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

Rhea-AI Summary

Matador Resources Company (NYSE: MTDR) has priced a private offering of $750 million of 6.250% senior unsecured notes due 2033 at 100% of their face value. The offering is expected to close on September 25, 2024, subject to customary closing conditions. Matador plans to use the net proceeds 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 the initial purchasers to qualified institutional buyers and non-U.S. persons outside the United States pursuant to Rule 144A and Regulation S, respectively.

Positive

• Successful pricing of $750 million senior unsecured notes offering
• Proceeds to be used to repay existing credit facility borrowings, including $250 million term loan
• Notes priced at par (100% of face value), indicating strong investor demand

Negative

• Increase in long-term debt with 6.250% interest rate
• Potential increase in interest expenses due to new notes issuance

Insights

Financial Analyst

Matador's $750 million senior notes offering at 6.250% interest rate is a significant move to restructure its debt. This strategy aims to refinance existing credit facility borrowings, including a $250 million term loan. The 6.250% rate seems competitive in the current market, potentially lowering Matador's overall interest expenses. However, investors should note that this increases the company's long-term debt obligations until 2033. The successful pricing at 100% of face value indicates strong investor confidence in Matador's financial health and future prospects. This debt restructuring could provide Matador with more financial flexibility for operations and potential growth initiatives in the oil and gas sector.

Legal Expert

The private offering of senior unsecured notes by Matador Resources Company raises important legal considerations. The company's explicit statement about the notes not being registered under the Securities Act of 1933 is crucial. This exemption from registration, relying on Rule 144A and Regulation S, allows for a quicker and less costly issuance process. However, it also limits the initial sale to qualified institutional buyers and non-U.S. persons, potentially affecting liquidity. The company's careful language about not offering or soliciting offers demonstrates compliance with securities laws. Investors should be aware that these unregistered securities may have resale restrictions, which could impact their investment strategy.

Market Research Analyst

Matador's decision to issue $750 million in senior notes reflects a broader trend in the energy sector of companies seeking to optimize their capital structures amid volatile commodity prices. The 6.250% coupon rate is indicative of the current interest rate environment and Matador's credit profile. By replacing short-term borrowings with longer-term debt, Matador is likely aiming to reduce refinancing risk and lock in rates before potential future increases. This move could be seen as a proactive step to strengthen the company's financial position, potentially enhancing its ability to weather market fluctuations and pursue growth opportunities in the dynamic oil and gas industry.

DALLAS--(BUSINESS WIRE)-- Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced that it has priced a private offering of $750 million of 6.250% senior unsecured notes due 2033 (the “Notes”) at a price of 100% of their face value. The offering is expected to close on September 25, 2024, subject to customary closing conditions.

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/20240920171507/en/

Mac Schmitz

Senior Vice President – Investor Relations

investors@matadorresources.com

(972) 371-5225

Source: Matador Resources Company

FAQ

What is the size and interest rate of Matador Resources Company's (MTDR) new senior notes offering?

Matador Resources Company (MTDR) has priced a private offering of $750 million of 6.250% senior unsecured notes due 2033.

When is the expected closing date for Matador Resources Company's (MTDR) senior notes offering?

The offering is expected to close on September 25, 2024, subject to customary closing conditions.

How does Matador Resources Company (MTDR) plan to use the proceeds from the senior notes offering?

Matador intends to use the net proceeds to repay borrowings outstanding under its credit facility, including all of the $250 million in outstanding borrowings under its term loan.

Are the senior notes offered by Matador Resources Company (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.