How Matador Resources Has Managed To Perform Well In Spite Of Lower Oil Prices? CEO Explains

The fall in oil prices was seen as a big setback for the shale oil and gas industry. However, shares of Matador Resources Co MTDR, an oil and gas exploration and production firm with emphasis on shale and other unconventional plays, have held high in spite of lower oil prices, up by over 55 percent in the last 6 months.

Joseph Foran, Matador Resources CEO, was on CNBC recently to explain the reason behind that and to share his outlook on oil prices.

Enjoying Price Cuts

“We all continue to try to be cautious in what we do because, I think, there is a feeling that the worse is behind us on prices,” Foran said. “But it isn’t going to be up and up and up. It will be up-down, up-down because the news is somewhat mixed. And in doing so what you are really aiming for is the efficiencies in drilling and completion that are sustainable.”

He continued, “By drilling the wells faster, fracking them better using the latest gas-lift technologies in producing them, those are sustainable. Now we are enjoying some price cuts, which takes […] prices because about every $2 cost reduction is about the equivalent of $1 increase in the price of oil.”

$70-$80, Not $100

Foran was asked if oil is headed back to $100. He replied, “It’s not going back to $100. But I think the trend is back towards $70 to $80. Maybe that’s where the stabilisation point will be.”

On when can one see oil trading back at $70-$80 levels, Foran said, “That’s a hard one given one of the big unknowns is of course the political risks involved in the Mideast.”

“The political risk is real and that’s hard to predict, what’s going to happen in Mideast, Russia. But as far as the industry itself demand is continuing to grow,” Foran concluded.