Matador Resources CoMTDR
Matador Resources Co Leases Disclosure
NOTE 4 — LEASES
The Company determines if an arrangement is a lease at inception of the contract. If an arrangement is a lease, the present value of the related lease payments is recorded as a liability, and an equal amount is capitalized on the Company’s consolidated balance sheets. The Company elected to include payments for non-lease components associated with certain leases when determining the present value of the lease payments. Right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company’s estimated incremental borrowing rate, determined at the lease commencement date using the Company’s average secured borrowing rate, is used to calculate present value. The weighted average estimated incremental borrowing rates used for the year ended December 31, 2025 were 5.40% and 6.15% for operating leases and finance leases, respectively. For these purposes, the lease term includes options to extend the lease when it is reasonably certain that the Company will exercise such option. Leases with terms of 12 months or less at inception are not recorded on the consolidated balance sheets unless there is a significant cost to terminate the lease, including the cost of removal of the leased asset. As the Company is the responsible party under these arrangements, the Company records the resulting assets and liabilities on a gross basis in its consolidated balance sheets.
The following table presents supplemental consolidated statements of income information related to lease expenses, on a gross basis, for the years ended December 31, 2025 and 2024, respectively (in thousands). Lease payments represent gross payments to vendors, which, for certain of the Company’s operating assets, are partially offset by amounts received from other working interest owners in the Company’s operated wells.
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating leases | |||||||||||
| Lease operating | $ | 35,407 | $ | 30,141 | |||||||
| General and administrative | 5,189 | 2,910 | |||||||||
Total operating leases(1) | 40,596 | 33,051 | |||||||||
| Short-term leases | |||||||||||
| Lease operating | 68,277 | 46,770 | |||||||||
| Midstream operating | 8,933 | 11,110 | |||||||||
| General and administrative | 22 | 54 | |||||||||
Total short-term leases(2)(3) | 77,232 | 57,934 | |||||||||
| Finance leases | |||||||||||
| Depreciation of assets | 1,765 | 2,296 | |||||||||
| Interest on lease liabilities | 866 | 607 | |||||||||
| Total finance leases | 2,631 | 2,903 | |||||||||
| Total lease expense | $ | 120,459 | $ | 93,888 | |||||||
_____________________
(1) Does not include gross payments related to drilling rig leases of $84.7 million and $87.8 million for the years ended December 31, 2025 and 2024, respectively, that were capitalized and recorded in “Oil and natural gas properties, full-cost method” in the consolidated balance sheets at December 31, 2025 and 2024, respectively.
(2) These costs are related to leases that are not recorded as right of use assets or lease liabilities in the consolidated balance sheets as they are short-term leases.
(3) Does not include gross payments related to short-term drilling rig leases and other equipment rentals of $265.9 million and $231.8 million for the years ended December 31, 2025 and 2024, respectively, that were capitalized and recorded in “Oil and natural gas properties, full-cost method” in the consolidated balance sheets at December 31, 2025 and 2024, respectively.
The following table presents supplemental consolidated balance sheet information related to leases as of December 31, 2025 and 2024, respectively (in thousands).
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Operating leases | ||||||||||||||
| $ | 138,655 | $ | 127,445 | |||||||||||
| $ | (65,091) | $ | (57,924) | |||||||||||
| (79,190) | (72,498) | |||||||||||||
| Total operating lease liabilities | $ | (144,281) | $ | (130,422) | ||||||||||
| Finance leases | ||||||||||||||
| Other property and equipment, at cost | $ | 14,204 | $ | 12,783 | ||||||||||
| Accumulated depreciation | (11,297) | (9,532) | ||||||||||||
| $ | 2,907 | $ | 3,251 | |||||||||||
| $ | (1,113) | $ | (1,312) | |||||||||||
| (1,175) | (1,021) | |||||||||||||
| Total finance lease liabilities | $ | (2,288) | $ | (2,333) | ||||||||||
The following table presents supplemental consolidated cash flow information related to lease payments for the years ended December 31, 2025 and 2024, respectively (in thousands).
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash paid related to lease liabilities | ||||||||||||||
| Operating cash payments for operating leases | $ | 36,725 | $ | 37,155 | ||||||||||
| Investing cash payments for operating leases | $ | 84,663 | $ | 87,776 | ||||||||||
| Financing cash payments for finance leases | $ | 1,466 | $ | 1,257 | ||||||||||
| Right of use assets obtained in exchange for lease obligations entered into during the period | ||||||||||||||
| Operating leases | $ | 139,400 | $ | 207,279 | ||||||||||
| Finance leases | $ | 1,421 | $ | 1,467 | ||||||||||
The following table presents the maturities of lease liabilities at December 31, 2025 (in years).
| Weighted-Average Remaining Lease Term | December 31, 2025 | |||||||
| Operating leases | 7.3 | |||||||
| Finance leases | 1.9 | |||||||
The following table presents a schedule of future minimum lease payments required under all lease agreements as of December 31, 2025 (in thousands).
| December 31, 2025 | ||||||||||||||
| Operating Leases | Finance Leases | |||||||||||||
| 2026 | $ | 65,091 | $ | 1,113 | ||||||||||
| 2027 | 25,690 | 808 | ||||||||||||
| 2028 | 13,383 | 384 | ||||||||||||
| 2029 | 7,618 | — | ||||||||||||
| 2030 | 5,076 | — | ||||||||||||
| Thereafter | 56,618 | — | ||||||||||||
| Total lease payments | 173,476 | 2,305 | ||||||||||||
| Less imputed interest | (29,195) | (17) | ||||||||||||
| Total lease obligations | 144,281 | 2,288 | ||||||||||||
| Less current obligations | (65,091) | (1,113) | ||||||||||||
| Long-term lease obligations | $ | 79,190 | $ | 1,175 | ||||||||||
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 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.