Matador Resources Company · NYSE:MTDR

Matador Resources — Investor Presentation (June 2020)

58 slides from Matador Resources's investor presentation, June 2020

1. Slide 1: Investor Presentation

   Investor Presentation June 2020

2. Slide 2: Disclosure Statements

   Disclosure Statements Safe Harbor Statement – This presentation and statements made by representatives of Matador Resources Company (“Matador” or the “Company”) during the course of this presentation include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933

3. Slide 3: Company Overview and Investment Highlights

   Company Overview and Investment Highlights

4. Slide 4: Matador Resources Company Overview

   Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Enterprise Value(1) $2.8 billion Delaware Basin Q1 2020 Avg. Daily Production 71.2 MBOE/d Assets Q1 2020 Proved Reserves(2) 260.0 MMBOE Haynesville/ Cotton Valley Q1 2020 Net Debt / LTM Adj. EBITDA(3)(4) 2.2x Assets MATADOR HEADQUAR

5. Slide 5: Investment Highlights – Matador Resources Company (NYSE: MTDR)

   Investment Highlights – Matador Resources Company (NYSE: MTDR) High Quality E&P Assets and Rapidly Growing Midstream Business • Matador is achieving strong operating results across its ~128,000 net acre Delaware Basin leasehold and minerals position, acquired for a weighted average cost of ~$11,000

6. Slide 6: Matador's Significant Officer % Ownership vs. Peer Group

   Matador’s Significant Officer % Ownership vs. Peer Group Interests Aligned with Shareholders • Since January 1, 2020, approximately 200 directors, special advisors and employees, or approximately two-thirds of the staff, have bought Matador stock in the open market! Joseph Wm. Foran Matthew V. Hairf

7. Slide 7: Strong, Organic Growth Coupled With Peer-Leading Financial Returns

   Strong, Organic Growth Coupled With Peer-Leading Financial Returns Total MMBOE Proved Reserves Growth(1) E&P and Total Return on Capital Employed(2) 3-Year Average (YE2018 to YE2019) (2017 to 2019) Peer 6 28% MTDR 17% Peer 1 MTDR 20% 24% 15% Peer 2 Peer Average 15% 14% Peer 3 14% MTDR Peer 7 15% 11%

8. Slide 8: A Tightly Integrated Strategy: Growing E&P and Midstream Together

   A Tightly Integrated Strategy: Growing E&P and Midstream Together Average Daily Total Production Average Daily Total Delaware Production (BOE/d) Delaware Basin (BOE/d) BOE down 4% sequentially; up 19% YoY 73,749 BOE down 2% sequentially; up 15% YoY 71,161 61,493 60,268 69,645 56,422 61,290 52,619 51

9. Slide 9: Matador Has Made Significant Progress Since the IPO in 2012

   Matador Has Made Significant Progress Since the IPO in 2012 Total Proved Reserves Net Acreage Position Average Daily Production (MMBOE) (MBOE/d) (1) (1) At IPO At IPO At IPO(1) Delaware Basin Delaware Basin Delaware Basin 0.1 MMBOE 7,500 net acres 0.0 MBOE/d Eagle Ford Eagle Ford 1.4 MMBOE 0.5 MBOE/

10. Slide 10: Consistent Growth in Proved Reserves per Share

    Consistent Growth in Proved Reserves per Share  Matador’s total proved reserves per share at all-time high(1) of 2.2 BOE/share (1.3 Bbl of oil + 5.5 Mcf of natural gas)  Since Matador’s IPO, total reserves have increased ~10x and oil reserves have increased 152x  Does not include value of 128,000

11. Slide 11: 2020 Priorities – Protecting the Balance Sheet is First Priority

    2020 Priorities – Protecting the Balance Sheet is First Priority Balance Sheet Improvements Significant 2020 Milestones - Timeline 1 Reducing Rig Count from 6 to 3 rigs Q3 2020 and Beyond 1 First Rodney Robinson wells turned to sales • Operating three rigs in 2 Reducing Capital Costs, G&A and LOE 2

12. Slide 12: Operations and Delaware Basin Update

    Operations and Delaware Basin Update

13. Slide 13: Delaware Basin Multi-Year Inventory of "A+ Locations"

    Delaware Basin Multi-Year Inventory of “A+ Locations” • Future drilling locations with a projected minimum 15% rate of return at $30/Bbl WTI oil pricing and $1.75/Mcf gas pricing A+  ~90% of Matador’s remaining 2020 oil production is hedged at a weighted average floor price of $38/Bbl Criteria • Al

14. Slide 14: Delaware Basin – Continuing to Deliver Strong Well Results!

    Delaware Basin – Continuing to Deliver Strong Well Results! Matador Acreage Reducing operated rigs in Delaware Basin TWIN LAKES ~44,400 gross / ~24,800 net acres from six to three by the end of Q2 2020 During full-year 2020:  Stateline: Two to four rigs (at times) testing ARROWHEAD five different t

15. Slide 15: First Six Rodney Robinson Wells Online – Results Above Expectations!

    First Six Rodney Robinson Wells Online – Results Above Expectations! “Rodney Robinson” Acreage Rodney Robinson Summary and Highlights • First six wells turned to sales on the Rodney Robinson Acreage tract in western Antelope Ridge in late Q1 2020 1 2 Overview • Matador acquired this 1,200 gross and

16. Slide 16: Stateline Asset Area – Eddy County, New Mexico

    Stateline Asset Area – Eddy County, New Mexico STATELINE Asset Summary and Highlights ~2,800 gross / ~ 2,800 net acres • Approximately 2,800 gross/net acres with 87.5% net Acreage revenue interest acquired in September 2018 BLM lease sale Overview • Approximately 88 gross two-mile and ~2.5-mile late

17. Slide 17: Greater Stebbins Area – Eddy County, New Mexico

    Greater Stebbins Area – Eddy County, New Mexico Greater Stebbins Area Summary and Highlights ARROWHEAD ~64,900 gross / ~26,500 net acres • Approximately 11,200 gross (5,000 net) acres Acreage • Currently producing from three primary intervals, Overview including 2nd Bone Spring, 3rd Bone Spring and

18. Slide 18: Rustler Breaks Asset Area – Eddy County, New Mexico

    Rustler Breaks Asset Area – Eddy County, New Mexico RUSTLER BREAKS Asset Summary and Highlights ~49,100 gross / ~27,000 net acres • Approximately 49,100 gross (27,000 net) acres Acreage • Producing from 12 different intervals throughout the Overview stratigraphic column • Successfully drilled five a

19. Slide 19: Capital Efficiency Gains: Better Wells for Less Money

    Capital Efficiency Gains: Better Wells for Less Money Capital Efficiency Gains  Matador continues to drill better wells for less money Transition to Longer Laterals ✔ • ~10% increase in well EUR by capturing 850 additional feet of completed lateral(1) 1 ✔ • ~25% less time spent drilling vertically

20. Slide 20: Capital Efficiency Gains: Better Wells for Less Money – Lateral Length and CapEx

    Capital Efficiency Gains: Better Wells for Less Money 1 2 – One-mile Wolfcamp A wells(1) 1 – Two-mile Wolfcamp A well(1) Lease Line Perforation Zone 10% less 10% additional completable lateral completable lateral ~4,450’ ~4,450’ ~4,450’ ~4,450’ ~8,900’ of Completable Lateral ~9,750’ of Completable L

21. Slide 21: San Mateo Midstream Operations and Plans

    San Mateo Midstream Operations and Plans

22. Slide 22: San Mateo Assets and Operations – "Three-Pipe" Offering

    San Mateo(1) Assets and Operations – “Three-Pipe” Offering Eddy County, NM Assets Loving County, TX Assets 1 Mile Greater Stebbins Area Wolf Natural Gas and Oil Pipelines 1 Mile Rustler Breaks Natural Gas Gathering and Processing  260 MMcf/d of designed natural gas cryogenic processing capacity  C

23. Slide 23: Significant Growth in All Parts of San Mateo's Delaware Midstream Business

    Significant Growth in All Parts of San Mateo’s Delaware Midstream Business (51% Owned by Matador) San Mateo Average Water Disposal San Mateo Average Natural Gas Gathering (MBbl/d) (MMcf/d) 250 300 Up 7% sequentially; Down 23% sequentially as anticipated(1); 262 up 19% YoY 203 up 12% YoY 190 190 250

24. Slide 24: San Mateo – Recent Highlights and Performance

    San Mateo – Recent Highlights and Performance  March 2020 – 10th commercial SWD well in Eddy County, NM online • Total of 13 commercial SWD wells in Eddy County, NM and Loving County, TX with ~335,000 Bbl/d of designed disposal capacity  October 2019 – Expanded credit facility for a second time fr

25. Slide 25: Updated 2020 Capital Investment Plan

    Updated 2020 Capital Investment Plan

26. Slide 26: Summary and Updated 2020 Guidance (as Provided on April 29, 2020)

    Summary and Updated 2020 Guidance (as Provided on April 29, 2020)  Six rigs operating in the Delaware Basin dropping to three – expect 53 gross (45.9 net) operated wells in 2020  Released one rig at the end of March 2020 and released a second rig at the end of April 2020  Anticipate releasing one

27. Slide 27: Updated 2020 Capital Investment Plan Summary vs. Original Guidance

    Updated 2020 Capital Investment Plan Summary vs. Original Guidance Original 2020 CapEx Guidance(1)(2)(3) – $815 million Updated 2020 CapEx Guidance(2)(3)(4) – $565 million (Delaware: 6 operated rigs) (Delaware: Moving from 6 to 3 operated rigs by end of Q2 2020) Midstream $95 million(3) 2020E Wells

28. Slide 28: 2020 Oil and Natural Gas Production Estimates

    2020 Oil and Natural Gas Production Estimates(1) Total Oil and Natural Gas Production 2020E CapEx(1)(2) (Midpoint): Natural Gas, Bcf D/C/E: Midstream(3): $470 MM $95 MM Oil, MBbl 7% 2020E Oil Production – 9% Growth YoY Total: $565 MM 25,950 24,164 • Estimated oil production of 15.1 to 15.5 million b

29. Slide 29: Wells Completed and Turned to Sales – 2020 Updated Guidance

    Wells Completed and Turned to Sales – 2020 Updated Guidance(1)  During full year 2020, Matador expects to complete and turn to sales 96 gross (48.6 net) wells. Matador expects the Delaware Basin to account for 93 gross (48.6 net) wells, including 53 gross (45.9 net) operated and 40 gross (2.7 net)

30. Slide 30: Hedging Profile – Remainder of 2020, 2021 and 2022

    Hedging Profile – Remainder of 2020, 2021 and 2022 Remainder of 2020, 2021 and 2022 Hedges(1)  Oil (WTI) Costless Collars: ~2.3 million Bbl hedged for the remainder of 2020 at weighted average floor and ceiling prices of $48/Bbl and $66/Bbl, respectively  Oil (WTI) Swaps: ~7.6 million Bbl hedged f

31. Slide 31: Simple Balance Sheet – No Near-Term Debt Maturities

    Simple Balance Sheet – No Near-Term Debt Maturities • Strong, supportive bank group led by Royal Bank of Canada • Facility size of $1.5 billion; matures in October 2023 • Based on December 2019 reserves review, borrowing base affirmed at $900 million in February 2020 (Spring 2020 redetermination) 

32. Slide 32: Revolver Borrowings Outstanding – Quarterly Estimates for 2020

    Revolver Borrowings Outstanding – Quarterly Estimates for 2020 ($ in millions) Letters of Credit $1,000 Revolver Borrowings Outstanding $900 $900 $800 $200 million $700 $700 $180 million $600 $545 $520 $45 $500 $45 $440 $400 $45 $361 $46 $300 $500 $475 $200 $395 $315 $100 $0 Q1 2020 Q2 2020E Q3 2020

33. Slide 33: Environmental, Social and Governance (ESG)

    Environmental, Social and Governance (ESG)

34. Slide 34: ESG: Environmental – Air

    ESG: Environmental – Air Reducing greenhouse gas (GHG) Reducing emissions since 2017 emissions using advanced Greenhouse Gases (6%) capture and control equipment Emission Intensity Rate Vapor recovery units (VRU) on 100% of (33%) newly constructed tank batteries Methane Intensity Rate (33%) Vapor co

35. Slide 35: ESG: Environmental – Water

    ESG: Environmental – Water 600 2019 Stimulation Over 550 million gallons Cumulative Recycled Production Water 500 Fluid Volumes recycled by YE 2019 400 +36% 80% ~$8.7 million Recycled (million gallons) 300 cost savings(1) Wolf Asset as alternative to 200 Area fresh water 100 sourcing and 0 Fresh pro

36. Slide 36: ESG: Increased Use of Recycled Water in Fracturing Operations

    ESG: Increased Use of Recycled Water in Fracturing Operations +550 Gallons(1) of recycled produced water utilized for fracture stimulation ~$8.7 Estimated cost savings(2) as alternative to fresh water sourcing and produced million since 2015 million water disposal Estimated fracture fluid volume MTD

37. Slide 37: ESG: Environmental – Land

    ESG: Environmental – Land # of Pads Built Reducing surface ~60% of oil and ~93% of footprint with fewer pads water produced from the 36 More batch drilling, longer laterals 31 Delaware Basin is and commingling production transported on pipe(1) 58% fewer pads anticipated to be built in 2020 vs. 2018

38. Slide 38: ESG: Social

    ESG: Social 18,000 Commitment to a 16,000 Over 17,000 hours of proactive safety culture 14,000 employee continuing 12,000 education in 2019 No recordable employee injuries 10,000 since 2014 8,000 6,000 Over 1.4 million employee man-hours 4,000 and zero lost time accidents (LTA) 2,000 since 2017 0 20

39. Slide 39: ESG: Governance

    ESG: Governance Engaged Board of Directors Annual with majority voting “Say on Pay” Diverse and independent board standard voting Commitment to Female Lead membership since 1988(1) Independent Director ethical conduct Board and compliance Composition Certification of 10 of 11 code of conduct by No “

40. Slide 40: Appendix

    ay, {Matador fies RESOURCES COMPANY Appendix MIDR NYSE

41. Slide 41: Highlights for Q1 2020

    Highlights for Q1 2020 • Oil production of ~40,600 Bbl/d, up 18% from ~34,500 Bbl/d in Q1 2019 – Above Guidance Strong Production • Natural gas production of ~183.2 MMcf/d, up 20% from ~152.5 MMcf/d in Q1 2019 – Above Guidance • Total production of ~71,200 BOE/d, up 19% from ~59,900 BOE/d in Q1 2019

42. Slide 42: Q1 2020 Selected Operating and Financial Results

    Q1 2020 Selected Operating and Financial Results Three Months Ended March 31, December 31, March 31, 2020 2019 2019 Net Production Volumes:(1) Oil (MBbl) 3,697 3,872 3,107 Natural gas (Bcf) 16.7 17.5 13.7 Total oil equivalent (MBOE) 6,476 6,785 5,395 Average Daily Production Volumes:(1) Oil (Bbl/d)

43. Slide 43: Delaware Basin Extended Lateral Well Location Inventory

    Delaware Basin Extended Lateral Well Location Inventory • Matador has identified up to 4,548 gross (1,600 net) remaining potential locations (1) for future drilling on its Delaware Basin acreage  Location counts assume extended lateral lengths whenever viable, and the total locations have an averag

44. Slide 44: A Step Change in Capital Efficiency: Updated 2020 Expectations

    A Step Change in Capital Efficiency: Updated 2020 Expectations(1) Average Lateral Length and % of Longer Laterals CapEx per Foot(2) and Lateral Footage Turned to Sales 100% 600,000 $1,700 Lateral Feet Turned to Sales 83% Average Drilling & Completions CapEx/foot, $/ft(2) 9,000 Average D&C CapEx/ft (

45. Slide 45: Delaware Basin Drilling Records Since MAXCOM Implementation

    Delaware Basin Drilling Records Since MAXCOM Implementation Recent Spud to TD Drilling Records: 86 MTDR Drilling Records and ~$9.4 Million  Jack Sleeper #201H – 17.8 days – 2-mile well Estimated Savings Since MAXCOM  Rodney Robinson #122H – 18.8 days – 2-mile well Implementation Through May 28, 20

46. Slide 46: Marketing and Takeaway Overview

    Marketing and Takeaway Overview Three-Stream Takeaway Marketing and Midstream Adding Value Oil The combined efforts of Matador’s marketing and midstream teams have significantly increased  Matador expects to have approximately 90% of its realized pricing by: operated Delaware Basin oil production o

47. Slide 47: Crude Oil Marketing Overview

    Crude Oil Marketing Overview  Matador expects to have almost all its operated Delaware Basin oil production on pipe by Q4 2020 Central Delivery Points  Contracted a long-term, fixed transport rate Existing Plains Pipeline  Market optionality into Midland, Gulf Coast Plains Pipeline (LLS), Houston

48. Slide 48: Natural Gas Marketing Overview

    Natural Gas Marketing Overview San Mateo’s  In late September 2019, Matador began Black River Processing Plant transporting most of its Delaware Basin residue natural gas production to the Texas Gulf Coast on the newly commissioned Gulf Coast Express Pipeline Project for ~110,000 to ~115,000 MMBtu/

49. Slide 49: Natural Gas Liquids Marketing Overview

    Natural Gas Liquids Marketing Overview Matador Acreage  Completed NGL connection at the Black River Black River Processing Plant Processing Plant on EPIC’s Y-Grade pipeline EPIC Y-Grade Pipeline in March 2018  BP Energy Company has continued to buy NGLs at tailgate of the Black River Processing Pl

50. Slide 50: Matador Resources and San Mateo I Credit Facilities

    Matador Resources and San Mateo I Credit Facilities Matador Credit Agreement Summary Bank group led by Royal Bank of Canada Elected Borrowings Letters of Credit Financial Covenant: Maturity Borrowing Last Reserves Facility Size Borrowing Outstanding Outstanding Maximum Net Debt to Date Base Review C

51. Slide 51: Adjusted EBITDA Reconciliation

    Adjusted EBITDA Reconciliation This presentation includes the non-GAAP financial measure of Adjusted EBITDA. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, inves

52. Slide 52: Adjusted EBITDA Reconciliation – Matador Resources Company, Consolidated

    Adjusted EBITDA Reconciliation Matador Resources Company, Consolidated The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively. (In thousands)

53. Slide 53: Adjusted EBITDA Reconciliation – San Mateo

    Adjusted EBITDA Reconciliation San Mateo(1) The following table presents the calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by (used in) operating activities, respectively, for San Mateo Midstream, LLC an

54. Slide 54: Adjusted EBITDA Reconciliation – San Mateo

    Adjusted EBITDA Reconciliation San Mateo(1) The following table presents the calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by (used in) operating activities, respectively, for San Mateo Midstream, LLC an

55. Slide 55: Adjusted Net Income and Adjusted Earnings Per Diluted Common Share

    Adjusted Net Income and Adjusted Earnings Per Diluted Common Share This presentation includes the non-GAAP financial measures of adjusted net income and adjusted earnings per diluted common share. These non-GAAP items are measured as net income attributable to Matador Resources Company shareholders,

56. Slide 56: Return on Average Capital Employed (ROACE) Reconciliation

    Return on Average Capital Employed (ROACE) Reconciliation The following table presents our calculation of E&P ROACE and Total ROACE and a reconciliation of such measures to the corresponding GAAP financial measures. Return on Average Capital Employed ($ in thousands) For the Years Ended December 31,

57. Slide 57: Cash Return on Capital Invested (CROCI) Reconciliation

    Cash Return on Capital Invested (CROCI) Reconciliation The following table presents our calculation of CROCI and Total CROCI and a reconciliation of such measures to the corresponding GAAP financial measures. Cash Return on Capital Invested ($ in thousands) For the Years Ended December 31, 2019 2018

58. Slide 58: PV-10 Reconciliation

    PV-10 Reconciliation PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues. PV-10 is not an estimate of the fair market value of the Co

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