Matador Resources (MTDR) risk factors, FY2025 10-K

Risks Related to our Financial Condition

1. 01Our success is dependent on the prices of oil, natural gas and NGLs. Low oil, natural gas and NGL prices and the continued volatility in these prices may adversely affect our financial condition and our ability to meet our capital expenditure requirements and financial obligations43% rewritten
2. 02pursuant to long-term fixed price contracts. Further, oil, natural gas and NGL prices do not necessarily fluctuate in direct relation to each other
3. 03We cannot predict the impact of armed conflicts, including the ongoing military conflicts between Russia and Ukraine and in the Middle East, and the related humanitarian crises on the global economy, energy markets, geopolitical stability and our business75% rewritten
4. 04Our exploration, development, exploitation and midstream projects require substantial capital expenditures that may exceed our cash flows from operations and potential borrowings, and we may be unable to obtain needed capital on satisfactory terms, which could adversely affect our future growth95% rewritten
5. 05Facility or otherwise may not be sufficient to fund all of our future capital expenditures or future acquisitions. The rate of our future growth is dependent, at least in part, on our ability to access capital at rates and on terms we determine to be acceptableNew
6. 06Our oil and natural gas reserves are estimated and may not reflect the actual volumes of oil and natural gas we will recover, and significant inaccuracies in these reserves estimates or underlying assumptions will materially affect the quantities and present value of our reserves34% rewritten
7. 07redetermined on at least an annual basis and may be adjusted to reflect new information based upon our actual production history, results of exploration and development, prevailing oil and natural gas prices and other factorsNew
8. 08The calculated present value of future net revenues from our proved oil and natural gas reserves will not necessarily be the same as the current market value of our estimated oil and natural gas reserves
9. 09Approximately 39% of our total proved reserves at December 31, 2025 consisted of undeveloped and developed non-producing reserves, and those reserves may not ultimately be developed or produced
10. 10Unless we replace our oil and natural gas reserves, our reserves and production will decline, which would adversely affect our business, financial condition, results of operations and cash flows
11. 11We may be required to write down the carrying value of our proved properties under accounting rules, and these write-downs could adversely affect our financial condition
12. 12Hedging transactions, or the lack thereof, may limit our potential gains and could result in financial losses
13. 13A change in the differential between the NYMEX or other benchmark prices of oil and natural gas and the wellhead price we receive for our production could adversely affect our business, financial condition, results of operations and cash flows
14. 14A component of our growth has come, and may continue to come, through acquisitions, and our failure to identify, complete or integrate future acquisitions successfully could reduce our earnings and hamper our growth
15. 15We may purchase oil and natural gas properties or midstream assets with liabilities or risks that we did not know about or that we did not assess correctly, and, as a result, we could be subject to liabilities that could adversely affect our results of operations
16. 16We may incur losses or costs as a result of title deficiencies in the properties in which we invest
17. 17Our ability to complete dispositions of assets, or interests in assets, may be subject to factors beyond our control, and in certain cases we may be required to retain liabilities for certain matters

Risks Related to our Liquidity

1. 18We may not be able to generate sufficient cash to fund our capital expenditures, service all of our indebtedness and pay dividends to our shareholders, and we may be forced to take other actions to satisfy our obligations under applicable debt instruments, which may not be successful
2. 19We may incur additional indebtedness, which could reduce our financial flexibility, increase interest expense and adversely impact our operations and our unit costs77% rewritten
3. 20The borrowing base under our Credit Agreement is subject to periodic redetermination
4. 21We are subject to interest rate risk under our Credit Agreement and the San Mateo Credit Facility60% rewritten
5. 22our Credit Agreement and interest rates increase, so will our interest costs, which may have a material adverse effect on our results of operations and financial conditionNew
6. 23The terms of the agreements governing our outstanding indebtedness may restrict our current and future operations, particularly our ability to respond to changes in business or to take certain actions38% rewritten
7. 24in our Credit Agreement, the San Mateo Credit Facility and the indentures governing our senior notes, see Note 7 to the consolidated financial statements in this Annual ReportNew
8. 25Our credit rating may be downgraded, which could reduce our financial flexibility, increase interest expense and adversely impact our operations32% rewritten
9. 26The payment of dividends and the repurchase of shares of our common stock will be at the discretion of our Board of Directors and subject to numerous factors51% rewritten

Risks Related to our Operations

1. 27Drilling for and producing oil, natural gas and NGLs is highly speculative and involves a high degree of operational and financial risk, with many uncertainties that could adversely affect our business
2. 28Our operations are subject to operational hazards and risks, which could result in significant damages and the loss of revenue
3. 29Insurance against all operational risks is not available to us
4. 30Because our reserves and production are concentrated in a few core areas, problems with production in and markets for a particular area could have a material impact on our business
5. 31There is no guarantee that we will be successful in optimizing our spacing, drilling and completions techniques in order to maximize our rate of return, cash flow from operations and shareholder value
6. 32Certain of our properties are in areas that may have been partially depleted or drained by offset wells, and certain of our wells may be adversely affected by actions other operators may take when drilling, completing or operating wells that they own
7. 33Multi-well pad drilling may result in volatility in our operating results
8. 34Construction of midstream projects subjects us to risks of construction delays, cost over-runs, limitations on our growth and negative effects on our financial condition, results of operations, cash flows and liquidity36% rewritten
9. 35Our identified drilling locations are scheduled over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling
10. 36Certain of our unproved and unevaluated acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage
11. 37The 2-D and 3-D seismic data and other advanced technologies we use cannot eliminate exploration risk, which could limit our ability to replace and grow our reserves and materially and adversely affect our results of operations and cash flows

Risks Related to Third Parties

1. 38Financial difficulties encountered by our oil, natural gas and NGL purchasers, third-party operators, third-party customers or other third parties could decrease our cash flows from operations and adversely affect the exploration and development of our prospects and assets
2. 39The marketability of our production is dependent upon oil, natural gas and NGL gathering, processing and transportation facilities, and the unavailability of satisfactory oil, natural gas and NGL gathering, processing and transportation arrangements could have a material adverse effect on our revenue
3. 40We conduct a portion of our operations through joint ventures, which subjects us to additional risks that could have a material adverse effect on the success of these operations, our financial position, results of operations or cash flows
4. 41We have entered into certain long-term contracts that require us to pay fees to our service providers based on minimum volumes regardless of actual volume throughput and that may limit our ability to use other service providers
5. 42We do not own all of the land on which our midstream assets are located, which could disrupt our operations
6. 43Competition in the oil and natural gas industry is intense, making it more difficult for us to acquire properties, market oil and natural gas, provide midstream services and secure trained personnel, and our competitors may use superior technology and data resources that we may be unable to afford
7. 44Strategic relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations
8. 45We have limited control over activities on properties we do not operate

Risks Related to Laws and Regulations

1. 46Approximately 33% of our leasehold and mineral acres in the Delaware Basin is located on federal lands, which are subject to administrative permitting requirements and potential federal legislation, regulation and orders that may limit or restrict oil and natural gas operations on federal lands36% rewritten
2. 47We are subject to government regulation and liability, including complex environmental laws, which could require significant expenditures62% rewritten
3. 48properties or otherwise violated state and federal rules regulating waste disposal. Private parties may also pursue legal actions challenging permitting programs that authorize certain of our operationsNew
4. 49Federal and state legislation and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays89% rewritten
5. 50implemented more stringent regulatory requirements applicable to hydraulic fracturing, including bans or moratoria on drilling that effectively prohibit further production of oil and natural gas through the use of hydraulic fracturing or similar operationsNew
6. 51New climate disclosure rules adopted by the SEC or states in which we have operations or do business could increase our costs of compliance and adversely impact our business88% rewritten
7. 52New regulations on all emissions from our operations could cause us to incur significant costs50% rewritten
8. 53We may incur significant costs and liabilities resulting from compliance with pipeline safety regulations48% rewritten
9. 54A change in the jurisdictional characterization of some of our assets by FERC or a change in policy by FERC may result in increased regulation of our assets, which may cause our revenues to decline and operating expenses to increase
10. 55The rates of our regulated assets are subject to review and reporting by federal regulators, which could adversely affect our revenues
11. 56Should we fail to comply with all applicable FERC-administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines
12. 57Derivatives legislation adopted by Congress could have an adverse impact on our ability to hedge risks associated with our business
13. 58Changes in U.S. foreign trade policies, including the imposition of additional tariffs and other trade barriers, and efforts to withdraw from or materially modify international trade agreements, may materially and adversely affect our business, operations and financial condition79% rewritten

Risks Related to Our Common Stock

1. 59The price of our common stock has fluctuated substantially and may fluctuate substantially in the future77% rewritten
2. 60Attention to environmental, social and governance (“ESG”) and conservation matters and a negative shift in market perception towards the oil and natural gas industry could adversely affect demand for oil and natural gas and our stock price27% rewritten
3. 61Future sales of shares of our common stock by existing shareholders and future offerings of our common stock by us could depress the price of our common stock
4. 62Our directors and executive officers own a significant percentage of our equity, which could give them influence in corporate transactions and other matters, and their interests could differ from other shareholders
5. 63Our Board can authorize the issuance of preferred stock, which could diminish the rights of holders of our common stock and make a change of control of the Company more difficult even if it might benefit our shareholders
6. 64We may have difficulty managing growth in our business, which could have a material adverse effect on our business, financial condition, results of operations and cash flows and our ability to execute our business plan in a timely fashion
7. 65Our success depends, to a large extent, on our ability to retain our key personnel, including our chairman and chief executive officer, management and technical team and the members of our Board, and the loss of any key personnel or Board member could disrupt our business operations21% rewritten
8. 66A cyber incident could occur and result in information theft, data corruption, operational disruption or financial loss20% rewritten
9. 67Provisions of our certificate of formation, bylaws and Texas law may have anti-takeover effects that could prevent a change in control even if it might be beneficial to our shareholders
10. 68We operate in a litigious environment and may be involved in legal proceedings that could have a material adverse effect on our results of operations and financial condition