Matador Resources Company MTDR is a leading upstream player having a solid foothold in prolific oil and natural gas shale and other unconventional plays. The company is likely to see earnings growth of almost 16% and 20% in 2024 and 2025, respectively.

What’s Favoring Matador Resources?

The price of West Texas Intermediate crude is again approaching the $70-per-barrel mark, which is highly favorable for exploration and production activities. Handsome crude price is likely to aid MTDR, carrying a Zacks Rank #3 (Hold), in increasing production volumes. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recently, the upstream energy major has entered into a $1.91 billion agreement to expand its footprint in the prolific Delaware Basin. With the deal expected to close in the late third quarter of 2024, Matador Resources is projected to have more than 190,000 net acres in the Delaware Basin on a pro forma basis. Consequently, the company estimates that its production will exceed 180,000 barrels of oil equivalent per day, positioning it for significant growth and enhanced operational scale.

Overall, handsome commodity prices and expectations for higher production will likely aid MTDR’s bottom line.

Risks to Matador Resources’ Business

However, being an upstream energy player, the company’s overall operations are exposed to extreme volatility in oil and natural gas prices. Other major exploration and production firms that are also exposed to commodity price volatility are ConocoPhillips COP, Diamondback Energy Inc FANG and Range Resources Corporation RRC.

ConocoPhillips has secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale.

Diamondback Energy, a leading pure-play Permian operator, has reported ongoing enhancements in the average productivity per well in the Midland Basin. Thus, the exploration and production company will likely continue witnessing increased production volumes.

Range Resources has decades of low-risk drilling inventory in Appalachia, brightening its production outlook. The company has lower well costs per lateral foot than many other upstream players.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ConocoPhillips (COP) : Free Stock Analysis Report

Range Resources Corporation (RRC) : Free Stock Analysis Report

Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report

Matador Resources Company (MTDR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research