Matador Resources Company · NYSE:MTDR
Matador Resources — Q2 2021 Earnings Presentation
33 slides from Matador Resources's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Earnings Release
Second Quarter 2021 Earnings Release July 27, 2021
Slide 2: Investor Relations Contact and Disclosure Statements
Investor Relations Contact and Disclosure Statements Safe Harbor Statement – This presentation and statements made by representatives of Matador Investor Relations Contact Resources Company (“Matador” or the “Company”) during the course of this presentation include “forward- looking statements” with
Slide 3: Matador Resources Company Overview
Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Capitalization(1) $3.7 billion Avg. Daily Production – Q2 2021 93.2 MBOE/d DELAWARE BASIN HAYNESVILLE/ Net Debt / LTM Adj. EBITDA(2)(3) – Q2 2021 ~1.8x 120,700 net acres COTTON VALLEY Adj. Free Cash Flow(2) – Q2 2021 $156.3 m
Slide 4: Matador's Significant Officer % Ownership vs. Peer Group
Matador’s Significant Officer % Ownership vs. Peer Group Interests Aligned with Shareholders Joseph Wm. Foran Matthew V. Hairford David E. Lancaster Craig N. Adams Billy E. Goodwin Founder, Chairman President and EVP and CFO EVP and COO EVP and COO and CEO Chair of the Operating – Land, Legal and –
Slide 5: Chairman's Remarks
Chairman’s Remarks July 27, 2021
Slide 6: Record Results for Second Quarter 2021
SLIDE A Record Results for Second Quarter 2021 Record • Generated adjusted free cash flow(1) of $156.3 million in Q2 2021 – Above Company Expectations! Adj. EBITDA & Adj. • Matador received $16.3 million in incentive payments from Five Point during Q2 2021 Free Cash Flow(1) • Oil and natural gas rev
Slide 7: San Mateo – Differentiated Midstream Asset Continues to Add Value
San Mateo – Differentiated Midstream Asset SLIDE B Continues to Add Value to Matador(1) 2015-2016 2017-2018 2019-2020 2021+ ► Initial midstream build-out ► San Mateo I formed in ► San Mateo II formed in ► Free cash flow generation in the Delaware Basin February 2017 February 2019 ► Focused on adding
Slide 8: Revolver Borrowings Outstanding – Paying Down Debt Remains a Key Objective
Revolver Borrowings Outstanding – Quarterly Results SLIDE C Paying Down Debt Remains a Key Objective in 2021 ($ in millions) Letters of Credit $1,000 Revolver Borrowings Outstanding $900 Borrowing Base $900 $800 $200 million Elected Commitment $700 $700 $235 million repaid from end of Q3 2020 $600 t
Slide 9: 2021 Priorities and Milestones – Executing Well Through H1
SLIDE D 2021 Priorities and Milestones – Executing Well Through H1 2021 Priorities Significant 2021 Milestones - Timeline 1 Deliver Free Cash Flow 1 4 Rodney Robinson wells to sales • Added fourth rig in March 2021 2 First 13 Voni (Stateline) wells to sales • 26 Stateline asset 2 Pay Down Debt area
Slide 10: A Step Change in Capital Efficiency: Record Low Costs
A Step Change in Capital Efficiency: SLIDE E Record Low Costs in 2020 Even Lower in 2021E Drilling & Completion (D&C) CapEx/ft(1) Percentage of Two-Mile Laterals ($/ft) Avg. Lateral 4,700’ 5,700’ 8,800’ 10,400’ Length +21% +54% +18% $1,528 98% -24% 74% $1,165 -27% $850 -18% ~ $695 8% 1% (2) (2) 20
Slide 11: Summary and Updated 2021 Guidance
Summary and Updated 2021 Guidance SLIDE F (as Provided on July 27, 2021) Actual February 23, 2021 %YoY July 27, 2021 %YoY Guidance Metric 2020 Results 2021 Guidance(1) Change(2) 2021 Guidance Change(2) Total Oil Production 15.9 million Bbl 17.2 to 17.8 million Bbl + 10% 17.2 to 17.8 million Bbl + 10
Slide 12: Operational and Financial Results
Operational and Financial Results July 27, 2021
Slide 13: Q2 2021 Selected Operating and Financial Results
Q2 2021 Selected Operating and Financial Results Three Months Ended June 30, March 31, June 30, 2021 2021 2020 Net Production Volumes:(1) Oil (MBbl) 4,855 3,738 3,920 Natural gas (Bcf) 21.8 17.5 16.5 Total oil equivalent (MBOE) 8,482 6,658 6,670 Average Daily Production Volumes:(1) Oil (Bbl/d) 53,35
Slide 14: An Integrated E&P and Midstream Strategy: Progress in All Areas
An Integrated E&P and Midstream Strategy: Progress in All Areas Average Daily Total Production Average Daily Total Delaware Basin Production (BOE/d) (BOE/d) Q2 2021 BOE up 26% sequentially; Record Quarter! Record Quarter! Q2 2021 BOE up 29% sequentially; 93,210 87,461 100 ,00 0 100 ,00 0 up 27% YoY
Slide 15: Delivering Strong Well Results All Around the Delaware Basin
Delivering Strong Well Results All Around the Delaware Basin! Matador Acreage TWIN LAKES ~35,100 gross / ~21,600 net acres CURRENT DELAWARE BASIN ACTIVITY Stateline: Two rigs currently drilling 11 ARROWHEAD RANGER ~65,200 gross / ~26,100 net acres ~34,200 gross / ~18,300 net acres additional Voni
Slide 16: Wells Turned to Sales – Q2 2021
Wells Turned to Sales – Q2 2021 During the second quarter of 2021, Matador turned to sales a total of 28 gross (15.6 net) wells in its various operating areas. This total was comprised of 15 gross (14.6 net) operated wells and 13 gross (1.0 net) non-operated wells. The 15 operated wells included t
Slide 17: 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 Loving ~43 miles Natural Gas and Oil Pipelines – IN SERVICE! Reeves Loving Ward 1 Mile Rustler Breaks Eddy Lea Natural Gas Gathering and Processing Processing
Slide 18: Continued Progress in All Parts of San Mateo's Midstream Business
Continued Progress in All Parts of San Mateo’s Midstream Business (51% Owned by Matador) San Mateo Average Water Handling San Mateo Average Natural Gas Gathering(1) (MBbl/d) (MMcf/d) Q2 2021 up 21% sequentially; Q2 2021 up 32% sequentially; 300 up 30% YoY 281 300 up 29% YoY 260 262 252 250 233 233 2
Slide 19: Hedging Profile – Remainder of 2021 and 2022
Hedging Profile – Remainder of 2021 and 2022(1) Oil Collars, Swaps, Puts Midland-Cushing Basis Swaps Natural Gas Collars ~65% hedged for Q3-Q4 2021 ~50% hedged for Q3-Q4 2021 ~50-55% hedged for Q3 2021 ~70-75% hedged for Q4 2021 WTI Collars 6,000 16.0 WTI Swaps 5,520 13.9 3,000 2,880 2,880 14.0 5,00
Slide 20: Full Year 2021 Guidance
Full Year 2021 Guidance July 27, 2021
Slide 21: 2021 Capital Investment Plan Summary
2021 Capital Investment Plan Summary(1) Full Year 2021E CapEx(2) – $560 to $620 million 2021E Wells Turned to Sales CapEx Guidance Range Gross Net No Drilling, Completing, Equipping $525 to $575 million change Operated 49 45.6 Operated D/C/E (Add’l Voni completions) $437 to $475 million Non-Operated
Slide 22: 2021 Production and D/C/E Capital Expenditure Guidance Affirmed
2021 Production and D/C/E Capital Expenditure Guidance Affirmed Despite production deferments to 2022 from non-operated activity and accelerated Voni completions, Matador affirmed full year 2021 production and D/C/E CapEx guidance on July 27, 2021 Full Year Oil Production Guidance Reduction in Non-O
Slide 23: 2021E Operating Cost Estimates (Unit Costs per BOE)
2021E Operating Cost Estimates (Unit Costs per BOE) Matador provides the following updated estimates for its 2021 unit operating costs as shown below 2020 Q1 2021 Q2 2021 2021E 1 Production taxes, transportation and processing $3.39 $5.13 $5.17 $5.25 to $5.75 (“PTTP”) 2 Lease operating (“LOE”) $3.
Slide 24: Appendix
ay, ¢ Matador fies RESOURCES COMPANY Appendix MIDR NYSE
Slide 25: Investment Highlights – Matador Resources Company
Investment Highlights – Matador Resources Company Positioned for Continued Free Cash Flow and Differentiated Growth • Generated adjusted free cash flow(1) of $156.3 million in Q2 2021 and grew total production by ~14% year-over-year in 2020 Returning Value to Shareholders • Declared and paid first q
Slide 26: Simple Balance Sheet – No Near-Term Debt Maturities
Simple Balance Sheet – No Near-Term Debt Maturities REPAID $235 MILLION PAYING DOWN DEBT in borrowings in Q4 2020 and H1 2021 is a key objective for 2021 Q2 2021 LEVERAGE RATIO Strong, supportive bank group REDUCED TO 1.8x(1)(2) Better Than Expected led by Royal Bank of Canada Debt Maturities ($ in
Slide 27: Matador Resources and San Mateo Credit Facilities
Increased June 2021! Matador Resources and San Mateo 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
Slide 28: Adjusted EBITDA & Adjusted Free Cash Flow Reconciliations
Adjusted EBITDA & Adjusted Free Cash Flow Reconciliations 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 consoli
Slide 29: Adjusted EBITDA Reconciliation – Matador Resources Company
Adjusted EBITDA Reconciliation – Matador Resources Company The following table presents the calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively. (In thousands) 1Q 2016
Slide 30: Adjusted EBITDA Reconciliation – San Mateo (100%)
Adjusted EBITDA Reconciliation – San Mateo(1) (100%) The following table presents the calculation of Adjusted EBITDA and the 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 Mids
Slide 31: Adjusted EBITDA Reconciliation – San Mateo (100%)
Adjusted EBITDA Reconciliation – San Mateo(1) (100%) The following table presents the calculation of Adjusted EBITDA and the 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 Mids
Slide 32: 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 (loss) attributable to Matador Resources Company shareh
Slide 33: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Matador Resources Company The following table presents the calculation of adjusted free cash flow and the reconciliation of adjusted free cash flow to the GAAP financial measure of net cash provided by operating activities. Three Months Ended (In thousands) Jun
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