Insight Guru Inc.
10/22/2026 | Press release | Distributed by Public on 10/22/2026 12:41
What Is Matador Getting For All That Spending
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Matador Resources (MTDR) drills for oil and natural gas in the Delaware Basin and is now building pipelines out to federal leases it bought in May 2026. Over the last twelve months, the company's cash spending on property and equipment came to $3.17 billion, compared with $1.15 billion in the twelve months to June 2023. Most of the June 2026 quarter's spending went to things other than drilling and pipelines, in the quarter Matador bought federal leases with bank debt. Take a guess: what share of its sales does Matador now spend this way?
How Big Is Matador's Spending Bill?
Over the last twelve months, Matador spent an amount equal to 82.6% of its sales, compared with 41.4% in the twelve months to June 2023. The bill is now about 2.8 times what it was three years ago. In the quarter to June 2026, Matador spent 213.5% more than in the same quarter a year earlier. By the company's own count, $0.445 billion of that quarter's $1.56 billion went toward drilling wells and building pipelines, and it guides that spending to $0.41 billion to $0.44 billion for the quarter to September 2026.
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Can Matador Pay For It?
Not in the latest quarter. In the quarter to June 2026, Matador spent more than its business brought in. That spending equaled 166.7% of that cash, compared with 99.5% in the same quarter a year earlier.
| Fiscal quarter | Cash spent on property and equipment | Cash the business brought in | Cash left over |
|---|---|---|---|
| Q1 FY2025 (ended 2025-03-31) | $0.534 billion | $0.728 billion | $0.194 billion |
| Q2 FY2025 (ended 2025-06-30) | $0.498 billion | $0.501 billion | $0.00273 billion |
| Q3 FY2025 (ended 2025-09-30) | $0.563 billion | $0.722 billion | $0.159 billion |
| Q4 FY2025 (ended 2025-12-31) | $0.588 billion | $0.474 billion | -$0.114 billion |
| Q1 FY2026 (ended 2026-03-31) | $0.459 billion | $0.471 billion | $0.0118 billion |
| Q2 FY2026 (ended 2026-06-30) | $1.56 billion | $0.937 billion | -$0.625 billion |
Each row is one fiscal quarter. Cash left over is the cash the business brought in minus the spending (free cash flow). The spending leaves out equipment taken on through leases.
One quarter's outlay can swing the picture, and this one, swollen by spending outside drilling and pipelines, stands far above the three before it. Yet the cash left after the spending was below zero in two of the last four quarters. Over the last twelve months, the spending came to 121.8% of the cash the business brought in. For now, Matador's business no longer covers the bill.
Management points to its own measure, adjusted free cash flow, which it put at a near record $303 million for the quarter. This is a different measure from the cash left after the spending discussed above, which was below zero for the quarter. The company used $200 million of that to pay down bank debt taken on for the federal leases. Even so, Matador held $26.3 million in cash and short-term investments at the end of June 2026, compared with $4.32 billion of debt.
What Has The Spending Bought So Far?
Over the same three years, Matador's sales grew 38.5%. The company spent $7.09 billion in all across those years, while the cash its business brings in each year rose by $812 million. The extra cash would take about 8.7 years to equal what was spent. That compares past spending with past growth, and not all of the growth came from the spending. Matador's business has grown, but far more slowly than its bill.
What Must Go Right For Matador
Management says it is raising its midstream spending on pipelines to reach the federal leases, and the company plans to start drilling wells near them in 2026. It points to demand for that pipeline space: about 100 rigs work within 10 miles of its pipelines, and management expects some tightness in the markets for getting gas out of the Delaware. On its own measure, which counts spending on drilling wells and building pipelines, Matador plans capital spending of $1.63 billion to $1.73 billion for 2026, a forecast.
On its August call, management said Matador will need to borrow some as it finishes developing those acres, and that paying down debt is its first priority. Since then, on October 1, Matador closed its $1.255 billion cash purchase of Paloma Permian, which came after the June cash and debt figures above. So Matador has to earn enough from its new wells and pipelines to pay for the spending and pay down its debt. The figure to watch at each quarterly report is the cash Matador has left after its spending, which was negative in the quarter to June 2026.
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Insight Guru Inc. published this content on October 22, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on October 22, 2026 at 18:41 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]