Matador Resources Co

Previous wording

By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include those described in the “Risk Factors” section of the Annual Report, as well as the following factors, among others: general economic conditions; our ability to execute our business plan, including whether our drilling program is successful; changes in oil, natural gas and natural gas liquids (“NGL”) prices and the demand for oil, natural gas and NGLs; our ability to replace reserves and efficiently develop current reserves; the operating results of our midstream business’s 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 NGLs; delays and other difficulties related to regulatory and governmental approvals and restrictions; impact on our operations due to seismic events; availability of sufficient capital to execute our business plan, including from future cash flows, available borrowing capacity under our revolving credit facilities and otherwise; our ability to make acquisitions on economically acceptable terms; our ability to integrate acquisitions; the operating results of and availability of any potential distributions from our joint ventures; weather and environmental conditions; disruption from our acquisitions making it more difficult to maintain business and operational relationships; significant transaction costs associated with our acquisitions; the risk of litigation and/or regulatory actions related to our acquisitions; and the other factors discussed below and elsewhere in this Quarterly Report and in other documents that we file with or furnish to the SEC, all of which are difficult to predict. Forward-looking statements may include statements about:

Current wording

By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include those described in the “Risk Factors” section of the Annual Report, as well as the following factors, among others: general economic conditions; our ability to execute our business plan, including whether our drilling program is successful; changes in oil, natural gas and natural gas liquids (“NGL”) prices and the demand for oil, natural gas and NGLs; our ability to replace reserves and efficiently develop current reserves; the operating results of our midstream business’s 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 NGLs; delays and other difficulties related to regulatory and governmental approvals and restrictions; impact on our operations due to seismic events; availability of sufficient capital to execute our business plan, including from future cash flows, available borrowing capacity under our revolving credit facilities and otherwise; our ability to make acquisitions on economically acceptable terms; our ability to integrate acquisitions, including the Ameredev Acquisition (as defined below); the operating results of and availability of any potential distributions from our joint ventures; weather and environmental conditions; our ability to consummate the Ameredev Acquisition in the anticipated timeframe or at all; risks related to the satisfaction or waiver of the conditions to closing the Ameredev Acquisition in the anticipated timeframe or at all; risks related to obtaining the requisite regulatory approvals for the Ameredev Acquisition; disruption from our acquisitions, including the Ameredev Acquisition, making it more difficult to maintain business and operational relationships; significant transaction costs associated with our acquisitions, including the Ameredev Acquisition; the risk of litigation and/or regulatory actions related to our acquisitions, including the Ameredev Acquisition; and the other factors discussed below and elsewhere in this Quarterly Report and in other documents that we file with or furnish to the SEC, all of which are difficult to predict. Forward-looking statements may include statements about:

Previous wording

•the integration of acquisitions with our business;

Current wording

•the integration of acquisitions, including the Ameredev Acquisition, with our business;

Previous wording

For the three months ended March 31, 2024, our total oil equivalent production was 13.6 million BOE, and our average daily oil equivalent production was 149,760 BOE per day, of which 84,777 Bbl per day, or 57%, was oil and 389.9 MMcf per day, or 43%, was natural gas. Our average daily oil production of 84,777 Bbl per day for the three months ended March 31, 2024 increased 44% year-over-year from 58,941 Bbl per day for the three months ended March 31, 2023. Our average daily natural gas production of 389.9 MMcf per day for the three months ended March 31, 2024 increased 36% year-over-year from 286.3 MMcf per day for the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, our total oil equivalent production was 14.6 million BOE, and our average daily oil equivalent production was 160,305 BOE per day, of which 95,488 Bbl per day, or 60%, was oil and 388.9 MMcf per day, or 40%, was natural gas. Our average daily oil production of 95,488 Bbl per day for the three months ended June 30, 2024 increased 25% year-over-year from 76,345 Bbl per day for the three months ended June 30, 2023. Our average daily natural gas production of 388.9 MMcf per day for the three months ended June 30, 2024 increased 19% year-over-year from 326.0 MMcf per day for the three months ended June 30, 2023.

Previous wording

For the first quarter of 2024, we reported net income attributable to Matador shareholders of $193.7 million, or $1.61 per diluted common share, on a GAAP basis, as compared to net income attributable to Matador shareholders of $163.1 million, or $1.36 per diluted common share, for the first quarter of 2023. For the first quarter of 2024, our Adjusted EBITDA, a non-GAAP financial measure, was $505.4 million, as compared to Adjusted EBITDA of $365.2 million during the first quarter of 2023.

Current wording

For the second quarter of 2024, we reported net income attributable to Matador shareholders of $228.8 million, or $1.83 per diluted common share, on a GAAP basis, as compared to net income attributable to Matador shareholders of $164.7 million, or $1.37 per diluted common share, for the second quarter of 2023. For the second quarter of 2024, our Adjusted EBITDA, a non-GAAP financial measure, was $578.1 million, as compared to Adjusted EBITDA of $423.3 million during the second quarter of 2023.

Previous wording

For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net income and net cash provided by operating activities, see “—Liquidity and Capital Resources—Non-GAAP Financial Measures.” For more information regarding our financial results for the three months ended March 31, 2024, see “—Results of Operations” below.

Current wording

For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net income and net cash provided by operating activities, see “—Liquidity and Capital Resources—Non-GAAP Financial Measures.” For more information regarding our financial results for the three and six months ended June 30, 2024, see “—Results of Operations” below.

Previous wording

We began 2024 operating seven drilling rigs in the Delaware Basin. We added an eighth operated drilling rig in the first quarter of 2024. We have built significant optionality into our drilling program, which should generally allow us to decrease or increase the number of rigs we operate as necessary based on changing commodity prices and other factors.

Current wording

We began 2024 operating seven drilling rigs in the Delaware Basin. We added an eighth operated drilling rig in the first quarter of 2024 and a ninth operated drilling rig late in the second quarter of 2024. Prior to the closing of the Ameredev Acquisition, we expect Ameredev to operate one drilling rig and to continue operations on 13 drilled but uncompleted (“DUC”) wells. Upon the consummation of the Ameredev Acquisition, which we anticipate to occur late in the third quarter of 2024, subject to customary closing conditions, including regulatory approval, we expect to continue operating a total of nine drilling rigs for the immediate future on the combined Matador and Ameredev properties covering approximately 192,000 net acres. We have built significant optionality into our drilling program, which should generally allow us to decrease or increase the number of rigs we operate as necessary based on changing commodity prices and other factors.

Previous wording

Our average daily oil equivalent production in the Delaware Basin for the first quarter of 2024 was 144,700 BOE per day, consisting of 83,900 Bbl of oil per day and 364.7 MMcf of natural gas per day, a 43% increase from 101,100 BOE per day, consisting of 58,200 Bbl of oil per day and 257.3 MMcf of natural gas per day, in the first quarter of 2023. These increases were primarily attributable to the Advance Acquisition and the increased number of wells being operated by us and other operators (where we own a working interest). The Delaware Basin contributed approximately 99% of our daily oil production and approximately 94% of our daily natural gas production in the first quarter of 2024, as compared to approximately 99% of our daily oil production and approximately 90% of our daily natural gas production in the first quarter of 2023.

Current wording

Our average daily oil equivalent production in the Delaware Basin for the second quarter of 2024 was 156,100 BOE per day, consisting of 94,700 Bbl of oil per day and 368.3 MMcf of natural gas per day, a 25% increase from 125,000 BOE per day, consisting of 75,600 Bbl of oil per day and 296.1 MMcf of natural gas per day, in the second quarter of 2023. These increases were primarily attributable to the Advance Acquisition and the increased number of wells being operated by us and other operators (where we own a working interest). The Delaware Basin contributed approximately 99% of our daily oil production and approximately 95% of our daily natural gas production in the second quarter of 2024, as compared to approximately 99% of our daily oil production and approximately 91% of our daily natural gas production in the second quarter of 2023.

Previous wording

In March 2024 we completed our natural gas pipeline connections between Pronto and San Mateo and between Pronto and Matador’s acreage obtained in the Advance Acquisition. These connector pipelines will provide further flow assurance and options for Matador and third-party customer natural gas.

Current wording

In March 2024, we completed our natural gas pipeline connections between Pronto and San Mateo and between Pronto and Matador’s acreage obtained in the Advance Acquisition. These connector pipelines provide further flow assurance and options for Matador and third-party customer natural gas.

Previous wording

In February 2024, Matador’s Board of Directors (the “Board”) declared a quarterly cash dividend of $0.20 per share of common stock, which was paid on March 13, 2024 to shareholders of record as of February 23, 2024. On April 17, 2024, the Board declared a quarterly cash dividend of $0.20 per share of common stock payable on June 7, 2024 to shareholders of record as of May 17, 2024.

Current wording

In February and April 2024, Matador’s Board of Directors (the “Board”) declared quarterly cash dividends of $0.20 per share of common stock. On July 18, 2024, the Board declared a quarterly cash dividend of $0.20 per share of common stock payable on September 5, 2024 to shareholders of record as of August 15, 2024.

Previous wording

On March 28, 2024, we completed an underwritten public offering of 5,250,000 shares of our common stock (the “2024 Equity Offering”). After deducting underwriting discounts and offering expenses, we received net proceeds of approximately $344.2 million. The net proceeds from the 2024 Equity Offering were used for general corporate purposes, including the funding of acquisitions and the repayment of borrowings outstanding under our Credit Agreement.

Current wording

On March 28, 2024, we completed an underwritten public offering of 5,250,000 shares of our common stock (the “2024 Equity Offering”). After deducting underwriting discounts and offering expenses, we received net proceeds of approximately $342.1 million. The net proceeds from the 2024 Equity Offering were used for general corporate purposes, including the funding of acquisitions and the repayment of borrowings outstanding under our Credit Agreement.

Previous wording

On April 2 and April 4, 2024, we completed the repurchase of an aggregate principal amount of approximately $556.3 million of the 2026 Notes outstanding as part of our cash tender offer announced on March 26, 2024 (the “2026 Notes Tender Offer”). On April 2, 2024, we exercised our optional right, under the indenture governing the 2026 Notes, to redeem the remaining aggregate principal amount of approximately $142.9 million of 2026 Notes outstanding on September 15, 2024 (the “2026 Notes Redemption”) and, in connection therewith, to satisfy and discharge the Company’s obligations under such indenture with respect to the 2026 Notes.

Current wording

On April 2 and April 4, 2024, we completed the repurchase of an aggregate principal amount of approximately $556.3 million of the $699.2 million of outstanding senior notes due 2026 (the “2026 Notes”) as part of our cash tender offer announced on March 26, 2024 (the “2026 Notes Tender Offer”). On April 2, 2024, we exercised our optional right, under the indenture governing the 2026 Notes, to redeem the remaining aggregate principal amount of approximately $142.9 million of 2026 Notes outstanding on September 15, 2024 (the “2026 Notes Redemption”) and, in connection therewith, to satisfy and discharge the Company’s obligations under such indenture with respect to the 2026 Notes.

Previous wording

At March 31, 2024, we had (i) $260.0 million in borrowings outstanding under our Credit Agreement, (ii) approximately $41.7 million in outstanding letters of credit issued pursuant to the Credit Agreement, (iii) $699.2 million of outstanding 5.875% senior notes due 2026 (the “2026 Notes”) and (iv) $500.0 million of outstanding 6.875% senior notes due 2028 (the “2028 Notes”).

Current wording

At June 30, 2024, we had (i) $95.0 million in borrowings outstanding under our Credit Agreement, (ii) approximately $52.8 million in outstanding letters of credit issued pursuant to the Credit Agreement, (iii) $500.0 million of outstanding 6.875% senior notes due 2028 (the “2028 Notes”) and (iv) $900.0 million of outstanding 2032 Notes. Between June 30, 2024 and July 23, 2024, we repaid all $95.0 million of borrowings outstanding under our Credit Agreement.

Previous wording

At March 31, 2024, San Mateo had $526.0 million in borrowings outstanding under San Mateo’s 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 March 31, 2024 and April 23, 2024, San Mateo repaid $31.0 million of borrowings under the San Mateo Credit Facility.

Current wording

At June 30, 2024, San Mateo had $512.0 million in borrowings outstanding under San Mateo’s 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, 2024 and July 23, 2024, San Mateo repaid $26.0 million of borrowings under the San Mateo Credit Facility.

Previous wording

Oil and natural gas revenues. Our oil and natural gas revenues increased $200.6 million, or 40%, to $703.5 million for the three months ended March 31, 2024, as compared to $502.9 million for the three months ended March 31, 2023. Our oil revenues increased $196.7 million, or 49%, to $598.5 million for the three months ended March 31, 2024, as compared to $401.8 million for the three months ended March 31, 2023. The increase in oil revenues resulted from a 45% increase in our oil production to 7.7 million Bbl for the three months ended March 31, 2024, as compared to 5.3 million Bbl for the three months ended March 31, 2023, and a 2% increase in the weighted average oil price realized for the three months ended March 31, 2024 to $77.58 per Bbl, as compared to $75.74 per Bbl for the three months ended March 31, 2023. Our natural gas revenues increased $3.9 million, or 4%, to $105.0 million for the three months ended March 31, 2024, as compared to $101.1 million for the three months ended March 31, 2023. The increase in natural gas revenues resulted from a 38% increase in our natural gas production to 35.5 Bcf for the three months ended March 31, 2024, as compared to 25.8 Bcf for the three months ended March 31, 2023, which was partially offset by a 25% decrease in the weighted average natural gas price realized for the three months ended March 31, 2024 to $2.96 per Mcf, as compared to a weighted average natural gas price of $3.93 per Mcf realized for the three months ended March 31, 2023.

Current wording

Oil and natural gas revenues. Our oil and natural gas revenues increased $188.4 million, or 32%, to $776.3 million for the three months ended June 30, 2024, as compared to $587.9 million for the three months ended June 30, 2023. Our oil revenues increased $195.2 million, or 38%, to $705.6 million for the three months ended June 30, 2024, as compared to $510.4 million for the three months ended June 30, 2023. The increase in oil revenues resulted from a 25% increase in our oil production to 8.7 million Bbl for the three months ended June 30, 2024, as compared to 6.9 million Bbl for the three months ended June 30, 2023, and an 11% increase in the weighted average oil price realized for the three months ended June 30, 2024 to $81.20 per Bbl, as compared to $73.46 per Bbl for the three months ended June 30, 2023. Our natural gas revenues decreased $6.8 million, or 9%, to $70.7 million for the three months ended June 30, 2024, as compared to $77.6 million for the three months ended June 30, 2023. The decrease in natural gas revenues resulted from a 23% decrease in the weighted average natural gas price realized for the three months ended June 30, 2024 to $2.00 per Mcf, as compared to a weighted average natural gas price of $2.61 per Mcf realized for the three months ended June 30, 2023, which was partially offset by a 20% increase in our natural gas production to 35.4 Bcf for the three months ended June 30, 2024, as compared to 29.7 Bcf for the three months ended June 30, 2023.

Previous wording

Third-party midstream services revenues. Our third-party midstream services revenues increased $5.8 million, or 22%, to $32.4 million for the three months ended March 31, 2024, as compared to $26.5 million for the three months ended March 31, 2023. Third-party midstream services revenues are those revenues from midstream operations related to third parties, including working interest owners in our operated wells. This increase was primarily attributable to an increase in our third-party produced water disposal revenues to $14.0 million for the three months ended March 31, 2024, as compared to $10.5 million for the three months ended March 31, 2023, and an increase in our third-party natural gas gathering and processing revenues to $15.2 million for the three months ended March 31, 2024, as compared to $13.6 million for the three months ended March 31, 2023.

Current wording

Third-party midstream services revenues. Our third-party midstream services revenues increased $2.6 million, or 9%, to $32.7 million for the three months ended June 30, 2024, as compared to $30.1 million for the three months ended June 30, 2023. Third-party midstream services revenues are those revenues from midstream operations related to third parties, including working interest owners in our operated wells. This increase was primarily attributable to an increase in our third-party produced water disposal revenues to $13.4 million for the three months ended June 30, 2024, as compared to $10.3 million for the three months ended June 30, 2023, which was partially offset by a decrease in our third-party natural gas gathering and processing revenues to $15.9 million for the three months ended June 30, 2024, as compared to $17.1 million for the three months ended June 30, 2023.

Previous wording

Sales of purchased natural gas. Our sales of purchased natural gas increased $15.2 million, or 44%, to $49.4 million for the three months ended March 31, 2024, as compared to $34.3 million for the three months ended March 31, 2023. This increase was primarily the result of a 45% increase in natural gas volumes sold. Sales of purchased natural gas reflect those natural gas purchase transactions that we periodically enter into with third parties whereby we purchase natural gas and (i) subsequently sell the natural gas to other purchasers or (ii) process the natural gas at either Pronto’s or San Mateo’s cryogenic natural gas processing plant and subsequently sell the residue natural gas and NGLs to other purchasers. These revenues, and the expenses related to these transactions included in “Purchased natural gas,” are presented on a gross basis in our interim unaudited condensed consolidated statements of income.

Current wording

Sales of purchased natural gas. Our sales of purchased natural gas increased $14.4 million, or 45%, to $46.3 million for the three months ended June 30, 2024, as compared to $31.9 million for the three months ended June 30, 2023. This increase was primarily the result of a 63% increase in natural gas volumes sold, which was partially offset by an 11% decrease in natural gas price realized. Sales of purchased natural gas reflect those natural gas purchase transactions that we periodically enter into with third parties whereby we purchase natural gas and (i) subsequently sell the natural gas to other purchasers or (ii) process the natural gas at either Pronto’s or San Mateo’s cryogenic natural gas processing plant and subsequently sell the residue natural gas and NGLs to other purchasers. These revenues, and the expenses related to these transactions included in “Purchased natural gas,” are presented on a gross basis in our interim unaudited condensed consolidated statements of income.

Previous wording

Unrealized gain (loss) on derivatives. During the three months ended March 31, 2024, the aggregate net fair value of our open natural gas basis differential swap contracts changed to a net asset of $4.7 million from a net asset of $2.7 million at December 31, 2023, resulting in an unrealized gain on derivatives of $2.1 million for the three months ended March 31, 2024. During the three months ended March 31, 2023, the aggregate net fair value of our open oil and natural gas derivative contracts changed to a net liability of $3.1 million from a net asset of $3.9 million at December 31, 2022, resulting in an unrealized loss on derivatives of $7.1 million for the three months ended March 31, 2023.

Current wording

Unrealized loss on derivatives. During the three months ended June 30, 2024, the aggregate net fair value of our open oil costless collar and natural gas basis differential swap contracts changed to a net liability of $7.1 million from a net asset of $4.7 million at March 31, 2024, resulting in an unrealized loss on derivatives of $11.8 million for the three months ended June 30, 2024. During the three months ended June 30, 2023, the aggregate net fair value of our open natural gas basis differential swap contracts changed to a net liability of $11.8 million from a net liability of $3.1 million at March 31, 2023, resulting in an unrealized loss on derivatives of $8.7 million for the three months ended June 30, 2023.

Previous wording

Realized gain on derivatives. Our realized gain on derivatives was $0.3 million for the three months ended March 31, 2024, as compared to a realized gain of $3.7 million for the three months ended March 31, 2023. We realized a net gain of $0.3 million related to our natural gas basis differential swap contracts for the three months ended March 31, 2024, resulting primarily from natural gas basis differentials that were below the fixed prices of certain of our natural gas basis differential swap contracts. For the three months ended March 31, 2023, we realized a net gain of $3.7 million related to our natural gas costless collar and natural gas basis swap contracts, resulting primarily from natural gas prices that were below the floor prices of certain of our natural gas costless collar contracts, offset by natural gas basis differential prices that were above the fixed price of our natural gas basis swap contract. We realized an average gain on our natural gas derivatives of approximately $0.01 per Mcf produced during the three months ended March 31, 2024, as compared to an average gain of approximately $0.14 per Mcf produced during the three months ended March 31, 2023.

Current wording

Realized gain (loss) on derivatives. Our realized gain on derivatives was $4.0 million for the six months ended June 30, 2024, as compared to a realized gain of $0.5 million for the six months ended June 30, 2023. We realized a net gain of $4.0 million related to our natural gas basis differential swap contracts for the six months ended June 30, 2024, resulting primarily from natural gas basis differentials that were below the fixed prices of our natural gas basis differential swap contracts. For the six months ended June 30, 2023, we realized a net gain of $0.5 million related to our natural gas costless collar and natural gas basis differential swap contracts, resulting primarily from natural gas prices that were below the floor prices of certain of our natural gas costless collar contracts, offset by natural gas prices that were above the fixed prices of our natural gas basis differential swap contracts. We realized an average gain on our natural gas derivatives of approximately $0.06 per Mcf produced during the six months ended June 30, 2024, as compared to an average gain of approximately $0.01 per Mcf produced during the six months ended June 30, 2023.

Previous wording

Lease operating. Our lease operating expenses increased $31.9 million, or 72%, to $76.3 million for the three months ended March 31, 2024, as compared to $44.4 million for the three months ended March 31, 2023. Our lease operating expenses on a unit-of-production basis increased 21% to $5.60 per BOE for the three months ended March 31, 2024, as compared to $4.63 per BOE for the three months ended March 31, 2023. These increases were primarily attributable to the increased number of wells being operated by us, including 127 wells from the Advance Acquisition, and operated by other operators (where we own a working interest) and to operating cost inflation for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

Current wording

Lease operating. Our lease operating expenses increased $18.0 million, or 29%, to $79.0 million for the three months ended June 30, 2024, as compared to $61.0 million for the three months ended June 30, 2023. Our lease operating expenses on a unit-of-production basis increased 6% to $5.42 per BOE for the three months ended June 30, 2024, as compared to $5.13 per BOE for the three months ended June 30, 2023. These increases were primarily attributable to the increased number of wells being operated by us and other operators (where we own a working interest) and to operating cost inflation for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

Previous wording

Plant and other midstream services operating. Our plant and other midstream services operating expenses increased $8.6 million, or 28%, to $39.6 million for the three months ended March 31, 2024, as compared to $31.0 million for the three months ended March 31, 2023. This increase was primarily attributable to increased throughput volumes from Matador and other San Mateo and Pronto customers, which resulted in (i) increased expenses associated with our expanded pipeline operations of $16.2 million for the three months ended March 31, 2024, as compared to $10.1 million for the three months ended March 31, 2023, and (ii) increased expenses associated with our commercial produced water disposal operations of $14.4 million for the three months ended March 31, 2024, as compared to $12.8 million for the three months ended March 31, 2023.

Current wording

Plant and other midstream services operating. Our plant and other midstream services operating expenses increased $6.6 million, or 22%, to $37.3 million for the three months ended June 30, 2024, as compared to $30.7 million for the three months ended June 30, 2023. This increase was primarily attributable to increased throughput volumes from Matador and other San Mateo and Pronto customers, which resulted in (i) increased expenses associated with our expanded pipeline operations of $13.4 million for the three months ended June 30, 2024, as compared to $10.1 million for the three months ended June 30, 2023, and (ii) increased expenses associated with our commercial produced water disposal operations of $16.6 million for the three months ended June 30, 2024, as compared to $13.1 million for the three months ended June 30, 2023.

Previous wording

Depletion, depreciation and amortization. Our depletion, depreciation and amortization expenses increased $86.0 million, or 68%, to $212.3 million for the three months ended March 31, 2024, as compared to $126.3 million for the three months ended March 31, 2023, primarily as a result of the Advance Acquisition and a 42% increase in our total oil equivalent production for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. On a unit-of-production basis, our depletion, depreciation and amortization expenses increased 18% to $15.58 per BOE for the three months ended March 31, 2024, as compared to $13.16 per BOE for the three months ended March 31, 2023, primarily as a result of the Advance Acquisition and an increase in actual costs and estimated future costs to drill, complete and equip our wells between the two periods.

Current wording

Depletion, depreciation and amortization. Our depletion, depreciation and amortization expenses increased $48.4 million, or 27%, to $225.9 million for the three months ended June 30, 2024, as compared to $177.5 million for the three months ended June 30, 2023, primarily as a result of the Advance Acquisition and a 23% increase in our total oil equivalent production for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. On a unit-of-production basis, our depletion, depreciation and amortization expenses increased 4% to $15.49 per BOE for the three months ended June 30, 2024, as compared to $14.93 per BOE for the three months ended June 30, 2023, primarily as a result of the Advance Acquisition.

Previous wording

General and administrative. Our general and administrative expenses increased $7.2 million, or 32%, to $29.7 million for the three months ended March 31, 2024, as compared to $22.4 million for the three months ended March 31, 2023. This increase was primarily attributable to an increase in employee stock-based compensation expense primarily associated with our cash-settled stock awards, the values of which are remeasured at each reporting period. The share price of our common stock increased by 17% from $56.86 at December 31, 2023 to $66.77 at March 31, 2024. Our general and administrative expenses decreased by 7% on a unit-of-production basis to $2.18 per BOE for the three months ended March 31, 2024, as compared to $2.34 per BOE for the three months ended March 31, 2023, primarily as a result of a 42% increase in our total oil equivalent production between the two periods.

Current wording

General and administrative. Our general and administrative expenses increased $1.2 million, or 4%, to $27.9 million for the three months ended June 30, 2024, as compared to $26.7 million for the three months ended June 30, 2023. Our general and administrative expenses decreased by 15% on a unit-of-production basis to $1.91 per BOE for the three months ended June 30, 2024, as compared to $2.25 per BOE for the three months ended June 30, 2023, primarily as a result of a 23% increase in our total oil equivalent production between the two periods.

Previous wording

Interest expense. For the three months ended March 31, 2024, we incurred total interest expense of $45.4 million. We capitalized $5.9 million of our interest expense on certain qualifying projects for the three months ended March 31, 2024 and expensed the remaining $39.6 million to operations. For the three months ended March 31, 2023, we incurred total interest expense of $19.6 million. We capitalized $3.4 million of our interest expense on certain qualifying projects for the three months ended March 31, 2023 and expensed the remaining $16.2 million to operations. The increase in interest expense for the three months ended March 31, 2024 is a result of borrowings under the Credit Agreement that were used in connection with the Advance Acquisition, borrowings under the San Mateo Credit Facility, the issuance of the 2028 Notes in April 2023 and the significant increase in interest rates between the two periods.

Current wording

Interest expense. For the three months ended June 30, 2024, we incurred total interest expense of $45.3 million. We capitalized $9.3 million of our interest expense on certain qualifying projects for the three months ended June 30, 2024 and expensed the remaining $36.0 million to operations. For the three months ended June 30, 2023, we incurred total interest expense of $39.5 million. We capitalized $5.3 million of our interest expense on certain qualifying projects for the three months ended June 30, 2023 and expensed the remaining $34.2 million to operations. The increase in interest expense for the three months ended June 30, 2024 was primarily attributable to an increase in our average debt outstanding between the two periods. In April 2024, we completed the 2026 Notes Tender Offer, the 2026 Notes Redemption and the 2032 Notes Offering, resulting in a net increase in our total senior notes outstanding to $1.40 billion at June 30, 2024 as compared to $1.20 billion at June 30, 2023. In connection with the 2026 Notes Tender Offer and 2026 Notes Redemption, we also incurred a loss of approximately $3.0 million included in interest expense for the three months ended June 30, 2024.

Previous wording

Income tax provision. We recorded a current income tax provision of $17.3 million and a deferred income tax provision of $49.5 million for the three months ended March 31, 2024. We recorded a current income tax provision of $4.9 million and a deferred income tax provision of $51.7 million for the three months ended March 31, 2023. Our effective income tax rate of 26% for each of the three months ended March 31, 2024 and 2023 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.

Current wording

Income tax provision (benefit). We recorded a current income tax provision of $30.1 million and a deferred income tax provision of $47.9 million for the three months ended June 30, 2024. We recorded a current income tax benefit of $4.9 million and a deferred income tax provision of $62.2 million for the three months ended June 30, 2023. Our effective income tax rate of 25% and 26% for the three months ended June 30, 2024 and 2023, respectively, 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.

Previous wording

Production taxes, transportation and processing. Our production taxes and transportation and processing expenses increased $14.7 million, or 26%, to $70.2 million for the three months ended March 31, 2024, as compared to $55.5 million for the three months ended March 31, 2023. The increase was primarily attributable to a $13.9 million increase in production taxes to $54.0 million for the three months ended March 31, 2024, as compared to $40.1 million for the three months ended March 31, 2023, primarily due to the increase in oil and natural gas revenues between the two periods. On a unit-of-production basis, our production taxes and transportation and processing expenses decreased 11% to $5.15 per BOE for the three months ended March 31, 2024, as compared to $5.78 per BOE for the three months ended March 31, 2023. This decrease was primarily attributable to a decrease in the transportation and processing expense per BOE that resulted from the mix of revenue contracts, including from San Mateo and Pronto, between the two periods.

Current wording

Production taxes, transportation and processing. Our production taxes, transportation and processing expenses increased $29.5 million, or 25%, to $147.0 million for the six months ended June 30, 2024, as compared to $117.5 million for the six months ended June 30, 2023. This increase was primarily attributable to a $27.8 million increase in production taxes to $114.1 million for the six months ended June 30, 2024, as compared to $86.3 million for the six months ended June 30, 2023, primarily due to the increase in oil and natural gas revenues between the two periods. On a unit-of-production basis, our production taxes, transportation and processing expenses decreased 5% to $5.21 per BOE for the six months ended June 30, 2024, as compared to $5.47 per BOE for the six months ended June 30, 2023. This decrease was primarily attributable to a decrease in the transportation and processing expense per BOE that resulted from the mix of revenue contracts, including from San Mateo and Pronto, between the two periods.

Previous wording

We recorded a current income tax provision of $17.3 million for the three months ended March 31, 2024 and a deferred income tax provision of $49.5 million for the three months ended March 31, 2024. Our effective income tax rate of 26% for the three months ended March 31, 2024 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.

Current wording

Income tax provision. We recorded a current income tax provision of $47.4 million and a deferred income tax provision of $97.4 million for the six months ended June 30, 2024. We recorded no current income tax provision and a deferred income tax provision of $114.0 million for the six months ended June 30, 2023. Our effective income tax rate of 26% for each of the six months ended June 30, 2024 and 2023 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.

Previous wording

Our primary use of capital has been, and we expect will continue to be during the remainder of 2024 and for the foreseeable future, for the acquisition, exploration and development of oil and natural gas properties and for midstream investments. Excluding any future significant acquisitions, we expect to fund our 2024 capital expenditures through a combination of cash on hand, operating cash flows and performance incentives paid to us by Five Point Energy, LLC or its affiliates. If capital expenditures were to exceed our operating cash flows during the remainder of 2024, we expect to fund any such excess capital expenditures, including for significant acquisitions, through borrowings under the Credit Agreement or the San Mateo Credit Facility (assuming availability under such facilities) or through other capital sources, including borrowings under expanded or additional credit arrangements, the sale or joint venture of midstream assets, oil and natural gas producing assets, leasehold interests or mineral interests and potential issuances of equity, debt or convertible securities, none of which may be available on satisfactory terms or at all. Our future success in growing proved reserves and production will be highly dependent on our ability to generate operating cash flows and access outside sources of capital.

Current wording

Our primary use of capital has been, and we expect will continue to be during the remainder of 2024 and for the foreseeable future, for the acquisition, exploration and development of oil and natural gas properties and for midstream investments. In June 2024, we announced the Ameredev Acquisition. We intend to fund the Ameredev Acquisition with a combination of cash on hand, free cash flow prior to closing and borrowings under our Credit Agreement, under which we have received an additional commitment of up to $1.00 billion in connection with this transaction. Excluding the Ameredev Acquisition and any future significant acquisitions, we expect to fund our 2024 capital expenditures through a combination of cash on hand, operating cash flows and performance incentives paid to us by Five Point Energy, LLC or its affiliates. If capital expenditures were to exceed our operating cash flows during the remainder of 2024, we expect to fund any such excess capital expenditures, including for significant acquisitions, through borrowings under the Credit Agreement or the San Mateo Credit Facility (assuming availability under such facilities) or through other capital sources, including borrowings under expanded or additional credit arrangements, the sale or joint venture of midstream assets, oil and natural gas producing assets, leasehold interests or mineral interests and potential issuances of equity, debt or convertible securities, none of which may be available on satisfactory terms or at all. Our future success in growing proved reserves and production will be highly dependent on our ability to generate operating cash flows and access outside sources of capital.

Previous wording

In February 2024, the Board declared a quarterly cash dividend of $0.20 per share of common stock, which was paid on March 13, 2024 to shareholders of record as of February 23, 2024. In April 2024, the Board declared a quarterly cash dividend of $0.20 per share of common stock payable on June 7, 2024 to shareholders of record as of May 17, 2024.

Current wording

In February and April 2024, our Board declared quarterly cash dividends of $0.20 per share of common stock. On July 18, 2024, the Board declared a quarterly cash dividend of $0.20 per share of common stock payable on September 5, 2024 to shareholders of record as of August 15, 2024.

Previous wording

On March 28, 2024, we completed the 2024 Equity Offering. After deducting underwriting discounts and offering expenses, we received net proceeds of approximately $344.2 million. The net proceeds from the 2024 Equity Offering were used for general corporate purposes, including the funding of acquisitions and the repayment of borrowings outstanding under our Credit Agreement.

Current wording

On March 28, 2024, we completed the 2024 Equity Offering. After deducting underwriting discounts and offering expenses, we received net proceeds of approximately $342.1 million. The net proceeds from the 2024 Equity Offering were used for general corporate purposes, including the funding of acquisitions and the repayment of borrowings outstanding under our Credit Agreement.

Previous wording

At March 31, 2024, we had cash totaling $23.2 million and restricted cash totaling $51.1 million, which was primarily associated with San Mateo. By contractual agreement, the cash in the accounts held by our less-than-wholly-owned subsidiaries is not to be commingled with our other cash and is to be used only to fund the capital expenditures and operations of these less-than-wholly-owned subsidiaries.

Current wording

At June 30, 2024, we had cash totaling $15.2 million and restricted cash totaling $48.7 million, which was primarily associated with San Mateo. By contractual agreement, the cash in the accounts held by our less-than-wholly-owned subsidiaries is not to be commingled with our other cash and is to be used only to fund the capital expenditures and operations of these less-than-wholly-owned subsidiaries.

Previous wording

At April 23, 2024, we had (i) $500.0 million of outstanding 2028 Notes, (ii) $900.0 million of outstanding 2032 Notes, (iii) $25.0 million of borrowings outstanding under the Credit Agreement and (iv) approximately $52.6 million in outstanding letters of credit issued pursuant to the Credit Agreement.

Current wording

At June 30, 2024, we had (i) $500.0 million of outstanding 2028 Notes, (ii) $900.0 million of outstanding 2032 Notes, (iii) $95.0 million in borrowings outstanding under the Credit Agreement and (iv) approximately $52.8 million in outstanding letters of credit issued pursuant to the Credit Agreement. Between June 30, 2024 and July 23, 2024, we repaid all $95.0 million of borrowings outstanding under our Credit Agreement.

Previous wording

At March 31, 2024, San Mateo had $526.0 million in borrowings outstanding under the San Mateo Credit Facility and approximately $9.0 million in outstanding letters of credit issued pursuant to the San Mateo Credit Facility. Between March 31, 2024 and April 23, 2024, San Mateo repaid $31.0 million of borrowings under the San Mateo Credit Facility. The outstanding borrowings under the San Mateo Credit Facility mature on December 9, 2026, and lender commitments under the facility were $535.0 million at March 31, 2024. 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 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 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 5.00 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 2.50 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. We believe that San Mateo was in compliance with the terms of the San Mateo Credit Facility at March 31, 2024.

Current wording

At June 30, 2024, San Mateo had $512.0 million in borrowings outstanding under 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, 2024 and July 23, 2024, San Mateo repaid $26.0 million of borrowings under the San Mateo Credit Facility. The outstanding borrowings under the San Mateo Credit Facility mature on December 9, 2026, and lender commitments under the facility were $535.0 million at June 30, 2024. 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 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 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 5.00 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 2.50 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. We believe that San Mateo was in compliance with the terms of the San Mateo Credit Facility at June 30, 2024.

Previous wording

We expect that development of our Delaware Basin assets will be the primary focus of our operations and capital expenditures for the remainder of 2024. We began 2024 operating seven drilling rigs in the Delaware Basin. We added an eighth operated drilling rig in the first quarter of 2024. We have built significant optionality into our drilling program, which should generally allow us to decrease or increase the number of rigs we operate as necessary based on changing commodity prices and other factors. Our estimated capital expenditures for drilling, completing and equipping wells (“D/C/E capital expenditures”) and midstream capital expenditures for 2024 consists of $1.10 to $1.30 billion and $200.0 to $250.0 million, respectively. The anticipated midstream capital expenditures include our proportionate share of San Mateo’s estimated 2024 capital expenditures as well as the estimated 2024 capital expenditures for other wholly-owned midstream projects, including projects completed by Pronto. The midstream capital budget includes 100% of the costs associated with the Marlan Processing Plant expansion noted above, although, at April 23, 2024, we were continuing to evaluate potential partners in Pronto that would share in these capital expenditures and strategic opportunities. Substantially all of these 2024 estimated capital expenditures are expected to be allocated to (i) the further delineation and development of our leasehold position, (ii) the construction, installation and maintenance of midstream assets and (iii) our participation in certain non-operated well opportunities in the Delaware Basin, South Texas and Haynesville shale. Our 2024 Delaware Basin operated drilling program is expected to focus on the continued development of our various asset areas throughout the Delaware Basin, with a continued emphasis on drilling and completing a high percentage of longer horizontal wells in 2024, including 99% with anticipated completed lateral lengths of one mile or greater.

Current wording

We expect that development of our Delaware Basin assets will be the primary focus of our operations and capital expenditures for the remainder of 2024. We began 2024 operating seven drilling rigs in the Delaware Basin. We added an eighth operated drilling rig in the first quarter of 2024 and a ninth operated drilling rig late in the second quarter of 2024. Prior to the closing of the Ameredev Acquisition, we expect Ameredev to operate one drilling rig and to continue operations on 13 DUC wells. Upon the consummation of the Ameredev Acquisition, which we anticipate to occur late in the third quarter of 2024, subject to customary closing conditions, including regulatory approval, we expect to continue operating a total of nine drilling rigs for the immediate future on the combined Matador and Ameredev properties covering approximately 192,000 net acres. We have built significant optionality into our drilling program, which should generally allow us to decrease or increase the number of rigs we operate as necessary based on changing commodity prices and other factors. At July 23, 2024, our estimated D/C/E capital expenditures for 2024 are $1.10 to $1.30 billion, which does not include any D/C/E capital expenditures on acreage to be acquired in the Ameredev Acquisition, and our estimated midstream capital expenditures for 2024 are $200.0 to $250.0 million. The anticipated midstream capital expenditures include our proportionate share of San Mateo’s estimated 2024 capital expenditures as well as the estimated 2024 capital expenditures for other wholly-owned midstream projects, including projects completed by Pronto. The midstream capital expenditures do not include any capital expenditures associated with the approximate 19% stake in Piñon to be acquired in the Ameredev Acquisition. The midstream capital budget includes 100% of the costs associated with the Marlan Processing Plant expansion noted above, although, at July 23, 2024, we were continuing to evaluate potential partners in Pronto that would share in these capital expenditures and strategic opportunities. Substantially all of these 2024 estimated capital expenditures are expected to be allocated to (i) the further delineation and development of our leasehold position, (ii) the construction, installation and maintenance of midstream assets and (iii) our participation in certain non-operated well opportunities in the Delaware Basin, South Texas and Haynesville shale. Our 2024 Delaware Basin operated drilling program is expected to focus on the continued development of our various asset areas throughout the Delaware Basin, with a continued emphasis on drilling and completing a high percentage of longer horizontal wells in 2024, including 99% with anticipated completed lateral lengths of one mile or greater.

Previous wording

Our unaudited cash flows for the three months ended March 31, 2024 and 2023 are presented below:

Current wording

Our unaudited cash flows for the six months ended June 30, 2024 and 2023 are presented below:

Previous wording

Net cash provided by operating activities increased $129.1 million to $468.6 million for the three months ended March 31, 2024 from $339.5 million for the three months ended March 31, 2023. Excluding changes in operating assets and liabilities, net cash provided by operating activities increased $113.5 million to $481.4 million for the three months ended March 31, 2024 from $367.9 million for the three months ended March 31, 2023. This increase was primarily attributable to higher oil and natural gas production and higher realized oil prices for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, partially offset by lower realized natural gas prices. Changes in our operating assets and liabilities between the two periods resulted in a net increase of approximately $15.6 million in net cash provided by operating activities for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

Current wording

Net cash provided by operating activities increased $273.0 million to $1.06 billion for the six months ended June 30, 2024 from $788.5 million for the six months ended June 30, 2023. Excluding changes in operating assets and liabilities, net cash provided by operating activities increased $239.0 million to $1.02 billion for the six months ended June 30, 2024 from $784.5 million for the six months ended June 30, 2023. This increase was primarily attributable to higher oil and natural gas production and higher realized oil prices for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, partially offset by lower realized natural gas prices. Changes in our operating assets and liabilities between the two periods resulted in a net increase of approximately $34.0 million in net cash provided by operating activities for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

Previous wording

Net cash used in investing activities increased $199.8 million to $543.3 million for the three months ended March 31, 2024 from $343.5 million for the three months ended March 31, 2023. This increase in net cash used in investing activities was primarily due to (i) an increase between the periods of $12.5 million in D/C/E capital expenditures primarily attributable to our operated and non-operated D/C/E activities in the Delaware Basin, (ii) an increase of $90.9 million in expenditures for midstream and other property and equipment and (iii) an increase of $98.4 million in expenditures related to acquisition of oil and natural gas properties.

Current wording

Net cash used in investing activities decreased $1.12 billion to $1.12 billion for the six months ended June 30, 2024 from $2.24 billion for the six months ended June 30, 2023. This decrease in net cash used in investing activities was primarily due to $1.61 billion in expenditures related to the Advance Acquisition in the six months ended June 30, 2023. This decrease was partially offset by (i) an increase between the periods of $200.2 million in expenditures related to the acquisition of oil and natural gas properties, (ii) an increase between the periods of $124.3 million in midstream capital expenditures, (iii) an increase between the periods of $95.3 million in expenditures related to the Ameredev Acquisition and (iv) an increase between the periods of $72.2 million in D/C/E capital expenditures primarily attributable to our operated and non-operated drilling, completion and equipping activities in the Delaware Basin.

Previous wording

Net cash provided by financing activities increased $82.7 million to $42.8 million for the three months ended March 31, 2024 from net cash used in financing activities of $39.9 million for the three months ended March 31, 2023. During the three months ended March 31, 2024, our primary sources of cash from financing activities included proceeds from the 2024 Equity Offering of $344.7 million, partially offset by net repayments under the Credit Agreement of $240.0 million, dividends paid of $23.9 million, net distributions related to San Mateo of $18.4 million and payment of taxes related to stock-based compensation of $13.5 million. During the three months ended March 31, 2023, our primary uses of cash related to financing activities were for net borrowings under the San Mateo Credit Facility of $10.0 million, dividends of $17.8 million and payment of taxes related to stock-based compensation of $18.9 million.

Current wording

Net cash provided by financing activities decreased $952.5 million to $16.3 million for the six months ended June 30, 2024 from $968.7 million for the six months ended June 30, 2023. During the six months ended June 30, 2024, our primary sources of cash from financing activities included proceeds from the 2032 Notes Offering of $900.0 million and proceeds from the 2024 Equity Offering of $344.7 million. These increases were partially offset by (i) the repurchase of an aggregate principal amount of approximately $699.2 million of 2026 Notes, (ii) net repayments under the Credit Agreement of $405.0 million, (iii) dividends paid of $48.7 million, (iv) net distributions related to San Mateo of $20.8 million and (v) payment of taxes related to stock-based compensation of $14.4 million. During the six months ended June 30, 2023, our primary sources of cash from financing activities included proceeds from the issuance of the 2028 Notes of $494.8 million and net borrowings under the Credit Agreement of $560.0 million, partially offset by dividends of $35.7 million and payment of taxes related to stock-based compensation of $22.8 million.

Previous wording

See Note 5 to the interim unaudited condensed consolidated financial statements in this Quarterly Report for a summary of our debt, including the Credit Agreement, the San Mateo Credit Facility, the 2026 Notes and the 2028 Notes. See Note 13 to the interim unaudited condensed consolidated financial statements for a discussion of changes in the Company’s debt between March 31, 2024 and April 23, 2024.

Current wording

See Note 5 to the interim unaudited condensed consolidated financial statements in this Quarterly Report for a summary of our debt, including the Credit Agreement, the San Mateo Credit Facility, the 2028 Notes and the 2032 Notes.

Previous wording

For the three months ended March 31, 2024, net income attributable to Matador shareholders increased $30.6 million to $193.7 million, as compared to $163.1 million for the three months ended March 31, 2023. The increase in net income attributable to Matador shareholders primarily resulted from higher realized oil prices and higher oil and natural gas production for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. In addition, we had increased depletion, depreciation and amortization expenses of $212.3 million for the three months ended March 31, 2024, as compared to $126.3 million for the three months ended March 31, 2023, and an unrealized gain on derivatives of $2.1 million for the three months ended March 31, 2024, as compared to an unrealized loss on derivatives of $7.1 million for the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, net income attributable to Matador shareholders increased $64.1 million to $228.8 million, as compared to $164.7 million for the three months ended June 30, 2023. The increase in net income attributable to Matador shareholders primarily resulted from higher oil and natural gas production and higher realized oil prices, partially offset by lower realized natural gas prices for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. These increases were partially offset by increased depletion, depreciation and amortization expenses of $225.9 million for the three months ended June 30, 2024, as compared to $177.5 million for the three months ended June 30, 2023, and an income tax provision of $78.0 million for the three months ended June 30, 2024, as compared to an income tax provision of $57.3 million for the three months ended June 30, 2023.

Previous wording

(1)The amounts included in the table above represent principal maturities only. At March 31, 2024, we had $260.0 million in borrowings outstanding under the Credit Agreement and approximately $41.7 million in outstanding letters of credit issued pursuant to the Credit Agreement. The Credit Agreement matures March 22, 2029. At March 31, 2024, San Mateo had $526.0 million of borrowings outstanding under the San Mateo Credit Facility and approximately $9.0 million in outstanding letters of credit issued pursuant to the San Mateo Credit Facility. The San Mateo Credit Facility matures December 9, 2026. Assuming the amounts outstanding and interest rates of 7.18% and 7.68%, respectively, for the Credit Agreement and the San Mateo Credit Facility at March 31, 2024, the interest expense for such facilities is expected to be approximately $18.9 million and $41.0 million, respectively, each year until maturity.

Current wording

(1)The amounts included in the table above represent principal maturities only. At June 30, 2024, we had $95.0 million in borrowings outstanding under the Credit Agreement and approximately $52.8 million in outstanding letters of credit issued pursuant to the Credit Agreement. The Credit Agreement matures March 22, 2029. At June 30, 2024, San Mateo had $512.0 million of borrowings outstanding under the San Mateo Credit Facility and approximately $9.0 million in outstanding letters of credit issued pursuant to the San Mateo Credit Facility. The San Mateo Credit Facility matures December 9, 2026. Assuming the amounts outstanding and interest rates of 7.18% and 7.69%, respectively, for the Credit Agreement and the San Mateo Credit Facility at June 30, 2024, the interest expense for such facilities is expected to be approximately $6.9 million and $39.9 million, respectively, each year until maturity.