Matador Resources CoMTDR
Matador Resources Co Fair Value Disclosure
NOTE 13 — FAIR VALUE MEASUREMENTS
The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements are classified and disclosed in one of the following categories.
Level 1 Unadjusted quoted prices for identical, unrestricted assets or liabilities in active markets.
Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs, including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace.
Level 3 Unobservable inputs that are not corroborated by market data that reflect a company’s own market assumptions.
Financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.
The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of December 31, 2025 and 2024 (in thousands).
Fair Value Measurements at December 31, 2025 using | ||||||||||||||||||||||||||
| Description | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Assets (Liabilities) | ||||||||||||||||||||||||||
| Oil costless collars | $ | — | $ | 717 | $ | — | $ | 717 | ||||||||||||||||||
| Natural gas costless collars | — | 17,396 | — | 17,396 | ||||||||||||||||||||||
| Natural gas basis differential swaps | — | 15,939 | — | 15,939 | ||||||||||||||||||||||
| Total | $ | — | $ | 34,052 | $ | — | $ | 34,052 | ||||||||||||||||||
Fair Value Measurements at December 31, 2024 using | ||||||||||||||||||||||||||
| Description | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Assets (Liabilities) | ||||||||||||||||||||||||||
| Oil costless collars | $ | — | $ | 3,676 | $ | — | $ | 3,676 | ||||||||||||||||||
| Natural gas basis differential swaps | — | 12,292 | — | 12,292 | ||||||||||||||||||||||
| Total | $ | — | $ | 15,968 | $ | — | $ | 15,968 | ||||||||||||||||||
Additional disclosures related to derivative financial instruments are provided in Note 12.
Other Fair Value Measurements
At December 31, 2025 and 2024, the carrying values reported on the consolidated balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, royalties payable, amounts due to affiliates, advances from joint interest owners and other current liabilities approximated their fair values due to their short-term maturities.
At December 31, 2025 and 2024, the carrying value of borrowings under the Credit Agreement and the San Mateo Credit Facility approximated their fair value as both are subject to short-term floating interest rates that reflect market rates available to the Company at the time and are classified at Level 2 in the fair value hierarchy.
The following table summarizes the carrying value and fair value of outstanding senior unsecured notes at December 31, 2025 and 2024 (in thousands).
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||
| Fair Value Hierarchy | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||||||
| 2028 Notes | Level 1 | $ | 500,000 | $ | 511,585 | $ | 500,000 | $ | 505,380 | |||||||||||||||||||||||
| 2032 Notes | Level 1 | $ | 900,000 | $ | 914,265 | $ | 900,000 | $ | 890,667 | |||||||||||||||||||||||
| 2033 Notes | Level 1 | $ | 750,000 | $ | 751,920 | $ | 750,000 | $ | 730,568 | |||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.