mtdr-20230630
0001520006false2023Q2December 31http://www.matadorresources.com/20230630#OpenBasisSwapContractsMemberhttp://fasb.org/us-gaap/2023#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#DerivativeAssetsCurrent00015200062023-01-012023-06-3000015200062023-07-25xbrli:shares00015200062023-06-30iso4217:USD00015200062022-12-31iso4217:USDxbrli:shares0001520006us-gaap:OilAndGasMember2023-04-012023-06-300001520006us-gaap:OilAndGasMember2022-04-012022-06-300001520006us-gaap:OilAndGasMember2023-01-012023-06-300001520006us-gaap:OilAndGasMember2022-01-012022-06-300001520006us-gaap:NaturalGasMidstreamMember2023-04-012023-06-300001520006us-gaap:NaturalGasMidstreamMember2022-04-012022-06-300001520006us-gaap:NaturalGasMidstreamMember2023-01-012023-06-300001520006us-gaap:NaturalGasMidstreamMember2022-01-012022-06-300001520006mtdr:NaturalGasSalesMember2023-04-012023-06-300001520006mtdr:NaturalGasSalesMember2022-04-012022-06-300001520006mtdr:NaturalGasSalesMember2023-01-012023-06-300001520006mtdr:NaturalGasSalesMember2022-01-012022-06-3000015200062023-04-012023-06-3000015200062022-04-012022-06-3000015200062022-01-012022-06-300001520006us-gaap:CommonStockMember2022-12-310001520006us-gaap:AdditionalPaidInCapitalMember2022-12-310001520006us-gaap:RetainedEarningsMember2022-12-310001520006us-gaap:TreasuryStockCommonMember2022-12-310001520006us-gaap:ParentMember2022-12-310001520006us-gaap:NoncontrollingInterestMember2022-12-3100015200062023-01-012023-03-310001520006us-gaap:RetainedEarningsMember2023-01-012023-03-310001520006us-gaap:ParentMember2023-01-012023-03-310001520006us-gaap:CommonStockMember2023-01-012023-03-310001520006us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001520006us-gaap:TreasuryStockCommonMember2023-01-012023-03-310001520006us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001520006us-gaap:CommonStockMember2023-03-310001520006us-gaap:AdditionalPaidInCapitalMember2023-03-310001520006us-gaap:RetainedEarningsMember2023-03-310001520006us-gaap:TreasuryStockCommonMember2023-03-310001520006us-gaap:ParentMember2023-03-310001520006us-gaap:NoncontrollingInterestMember2023-03-3100015200062023-03-310001520006us-gaap:RetainedEarningsMember2023-04-012023-06-300001520006us-gaap:ParentMember2023-04-012023-06-300001520006us-gaap:CommonStockMember2023-04-012023-06-300001520006us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001520006us-gaap:TreasuryStockCommonMember2023-04-012023-06-300001520006us-gaap:NoncontrollingInterestMember2023-04-012023-06-300001520006us-gaap:CommonStockMember2023-06-300001520006us-gaap:AdditionalPaidInCapitalMember2023-06-300001520006us-gaap:RetainedEarningsMember2023-06-300001520006us-gaap:TreasuryStockCommonMember2023-06-300001520006us-gaap:ParentMember2023-06-300001520006us-gaap:NoncontrollingInterestMember2023-06-300001520006us-gaap:CommonStockMember2021-12-310001520006us-gaap:AdditionalPaidInCapitalMember2021-12-310001520006us-gaap:RetainedEarningsMember2021-12-310001520006us-gaap:TreasuryStockCommonMember2021-12-310001520006us-gaap:ParentMember2021-12-310001520006us-gaap:NoncontrollingInterestMember2021-12-3100015200062021-12-3100015200062022-01-012022-03-310001520006us-gaap:RetainedEarningsMember2022-01-012022-03-310001520006us-gaap:ParentMember2022-01-012022-03-310001520006us-gaap:CommonStockMember2022-01-012022-03-310001520006us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001520006us-gaap:TreasuryStockCommonMember2022-01-012022-03-310001520006us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001520006us-gaap:CommonStockMember2022-03-310001520006us-gaap:AdditionalPaidInCapitalMember2022-03-310001520006us-gaap:RetainedEarningsMember2022-03-310001520006us-gaap:TreasuryStockCommonMember2022-03-310001520006us-gaap:ParentMember2022-03-310001520006us-gaap:NoncontrollingInterestMember2022-03-3100015200062022-03-310001520006us-gaap:RetainedEarningsMember2022-04-012022-06-300001520006us-gaap:ParentMember2022-04-012022-06-300001520006us-gaap:CommonStockMember2022-04-012022-06-300001520006us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001520006us-gaap:TreasuryStockCommonMember2022-04-012022-06-300001520006us-gaap:NoncontrollingInterestMember2022-04-012022-06-300001520006us-gaap:CommonStockMember2022-06-300001520006us-gaap:AdditionalPaidInCapitalMember2022-06-300001520006us-gaap:RetainedEarningsMember2022-06-300001520006us-gaap:TreasuryStockCommonMember2022-06-300001520006us-gaap:ParentMember2022-06-300001520006us-gaap:NoncontrollingInterestMember2022-06-3000015200062022-06-300001520006mtdr:AdvanceMember2023-01-012023-06-300001520006mtdr:AdvanceMember2022-01-012022-06-300001520006mtdr:MidstreamMember2023-01-012023-06-300001520006mtdr:MidstreamMember2022-01-012022-06-300001520006mtdr:OilRevenuesMember2023-04-012023-06-300001520006mtdr:OilRevenuesMember2022-04-012022-06-300001520006mtdr:OilRevenuesMember2023-01-012023-06-300001520006mtdr:OilRevenuesMember2022-01-012022-06-300001520006mtdr:NaturalGasRevenuesMember2023-04-012023-06-300001520006mtdr:NaturalGasRevenuesMember2022-04-012022-06-300001520006mtdr:NaturalGasRevenuesMember2023-01-012023-06-300001520006mtdr:NaturalGasRevenuesMember2022-01-012022-06-30xbrli:pure0001520006mtdr:AdvanceMember2023-04-122023-04-120001520006mtdr:AdvanceMember2023-04-12iso4217:USDutr:bbl0001520006mtdr:AdvanceMember2023-04-122023-06-300001520006mtdr:AdvanceMember2023-01-012023-03-31utr:Boe0001520006us-gaap:OilAndGasMembermtdr:AdvanceMember2023-04-122023-06-300001520006mtdr:AdvanceMember2023-04-012023-06-300001520006mtdr:AdvanceMember2022-04-012022-06-300001520006mtdr:SeniorNotesDue2026Memberus-gaap:UnsecuredDebtMember2023-06-300001520006mtdr:SeniorNotesDue2028Memberus-gaap:UnsecuredDebtMember2023-06-300001520006mtdr:CreditAgreementMember2023-06-300001520006mtdr:CreditAgreementMemberus-gaap:LetterOfCreditMember2023-06-300001520006mtdr:SanMateoCreditFacilityMemberus-gaap:LineOfCreditMember2023-06-300001520006mtdr:SanMateoCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMember2023-07-012023-07-250001520006mtdr:ThirdAmendedCreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-03-310001520006mtdr:ThirdAmendedCreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-03-312023-03-310001520006mtdr:SanMateoCreditFacilityMemberus-gaap:LineOfCreditMember2023-01-012023-06-300001520006mtdr:A2026NotesOfferingMemberus-gaap:UnsecuredDebtMember2023-06-300001520006mtdr:SeniorNotesDue2028Memberus-gaap:UnsecuredDebtMember2023-04-110001520006mtdr:SeniorNotesDue2028Memberus-gaap:UnsecuredDebtMemberus-gaap:DebtInstrumentRedemptionPeriodOneMember2023-04-112023-04-110001520006mtdr:SeniorNotesDue2028Memberus-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:UnsecuredDebtMember2023-04-112023-04-110001520006mtdr:SeniorNotesDue2028Memberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodOneMember2023-01-012023-06-300001520006mtdr:SeniorNotesDue2028Memberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMember2023-01-012023-06-300001520006mtdr:SeniorNotesDue2028Memberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMember2023-01-012023-06-300001520006mtdr:ServiceBasedRestrictedStockUnitsMember2023-01-012023-06-300001520006mtdr:PerformanceBasedStockUnitsMember2023-01-012023-06-300001520006us-gaap:RestrictedStockMember2023-01-012023-06-300001520006srt:MinimumMembermtdr:PerformanceBasedStockUnitsMember2023-01-012023-06-300001520006srt:MaximumMembermtdr:PerformanceBasedStockUnitsMember2023-01-012023-06-300001520006mtdr:ServicebasedRestrictedStockUnitsAndPerformanceBasedStockUnitsMember2023-01-012023-06-3000015200062023-03-092023-03-0900015200062023-06-012023-06-010001520006us-gaap:SubsequentEventMember2023-07-012023-07-310001520006mtdr:SanMateoMembermtdr:MatadorResourcesCompanyMember2023-04-012023-06-300001520006mtdr:SanMateoMembermtdr:MatadorResourcesCompanyMember2022-04-012022-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2023-04-012023-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2022-04-012022-06-300001520006mtdr:SanMateoMembermtdr:MatadorResourcesCompanyMember2023-01-012023-06-300001520006mtdr:SanMateoMembermtdr:MatadorResourcesCompanyMember2022-01-012022-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2023-01-012023-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2022-01-012022-06-300001520006mtdr:MatadorResourcesCompanyMembermtdr:SanMateoMember2023-01-012023-06-300001520006mtdr:MatadorResourcesCompanyMembermtdr:SanMateoMember2023-04-012023-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2023-01-012023-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2023-04-012023-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2022-01-012022-06-300001520006mtdr:SanMateoMembermtdr:FivePointMember2022-04-012022-06-300001520006mtdr:MatadorResourcesCompanyMembermtdr:SanMateoMember2022-01-012022-06-300001520006mtdr:MatadorResourcesCompanyMembermtdr:SanMateoMember2022-04-012022-06-300001520006mtdr:SanMateoMember2023-04-012023-06-300001520006mtdr:SanMateoMember2022-04-012022-06-300001520006mtdr:SanMateoMember2023-01-012023-06-300001520006mtdr:SanMateoMember2022-01-012022-06-300001520006mtdr:OilBasisSwapMember2023-06-30mtdr:derivative_contract0001520006mtdr:DerivativeContractCalculationPeriodThreeMembermtdr:OilBasisSwapMember2023-06-30utr:bbl0001520006us-gaap:SalesMembersrt:OilReservesMember2023-04-012023-06-300001520006us-gaap:SalesMembersrt:OilReservesMember2022-04-012022-06-300001520006us-gaap:SalesMembersrt:OilReservesMember2023-01-012023-06-300001520006us-gaap:SalesMembersrt:OilReservesMember2022-01-012022-06-300001520006us-gaap:SalesMembersrt:NaturalGasReservesMember2023-04-012023-06-300001520006us-gaap:SalesMembersrt:NaturalGasReservesMember2022-04-012022-06-300001520006us-gaap:SalesMembersrt:NaturalGasReservesMember2023-01-012023-06-300001520006us-gaap:SalesMembersrt:NaturalGasReservesMember2022-01-012022-06-300001520006us-gaap:SalesMember2023-04-012023-06-300001520006us-gaap:SalesMember2022-04-012022-06-300001520006us-gaap:SalesMember2023-01-012023-06-300001520006us-gaap:SalesMember2022-01-012022-06-300001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Membermtdr:GasDerivativesMember2023-06-300001520006us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembermtdr:GasDerivativesMember2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMembermtdr:GasDerivativesMemberus-gaap:FairValueInputsLevel3Member2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMembermtdr:GasDerivativesMember2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMember2023-06-300001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Membermtdr:GasDerivativesMember2022-12-310001520006us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembermtdr:GasDerivativesMember2022-12-310001520006us-gaap:FairValueMeasurementsRecurringMembermtdr:GasDerivativesMemberus-gaap:FairValueInputsLevel3Member2022-12-310001520006us-gaap:FairValueMeasurementsRecurringMembermtdr:GasDerivativesMember2022-12-310001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001520006us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001520006us-gaap:FairValueMeasurementsRecurringMember2022-12-310001520006mtdr:SeniorNotesDue2026Memberus-gaap:UnsecuredDebtMember2022-12-310001520006mtdr:DeliveryOfNaturalGasAndOilProductionToThirdPartiesMember2023-04-012023-06-300001520006mtdr:DeliveryOfNaturalGasAndOilProductionToThirdPartiesMember2022-04-012022-06-300001520006mtdr:DeliveryOfNaturalGasAndOilProductionToThirdPartiesMember2023-01-012023-06-300001520006mtdr:DeliveryOfNaturalGasAndOilProductionToThirdPartiesMember2022-01-012022-06-300001520006mtdr:DeliveryOfNaturalGasAndOilProductionToThirdPartiesMember2023-06-300001520006mtdr:SanMateoMidstreamMembermtdr:RustlerBreaksandWolfAssetAreaMemberus-gaap:CorporateJointVentureMember2017-02-172017-02-170001520006mtdr:RustlerBreaksAssetAreaMembermtdr:SanMateoMidstreamMemberus-gaap:CorporateJointVentureMember2017-02-172017-02-170001520006mtdr:OperationalAgreementsMembermtdr:SanMateoMidstreamMember2023-06-300001520006mtdr:AccruedEvaluatedAndUnprovedAndUnevaluatedPropertyCostsMember2023-06-300001520006mtdr:AccruedEvaluatedAndUnprovedAndUnevaluatedPropertyCostsMember2022-12-310001520006mtdr:AccruedSupportEquipmentAndFacilitiesCostsMember2023-06-300001520006mtdr:AccruedSupportEquipmentAndFacilitiesCostsMember2022-12-310001520006mtdr:AccruedLeaseOperatingExpensesMember2023-06-300001520006mtdr:AccruedLeaseOperatingExpensesMember2022-12-310001520006mtdr:AccruedInterestOnBorrowingsUnderCreditAgreementMember2023-06-300001520006mtdr:AccruedInterestOnBorrowingsUnderCreditAgreementMember2022-12-310001520006mtdr:AccruedAssetRetirementObligationsMember2023-06-300001520006mtdr:AccruedAssetRetirementObligationsMember2022-12-310001520006mtdr:AccruedPartnersShareOfJointInterestChargesMember2023-06-300001520006mtdr:AccruedPartnersShareOfJointInterestChargesMember2022-12-310001520006mtdr:AccruedPayableRelatedToPurchasedNaturalGasMember2023-06-300001520006mtdr:AccruedPayableRelatedToPurchasedNaturalGasMember2022-12-310001520006mtdr:OtherAccruedLiabilityMember2023-06-300001520006mtdr:OtherAccruedLiabilityMember2022-12-310001520006mtdr:MineralPropertiesMember2023-01-012023-06-300001520006mtdr:MineralPropertiesMember2022-01-012022-06-300001520006mtdr:MidstreamPropertiesMember2023-01-012023-06-300001520006mtdr:MidstreamPropertiesMember2022-01-012022-06-30mtdr:segment0001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:ExplorationandProductionSegmentMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:MidstreamSegmentMember2023-04-012023-06-300001520006us-gaap:OilAndGasMemberus-gaap:CorporateNonSegmentMember2023-04-012023-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:OilAndGasMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:NaturalGasMidstreamMembermtdr:ExplorationandProductionSegmentMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMemberus-gaap:NaturalGasMidstreamMember2023-04-012023-06-300001520006us-gaap:NaturalGasMidstreamMemberus-gaap:CorporateNonSegmentMember2023-04-012023-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:NaturalGasMidstreamMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:ExplorationandProductionSegmentMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:MidstreamSegmentMember2023-04-012023-06-300001520006mtdr:NaturalGasSalesMemberus-gaap:CorporateNonSegmentMember2023-04-012023-06-300001520006us-gaap:IntersegmentEliminationMembermtdr:NaturalGasSalesMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:ExplorationandProductionSegmentMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMember2023-04-012023-06-300001520006us-gaap:CorporateNonSegmentMember2023-04-012023-06-300001520006us-gaap:IntersegmentEliminationMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:ExplorationandProductionSegmentMember2023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMember2023-06-300001520006us-gaap:CorporateNonSegmentMember2023-06-300001520006us-gaap:IntersegmentEliminationMember2023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMemberus-gaap:OperatingIncomeLossMember2023-04-012023-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:ExplorationandProductionSegmentMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:MidstreamSegmentMember2022-04-012022-06-300001520006us-gaap:OilAndGasMemberus-gaap:CorporateNonSegmentMember2022-04-012022-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:OilAndGasMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:NaturalGasMidstreamMembermtdr:ExplorationandProductionSegmentMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMemberus-gaap:NaturalGasMidstreamMember2022-04-012022-06-300001520006us-gaap:NaturalGasMidstreamMemberus-gaap:CorporateNonSegmentMember2022-04-012022-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:NaturalGasMidstreamMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:ExplorationandProductionSegmentMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:MidstreamSegmentMember2022-04-012022-06-300001520006mtdr:NaturalGasSalesMemberus-gaap:CorporateNonSegmentMember2022-04-012022-06-300001520006us-gaap:IntersegmentEliminationMembermtdr:NaturalGasSalesMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:ExplorationandProductionSegmentMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMember2022-04-012022-06-300001520006us-gaap:CorporateNonSegmentMember2022-04-012022-06-300001520006us-gaap:IntersegmentEliminationMember2022-04-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:ExplorationandProductionSegmentMember2022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMember2022-06-300001520006us-gaap:CorporateNonSegmentMember2022-06-300001520006us-gaap:IntersegmentEliminationMember2022-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:ExplorationandProductionSegmentMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:MidstreamSegmentMember2023-01-012023-06-300001520006us-gaap:OilAndGasMemberus-gaap:CorporateNonSegmentMember2023-01-012023-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:OilAndGasMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:NaturalGasMidstreamMembermtdr:ExplorationandProductionSegmentMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMemberus-gaap:NaturalGasMidstreamMember2023-01-012023-06-300001520006us-gaap:NaturalGasMidstreamMemberus-gaap:CorporateNonSegmentMember2023-01-012023-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:NaturalGasMidstreamMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:ExplorationandProductionSegmentMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:MidstreamSegmentMember2023-01-012023-06-300001520006mtdr:NaturalGasSalesMemberus-gaap:CorporateNonSegmentMember2023-01-012023-06-300001520006us-gaap:IntersegmentEliminationMembermtdr:NaturalGasSalesMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:ExplorationandProductionSegmentMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMember2023-01-012023-06-300001520006us-gaap:CorporateNonSegmentMember2023-01-012023-06-300001520006us-gaap:IntersegmentEliminationMember2023-01-012023-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:ExplorationandProductionSegmentMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMembermtdr:MidstreamSegmentMember2022-01-012022-06-300001520006us-gaap:OilAndGasMemberus-gaap:CorporateNonSegmentMember2022-01-012022-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:OilAndGasMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMemberus-gaap:NaturalGasMidstreamMembermtdr:ExplorationandProductionSegmentMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMemberus-gaap:NaturalGasMidstreamMember2022-01-012022-06-300001520006us-gaap:NaturalGasMidstreamMemberus-gaap:CorporateNonSegmentMember2022-01-012022-06-300001520006us-gaap:IntersegmentEliminationMemberus-gaap:NaturalGasMidstreamMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:ExplorationandProductionSegmentMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:NaturalGasSalesMembermtdr:MidstreamSegmentMember2022-01-012022-06-300001520006mtdr:NaturalGasSalesMemberus-gaap:CorporateNonSegmentMember2022-01-012022-06-300001520006us-gaap:IntersegmentEliminationMembermtdr:NaturalGasSalesMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:ExplorationandProductionSegmentMember2022-01-012022-06-300001520006us-gaap:OperatingSegmentsMembermtdr:MidstreamSegmentMember2022-01-012022-06-300001520006us-gaap:CorporateNonSegmentMember2022-01-012022-06-300001520006us-gaap:IntersegmentEliminationMember2022-01-012022-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ________________________________________________________ 
FORM 10-Q
 _________________________________________________________  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission File Number 001-35410
 _________________________________________________________  
Matador Resources Company
(Exact name of registrant as specified in its charter)
  _________________________________________________________ 
Texas27-4662601
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5400 LBJ Freeway, Suite 1500
Dallas, Texas
75240
(Address of principal executive offices)(Zip Code)
(972) 371-5200
(Registrant’s telephone number, including area code)
 _________________________________________________________  
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareMTDRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.       Yes      No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes      No
As of July 25, 2023, there were 119,148,250 shares of the registrant’s common stock, par value $0.01 per share, outstanding.


Table of Contents
MATADOR RESOURCES COMPANY
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2023
TABLE OF CONTENTS
 Page


Table of Contents
Part I — FINANCIAL INFORMATION
Item 1. Financial Statements — Unaudited
Matador Resources Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
(In thousands, except par value and share data)
June 30,
2023
December 31,
2022
ASSETS
Current assets
Cash$22,303 $505,179 
Restricted cash43,535 42,151 
Accounts receivable
Oil and natural gas revenues201,612 224,860 
Joint interest billings220,126 180,947 
Other39,013 48,011 
Derivative instruments 3,930 
Lease and well equipment inventory30,848 15,184 
Prepaid expenses and other current assets76,966 51,570 
Total current assets634,403 1,071,832 
Property and equipment, at cost
Oil and natural gas properties, full-cost method
Evaluated8,857,450 6,862,455 
Unproved and unevaluated1,207,186 977,502 
Midstream properties1,153,915 1,057,668 
Other property and equipment36,810 32,847 
Less accumulated depletion, depreciation and amortization(4,816,115)(4,512,275)
Net property and equipment6,439,246 4,418,197 
Other assets
Other long-term assets 58,689 64,476 
Total assets$7,132,338 $5,554,505 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable$75,275 $58,848 
Accrued liabilities350,343 261,310 
Royalties payable137,795 117,698 
Amounts due to affiliates17,163 32,803 
Derivative instruments11,796  
Advances from joint interest owners47,378 52,357 
Other current liabilities47,222 52,857 
Total current liabilities686,972 575,873 
Long-term liabilities
Borrowings under Credit Agreement560,000  
Borrowings under San Mateo Credit Facility460,000 465,000 
Senior unsecured notes payable1,182,718 695,245 
Asset retirement obligations63,246 52,985 
Deferred income taxes545,415 428,351 
Other long-term liabilities16,557 19,960 
Total long-term liabilities2,827,936 1,661,541 
Commitments and contingencies (Note 10)
Shareholders’ equity
         Common stock - $0.01 par value, 160,000,000 shares authorized; 119,272,719 and 118,953,381 shares issued;
         and 119,147,205 and 118,948,624 shares outstanding, respectively
1,192 1,190 
Additional paid-in capital2,106,987 2,101,999 
Retained earnings1,299,753 1,007,642 
Treasury stock, at cost, 125,514 and 4,757 shares, respectively
(5,076)(34)
Total Matador Resources Company shareholders’ equity3,402,856 3,110,797 
Non-controlling interest in subsidiaries214,574 206,294 
Total shareholders’ equity3,617,430 3,317,091 
Total liabilities and shareholders’ equity$7,132,338 $5,554,505 




The accompanying notes are an integral part of these financial statements.
3

Table of Contents
Matador Resources Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
(In thousands, except per share data)
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2023202220232022
Revenues
Oil and natural gas revenues$587,917 $892,769 $1,090,826 $1,519,284 
Third-party midstream services revenues30,075 21,886 56,586 39,192 
Sales of purchased natural gas31,898 60,008 66,152 79,347 
Realized (loss) gain on derivatives(3,148)(61,163)521 (83,602)
Unrealized (loss) gain on derivatives(8,659)30,430 (15,726)(44,599)
Total revenues638,083 943,930 1,198,359 1,509,622 
Expenses
Production taxes, transportation and processing61,991 85,658 117,477 145,477 
Lease operating61,043 39,857 105,450 73,812 
Plant and other midstream services operating30,657 22,014 61,702 41,475 
Purchased natural gas27,103 56,440 55,551 73,461 
Depletion, depreciation and amortization177,514 120,024 303,839 215,877 
Accretion of asset retirement obligations792 517 1,491 1,060 
General and administrative26,715 24,431 49,148 54,164 
Total expenses385,815 348,941 694,658 605,326 
Operating income252,268 594,989 503,701 904,296 
Other income (expense)
Net loss on impairment(202) (202)(198)
Interest expense(34,229)(18,492)(50,405)(34,744)
Other income (expense)16,564 (4,342)16,903 (4,486)
Total other expense(17,867)(22,834)(33,704)(39,428)
Income before income taxes234,401 572,155 469,997 864,868 
Income tax provision (benefit)
Current(4,929)36,261  51,670 
Deferred62,235 99,699 113,978 152,818 
Total income tax provision57,306 135,960 113,978 204,488 
Net income177,095 436,195 356,019 660,380 
Net income attributable to non-controlling interest in subsidiaries(12,429)(20,477)(28,223)(37,538)
Net income attributable to Matador Resources Company shareholders$164,666 $415,718 $327,796 $622,842 
Earnings per common share
Basic$1.38 $3.52 $2.75 $5.28 
Diluted$1.37 $3.47 $2.73 $5.20 
Weighted average common shares outstanding
Basic119,183 118,103 119,109 118,027 
Diluted119,842 119,903 119,856 119,857 
The accompanying notes are an integral part of these financial statements.
4

Table of Contents

Matador Resources Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED
(In thousands)
For the Three and Six Months Ended June 30, 2023
Total shareholders’ equity attributable to Matador Resources Company
Non-controlling interest in subsidiariesTotal shareholders’ equity
 Common StockAdditional
paid-in capital
Retained earningsTreasury Stock
 SharesAmountSharesAmount
Balance at January 1, 2023118,953 $1,190 $2,101,999 $1,007,642 5 $(34)$3,110,797 $206,294 $3,317,091 
Dividends declared ($0.15 per share)
— — — (17,768)— — (17,768)— (17,768)
Issuance of common stock pursuant to employee stock compensation plan264 2 (17,592)— — — (17,590)— (17,590)
Stock-based compensation expense related to equity-based awards including amounts capitalized— — 3,894 — — — 3,894 — 3,894 
Stock options exercised, net of options forfeited in net share settlements15 — 12 — — — 12 — 12 
Restricted stock forfeited— — — — 21 (1,236)(1,236)— (1,236)
Contribution related to formation of San Mateo, net of tax of $3.1 million (see Note 7)
— — 11,613 — — — 11,613 — 11,613 
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries— — — — — — — (19,110)(19,110)
Current period net income— — — 163,130 — — 163,130 15,794 178,924 
Balance at March 31, 2023119,232 $1,192 $2,099,926 $1,153,004 26 $(1,270)$3,252,852 $202,978 $3,455,830 
Dividends declared ($0.15 per share)
— — — (17,917)— — (17,917)— (17,917)
Issuance of common stock pursuant to employee stock compensation plan27 — 950 — — — 950 — 950 
Issuance of common stock pursuant to directors’ and advisors’
compensation plan
11 — — — — — — — — 
Stock-based compensation expense related to equity-based awards including amounts capitalized— — 6,097 — — — 6,097 — 6,097 
Stock options exercised, net of options forfeited in net share settlements2 — 14 — — — 14 — 14 
Restricted stock forfeited— — — — 100 (3,806)(3,806)— (3,806)
Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries (see Note 7)— — — — — — — 24,500 24,500 
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries— — — — — — — (25,333)(25,333)
Current period net income— — — 164,666 — — 164,666 12,429 177,095 
Balance at June 30, 2023119,272 $1,192 $2,106,987 $1,299,753 126 $(5,076)$3,402,856 $214,574 $3,617,430 



The accompanying notes are an integral part of these financial statements.
5

Table of Contents


Matador Resources Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED
(In thousands)
For the Three and Six Months Ended June 30, 2022
Total shareholders’ equity attributable to Matador Resources Company
Non-controlling interest in subsidiariesTotal shareholders’ equity
Common StockAdditional
paid-in capital
Retained earnings (accumulated deficit)Treasury Stock
SharesAmountSharesAmount
Balance at January 1, 2022117,862 $1,179 $2,077,592 $(171,318)12 $(243)$1,907,210 $220,178 $2,127,388 
Dividends declared ($0.05 per share)
— — — (5,866)— — (5,866)— (5,866)
Issuance of common stock pursuant to employee stock compensation plan205 2 (11,536)— — — (11,534)— (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 settlements24 — (585)— — — (585)— (585)
Restricted stock forfeited— — — — 12 (66)(66)— (66)
Contribution related to formation of San Mateo, net of tax of $4.8 million (see Note 7)
— — 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— — — 207,124 — — 207,124 17,061 224,185 
Balance at March 31, 2022118,091 $1,181 $2,087,788 $29,940 24 $(309)$2,118,600 $218,864 $2,337,464 
Dividends declared ($0.05 per share)
— — — (5,878)— — (5,878)— (5,878)
Issuance of common stock pursuant to employee stock compensation plan10 — — — — — — — — 
Issuance of common stock pursuant to director' and advisors' compensation plan25 — — — — — — — — 
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 settlements75 1 (2,607)— — — (2,606)— (2,606)
Restricted stock forfeited— — — — 47 (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— — — 415,718 — — 415,718 20,477 436,195 
Balance at June 30, 2022118,201 $1,182 $2,090,564 $439,780 71 $(2,356)$2,529,170 $212,881 $2,742,051 



The accompanying notes are an integral part of these financial statements.
6

Table of Contents
Matador Resources Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(In thousands)
 Six Months Ended
June 30,
 20232022
Operating activities
Net income$356,019 $660,380 
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on derivatives15,726 44,599 
Depletion, depreciation and amortization303,839 215,877 
Accretion of asset retirement obligations1,491 1,060 
Stock-based compensation expense6,221 7,077 
Deferred income tax provision113,978 152,818 
Amortization of debt issuance cost and other debt-related costs2,895 1,206 
Other non-cash changes(15,682)198 
Changes in operating assets and liabilities
Accounts receivable56,407 (211,023)
Lease and well equipment inventory(7,237)(829)
Prepaid expenses and other current assets(24,124)(14,717)
Other long-term assets2,072 227 
Accounts payable, accrued liabilities and other current liabilities(28,232)30,492 
Royalties payable10,085 56,539 
Advances from joint interest owners(4,979)857 
Income taxes payable(1,677)38,170 
Other long-term liabilities1,709 (7,675)
Net cash provided by operating activities788,511 975,256 
Investing activities
Drilling, completion and equipping capital expenditures(539,511)(389,893)
Acquisition of Advance(1,608,427) 
Acquisition of oil and natural gas properties(55,897)(73,114)
Midstream capital expenditures(32,871)(28,310)
Acquisition of midstream assets (75,816)
Expenditures for other property and equipment(2,478)(283)
Proceeds from sale of assets451 46,412 
Net cash used in investing activities(2,238,733)(521,004)
Financing activities
Purchase of senior unsecured notes (142,404)
Repayments of borrowings under Credit Agreement(2,190,000)(300,000)
Borrowings under Credit Agreement2,750,000 200,000 
Repayments of borrowings under San Mateo Credit Facility(108,000)(70,000)
Borrowings under San Mateo Credit Facility103,000 105,000 
Cost to amend credit facilities(8,645)(506)
Proceeds from issuance of senior unsecured notes494,800  
Cost to issue senior unsecured notes(8,255) 
Dividends paid(35,685)(11,744)
Contributions related to formation of San Mateo14,700 22,750 
Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries24,500  
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries(44,443)(44,835)
Taxes paid related to net share settlement of stock-based compensation(22,790)(16,852)
Other(452)(298)
Net cash provided by (used in) financing activities968,730 (258,889)
Change in cash and restricted cash(481,492)195,363 
Cash and restricted cash at beginning of period547,330 86,920 
Cash and restricted cash at end of period$65,838 $282,283 
Supplemental disclosures of cash flow information (Note 11)

The accompanying notes are an integral part of these financial statements.
7

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED
NOTE 1 — NATURE OF OPERATIONS
Matador 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.
NOTE 2 — 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, 2022 filed with the SEC on March 1, 2023 (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, 2023. Amounts as of December 31, 2022 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, purchase price allocations 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.
8

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued
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, 2023 and 2022 (in thousands).
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Revenues from contracts with customers$649,890 $974,663 $1,213,564 $1,637,823 
Realized (loss) gain on derivatives(3,148)(61,163)521 (83,602)
Unrealized (loss) gain on derivatives(8,659)30,430 (15,726)(44,599)
Total revenues$638,083 $943,930 $1,198,359 $1,509,622 
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Oil revenues$510,364 $650,233 $912,141 $1,110,355 
Natural gas revenues77,553 242,536 178,685 408,929 
Third-party midstream services revenues30,075 21,886 56,586 39,192 
Sales of purchased natural gas31,898 60,008 66,152 79,347 
Total revenues from contracts with customers$649,890 $974,663 $1,213,564 $1,637,823 

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 each of the three and six months ended June 30, 2023 and 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 $14.5 million and $10.4 million of its general and administrative costs for the three months ended June 30, 2023 and 2022, respectively, and $27.1 million and $23.6 million of its general and administrative costs for the six months ended June 30, 2023 and 2022, respectively. The Company capitalized approximately $5.3 million and $0.8 million of its interest expense for the three months ended June 30, 2023 and 2022, respectively, and $8.7 million and $4.4 million of its interest expense for the six months ended June 30, 2023 and 2022, 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.
9

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued
The following table sets forth the computation of diluted weighted average common shares outstanding for the three and six months ended June 30, 2023 and 2022 (in thousands).
 Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Weighted average common shares outstanding
Basic119,183 118,103 119,109 118,027 
Dilutive effect of options and restricted stock units659 1,800 747 1,830 
Diluted weighted average common shares outstanding 119,842 119,903 119,856 119,857 

NOTE 3 — BUSINESS COMBINATIONS

On April 12, 2023, a wholly-owned subsidiary of the Company completed the acquisition of Advance Energy Partners Holdings, LLC (“Advance”) from affiliates of EnCap Investments L.P., including certain oil and natural gas producing properties, undeveloped acreage and midstream assets located primarily in Lea County, New Mexico and Ward County, Texas (the “Advance Acquisition”). The Advance Acquisition had an effective date of January 1, 2023 and an aggregate purchase price consisting of (i) an amount in cash equal to approximately $1.61 billion (which amount is subject to certain customary post-closing adjustments) (the “Cash Consideration”) and (ii) potential additional cash consideration of $7.5 million for each month of 2023 in which the average oil price (as defined in the securities purchase agreement) exceeds $85 per barrel (all such payments for the 12 months in 2023, the “Contingent Consideration”). The Cash Consideration was paid upon the closing of the Advance Acquisition and was funded by a combination of cash on hand and borrowings under the Company’s reserves-based revolving credit facility (the “Credit Agreement”).
The Advance Acquisition was accounted for under the acquisition method of accounting as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations (“ASC Topic 805”). Under ASC Topic 805, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values as of the respective acquisition date, with any excess purchase price allocated to goodwill. As the Company acquired 100% of the membership interests of Advance, the acquisition was treated as an asset acquisition for tax purposes.
The Company recorded the 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 income (expense)” in its unaudited condensed consolidated statements of operations. The fair value of the Contingent Consideration was $21.2 million at April 12, 2023. The fair value of the Contingent Consideration decreased by $15.9 million between April 12, 2023 and June 30, 2023, and this decrease was recorded as “Other income” for the three and six months ended June 30, 2023. 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 9 for discussion of the fair value hierarchy).
The preliminary allocation of the total purchase price for the Advance Acquisition is set forth below (in thousands). The Company anticipates that the allocation of the purchase price should be finalized during 2023 upon determination of the final purchase price adjustments.
10

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED
NOTE 3 — BUSINESS COMBINATIONS — Continued
Consideration Allocation
Cash$1,608,427 
Working capital adjustments(8,405)
Fair value of Contingent Consideration at April 12, 202321,151
Total consideration given$1,621,173 
Allocation of purchase price
Current assets$74,689 
Oil and natural gas properties
Evaluated1,362,533
Unproved and unevaluated202,396
Midstream assets63,644
Current liabilities(73,763)
Asset retirement obligations(8,326)
Net assets acquired$1,621,173 
The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair value of oil and gas properties and asset retirement obligations were measured using the discounted cash flow technique of valuation.
Significant inputs to the valuation of oil and gas properties include estimates of: (i) reserves, (ii) future operating and development costs, (iii) future commodity prices, (iv) future plugging and abandonment costs, (v) estimated future cash flows, (vi) recent market comparable transactions for unproved acreage, and (vii) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates and are the most sensitive and subject to change.
Estimated production from the Advance wells averaged approximately 25,450 BOE per day during the first quarter of 2023 based upon Advance’s production records. The results of operations for the Advance Acquisition since the closing date have been included in the Company’s condensed consolidated financial statements for the three and six months ended June 30, 2023. The oil and natural gas production from Advance increased the Company’s revenues and net income for the period from April 12, 2023 through June 30, 2023 by $92.1 million and $40.3 million, respectively.
Pro Forma Information
The following unaudited pro forma financial information represents a summary of the condensed consolidated results of operations for the three and six months ended June 30, 2023 and 2022, assuming the Advance Acquisition had been completed as of January 1, 2022. The pro forma financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of the Company would have been had the Advance Acquisition occurred on the dates noted above, nor is it necessarily indicative of the future results of operations or consolidated financial position of the Company. Future results may vary significantly from the results reflected because of various factors.
The information below reflects certain nonrecurring pro forma adjustments that were directly related to the business combination based on currently available information and certain estimates and assumptions that the Company believes provide a reasonable basis for presenting the significant effects of the Advance Acquisition, including (i) the increase in depletion reflecting the relative fair values and production volumes attributable to Advance’s properties and the revision to the depletion rate reflecting the reserve volumes acquired, (ii) adjustments to interest expense as a result of the incremental borrowings necessary to finance the Advance Acquisition and (iii) the estimated tax impacts of the pro-forma adjustments. The pro forma financial information does not reflect the benefits of projected synergies, potential cost savings or the costs that may be necessary to achieve such savings, opportunities to increase revenue generation or other factors that may result from the Advance Acquisition and, accordingly, does not attempt to predict or suggest future results. Management cannot identify the timing, nature and amount of such savings, costs or other factors, any of which could affect the future consolidated results of operations or consolidated financial position of the Company.
11

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED
NOTE 3 — BUSINESS COMBINATIONS — Continued
Three months ended
 June 30,
Six months ended
June 30,
2023202220232022
(In thousands, except per share data)
Total revenue$658,084 $1,138,174 $1,354,640$1,871,007 
Net income attributable to Matador Resources Company shareholders$166,174 $490,951 $356,681 $756,239 
Earnings per share:
Basic$1.39 $4.16 $2.99 $6.41 
Diluted$1.39 $4.09 $2.98 $6.31 
NOTE 4 — ASSET RETIREMENT OBLIGATIONS
The following table summarizes the changes in the Company’s asset retirement obligations for the six months ended June 30, 2023 (in thousands).
Beginning asset retirement obligations$53,741 
Liabilities incurred during period2,535 
Liabilities settled during period(782)
Acquisitions during period8,326 
Divestitures during period(652)
Accretion expense1,491 
Ending asset retirement obligations64,659 
Less: current asset retirement obligations(1)
(1,413)
Long-term asset retirement obligations$63,246 
 _______________
(1)Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at June 30, 2023.
NOTE 5 — DEBT
At June 30, 2023, the Company had (i) $699.2 million of outstanding senior notes due 2026 (the “2026 Notes”), (ii) $500.0 million of outstanding senior notes due 2028 (the “2028 Notes”), (iii) $560.0 million in borrowings outstanding under the Credit Agreement and (iv) approximately $45.4 million in outstanding letters of credit issued pursuant to the Credit Agreement.
At June 30, 2023, San Mateo had $460.0 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, 2023 and July 25, 2023, San Mateo repaid $25.0 million of borrowings under the San Mateo Credit Facility.
12

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

NOTE 5 — DEBT — Continued
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. On March 31, 2023, the lenders completed their review of the Company’s proved oil and natural gas reserves, and, as a result, the Company and its lenders entered into a Second Amendment to the Fourth Amended and Restated Credit Agreement, which amended the Credit Agreement to, among other things: (i) reaffirm the borrowing base at $2.25 billion, (ii) increase the elected commitment from $775.0 million to $1.25 billion and (iii) maintain the maximum facility amount at $1.50 billion. This reaffirmation of the borrowing base constituted the regularly scheduled May 1 redetermination. 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, 2023.
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 9, 2026 and lender commitments under the revolving credit facility were $485.0 million at June 30, 2023 (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 of up to $735.0 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 for such period, 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, 2023.
Senior Unsecured Notes
At June 30, 2023, the Company had $699.2 million of outstanding 2026 Notes, which have a 5.875% coupon rate. The 2026 Notes mature September 15, 2026, and interest is payable on the 2026 Notes semi-annually in arrears on each March 15 and September 15. The 2026 Notes are jointly and severally guaranteed on a senior unsecured basis by certain subsidiaries of the Company (the “Guarantor Subsidiaries”).
On April 11, 2023, the Company completed the sale of $500.0 million in aggregate principal amount of the 2028 Notes, which have a 6.875% coupon rate and mature April 15, 2028. Interest is payable on the 2028 Notes semi-annually in arrears on each April 15 and October 15, and the first interest payment date for the 2028 Notes will be October 15, 2023. The 2028 Notes are jointly and severally guaranteed on a senior unsecured basis by the Guarantor Subsidiaries.
At any time prior to April 15, 2025, the Company may redeem up to 35% in aggregate principal amount of 2028 Notes at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, in an amount not greater than the net proceeds of certain equity offerings so long as the redemption occurs within 180 days of completing such equity offering and at least 65% of the aggregate principal amount of the 2028 Notes remains outstanding after such redemption. In addition, at any time prior to April 15, 2025, the Company may redeem all or part of the 2028 Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest.
13

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

NOTE 5 — DEBT — Continued
On or after April 15, 2025, the Company may redeem all or a part of the 2028 Notes at any time or from time to time at the following redemption prices (expressed as percentages of principal amount) plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on April 15 of the years indicated below:
YearRedemption Price
2025103.438%
2026101.719%
2027100.000%

Debt Maturities
The outstanding borrowings of $560.0 million at June 30, 2023 under the Credit Agreement mature on October 31, 2026. The outstanding borrowings of $460.0 million at June 30, 2023 under the San Mateo Credit Facility mature on December 9, 2026. The $699.2 million of outstanding 2026 Notes at June 30, 2023 mature on September 15, 2026. The $500.0 million of outstanding 2028 Notes at June 30, 2023 mature on April 15, 2028.
NOTE 6 — INCOME TAXES
The Company recorded a current income tax benefit of $4.9 million for the three months ended June 30, 2023 and a deferred income tax provision of $62.2 million and $114.0 million, respectively, for the three and six months ended June 30, 2023. The Company recorded no current income tax provision for the six months ended June 30, 2023. For the three and six months ended June 30, 2022, the 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.
As of March 31, 2023, the Company expected to pay federal income taxes and state income taxes in New Mexico during 2023 based upon the Company’s projections of taxable income for 2023 at that time and the utilization of substantially all of the Company’s federal and state net operating loss carryforwards in 2022. On April 12, 2023, the Company completed the Advance Acquisition, which was treated as an asset acquisition for tax purposes. At June 30, 2023, the additional deductions the Company expects to utilize in 2023 from the Advance Acquisition, in excess of projected increased revenues from the Advance Acquisition, are expected to fully offset the taxable income the Company otherwise is projected to generate for 2023. As a result, the Company does not expect to pay federal income taxes or state income taxes in 2023 at this time. The Company’s effective income tax rate of 26% for both the three and six months ended June 30, 2023, and 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 taxable income and state taxes, primarily in New Mexico.
NOTE 7 — EQUITY
Stock-based Compensation
During the six months ended June 30, 2023, the Company granted awards to certain of its employees of 228,100 service-based restricted stock units to be settled in cash, which are liability instruments, and 143,500 performance-based stock units and 269,000 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, 2025, 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 $32.7 million on the grant date.
Common Stock Dividend
The Board of Directors (the “Board”) declared a quarterly cash dividend of $0.15 per share of common stock in each of the first and second quarters of 2023. The first quarter dividend, which totaled $17.8 million, was paid on March 9, 2023 to shareholders of record as of February 27, 2023. The second quarter dividend, which totaled $17.9 million, was paid on June 1, 2023 to shareholders of record as of May 11, 2023. In July 2023, the Board declared a quarterly cash dividend of $0.15 per share of common stock payable on September 1, 2023 to shareholders of record as of August 11, 2023.
14

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED


San Mateo Distributions and Contributions
During the three months ended June 30, 2023 and 2022, San Mateo distributed $26.4 million and $27.5 million, respectively, to the Company and $25.3 million and $26.5 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, 2023 and 2022, San Mateo distributed $46.3 million and $46.7 million, respectively, to the Company and $44.4 million and $44.8 million, respectively, to Five Point. During the three and six months ended June 30, 2023, the Company contributed $25.5 million and Five Point contributed $24.5 million of cash to San Mateo. During the three and six months ended June 30, 2022, 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 each of the three months ended June 30, 2023 and 2022. Five Point paid to the Company $14.7 million and $22.8 million of performance incentives during the six months ended June 30, 2023 and 2022, respectively. These performance incentives are recorded when received, net of the $3.1 million and $4.8 million deferred tax impact to Matador for the six months ended June 30, 2023 and 2022, respectively, in “Additional paid-in capital” in the Company’s interim unaudited condensed consolidated balance sheets. These performance incentives for the six months ended June 30, 2023 and 2022 are also denoted as “Contributions related to formation of San Mateo” under “Financing activities” in the Company’s interim unaudited condensed consolidated statements of cash flows and changes in shareholders’ equity.
NOTE 8 — DERIVATIVE FINANCIAL INSTRUMENTS
At June 30, 2023, the Company had one natural gas basis swap contract open and in place to mitigate its exposure to natural gas price volatility, with a specific term (calculation period), notional quantity (volume hedged) and fixed price. At June 30, 2023, the contract was set to expire during the fourth quarter of 2023. The Company had no open contracts associated with oil or natural gas liquids prices at June 30, 2023.
The following is a summary of the Company’s open basis swap contract at June 30, 2023.
CommodityCalculation PeriodNotional Quantity (MMBtu)Fixed Price
($/MMBtu)
Fair Value of
Asset
(Liability)
(thousands)
Natural Gas Basis07/01/2023 - 12/31/20239,200,000 $(1.85)$(11,796)
Total open basis swap contracts$(11,796)
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.
15

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

NOTE 8 — DERIVATIVE FINANCIAL INSTRUMENTS — Continued
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, 2023 and December 31, 2022 (in thousands).
Derivative InstrumentsGross
amounts
recognized
Gross amounts
netted in the condensed
consolidated
balance sheets
Net amounts presented in the condensed
consolidated
balance sheets
June 30, 2023
Current liabilities$(11,796)$ $(11,796)
Total$(11,796)$ $(11,796)
December 31, 2022
Current assets$3,931 $ $3,931 
Total$3,931 $ $3,931 
The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands).
 Three Months Ended
June 30,
Six Months Ended
June 30,
Type of InstrumentLocation in Condensed Consolidated 
Statement of Operations
2023202220232022
Derivative Instrument
OilRevenues: Realized loss on derivatives$ $(34,237)$ $(52,403)
Natural GasRevenues: Realized (loss) gain on derivatives(3,148)(26,926)521 (31,199)
Realized (loss) gain on derivatives(3,148)(61,163)521 (83,602)
OilRevenues: Unrealized gain (loss) on derivatives 10,636  (34,363)
Natural GasRevenues: Unrealized (loss) gain on derivatives(8,659)19,794 (15,726)(10,236)
Unrealized (loss) gain on derivatives(8,659)30,430 (15,726)(44,599)
Total$(11,807)$(30,733)$(15,205)$(128,201)
NOTE 9 — 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
16

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

NOTE 9 — FAIR VALUE MEASUREMENTS — Continued
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, 2023 and December 31, 2022 (in thousands).
 
Fair Value Measurements at
 June 30, 2023 using
DescriptionLevel 1Level 2Level 3Total
Assets (Liabilities)
Natural gas basis swaps$ $(11,796)$ $(11,796)
Contingent consideration related to business combination  (5,267)(5,267)
Total$ $(11,796)$(5,267)$(17,063)
 
Fair Value Measurements at
December 31, 2022 using
DescriptionLevel 1Level 2Level 3Total
Assets (Liabilities)
Natural gas derivatives$ $3,931 $ $3,931 
Total$ $3,931 $ $3,931 

Additional disclosures related to derivative financial instruments are provided in Note 8.
Other Fair Value Measurements
At June 30, 2023 and December 31, 2022, 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 and other current liabilities approximated their fair values due to their short-term maturities.
At June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, the fair value of the 2026 Notes was $679.1 million and $675.7 million, respectively, based on quoted market prices, which represent Level 1 inputs in the fair value hierarchy.
At June 30, 2023, the fair value of the 2028 Notes was $493.1 million based on quoted market prices, which represent Level 1 inputs in the fair value hierarchy.
Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets and liabilities acquired in a business combination, lease and well equipment inventory when the market value is determined to be lower than the cost of the inventory and other property and equipment that are reduced to fair value when they are impaired or held for sale. See Note 3 for discussion of the fair value measurement of assets acquired and liabilities assumed as part of the Advance Acquisition.
17

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED


NOTE 10 — 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 $11.4 million and $12.8 million for deliveries under these agreements during the three months ended June 30, 2023 and 2022, respectively, and $22.1 million and $23.8 million for deliveries under these agreements during the six months ended June 30, 2023 and 2022, 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, 2023, the total deficiencies required to be paid by the Company under these agreements would be approximately $586.0 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, 2023 was approximately $253.5 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.

NOTE 11 — SUPPLEMENTAL DISCLOSURES
Accrued Liabilities
The following table summarizes the Company’s current accrued liabilities at June 30, 2023 and December 31, 2022 (in thousands).
June 30,
2023
December 31,
2022
Accrued evaluated and unproved and unevaluated property costs$202,251 $112,766 
Accrued midstream properties costs10,696 11,623 
Accrued lease operating expenses53,623 46,975 
Accrued interest on debt22,249 10,461 
Accrued asset retirement obligations1,413 756 
Accrued partners’ share of joint interest charges31,295 42,199 
Accrued payable related to purchased natural gas7,629 11,158 
Other21,187 25,372 
Total accrued liabilities$350,343 $261,310 


18

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED

Supplemental Cash Flow Information
The following table provides supplemental disclosures of cash flow information for the six months ended June 30, 2023 and 2022 (in thousands).
 Six Months Ended
June 30,
 20232022
Cash paid for income taxes$1,677 $13,500 
Cash paid for interest expense, net of amounts capitalized$65,757 $37,254 
Increase (decrease) in asset retirement obligations related to mineral properties$8,787 $(4,094)
Increase in asset retirement obligations related to midstream properties$641 $ 
Increase (decrease) in liabilities for drilling, completion and equipping capital expenditures$89,760 $(50,283)
Decrease in liabilities for acquisition of oil and natural gas properties$(346)$(2,510)
(Decrease) increase in liabilities for midstream properties capital expenditures$(929)$7,226 
Stock-based compensation expense recognized as a liability$3,628 $17,521 
Increase in liabilities for accrued cost to issue senior notes$248 $ 
Transfer of inventory from (to) oil and natural gas properties$725 $(162)

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
June 30,
 20232022
Cash$22,303 $230,394 
Restricted cash43,535 51,889 
Total cash and restricted cash$65,838 $282,283 
19

Table of Contents
Matador Resources Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —
UNAUDITED — CONTINUED


NOTE 12 — 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, at June 30, 2023, the Company operated a cryogenic gas processing plant, compressor stations and a natural gas gathering pipeline system in Lea and Eddy Counties, New Mexico through Pronto Midstream, LLC (“Pronto”), which is a wholly-owned subsidiary of the Company. Neither San Mateo nor Pronto is a guarantor of the 2026 Notes or the 2028 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 ProductionConsolidations and EliminationsConsolidated Company
MidstreamCorporate
Three Months Ended June 30, 2023
Oil and natural gas revenues$586,732 $1,185 $ $ $587,917 
Midstream services revenues 79,214  (49,139)30,075 
Sales of purchased natural gas5,544 26,354   31,898 
Realized loss on derivatives(3,148)   (3,148)
Unrealized loss on derivatives(8,659)   (8,659)
Expenses(1)
341,513 70,122 23,319 (49,139)385,815 
Operating income(2)
$238,956 $36,631 $(23,319)$ $252,268 
Total assets$5,998,037 $1,088,627 $45,674 $ $7,132,338 
Capital expenditures(3)
$1,897,679 $82,129 $709 $