | 92,043 | 7,863 | 111,124 | 17,636 | |
Depletion, depreciation and amortization | 8,300 | 7,800 | 16,300 | 15,600 | |
Net income attributable to non-controlling interest in subsidiaries | (15,900) | ||||
Midstream capital expenditures | 75,000 | 75,000 | |||
Capital expenditures attributable to non-controlling interest | 8,200 | 3,800 | 17,500 | 8,200 | |
Operating Income (Loss) | Midstream | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net income attributable to non-controlling interest in subsidiaries | (20,500) | (37,500) | (24,800) | ||
Oil and natural gas revenues | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 892,769 | 412,074 | 1,519,284 | 728,307 | |
Oil and natural gas revenues | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Oil and natural gas revenues | Consolidations and Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Oil and natural gas revenues | Exploration and Production | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 889,728 | 411,134 | 1,514,521 | 725,780 | |
Oil and natural gas revenues | Midstream | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 3,041 | 940 | 4,763 | 2,527 | |
Midstream services revenues | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 21,886 | 19,850 | 39,192 | 35,288 | |
Midstream services revenues | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Midstream services revenues | Consolidations and Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | (53,158) | (39,841) | (103,243) | (68,312) | |
Midstream services revenues | Exploration and Production | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Midstream services revenues | Midstream | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 75,044 | 59,691 | 142,435 | 103,600 | |
Sales of purchased natural gas | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 60,008 | 10,918 | 79,347 | 15,428 | |
Sales of purchased natural gas | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Sales of purchased natural gas | Consolidations and Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Sales of purchased natural gas | Exploration and Production | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 44,532 | 4,120 | 51,654 | 6,582 | |
Sales of purchased natural gas | Midstream | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 15,476 | $ 6,798 | $ 27,693 | $ 8,846 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) compressorStation mi | Dec. 14, 2021 USD ($) $ / bbl | Mar. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) compressorStation mi | |
Properties in Lea and Eddy, NM | ||||
Asset Acquisition [Line Items] | ||||
Cash | $ 161,680 | |||
Working capital adjustments | $ (4,519) | |||
Purchase price increase (decrease) due to average oil price | 5,000 | $ 5,000 | ||
Contingent consideration increase (decrease) | $ 10,100 | |||
Contingent consideration related to business combination | $ 13,300 | $ 13,300 | ||
Total consideration given | $ 163,879 | |||
Properties in Lea and Eddy, NM | Minimum | ||||
Asset Acquisition [Line Items] | ||||
Average oil and gas prices | $ / bbl | 75 | |||
Summit Midstream | ||||
Asset Acquisition [Line Items] | ||||
Compressor stations | compressorStation | 3 | 3 | ||
Oil and gas pipeline | mi | 45 | 45 | ||
Total consideration given | $ 77,828 |
BUSINESS COMBINATION - Allocati
BUSINESS COMBINATION - Allocation Schedule (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 14, 2021 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Evaluated | $ 6,352,486 | $ 6,007,325 | |
Unproved and unevaluated | 971,185 | 964,714 | |
Advances from joint interest owners | (18,931) | $ (18,074) | |
Properties in Lea and Eddy, NM | |||
Business Acquisition [Line Items] | |||
Cash | $ 161,680 | ||
Working capital adjustments | $ (4,519) | ||
Fair value of contingent consideration at December 14, 2021 | 6,718 | ||
Total consideration given | 163,879 | ||
Evaluated | 139,312 | ||
Unproved and unevaluated | 32,185 | ||
Accrued liabilities | (360) | ||
Advances from joint interest owners | (6,865) | ||
Asset retirement obligations | (393) | ||
Net assets acquired | $ 163,879 |
BUSINESS COMBINATION - Midstrea
BUSINESS COMBINATION - Midstream Assets Allocation (Details) - Summit Midstream $ in Thousands | Jun. 30, 2022 USD ($) |
Business Acquisition [Line Items] | |
Total consideration given | $ 77,828 |
Cash acquired | 2,012 |
Property, plant & equipment | 75,000 |
Accounts receivable | 5,033 |
Other assets | 296 |
Accrued liabilities | (4,513) |
Net assets acquired | $ 77,828 |