Matador Resources Company Announces Offering of $750 Million of Senior Notes Due 2033

Rhea-AI Summary

Matador Resources Company (NYSE: MTDR) has announced its intention to offer $750 million of senior unsecured notes due 2033 in a private placement to eligible purchasers, subject to market conditions. The company plans to use the net proceeds from this offering to repay borrowings outstanding under its credit facility, including all of the $250 million in outstanding borrowings under its term loan.

The Notes and related guarantees have not been registered under the Securities Act of 1933 and may not be offered, transferred, or sold in the United States without registration or an applicable exemption. The Notes may be resold by initial purchasers to qualified institutional buyers and non-U.S. persons outside the United States under specific regulations.

Positive

• Offering $750 million of senior unsecured notes due 2033
• Proceeds to be used to repay outstanding borrowings, including $250 million term loan

Negative

• Increased debt burden with new $750 million notes offering
• Potential dilution of existing shareholders' value

Insights

Financial Analyst

Matador Resources' $750 million senior notes offering is a significant move that could reshape its capital structure. This debt issuance, aimed at repaying existing credit facility borrowings, including a $250 million term loan, suggests a strategic shift towards longer-term financing. By replacing short-term debt with 10-year notes, the company potentially gains more financial flexibility and stability.

However, investors should note that while this may improve Matador's debt maturity profile, it doesn't necessarily reduce overall leverage. The impact on interest expenses will be important to watch, as it could affect profitability. Additionally, the private placement nature of this offering limits participation to qualified institutional buyers, which could influence liquidity in the secondary market.

Overall, this refinancing effort indicates Matador's proactive approach to managing its balance sheet, but the true impact will depend on the interest rate secured and how effectively the company utilizes its improved financial flexibility.

Oil & Gas Industry Expert

Matador's decision to issue $750 million in senior notes reflects confidence in its long-term prospects within the oil and gas sector. This move aligns with industry trends where companies are seeking to lock in financing while interest rates remain relatively favorable, especially given recent market volatility.

The extended maturity to 2033 provides Matador with a decade of financial runway, which is particularly valuable in the cyclical energy industry. This could allow the company to weather potential downturns and invest in growth opportunities without immediate refinancing pressures.

However, investors should consider the broader implications for Matador's operational strategy. Such a substantial debt issuance might signal plans for aggressive expansion or acquisitions in the near future. It's important to monitor how Matador balances this increased long-term debt with its operational cash flows and capital expenditure plans in the volatile oil and gas market.

DALLAS--(BUSINESS WIRE)-- Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced that, subject to market conditions, it intends to offer $750 million of senior unsecured notes due 2033 (the “Notes”) in a private placement to eligible purchasers. Matador intends to use the net proceeds from the offering to repay borrowings outstanding under Matador’s credit facility, including all of the $250 million in outstanding borrowings under Matador’s term loan.

The Notes and related guarantees have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the applicable securities laws of any state or other jurisdiction and may not be offered, transferred or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and the applicable securities laws of any state or other jurisdiction. The Notes may be resold by the initial purchasers to persons they reasonably believe to be “qualified institutional buyers” pursuant to Rule 144A and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. This press release is being issued pursuant to Rule 135c under the Securities Act and is neither an offer to sell nor a solicitation of an offer to buy any security, including the Notes, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Matador Resources Company

Matador 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. Its 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. Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, Matador conducts midstream operations in support of its 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.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking statements” are statements related to future, not past, events. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “could,” “believe,” “would,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “should,” “continue,” “plan,” “predict,” “potential,” “project,” “hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements include, but are not limited to, statements about guidance, projected or forecasted financial and operating results, future liquidity, the payment of dividends, results in certain basins, objectives, project timing, expectations and intentions, regulatory and governmental actions and other statements that are not historical facts. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks and uncertainties related to the capital markets generally, whether the Company will offer the Notes or consummate the offering, the anticipated terms of the Notes and the anticipated use of proceeds, as well as the following risks related to financial and operational performance: general economic conditions; the Company’s ability to execute its business plan, including whether its 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; its ability to replace reserves and efficiently develop current reserves; the operating results of the Company’s midstream oil, natural gas and water gathering and transportation systems, pipelines and facilities, the acquiring of third-party business and the drilling of any additional salt water disposal wells; 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; impact on the Company’s operations due to seismic events; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions, including the Company’s recently completed acquisition of a subsidiary of Ameredev II Parent, LLC from affiliates of EnCap Investments L.P. (the “Ameredev Acquisition”); disruption from the Company’s acquisitions, including the Ameredev Acquisition, making it more difficult to maintain business and operational relationships; significant transaction costs associated with the Company’s acquisitions, including the Ameredev Acquisition; the risk of litigation and/or regulatory actions related to the Company’s acquisitions, including the Ameredev Acquisition; availability of sufficient capital to execute its business plan, including from future cash flows, available borrowing capacity under its revolving credit facilities and otherwise; the operating results of and the availability of any potential distributions from our joint ventures; weather and environmental conditions; and the other factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. For further discussions of risks and uncertainties, you should refer to Matador’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section of Matador’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Matador undertakes no obligation to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except as required by law, including the securities laws of the United States and the rules and regulations of the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240920677986/en/

Mac Schmitz

Senior Vice President – Investor Relations

investors@matadorresources.com

(972) 371-5225

Source: Matador Resources Company

FAQ

What is the purpose of Matador Resources Company's $750 million notes offering?

Matador Resources Company (MTDR) intends to use the net proceeds from the $750 million notes offering to repay borrowings outstanding under its credit facility, including all of the $250 million in outstanding borrowings under its term loan.

When are Matador Resources Company's (MTDR) newly offered notes due?

The senior unsecured notes being offered by Matador Resources Company (MTDR) are due in 2033.

Are the new notes from Matador Resources (MTDR) registered under the Securities Act?

No, the Notes and related guarantees have not been registered under the Securities Act of 1933 and may not be offered, transferred, or sold in the United States without registration or an applicable exemption.

Who are the potential buyers for Matador Resources Company's (MTDR) new notes offering?

The Notes may be resold by initial purchasers to qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.