Matador secured enough firm pipeline capacity to move 500,000 MMBtu of natural gas per day. The Hugh Brinson pipeline began flowing in the latest three months, a physical sign of new transportation infrastructure connected to Matador’s gas business.
The same three-month period ended June 30 brought a far less complicated headline: revenue rose 32.5% to $1.2 billion, while operating income doubled to $577.3 million. Net income climbed 160% to $390.7 million, lifting the operating margin from 32.2% to 48.7%.
That margin jump came with an unusual price receipt. Matador said average Waha natural gas pricing fell about 910%, resulting in negative prices, even as purchased volumes rose 55% because of the weaker market pricing.
"The decrease in purchased natural gas expense was primarily due to a decline of approximately 910% in average Waha pricing resulting in negative prices during the current period, which was partially offset by a 55% increase in volumes purchased due to the weaker market pricing."
10-Q 2026-08-07
In plain English, one gas-cost line reflected a market price that went below zero. That helps explain part of the wider operating margin. It also puts asterisks around treating the 48.7% margin as a clean operating baseline. The company does not quantify how much of the improvement came from that pricing move.
The other half of the filing is a spending and financing story. Net cash used in investing activities rose primarily because Matador spent an additional $1.10 billion acquiring oil and natural gas properties, chiefly through the BLM Acquisition. Cash ended the period at $26.3 million, up from $10.5 million a year earlier.
"The increase in net cash used in investing activities between the periods was primarily due to (i) a $1.10 billion increase in expenditures related to the acquisition of oil and natural gas properties, primarily the BLM Acquisition, (ii) a $37.6 million cash deposit related to the Cardinal Acquisition and (iii) a $21.4 million decrease in cash provided by proceeds from the sale of assets, partially offset by a $121.1 million decrease in midstream capital expenditures."
10-Q 2026-08-07
The financing section separately shows larger borrowings and new notes. The company disclosed a $746.5 million increase in net borrowings under its Credit Agreement and $737.1 million of proceeds from its 2034 Notes Offering, alongside the repurchase of $509.7 million of 2028 Notes. Interest expense still rose as average debt increased across several facilities and the senior notes, despite lower rates.
That leaves two numbers moving in opposite directions: operating income surged, while the business also reported more acquisition spending and more financing activity. Accounts receivable rose 21.5%, slower than revenue growth, so the balance-sheet movement is not simply a replay of the sales increase. The latest report gives the cash uses and funding sources, but not a single measure tying the acquisition spending to the period’s profit.
The pipeline disclosure adds a specific operating read-through. Matador said the new Energy Transfer line is expected to be fully in service by the end of the third quarter, giving the company transportation capacity while Waha pricing has become unusually distorted. That is infrastructure attached to a gas market whose economics changed sharply during the period, not a tidy supply-chain footnote.
Matador’s annual results also show why the latest margin deserves a time series: operating margin was 33.5% in 2025, down from 41.2% in 2024. The latest report therefore shows both higher three-month profitability and substantial acquisition activity alongside debt financing. The unresolved question is what Matador’s next quarterly report will disclose about Waha pricing and acquisition-related spending.