Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes thereto contained herein and the consolidated financial statements and related notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2020 (the "Annual Report") filed with the Securities and Exchange Commission (the "SEC") on February 26, 2021, along with Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Annual Report. The Annual Report is accessible on the SEC's website at www.sec.gov and on our website at www.matadorresources.com. Our discussion and analysis includes forward-looking information that involves risks and uncertainties and should be read in conjunction with the "Risk Factors" section of the Annual Report and the section entitled "Cautionary Note Regarding Forward-Looking Statements" below for information about the risks and uncertainties that could cause our actual results to be materially different than our forward-looking statements. In this Quarterly Report on Form 10-Q (this "Quarterly Report"), (i) references to "we," "our" or the "Company" refer to Matador Resources Company and its subsidiaries as a whole (unless the context indicates otherwise), (ii) references to "Matador" refer solely to Matador Resources Company and (iii) references to "San Mateo" refer to San Mateo Midstream, LLC, collectively with its subsidiaries. For certain oil and natural gas terms used in this Quarterly Report, please see the "Glossary of Oil and Natural Gas Terms" included with the Annual Report. Cautionary Note Regarding Forward-Looking Statements Certain statements in this Quarterly Report constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Additionally, forward-looking statements may be made orally or in press releases, conferences, reports, on our website or otherwise, in the future by us or on our behalf. Such statements are generally identifiable by the terminology used such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecasted," "hypothetical," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "would" or other similar words, although not all forward-looking statements contain such identifying words. By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, among others: general economic conditions; our ability to execute our business plan, including whether our drilling program is successful; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and natural gas liquids; our ability to replace reserves and efficiently develop current reserves; costs of operations; delays and other difficulties related to producing oil, natural gas and natural gas liquids; delays and other difficulties related to regulatory and governmental approvals and restrictions; availability of sufficient capital to execute our business plan, including from future cash flows, available borrowing capacity under our revolving credit facilities and otherwise; our ability to make acquisitions on economically acceptable terms; our ability to integrate acquisitions; weather and environmental conditions; the impact of the worldwide spread of the novel coronavirus ("COVID-19") on oil and natural gas demand, oil and natural gas prices and our business; the operating results of San Mateo's Black River cryogenic natural gas processing plant; the timing and operating results of the buildout by San Mateo of oil, natural gas and water gathering and transportation systems and the drilling of any additional salt water disposal wells; and the other factors discussed below and elsewhere in this Quarterly Report and in other documents that we file with or furnish to the SEC, all of which are difficult to predict. Forward-looking statements may include statements about: our business strategy; our estimated future reserves and the present value thereof, including whether or not a full-cost ceiling impairment could be realized; our cash flows and liquidity; the amount, timing and payment of dividends, if any; our financial strategy, budget, projections and operating results; the supply and demand of oil, natural gas and natural gas liquids; oil, natural gas and natural gas liquids prices, including our realized prices thereof; the timing and amount of future production of oil and natural gas; the availability of drilling, completion and production equipment; the availability of oil storage capacity; the availability of oil field labor; the amount, nature and timing of capital expenditures, including future exploration and development costs; the availability and terms of capital; our drilling of wells;
Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Operating Data Revenues (in thousands)(1) Oil $ 325,560 $ 150,620 $ 853,953 $ 414,379 Natural gas 135,905 38,484 335,819 91,406 Total oil and natural gas revenues 461,465 189,104 1,189,772 505,785 Third-party midstream services revenues 20,486 19,363 55,774 49,861 Sales of purchased natural gas 38,770 13,358 54,198 37,883 Lease bonus - mineral acreage - - - 4,062 Realized (loss) gain on derivatives (57,419) (5,406) (125,943) 49,571 Unrealized gain (loss) on derivatives 9,049 (13,033) (77,178) (9,271) Total revenues $ 472,351 $ 203,386 $ 1,096,623 $ 637,891 Net Production Volumes(1) Oil (MBbl)(2) 4,669 3,895 13,263 11,512 Natural gas (Bcf)(3) 21.7 16.9 61.0 50.1 Total oil equivalent (MBOE)(4) 8,283 6,715 23,423 19,861 Average daily production (BOE/d)(5) 90,033 72,989 85,801 72,486 Average Sales Prices Oil, without realized derivatives (per Bbl) $ 69.73 $ 38.67 $ 64.39 $ 36.00 Oil, with realized derivatives (per Bbl) $ 58.43 $ 37.28 $ 55.23 $ 40.30 Natural gas, without realized derivatives (per Mcf) $ 6.27 $ 2.27 $ 5.51 $ 1.82 Natural gas, with realized derivatives (per Mcf) $ 6.05 $ 2.27 $ 5.43 $ 1.82 _________________ (1)We report our production volumes in two streams: oil and natural gas,
Oct 29, 2021
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