Matador Resources Co. (NYSE: MTDR) has announced that over the next few months, the oil and gas production company is shutting down its two rig operations in the Eagle Ford in light of plummeting petroleum prices.
The Dallas-based company holds an emphasis in producing oil and natural gas in the Eagle Ford and Permian Shale Plays. According to its investor presentations, the company holds over 29,000 net acres in South Texas. However, in a news release issued January 6th, Matador announced that it intends to scale back particular operation in the South Texas region and continue operating the three rigs in Southeast New Mexico and West Texas.
The reasons that Matador has decided to reduce its Eagle Ford drilling program significantly in 2015 are due to lower oil and natural gas prices and the fact that almost all of the Company’s acreage in the Eagle Ford shale is now held by production. As a result of the Company’s strong execution in the Eagle Ford over the past three years, this asset has become an “oil bank” that Matador can return to and develop further at a future time when commodity prices are more favorable.”
Matador also exclaimed that the company currently plans a total 2015 capital spending program in the range of $325 to $375 million as it seeks to maintain its spending and balance sheet discipline in the current commodity price environment.
Permian Basin operations for the company are still in the clear. The primary prospect areas — the Wolf Prospect in Loving County, Texas, the Ranger Prospect in Lea County, New Mexico and the Rustler Breaks Prospect in Eddy County, New Mexico– are all equipped with full walking capability new-build rigs. Matador expects these rigs will result in additional operational efficiencies and will reduce the costs associated with its Permian drilling program in 2015.
Additionally, Matador also expects to raise its natural gas production In Northwest Louisiana. Once wells are in production within the Haynesville fields, Matador expects to raise its production from approximately 65 million cubic feet of natural gas per day at January 6, 2015 to between 70 and 75 million cubic feet of natural gas per day.