Matador Resources Company · NYSE:MTDR
Matador Resources — Investor Day (February 2016)
80 slides from Matador Resources's investor day presentation, Feb 3, 2016
Slide 1: 2016 Analyst Day Presentation
February 3, 2016 2016 Analyst Day Presentation NYSE: MTDR Managing 2016... Exhibit 99.2
Slide 2: Disclosure Statements
2 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 19
Slide 3: Welcome and Opening Remarks
Welcome and Opening Remarks Joseph Wm. Foran – Chairman and CEO
Slide 4: Today's Agenda
4 Today’s Agenda Welcome and Opening Remarks Joseph Wm. Foran, Chairman and CEO 2015 Summary and 2016 Capital Investment Plan David E. Lancaster, Executive Vice President and CFO Morning Break Delaware Basin Operations Update Matthew V. Hairford, President David E. Lancaster, Executi
Slide 5: Managing 2016 – The Elephants in the Room Today
5 Managing 2016 – The Elephants in the Room Today Continue with 3 rigs or drop a rig? Outspend? How to fund outspend? Maximizing shareholder value in a challenging environment?
Slide 6: Matador Has Made Tremendous Progress Since its IPO
Matador Has Made Tremendous Progress Since its IPO At IPO(1): February 7, 2012 Today(2) Difference Oil Production 414 Bbl/d (6% oil) 11,547 Bbl/d (49% oil) Proved Reserves 27 MMBOE (4% oil) 85 MMBOE (54% oil) Proved Oil Reserves 1.1 MMBbl 45.6 MMBbl Delaware Acreage ~7,500 net acres ~88,900 net acre
Slide 7: Attractive Wolfcamp Economics – Yesterday, Today and in the Future
Attractive Wolfcamp Economics – Yesterday, Today and in the Future 7 Note: Oil price is West Texas Intermediate. Natural gas price is Henry Hub. Differentials to these base prices applied to al l cases. Well costs reflect estimated drilling, completions, production and facilities costs for typical d
Slide 8: ROR Relationship to Well Cost and EUR
29 32 35 39 43 47 49 53 56 60 64 69 20 30 40 50 60 70 80 800 840 880 920 960 1000 ROR, % EUR, MBOE $35/Bbl WTI Oil Price Increasing Oil Price Model 20 30 40 50 60 70 80 $5.0 $5.2 $5.4 $5.6 $5.8 $6.0 ROR, % Well Cost, millions $35/Bbl WTI Oil Price Increasing Oil Price Model ROR Relationship to Well
Slide 9: 2015 Summary and 2016 Capital Investment Plan
2015 Summary and 2016 Capital Investment Plan David E. Lancaster – Executive Vice President and CFO
Slide 10: Matador Resources Company – Operations Overview
Matador Resources Company – Operations Overview Market Capitalization(1) ~$1.4 billion Avg Daily Production – YE 2015(2) 24,955 BOE/d Oil (% total) 12,306 Bbl/d (49%) Natural Gas (% total) 75.9 MMcf/d (51%) Proved Reserves @ 12/31/2015 85.1 million BOE % Proved Developed 40% % Oil 54% 2016E CapEx(3)
Slide 11: Delaware Basin Inventory Continues to Increase
Delaware Basin Inventory Continues to Increase Matador has identified up to 3,543 gross (1,417 net) potential locations(1) for future drilling on its Delaware Basin acreage Only 118 gross (72.3 net) locations are PUD locations at December 31, 2015 Matador anticipates operating up to 2,263 gros
Slide 12: Despite Low Commodity Prices, 2015 Was an Excellent Year for Matador
Despite Low Commodity Prices, 2015 Was an Excellent Year for Matador 12 Four key transactions improved our asset base and kept our balance sheet strong HEYCO merger in February 2015 added approximately 60,000 gross (20,000 net) acres in the Delaware Basin(1) Initial non-operated well results a
Slide 13: Record Oil, Natural Gas and Total Production in 2015
39.8 34.1 35.4 41.9 75.9 2011 2012 2013 2014 2015 422 3,317 5,843 9,095 12,306 2011 2012 3 2014 2015 Average Daily Oil Production (Bbl/d) Average Daily Natural Gas Production (MMcf/d) Average Daily Total Production (MBOE/d) Oil Production Mix (% of Average Daily Production) 13 Growth since IPO Growt
Slide 14: Matador's Reserves Volumes at an All-Time High at Year-End 2015
14 Matador’s Reserves Volumes at an All-Time High at Year-End 2015 Eagle Ford $540.4 million, 82% Haynesville/CV $82.9 million, 13% Delaware Basin $31.9 million, 5% YE 2013 51.7 million BOE 16.4 million Bbl oil (32% oil) PV-10(1): $655.2 million $93.42 oil / $3.67 gas 68.7 million BOE 24.2 million B
Slide 15: Committed to Maintaining Strong Balance Sheet
0.0x 0.0x 0.1x 1.5x 0.2x 0.7x 1.1x 1.3x 1.5x 1.6x 0.8x 1.0x 1.2x 0.6x 1.0x 1.3x 1.6x 1.4x 1.6x 1.5x 2008 2009 2010 2011 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Net Debt / LTM EBITDA $76 $240 $256 $416 $340 In it ia l P u b lic O ff e ri n g Preserved and enh
Slide 16: Strong Balance Sheet Metrics Relative to Peers
84% 83% 79% 73% 71% 47% 42% 22% 21% 19% 14% 11% 8% Peer H Peer G Peer F Peer A Peer D Peer C Peer E Peer J Peer I Peer L MTDR Peer B Peer K 7.2x 5.2x 5.2x 4.5x 3.3x 3.2x 2.9x 2.8x 2.4x 2.0x 1.9x 1.9x 1.6x Peer I Peer K Peer J MTDR Peer B Peer C Peer A Peer E Peer L Peer G Peer H Peer F Peer D 4.8x 3
Slide 17: 2015 Anticipated Results vs. 2015 Guidance
17 2015 Anticipated Results vs. 2015 Guidance (As Updated Nov. 4, 2015) Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 85.6 million common shares Share Price(1) $16.03/share Market Capitalization(1) $1.4 billion Actual Original Updated Estimated % 2014 2015 Guidance 2015 Guidance(2) 2015 Results(
Slide 18: 2016 Capital Investment Plan – Summary (3-Rig Case)
We will keep the focus on our Delaware Basin assets and opportunities with the intent of creating and preserving long-term shareholder value Plan to run 3 rigs in 2016, but will consider dropping to 2 rigs as early as Q2 2016 if oil prices drop back and remain below $30 per barrel Continue to
Slide 19: 2016 Capital Investment Plan – Summary (2-Rig Case)
We will keep the focus on our Delaware Basin assets and opportunities with the intent of creating and preserving long-term shareholder value Plan to run 3 rigs in 2016, but will consider dropping to 2 rigs as early as Q2 2016 if oil prices drop back and remain below $30 per barrel Continue to
Slide 20: 2016 Capital Investment Plan – Summary
20 We estimate our capital budget in 2016 to be approximately $325 million for the 3-rig case (down 32% from 2015(1)), declining to $277 million for the 2-rig case (down 42% from 2015(1)) We expect to have sufficient liquidity to fund our 2016 capital investments - ~$60 million in cash and $375
Slide 21: 2016 Capital Investment Plan – Production and Outspend Funding
21 We expect to grow oil production by about 11% and keep natural gas production close to flat; total BOE production growth of about 4% in the 3-rig program as compared to 2015 We expect to outspend cash flow by ~$205 million (2-rig) to ~$230 million (3-rig) in 2016, including outspend associate
Slide 22: Matador's 2016 Delaware Basin Operated Drilling Plan: 3-Rig Case
Matador’s 2016 Delaware Basin Operated Drilling Plan: 3-Rig Case 22 Note: All acreage at January 7, 2016. Some tracts not shown on map. L E A LOVING WARD TWIN LAKES ~42,300 gross / ~29,900 net acres WOLF / LOVING AREA ~12,200 gross / ~7,500 net acres Jackson Trust RANGER ~32,500 gross / ~19,400 net
Slide 23: 2015 Drilled, 2016 Anticipated Completion and Drilling
2015 Drilled, 2016 Anticipated Completion(1) 2016 Anticipated Drilling & Completion 2016 Anticipated Drilling, 2017 Anticipated Completion(2) 2016 Anticipated First Sales(2) 2016E CapEx Gross Wells(3) Net Wells(3) Gross Wells(3) Net Wells(3) Gross Wells(3) Net Wells(3) Gross Wells(3) Net Wells(3) (i
Slide 24: Estimated Rate of Return by Formation vs. WTI Oil Price
0 40 80 120 160 200 240 30 35 40 45 50 55 60 R O R, % WTI Oil Price, $/Bbl Rustler Breaks - Wolfcamp A-X/Y (85% oil) 800 MBOE, $5.0 MM 800 MBOE, $6.0 MM 600 MBOE, $5.0 MM 600 MBOE, $6.0 MM 24 0 50 100 150 200 250 300 30 35 40 45 50 55 60 R O R, % WTI Oil Price, $/Bbl Wolf - Wolfcamp A-X/Y (70% oil)
Slide 25: Single Wolfcamp B Well at Rustler Breaks Holds Up To Potential Locations
Single Wolfcamp B Well at Rustler Breaks Holds Up To 15 Potential Locations 25 Brushy Canyon Avalon 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Wolfcamp B Wolfcamp A-X/Y One producing Wolfcamp B well holds 320 surface acres and up to 15 additional potential locations for future development 1/2
Slide 26: 2016E CapEx by Quarter
$75.0 $62.0 $62.0 $61.0 $22.0 $16.0 $2.0 $6.0 $6.0 $6.0 $7.0 $103.0 $84.0 $70.0 $68.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 1Q16 2Q16 3Q16 4Q16 D&C + Facilities Midstream Land, Seismic, Etc. (Discretionary) 2016E CapEx of ~$325 million − Decrease of ~32% from 2015 estimated capital expenditur
Slide 27: 2016 Capital Investment Plan Summary – 3-Rig and 2-Rig Cases
$75.0 $62.0 $62.0 $61.0 $22.0 $16.0 $2.0 $6.0 $6.0 $6.0 $7.0 $103.0 $84.0 $70.0 $68.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 1Q16 2Q16 3Q16 4Q16 D&C + Facilities Midstream Land, Seismic, Etc. (Discretionary) $75.0 $47.0 $50.0 $40.0 $22.0 $16.0 $2.0 $6.0 $6.0 $6.0 $7.0 $103.0 $69.0 $58.0 $47.0 $0
Slide 28: 2016 Oil and Natural Gas Production Estimates
2,133 3,320 4,492 4,800 4,285 5,870 9,108 9,133 2013 2014 2015 2016E 7% 0% 56% 37% 35% 55% 2,133 3,320 4,492 5,000 4,285 5,870 9,108 9,500 2013 2014 2015 2016E 11% 4% 56% 37% 35% 55% Oil and Natural Gas Production – 3-Rig Case (3 rigs in the Delaware Basin throughout 2016) Oil 28 2016 Oil and Natura
Slide 29: 2016E Oil and Natural Gas Revenues
$269 $368 $278 $225 $0 $100 $200 $300 $400 2013 2014 2015 2016E (19%) (24%) 37% Realized $45.27/Bbl $2.71/Mcf Realized $34.00/Bbl $2.37/Mcf Realized $99.79 Bbl $4.35/Mcf Realized $87.37/Bbl $5.08/Mcf $269 $368 $278 $235 $0 $100 $200 $300 $400 2013 2014 2015 2016E (15%) (24%) 37% 2016E Oil and Natura
Slide 30: 2016E Adjusted EBITDA and Operating Cost Estimates
$223 $108 $192 $263 $331 $105 $0 $100 $200 $300 $400 2013 2014 2015 2016E 37% (15%) (53%) Realized $45.27/Bbl $2.71/Mcf Realized $34.00/Bbl $2.37/Mcf Realized $99.79 Bbl $4.35/Mcf Realized $87.37/Bbl $5.08/Mcf $223 $108 $192 $263 $331 $125 $0 $100 $200 $300 $400 2013 2014 2015 2016E 37% (15%) (44%)
Slide 31: Commodity Price and CapEx Estimates
$88 $104 $120 $125 $136 $153 $175 $196 $80 $100 $120 $140 $160 $180 $200 $25 $30 $35 Strip $40 $45 $50 $55 201 6E A dj us te d EB IT DA M id po in t ( $ m ill io ns ) WTI Oil Price ($/Bbl) Relatively small improvements in oil price and service cost reductions can significantly improve financial fo
Slide 32: Hedging Profile
390,000 390,000 390,000 390,000 $74.64 $74.64 $74.64 $74.64 $47.46 $47.46 $47.46 $47.46 $0 $20 $40 $60 $80 $100 $120 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Oil Vol ume He dg ed (B bl) 2.70 3.00 3.00 3.00 1.80 1.80 1.80 1.80 $3.60 $3.5
Slide 33: Credit Agreement Status
Strong, supportive bank group led by Royal Bank of Canada Borrowing base reaffirmed on October 16, 2015 at $375 million based on June 30, 2015 reserves Maturity of credit facility extended from December 2016 to October 2020 Bank group unanimous in supporting borrowing base affirmation and ma
Slide 34: Summary and Initial 2016 Guidance
34 Summary and Initial 2016 Guidance (1) Estimated 2015 financial results are estimated at February 3, 2016 and subject to adjustment pending completion and release of 2015 audited financial statements. (2) Estimated 2016 Adjusted EBITDA is based upon the midpoint of 2016 production guidance range a
Slide 35: Delaware Basin Operations Update
Delaware Basin Operations Update Matthew V. Hairford – President David E. Lancaster – Executive Vice President and CFO
Slide 36: Understanding the Opportunities
Understanding the Opportunities 3rd Bone Spring L. Avalon 800’ Most current unconventional plays target one or two zones across a trend area. The Delaware Basin has over a dozen unique targets between the top of the Brushy Canyon and the Woodford. All logs plotted at same scale Delaware Basin Wolfca
Slide 37: Improved Wolfcamp Drilling Times Significantly in 2015
Improved Wolfcamp Drilling Times Significantly in 2015 37 43 32 35 26 18 15 0 5 10 15 20 25 30 35 40 45 50 Dril ling Da y s 2014 Average 2015 Planned 2015 Best Well Note: Best wells are Johnson 44-02S-B53 #206H in Loving County (Wolfcamp) and Tiger 14-24S-28E RB #204H in Eddy County (Wolfcamp). Lovi
Slide 38: 2015 Wolf Area Drilling Cost Improvements
$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 H2 2014 Rigs Labor/ Supply Rentals Directional Fluids Casing/ Cement YE 2015 20% 9% 8% 6% 3% 24% 10% 22% 19% 12% 12% 17% 38 2015 Wolf Area Drilling Cost Improvements $7.4 $3.6 D ri ll in g C o s ts, m il li o n s Rigs Labor/ Supply Rentals Directional Flu
Slide 39: 2016 Anticipated Wolf Area Drilling Cost Improvements
$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 H2 2014 YE 2015 YE 2016 51% Savings 17% Savings 2016 Anticipated Wolf Area Drilling Cost Improvements 39 Service Costs Service Costs Efficiencies Efficiencies $7.4 $3.6 $3.0 41% 59% 50% 50% D ri ll in g C o s ts, m il li o n s
Slide 40: 2015 Wolf Area Completion Cost Improvements
Stimulation Location Surface Rentals CTU Drillout Wireline $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 H2 2014 Stimulation Location Surface Rentals CTU/Drillout Wireline YE 2015 15% 12% 12% 9% 52% 40 2015 Wolf Area Completion Cost Improvements $4.6 $2.4 C omple ti o n C o s ts, m il li o n s
Slide 41: 2016 Anticipated Wolf Area Completion Cost Improvements
$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 H2 2014 YE 2015 YE 2016E 2016 Anticipated Wolf Area Completion Cost Improvements 41 $4.6 Service Costs 83% Service Costs 83% 75% 25% Efficiencies Efficiencies $2.4 $1.8 C omple ti o n C o s ts, m il li o n s More to come? 48% Savings 25% Savings 17% 75%
Slide 42: 2016 Anticipated Wolf Area Total Drilling and Completion Cost Improvements
$0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 H2 2014 YE 2015 YE 2016E 25% 2016 Anticipated Wolf Area Total Drilling and Completion Cost Improvements 42 $12.0 $6.0 $4.8 D ri ll in g a n d C omple ti o n C o s ts , m il li o n s $100,000 Cost Reduction ROR Increase ~2% More to come? Service Costs Service Cost
Slide 43: Wolf Prospect Area – Continued Focus on Wolfcamp Development in 2016
43 Wolf Prospect Area – Continued Focus on Wolfcamp Development in 2016 Matador Acreage Wolfcamp A-X/Y 2nd Bone Spring Recently Added 2016 Focus Area Norton Schaub 84-TTT-B33 WF #201 Cumulative BOE: 360 MBOE EUR (BOE): ~1,000 MBOE Dorothy White #1H Cumulative BOE: 480 MBOE EUR (BOE): >1,000 MBOE 2
Slide 44: Wolf Inventory – Multi-Pay Development Potential
2nd Bone Spring Wolfcamp X/Y Wolf Inventory – Multi-Pay Development Potential ~660’ Brushy Canyon Avalon 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Wolfcamp A-X/Y Wolfcamp A Full Development Location 1 mile MRC Spacing Test Completed Full Development Spacing Pattern (Cross-Section View) 44 A-X/
Slide 45: Drilling Wells in Batch Mode / Central Production Facilities
Drilling Wells in Batch Mode / Central Production Facilities 45 Dick Jay / Barnett Development (Top-Down View) Dick Jay / Barnett Development (Cross-Section View) Dick Jay Pad Barnett Pad 2nd Bone Spring 3rd Bone Spring Wolfcamp A “Fat” Wolfcamp A-X/Y Dick Jay 124H Dick Jay 204H Dick Jay 203H Dick J
Slide 46: Wolf Area Wolfcamp A-X/Y Wells Continue Strong Performance
Wolf Area Wolfcamp A-X/Y Wells Continue Strong Performance Across Acreage 46 10 100 1,000 10,000 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 P roduction R a te, BO E /d Time, Days Dorothy White #1H Norton Schaub #201H Billy Burt #203H Johnson #204H Barnett #201H Dorothy White #1H has pr
Slide 47: Wolf – Estimated Returns by Formation
Wolf – Estimated Returns by Formation 47 Formation Development Well Cost(1)(2) (millions) EUR(3) (MBOE) % Oil 2nd Bone Spring $4.0 - $5.0 400 – 500 50 – 65% Wolfcamp A-X/Y $5.5 - $6.5 650 – 1,100 65 – 80% 0 50 100 150 200 $30 $35 $40 $45 $50 $55 $60 R OR % WTI Oil Price, $/Bbl Wolfcamp A-X/Y 1,000 M
Slide 48: Stacked Horizon Test at Jackson Trust
Stacked Horizon Test at Jackson Trust Jackson Trust C 12-TTT-C24 #021H Preparing to run ESP Jackson Trust C 12-TTT-C24 #121H 24 hr. IP: 800 BOE/d (72% oil) Jackson Trust C 12-TTT-C24 #211H 24 hr. IP: 702 BOE/d (82% oil) Jackson Trust C 12-TTT-C24 #101H Testing at 331 BOE/d on ESP (80% oil) and impro
Slide 49: Rustler Breaks – Focus on Wolfcamp Development in 2016
Rustler Breaks – Focus on Wolfcamp Development in 2016 49 Wolfcamp A-X/Y Wolfcamp B Matador Acreage Dr K #203H 24 hr IP: 1,241 BOE/d (69% oil) Scott Walker #204H 24 hr IP: 504 BOE/d (70% oil) Rustler Breaks #224H 24 hr IP: 987 BOE/d (44% oil) Guitar #202H 24 hr IP: 1,274 BOE/d (79% oil) Tiger #224H
Slide 50: Rustler Breaks Inventory – Multi-Pay Development Potential
Rustler Breaks Inventory – Multi-Pay Development Potential Brushy Canyon Avalon 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Wolfcamp A-X/Y Wolfcamp B ~ 80 0’ 171 178 183 188 173 235 167 1,637 Full Development Location Total Gross Locations(4) Formation Development Well Costs(1)(2) (millions) EUR
Slide 51: Rustler Breaks – Wells Producing From Zones on Multi-Well Pad
Rustler Breaks – 5 Wells Producing From 3 Zones on Multi-Well Pad Bone Spring Lime Upper Avalon Shale Lower Avalon Shale First Bone Spring Sand Second Bone Spring Carbonate Third Bone Spring Carbonate Wolfcamp / Pennsylvanian Strawn Wolfcamp “C” Third Bone Spring Sand Gamma Ray INTER-Formational Sta
Slide 52: Rustler Breaks Well Cost Achievements
8.3 8.6 5.1 5.9 6.9 3.9 5.0 5.5 3.0 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Guitar #202H Tiger #224 Tiger #124H Tiger #204H Janie Conner #224 Janie Conner #124 Wolfcamp A 2016 Target Wolfcamp B 2016 Target 2nd Bone Springs 2016 Target C o m p le te d W el l C o st , $m ill io n s 52 Rustler Breaks Well Co
Slide 53: Rustler Breaks Wolfcamp B Wells Performing Above Expectations
Rustler Breaks Wolfcamp B Wells Performing Above Expectations 53 10 100 1,000 10,000 0 50 100 150 200 250 300 350 400 450 500 550 600 P roduction R a te, BO E /d Time, Days Rustler Breaks #224H Tiger #224H Janie Conner #224H Rustler Breaks 12-24S-27E #224H has produced 233 MBOE (41% oil) in 20 month
Slide 54: Rustler Breaks Wolfcamp A-X/Y Wells Performing Above Expectations
Rustler Breaks Wolfcamp A-X/Y Wells Performing Above Expectations 54 10 100 1,000 10,000 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 P roduction R a te, BO E /d Time, Days Guitar #202H Tiger #204H Scott Walker #204H Guitar 10-24S-28E RB #202H has produced 164 MBOE (78% oil) in 10 month
Slide 55: Rustler Breaks – Estimated Returns by Formation
0 40 80 120 160 30 35 40 45 50 R O R, % WTI Oil Price, $/Bbl Rustler Breaks - Wolfcamp A-X/Y (85% oil) 800 MBOE, $5.0 MM 800 MBOE, $6.0 MM 600 MBOE, $5.0 MM 600 MBOE, $6.0 MM 0 20 40 60 80 100 30 35 40 45 50 R O R, % WTI Oil Price, $/Bbl Rustler Breaks - Wolfcamp B (45% oil) 1,000 MBOE, $5.5 MM 1,00
Slide 56: Single Wolfcamp B Well at Rustler Breaks Holds Up To Potential Locations
Single Wolfcamp B Well at Rustler Breaks Holds Up To 15 Potential Locations 56 Brushy Canyon Avalon 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Wolfcamp B Wolfcamp A-X/Y One producing Wolfcamp B well holds 320 surface acres and up to 15 additional potential locations for future development 1/2
Slide 57: Ranger/Arrowhead – Bone Spring and Wolfcamp Development in 2016
57 2nd Bone Spring 3rd Bone Spring Wolfcamp D Wolfcamp A Cimarron State RN #133H, 804 - 804 BOE/d (94% oil). Matador Acreage Ranger/Arrowhead – Bone Spring and Wolfcamp Development in 2016 2015 Accomplishments Merged with HEYCO adding ~60,000 gross and ~20,000 net acres(1) 12 gross (4.5 net) w
Slide 58: Ranger Inventory – Multi-Well Development Potential
Formation Development Well Costs(1)(2) (millions) EUR(3) (MBOE) % Oil Bone Spring $4.5 – $6.0 400 – 700 90 – 95% Wolfcamp $6.5 – $8.0 200 – 800* 80 – 85% Ranger Inventory – Multi-Well Development Potential 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Wolfcamp A-D * Based on Volumetrics and 4-8% R
Slide 59: Arrowhead Inventory – Multi-Well Development Potential
Arrowhead Inventory – Multi-Well Development Potential 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Wolfcamp A-D Formation Development Well Costs(1)(2) (millions) EUR(3) (MBOE) % Oil Bone Spring $4.5 – $6.0 400 – 700 80 – 90% Wolfcamp $6.5 – $8.0 200 – 800* 80 – 85% * Based on Volumetrics and 4-8
Slide 60: Ranger Area Bone Spring Wells Continued Strong Performance
60 Ranger Area Bone Spring Wells Continued Strong Performance Note: Production as of January 2016. 700 MBOE Type Curve 400 MBOE Type Curve 10 100 1,000 10,000 0 100 200 300 400 500 600 700 Production R ate, BO E/ d Time, Days Ranger 33 #121H Ranger 33 #122H Pickard State #1H Cimarron State #134H Bon
Slide 61: Testing New Oil Shale Play in Twin Lakes Prospect
Testing New Oil Shale Play in Twin Lakes Prospect 61 Olivine State 5-16S-37E TL #1 Matador Resources Acreage M ic ro -C o u p le d C o u p le d One of the primary source rocks for Twin Lakes prospect area (~42,300 gross and ~29,900 net acres) Super-charged area having produced 1.3 billion Bbl oi
Slide 62: Testing New Oil Shale Play in Twin Lakes Prospect
One of the primary source rocks for Twin Lakes prospect area (~42,300 gross and ~29,900 net acres) Super-charged area having produced 1.3 billion Bbl oil and 2.2 trillion cubic feet natural gas Drilled initial data collection well (Olivine State #1) to obtain full set of whole cores and geophy
Slide 63: Midstream Operations and 2016 Plans
Midstream Operations and 2016 Plans NYSE: MTDR Matthew D. Spicer – Vice President and General Manager of Midstream Matthew V. Hairford – President
Slide 64: Longwood Gathering and Disposal Systems in Delaware Basin
64 Longwood Gathering and Disposal Systems(1) in Delaware Basin Loving County, TX Gas gathering Water gathering Salt water disposal Oil gathering Cryogenic gas processing plant Sold to EnLink Eddy County, NM Gas gathering and compression Cryogenic gas processing plant Water gathe
Slide 65: Wolf - Loving County, TX – Significant Midstream Footprint
65 Wolf - Loving County, TX – Significant Midstream Footprint Gas Gathering Water Gathering Salt Water Disposal Oil Gathering Matador Acreage Note: All acreage at January 7, 2016.
Slide 66: Rustler Breaks - Eddy County, NM – Repeating the Proven Wolf Model
66 Rustler Breaks - Eddy County, NM – Repeating the Proven Wolf Model Gas gathering and compression Cryogenic gas processing plant Water gathering (under evaluation) Salt water disposal (under evaluation) Matador Acreage Note: All acreage at January 7, 2016.
Slide 67: Midstream Initiatives Growing into Respectable Business
Midstream Initiatives Growing into Respectable Business 67 Expect to spend ~$40 million on midstream initiatives in the Delaware Basin in 2016 Matador expects Longwood to be able to support its own sources of financing Monetization of midstream assets could be a significant source of funding f
Slide 68: Summary; Q&A
Summary; Q&A NYSE: MTDR
Slide 69: 2016 Analyst Day Presentation
February 3, 2016 2016 Analyst Day Presentation NYSE: MTDR
Slide 70: Appendix
iy ‘| {Matador Lassa Appendix
Slide 71: Eagle Ford – "Oil Bank"
71 Eagle Ford – “Oil Bank” Note: All acreage at January 7, 2016. Some tracts not shown on map. Karnes Uvalde Medina Zavala Frio Dimmit La Salle Webb Atascosa McMullen Live Oak Bee Goliad Dewitt Gonzales Wilson San Antonio Glasscock Ranch Martin Ranch Northcut Affleck Troutt Sutton Love Cowey Lewton
Slide 72: Haynesville Operations
Haynesville Operations 72 5 gross (0.6 net) wells expected to be drilled and completed in the Haynesville in 2016 Estimated capital expenditures of ~$4 million 9 gross (1.9 net) Elm Grove wells operated by Chesapeake turned to sales in early 2016 ˗ Initial rates of ~13 MMcf/d of natural gas wi
Slide 73: Economics of Tier 1 Haynesville Well in Elm Grove
0 25 50 75 100 125 150 175 200 $2.00 $2.25 $2.50 $2.75 $3.00 $3.25 $3.50 $3.75 $4.00 R a te o f R e turn (% ) Natural Gas Price ($/Mcf) $6 MM D&C Cost $7 MM D&C Cost $8 MM D&C Cost Economics of Tier 1 Haynesville Well (10 Bcf) in Elm Grove 73 Note: Individual well economics only. Excludes costs prio
Slide 74: Board of Directors – Expertise and Stewardship
Board of Directors – Expertise and Stewardship Board Members Professional Experience Business Expertise David M. Laney Lead Director - Past Chairman, Amtrak Board of Directors - Former Partner, Jackson Walker LLP Law and Investments Reynald A. Baribault Director - Vice President / Engineering and Co
Slide 75: Special Board Advisors
Special Board Advisors Professional Experience Business Expertise Ronney F. Coleman - Retired President – North America, Archer - Former Vice President North America Pumping, BJ Services Co. Oilfield Services Marlan W. Downey - Retired President, ARCO International - Former President, Shell Pecten I
Slide 76: Proven Management Team – Experienced Leadership
Proven Management Team – Experienced Leadership Management Team Background and Prior Affiliations Industry Experience Matador Experience Joseph Wm. Foran Founder, Chairman and CEO - Matador Petroleum Corporation, Foran Oil Company, James Cleo Thompson Jr. 35 years Since Inception Matthew V. Hairford
Slide 77: Adjusted EBITDA Reconciliation
77 Adjusted EBITDA Reconciliation This investor 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 consolidated financial statements, such as industry analysts, investo
Slide 78: 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 income (loss) and net cash provided by operating activities, respectively. 78 (In thousands) 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2
Slide 79: 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 income (loss) and net cash provided by operating activities, respectively. 79 Note: LTM is last 12 months. LTM at (In thousands)
Slide 80: PV-10 Reconciliation
80 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