Shares of U.S.-focused exploration and production company Matador Resources (NYSE: MTDR) rose as much as 10% in the first hour of trading today. A bit of that investor enthusiasm probably arose because oil prices, after falling sharply the day before, were higher when Wall Street opened for trading. But most of the early excitement was likely related to some news of a different sort.
The first big story here came from the company itself, with Matador announcing encouraging results from a new development effort. Having released the results for four wells, the company highlighted that another nine wells in the same region would be coming on line over the next couple of weeks. Notably, drilling costs were about 20% lower than originally expected, and initial production was strong. The company anticipates a sizable increase in production in the fourth quarter and is projecting that it will be cash flow positive. That's a key achievement today as the energy sector works through a painful downturn.
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Why Matador Resources Stock Rallied as Much as 10% at the Open Today