Earnings Highlights MTDR, DVN, OXY 2/19/2025

2/19/25

MTDR
Matador Resources reported eye-poppingly good results today, with Q4 2024 production at 201 mboed vs 154 mboed year-ago, a 30% increase, and 3% better than guidance.  Though they did commit the customary “sin” of reporting post-acquisition production results as compared to pre-acquisition, approximate Ameredev production (from acquisition announcement) was in the neighborhood of 20 mboed, which would yield approximately 175 mboed to 201 mboed, or a 14% increase in production, year-on-year, which is still impressive.  They also reported a reduction in D&C costs averaging 11% from extensive use of U-turn laterals, and multi-lateral completions.’  Almost all of their production is in the Delaware basin, and all of their activity is there.

They are guiding 2025 to a constant 9-rig program, at 120-124 mboed, and again, using some back-of-the-envelope calculations, that would result in approximately 10% increase, YOY.  They are also guiding to a 3% decrease in D&C costs.  Both of those appear to be conservative given their 2024 performance.

They highlighted their Cotton Valley acreage, but gave no guidance on activity there.  Comments in the earnings call implied that they were near breakevens - but not yet there.  They denied that they were trying to sell the acreage.

DVN
It’s a good time to be a Permian independent.  Devon Energy reported full-year 2024 production of 737 mboed vs 658 mboed in 2023, but with a significant acquisition mid-year.  Exclusive of the acquisition, it’s approximately a 7% increase YOY.  They are guiding 2025 production to 804 to 825 mboed, which would be about a much slower rate, at about flat to 3% (again, with approximate calculations on a consistent basis).  They also reported a significant overperformance in 2024 Q4, coming in at 398 mbd vs 385 guidance.

They also are guiding to between 1320 to 1365 mmcf/d of gas production in 2025, almost exclusively associated.  They are aggressively pursuing mid and downstream deals for continued flow assurance.

2025 guidance is for 14 rigs in Permian (50% of capex), 4 rigs in Bakken/Powder River (25% of capex), and 4 rigs in EF and Anadarko.  They are another producer that has mentioned the significant uplift from refracs that they are seeing in Eagle Ford, but with no details given.

Devon parted ways with BPX in their EF JV, with “material (per well) D&C savings”.  They mentioned over $2M savings per well and credited it with material changes to their 2025 estimated production and returns.

OXY
Occidental Petroleum reported positive, though not thrilling results for 2024.  Their 2024 reported production was 1.1 mmboed, up 10% from 2023’s 1.0 mmboed, though much of that (approximately 70 mbd) came from their CrownRock acquisition.  They are guiding to 1.39 to 1.44 mmboed for 2025, which would be a 14% increase on a consistent basis, but with a 1.46 mmboed reported 2024 Q4, they are treading water at best.  One of the “headwinds” to their production increases is the plan to substantially increase ethane rejection in the Rockies to improve netbacks, which reduce production by over 20 mboed.  Their Permian guidance for 2025 is 754-789 mboed, which would be a flat-to-3% increase on a consistent basis.

Thanks to the CrownRock acquisition, they are reporting substantially improved breakevens in the Permian, with reductions of over 6%, and all unconventional D&C costs down 12%, with a further reduction of 7% forecast for 2025.  

OXY also detailed the breakevens of some of their remaining Permian inventory.  Of the 8000 wells with < $60 breakeven, 45% fall below $40, and 33% below $50.