MTDR - Upgrading to Buy Following Strong 1Q

研报英文原文证据摘录

MTDR - Upgrading to Buy Following Strong 1Q

Truist Securities

Brinson pipe (expected ISD in 3Q/4Q26) alongside legacy capacity on GCX (~114.5MMcf/d to HSC) and El Paso (~20MMcf/d to SoCal). We

estimate the 15-year Hugh Brinson contract provides ~$142MM in NPV (~$1.10/shr) based on our estimate of transport costs (65c/Mcf) and

current Waha and Katy/HSC spreads. Given these contracts in place that now dilute MTDR's Waha exposure to just ~24% for '27, we model

MTDR will realize ~80% of NYMEX v just ~21% this year, a significant improvement. We note MTDR already shows one of the highest

cash margins per BOE for our oily coverage and when compared to its '25 PD F&D of $13.39/Boe, implies a robust recycle ratio of ~3.0x.

Figure 1 - Cash Margin/BOE Across All Oil-Focused E&Ps Within Coverage

Source: Truist Securities Estimates, Company Reports

San Mateo initiatives in focus. We previously highlighted the sale of Brazos (Private) this week to Western Midstream (WES, Not

Rated) for $1.6Bn in cash-and-units consideration. The Brazos assets included 460 MMcf/d of processing capacity at Comanche, incl. 125

MMcf/d of available capacity. The portfolio also included crude and gas gathering systems and ~470k dedicated acres in the Delaware.

WES highlighted an ~8x '27e EV/EBITDA multiple. In comparison, the San Mateo footprint has 760 MMcf/d of processing capacity with

less gathering pipeline mileage but includes water lines and 16 saltwater disposal wells. While the San Mateo assets do carry more

concentration risk, the processing plants sit in more advantageous locations with both Black River and Marlan in New Mexico (vs east

Reeves County, TX for Brazos) nearer to higher production growth areas of the basin given still significant undeveloped inventory remaining