MTDR · NYSE Arca · United States
matadorresources.comFinancials as of FY2025
Drills oil and gas wells in New Mexico and moves everything produced through its own San Mateo pipeline system.
Matador Resources drills horizontal wells into stacked rock formations called the Wolfcamp and Bone Spring in Eddy and Lea Counties, New Mexico, fracturing each well open before it can produce, and then moves all of that gas through its own compression and pipeline infrastructure, called San Mateo, before it reaches any outside market. Because San Mateo is the only compression step between Matador's wellheads and the regional takeaway pipelines, every new well Matador drills depends on San Mateo having enough capacity to handle it — if drilling outpaces a compression expansion, the finished wells simply sit idle behind the bottleneck. The same physical interconnections that lock outside gatherers out of the acreage also lock Matador in, so a single compressor failure can shut in multiple wellheads at once with no alternative route to send the gas. That is the central tension in how the company is built: San Mateo is what makes the drilling economics work, and it is also the one place where something going wrong stops everything.
How does this company make money?
Matador sells crude oil at prices set each month against the NYMEX WTI benchmark and sells natural gas at prices tied to the Henry Hub benchmark. It also sells natural gas liquids at Mont Belvieu pricing. On top of that, the San Mateo system charges other Delaware Basin producers a fee to compress and process their gas, bringing in midstream revenue that does not depend on Matador's own well production.
What makes this company hard to replace?
Producers who send their gas through San Mateo are locked in by long-term processing agreements that come with physical pipeline connections already in the ground — switching to a different gatherer would mean physically rebuilding that infrastructure, not just signing a new contract. On the other side, Matador's own drilling positions in Eddy and Lea Counties sit inside established drilling spacing units, meaning competitors cannot access the same underground formations from the same surface locations.
What limits this company?
San Mateo's compression facilities cannot grow smoothly — each expansion requires a separate construction project and a separate round of spending. When Matador drills new wells faster than San Mateo adds compression capacity, the gas those wells produce has nowhere to go. The wells sit drilled but idle, and production that could be sold today gets pushed into the future instead.
What does this company depend on?
Matador cannot operate without five specific inputs: its leasehold land in Eddy and Lea Counties, New Mexico; hydraulic fracturing crews and equipment from Halliburton or Schlumberger; fresh water drawn from the Ogallala Aquifer to run those fracturing operations; capacity on its own San Mateo gathering system; and access to regional takeaway pipelines like Permian Express to move gas to market.
Who depends on this company?
Phillips 66 and Valero refineries rely on Matador's crude oil for its specific gravity and sulfur content — if that supply stopped, those refineries would need to source a replacement crude that matches those exact qualities. Petrochemical plants along the Texas Gulf Coast use natural gas liquids from the region as raw material; losing Matador's volumes would reduce what those plants have to work with. Kinder Morgan and Enterprise pipeline systems would also lose throughput, leaving capacity sitting unused.
How does this company scale?
The horizontal drilling and completion techniques Matador uses work across similar geology throughout the Delaware Basin, so adding new wells is relatively straightforward to repeat. What does not scale smoothly is the San Mateo system — every time production grows past a threshold, Matador must make a discrete, expensive infrastructure investment to add compression capacity and pipeline connections, or the new wells simply back up behind the bottleneck.
What external forces can significantly affect this company?
The EPA requires leak detection and repair programs at every wellhead under federal methane emissions rules, which adds operating cost per well as the well count grows. New Mexico's 2019 Oil and Gas Act introduced stricter environmental review requirements and higher bonding amounts before drilling can begin. On the cost side, some service companies operating in the Permian region source labor and equipment from Mexico, so when the peso loses value against the dollar, those cross-border service costs shift.
Where is this company structurally vulnerable?
If a compressor failed or a pipeline on the San Mateo system went down, multiple wellheads would shut off at the same time. Because San Mateo is the only compression step in this chain, Matador has no backup route to move its gas — the same design that keeps outside midstream companies out also keeps Matador locked in with no alternative when something goes wrong.
Sign in to view price data.
Sign inStructural observations derived from financial data, industry benchmarks, and supply chain position.
Companies that share the same coordination system — how they create, deliver, or capture value.
Companies that share active interpretations — structural patterns currently present in both stocks.
Screen for dividend patterns
Find other stocks with similar dividend characteristics in the screener.
CompanyGraph