Matador Resources Company · NYSE:MTDR
Matador Resources — Investor Presentation (January 2013)
58 slides from Matador Resources's investor presentation, Jan 28, 2013
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation January 2013
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
Slide 3: Company Summary
oN, ¢ Matador {We (eae TSCUREES Conran Company Summary
Slide 4: Matador History
Matador History Predecessor Entities Foran Oil & Matador Petroleum Founded by Joe Foran in 1983 Foran Oil funded with $270,000 in contributed capital from 17 friends and family members Sold to Tom Brown, Inc. in June 2003 for an enterprise value of $388 million in an all-cash transaction Matador Tod
Slide 5: Investment Highlights
Investment Highlights Strong Financial Position and Prudent Risk Management High Quality Asset Base in Attractive Areas Eagle Ford provides immediate oil-weighted value and upside Expanding acreage position in Delaware Basin in West Texas Other key assets provide long-term option value on natural ga
Slide 6: Matador's Continued Growth
Matador’s Continued Growth TOTAL OIL AND (1) (2) TOTAL OIL PRODUCTION NATURAL GAS REVENUES ADJUSTED EBITDA (1) 2013E Total Oil Production at the mid-point of 2013 guidance of estimated total oil production of 1.6 to 1.8 million barrels (2) Adjusted EBITDA is a non-GAAP financial measure. For a defin
Slide 7: Growth in PV-10 from Proved Reserves
Growth in PV-10(1) from Proved Reserves $500 $450 $91.21 oil $2.76 gas SEC Pricing $400 Oil, $/Bbl Gas, $/MMBtu $350 $300 $92.71 oil $4.12 gas $250 $200 $150 $75.96 oil $4.38 gas $100 $57.65 oil $3.87 gas $41.00 oil $50 $5.71 gas $0 2008 (2) 2009 (2) 2010 (2) 2011 (2) 2012 (2) (1) PV-10 is a non-GAA
Slide 8: Eagle Ford
Key Operating Areas Eagle Ford South Texas
Slide 9: Eagle Ford and Austin Chalk Overview
Eagle Ford and Austin Chalk Overview Acreage positioned in some of the most active counties for Eagle Ford Proved Reserves @ 12/31/12 14.3 Million BOE(1) and Austin Chalk (including “Chalkleford”) % Proved Developed 46% Two rigs running, primarily focused on % Oil / Liquids 72% oil and liquids Daily
Slide 10: Eagle Ford Properties are in Good Neighborhoods
Eagle Ford Properties are in Good Neighborhoods Highlights KKR / HILCORP Guadalupe Matador’s acreage in Anadarko Marathon Bexar June 2010 ~$10,000 / acre El Paso Petrohawk/BHP counties with robust Carrizo Pioneer Gonzales MARATHON / PALOMA transaction activity – “good Chesapeake EOG SM Energy Shell
Slide 11: Eagle Ford Properties
Eagle Ford Properties EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST Nickel Ranch 44,326 gross / 29,555 net acres Bexar 7,568 gross / 6,171 net acres Hennig San Antonio Uvalde Medina Gonzales Lewton EOG OPERATED, MTDR WI ~21% Finney 13,055 gross / 2,515 net acres Keseling Love Cowey Wilson RCT Wilson GLA
Slide 12: 2012 Operated Eagle Ford Completion Results – 24 Hour IP Tests
2012 Operated Eagle Ford Completion Results – 24 Hour IP Tests (1) (2) (3)(4) (3)(4) (5) Well Name County Completion Date Perforated Length Top Perf Frac Stages Oil IP Gas IP Oil Equiv IP Choke Pressure Total (ft.) (ft.) (Bbl/day) (Mcf/day) (BOE/day) (inch) (psi) 2012 Wells Martin Ranch A 8H La Sall
Slide 13: Eagle Ford Well Costs Declined During 2012 – Eastern Acreage
Eagle Ford Well Costs Declined During 2012 – Eastern Acreage $12,000,000 Total Cost 5000' Normalized Cost $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 1 2 3 4 5 6 7 8 9 10 Note: Wells are displayed in chronological order. Wells drilled and completed using two casing strings. Well drill
Slide 14: Eagle Ford Well Costs Declined During 2012 – Western Acreage
Eagle Ford Well Costs Declined During 2012 – Western Acreage $12,000,000 Total Cost 5000' Normalized Cost $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 1 2 3 4 5 6 7 8 9 10 11 12 Note: Wells are displayed in chronological order. Wells drilled and completed using two casing strings. Well
Slide 15: Average Frac Stage Cost per Well
Average Frac Stage Cost per Well $450,000 Bauxite White Sand Resin-Coated Sand $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Note: Wells are displayed in chronological order; includes a
Slide 16: Eagle Ford Well Estimated ROR as a Function of EUR and Well Cost
Eagle Ford Well Estimated ROR as a Function of EUR and Well Cost 200 $7.0 $90.00/Bbl NYMEX oil; Well Cost, 180 millions $3.00/Mcf NYMEX natural gas 160 $8.0 140 120 100 80 $10.0 60 $12.0 40 20 0 100 200 300 400 500 600 700 Estimated Ultimate Recovery (EUR), MBOE Note: Individual well economics only.
Slide 17: Technical Advancements in the Eagle Ford
Technical Advancements in the Eagle Ford Rotary Steerable Tools – Drilling time in curve and lateral reduced by two days – Measurement While Drilling (MWD) telemetry closer to drill bit – Improves ability to stay in “sweet-spot” – Removes sumps and high-angle curves Improved frac design – Increases
Slide 18: Drilling Times and Efficiencies
Drilling Times and Efficiencies First 4 Wells * Bold wells utilized rotary steerable systems Note: As of January 25, 2013 18
Slide 19: Zavala County
Zavala County Eagle Ford & Pearsall Trend
Slide 20: South Texas Multi-Pay Petroleum Systems: Upside Potential in Zavala County
South Texas Multi-Pay Petroleum Systems: Upside Potential in Zavala County 8,891 gross / 8,891 net acres 100% Held By Production (HBP) All Rights, All Depths Redhawk Area Matador Resources Acreage Note: All acreage as of November 30, 2012 Oil and Gas Fields: Olmos/Navarro Austin Chalk Edwards Buda W
Slide 21: Multi-Pay Fairway: Productive and Prospective Pay Zones
Multi-Pay Fairway: Productive and Prospective Pay Zones Navarro Historic Conventional Zones Olmos-Navarro Gas and oil fields in shallow section Austin Chalk Olmos Upper Austin horizontal drilling Fractured reservoir Buda Primarily productive on structure Fractured reservoir ANCC Edwards Productive o
Slide 22: Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage
Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage San Antonio Multi-Pay Fairway with Pearsall, Austin Chalk and Buda potential OIL FAIRWAY Matador Resources Acreage DRY GAS FAIRWAY Note: All acreage as of November 30, 2012 22
Slide 23: Delaware Basin
Key Operating Areas Delaware Basin Southeast New Mexico and West Texas
Slide 24: Southeast New Mexico / West Texas
Southeast New Mexico / West Texas Matador Today (1) Gross Acres 15,860 acres (1) Net Acres 7,638 acres Foothold of existing production and reserves On August 10, 2012, acquired approx. 4,900 gross and 2,900 net acres prospective for the INDIAN DRAW Wolfbone play in the Delaware Basin in RANGER- Lovi
Slide 25: Wolfbone Play in the Delaware Basin Stratigraphic Column
Wolfbone Play in the Delaware Basin (West Texas) Stratigraphic Column Horizontal Targets Avalon Shale Depth: 7,900’ – 8,300’ (Oil Window) Density Porosity: 12-14% Thickness: 300-500 ft. Normal Pressure (0.45 psi/ft.) Total Organic Carbon (TOC) 5-8% XRD: 15-20% clay and 40-60% silica IP: 100-270 Bbl/
Slide 26: Wolf Leasehold: Proposed Wolfbone Multi-Zone Exploration Program
Wolf Leasehold: Proposed Wolfbone Multi-Zone Exploration Program and Surrounding Results Chesapeake Chesapeake Johnson 1-88 Lov #1H Johnson 1-86 (1H) Wolfcamp Wolfcamp 10 mo.cum: 17 mo.cum: 72 MBO; 295 MMcf 122 MBO; 344 MMcf Chesapeake Johnson 1-76 (1H) Wolfcamp 22 mo.cum: 140 MBO; 475 MMcf Wolf Ene
Slide 27: Ranger Prospect Area: Proposed Wolfbone Multi-Zone Exploration Program
Ranger Prospect Area: Proposed Wolfbone Multi-Zone Exploration Program and Surrounding Results Bone Spring / Upper Wolfcamp Type Log Concho AirCobra 12 #2H 3 Bone Spring rd 12 mo.cum: 196 MBO; 132 MMcf XOG Operating (Vertical well) Jordan B #1 Wolfcamp 20 years cum: 386 MBO; 5 Bcf Legacy Operating L
Slide 28: Haynesville & Cotton Valley
Key Operating Areas Haynesville & Cotton Valley Northwest Louisiana and East Texas
Slide 29: Tier 1 Haynesville and Elm Grove Cotton Valley Acreage Positions
Tier 1 Haynesville and Elm Grove Cotton Valley Acreage Positions – Almost all prospective Haynesville acreage is HBP TIER 3: 2 – 4 Bcf BOSSIER TIER 2: 4 – 6 Bcf CADDO BIENVILLE TIER 1: 6 – 10+ Bcf MTDR CV Horizontal T. Walker #1H Elm Grove Cotton Valley: Tier 1 Haynesville: 49 Net Locations 50 Net L
Slide 30: Haynesville Well Economics – Tier 1 Area
Haynesville Well Economics – Tier 1 Area 300 8 Bcf - $8.0 MM D&C Cost 275 9 Bcf - $8.0 MM D&C Cost 250 10 Bcf - $8.0 MM D&C Cost 8 Bcf - $9.0 MM D&C Cost 225 9 Bcf - $9.0 MM D&C Cost 200 10 Bcf - $9.0 MM D&C Cost 175 150 125 100 75 50 25 0 3 3.5 4 4.5 5 5.5 6 Natural Gas Price, $/Mcf Note: Individua
Slide 31: Cotton Valley Horizontal Well Economics
Cotton Valley Horizontal Well Economics 100.0 4.0 Bcf - $5.6 MM D&C Cost 90.0 5.0 Bcf - $5.6 MM D&C Cost 6.0 Bcf - $5.6 MM D&C Cost 80.0 4.0 Bcf - $6.6 MM D&C Cost 5.0 Bcf - $6.6 MM D&C Cost 70.0 6.0 Bcf - $6.6 MM D&C Cost 60.0 50.0 40.0 30.0 20.0 10.0 0.0 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 Natural
Slide 32: Gracie
Key Operating Areas Gracie Wyoming, Utah and Idaho
Slide 33: Matador Gracie Project Total Prospect Acreage
Matador Gracie Project Total Prospect Acreage WYOMING IDAHO UTAH 54,450 gross acres Crawford Federal #1H 26,908 net acres Crawford Federal #1H completion scheduled for summer 2013 WYOMING Note: All acreage as of November 30, 2012 33
Slide 34: Southwest Wyoming Stratigraphy and Target Zones
Southwest Wyoming Stratigraphy and Target Zones Crawford Federal #1: Drilled straight hole in late 2011 2% TOC Cretaceous Shales Encountered 161’Meade Peak with 46’ of main pay Recovered 50’ conventional core across pay zone TOC ave 4.52% (Maximum 14.2%) Thermally mature: Ro 1.69% 13% TOC Porosity A
Slide 35: 2013 Capital Investment Plan
2013 Capital Investment Plan
Slide 36: 2013 Capital Investment Plan Highlights
2013 Capital Investment Plan Highlights 2013 projected capital expenditures of approximately $310 million – Drill and complete or participate in 48 gross/31.3 net wells in 2013 – Including 31.0 gross/25.8 net Eagle Ford Shale and 3.0 gross/3.0 net Bone Spring/Wolfcamp – Also, includes 3.0 gross/1.6
Slide 37: 2013 Production Expectations
2013 Production Expectations 2013 Oil Production Oil Production (1) (Bbl/d) Estimated total oil production of 1.6 to 6,000 1.8 million barrels 5,000 Increase of approximately 40% from 4,000 2012 3,000 Oil production expected to decline from year-end 2012 levels in early 2013 2,000 – Production delay
Slide 38: 2013 Financial Expectations
2013 Financial Expectations 2013 Revenue and Adjusted EBITDA (1)(2) Oil and Natural Gas Revenues (2) (millions) $250.0 Estimated oil and natural gas revenues of $200 $210.0 to $220 million $200.0 Increase of approximately 40% from $150.0 estimated $145 to $155 million in 2012 $150.0 Estimated Adjust
Slide 39: Funding for 2013 Capital Investment Plan
Funding for 2013 Capital Investment Plan Maintain financial discipline by anticipated funding of 2013 capital expenditures through operating cash flows and borrowings under revolving credit facility – Most of 2013 Eagle Ford program is development drilling and largely de-risked by 2012 results – 1.5
Slide 40: Continued Oil/Liquids Focus to Fuel 2013 Growth
Continued Oil/Liquids Focus to Fuel 2013 Growth 2013 Anticipated Drilling 2013E CapEx Gross Wells Net Wells (in millions) Total Total % Total % South Texas Eagle Ford Shale 31.0 25.8 82.4% $217.0 70.1% Austin Chalk, Buda, Edwards 3.0 1.6 5.1% $5.9 1.9% Facilities/Pipelines/Etc. - - - $19.8 6.4% Area
Slide 41: 2013 South Texas Drilling Plan
2013 South Texas Drilling Plan EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST Nickel Ranch 44,326 gross / 29,555 net acres Bexar 7,568 gross / 6,171 net acres Hennig 1 (Austin Chalk) San Antonio # - Gross wells planned in 2013; All Matador Gonzales operated Eagle Ford wells unless noted Medina Lewton oth
Slide 42: Delaware Basin Acreage and 2013 Drilling Plan
Delaware Basin Acreage and 2013 Drilling Plan DELAWARE BASIN PROSPECTIVE ACREAGE RANGER 7,498 gross / 4,928 net acres 1,955 gross / 1,562 net acres RANGER Ranger A2 Primary Target: Wolfcamp Shale 1 Ranger A1 Primary Target: 2nd Bone Spring Sand 1 # - Matador operated wells planned in 2013 3 gross/3
Slide 43: Financials
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Slide 44: January 7, 2013 Operational Update
January 7, 2013 Operational Update Matador announced that its average production rate during the month of December 2012 was approximately 5,800 barrels of oil per day and 34.6 million cubic feet of gas per day, or approximately 11,500 BOE per day. The average oil rate for December of 5,800 barrels p
Slide 45: Recent Production and Financial Highlights
Recent Production and Financial Highlights Record results in Q3 2012 – Oil production of 303,000 Bbl, a sequential quarterly increase of 6% from 285,000 Bbl produced in Q2 2012 and a year-over-year increase of 7-fold – 25% sequential increase in oil reserves to 8.4 million Bbl and 20% sequential inc
Slide 46: 2013 and 2014 Hedging Profile
2013 and 2014 Hedging Profile Oil Hedges (Costless Collars) 1.5 million barrels of oil hedged for 2013 FY 2013 at weighted average floor and ceiling of Total Volume Hedged by Ceiling (Bbl) 1,260,000 $88/Bbl and $107/Bbl, respectively Weighted Average Price ($ / Bbl) $110.26 4.7 Bcf of natural gas he
Slide 47: Reserves Summary – December 31, 2012
Reserves Summary – December 31, 2012 Total proved reserves: 23.8 million BOE (142.9 Bcfe) at December 31, 2012, including 10.5 million Bbl of oil and 80.0 Bcf of natural gas Oil reserves grew 176% to 10.5 million Bbl from 3.8 million Bbl at December 31, 2011 PV-10 (1) increased 70% to $423.2 million
Slide 48: Value of Proved Reserves Up 70% and Shifting to Oil Over Past Year
Value of Proved Reserves Up 70% and Shifting to Oil Over Past Year SE New Mexico Cotton Valley SE New Mexico $2.4 million, 1% $5.9 million, 1% $2.0 million, 0% Haynesville Cotton Valley $21.8 million, 5% $19.5 million, 8% Eagle Ford $130.2 million, 52% Haynesville $96.6 million, 39% Eagle Ford $393.
Slide 49: Appendix
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Slide 50: Board of Directors and Special Board Advisors – Expertise and Stewardship
Board of Directors and Special Board Advisors – Expertise and Stewardship Board Members Professional Experience Business Expertise and Advisors - Professor and Former Head of Dept. of Petroleum Engineering, Texas A&M University Dr. Stephen A. Holditch - Founder / President S.A. Holditch & Associates
Slide 51: Proven Management Team – Experienced Leadership
Proven Management Team – Experienced Leadership Industry Matador Management Team Background and Prior Affiliations Experience Experience Joseph Wm. Foran - Matador Petroleum Corporation, Foran Oil Company, Founder, Chairman and CEO 32 years Since Inception J Cleo Thompson Jr. and Thompson Petroleum
Slide 52: Quarterly Performance Metrics Through Q3 2012
Quarterly Performance Metrics Through Q3 2012 Average Daily Equivalent Production Oil and Natural Gas Revenues (BOE/d) ($ in mm) $40.0 $38.0 $36.1 $35.0 $29.2 $30.0 $25.0 $20.9 $20.0 $17.4 $15.0 $15.0 $13.7 $9.2 $8.5 $8.9 $10.0 $7.5 $5.0 $0.0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Ad
Slide 53: South Texas Pearsall Play: Activity & Liquids to Dry Gas Distribution Model
South Texas Pearsall Play: Activity & Liquids to Dry Gas Distribution Model Blackbrush O&G Pals Ranch 11H IP 706 BCPD/ 4 MMCFPD PXP Cabot Chesapeake 6 Horiz. Drilled Wilson C#1HP 3 Permits Cheyenne IP 250 BCPD/ 3 MMCFPD Drilling Abnd. Chesapeake Avant D#1HP 300 BC/mo. Abnd. Valence Op. Co. Chesapeak
Slide 54: Zavala, Frio, La Salle and Dimmit Counties: Important Matador and Competitor Wells Since 2011
Zavala, Frio, La Salle and Dimmit Counties: Important Matador and Competitor Wells Since 2011 (CHK) Traylor North 2H (BBOG) Oppenheimer A1 OIL IP: 405; GAS IP: 78 (CHK) Winterbotham A 4H OIL IP: 273; GAS IP: 1,400 14/64” choke OIL IP: 909 38/64” choke Best 3 Oil – 19,476 13/64” choke Best 3 Oil – 9,
Slide 55: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation This presentation includes, and certain statements made during this presentation may include, the non- GAAP financial measure of Adjusted EBITDA. We believe Adjusted EBITDA helps us evaluate our operating performance and compare our results of operation from period to
Slide 56: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net (loss) income and cash provided by operating activities, respectively. Nine Months Ended Year Ended December 31, September 30, (I
Slide 57: Adjusted EBITDA Reconciliation (Cont.)
Adjusted EBITDA Reconciliation (Cont.) The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net (loss) income and cash provided by operating activities, respectively. (In thousands) 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q
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 our pr
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