Matador Resources Company MTDR has witnessed upward earnings estimate revisions for 2021 and 2022 in the past 30 days. Also, the stock, sporting a Zacks Rank #1 (Strong Buy), is likely to see earnings growth of 507.1% this year.
What’s Favoring the Stock?
On Aug 23, oil price jumped more than 5%, thanks primarily to weaker dollar. This is because the commodity is cheaper for holders of other currencies. Thus, price of oil increased after seven days of a losing streak. The price of West Texas Intermediate (WTI) crude has again crossed the $65-per-barrel benchmark, turning around from last week when the commodity plunged 9% to mark the biggest week of losses in more than nine months.
The rapidly-spreading delta variant of coronavirus has been weighing on oil price since countries are considering new lockdown measures. Overall, short-term fuel demand looks cloudy but with rolling out of coronavirus vaccines across the world, the long-term outlook continues to be rosy.
Improving oil prices are definitely a boon for Matador’s upstream operations. This is because the company has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. In the June quarter, the company’s average daily oil equivalent total production was up 26% sequentially, beating the guidance for an increment of 19-22%.
The upstream energy player continues to improve its capital efficiency. Matador’s drilling and completion costs through the first half of this year for 21 operated horizontal wells were $655 per completed lateral foot. This was roughly 4% lower than the expectation the company had for the metric for the first half.
Other Stocks to Consider
Other promising players in the energy space include Whiting Petroleum Corporation WLL, Continental Resources, Inc. CLR and PDC Energy, Inc. PDCE. While Whiting Petroleum and Continental Resources sport a Zacks Rank #1, PDC Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Continental is expected to witness earnings growth of 256% in 2021.
PDC Energy is likely to see earnings growth of 111.8% in 2021.