Matador Resources Company · NYSE:MTDR
Matador Resources — Q3 2020 Earnings Presentation
32 slides from Matador Resources's earnings presentation, Oct 28, 2020
Slide 1: Third Quarter 2020 Earnings Release
Third Quarter 2020 Earnings Release October 27, 2020
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: Chairman's Remarks
Chairman’s Remarks October 27, 2020
Slide 4: 2020 Priorities – Protecting the Balance Sheet is First Priority
SLIDE A 2020 Priorities – Protecting the Balance Sheet is First Priority Balance Sheet Improvements Five Significant 2020 Milestones - Timeline 1 Reducing Rig Count from 6 to 3 rigs Q3 2020 and Beyond 1 Rodney Robinson wells turned to sales • Operating three rigs in 2 Reducing Capital Costs, G&A and
Slide 5: Revolver Borrowings Outstanding – Quarterly Estimates for Q4 2020
SLIDE B Revolver Borrowings Outstanding – Quarterly Estimates for Q4 2020 ($ in millions) Letters of Credit $1,000 Revolver Borrowings Outstanding $900 Borrowing Base $900 $800 $200 million Elected Commitment $700 $700 $25 million better than July 28, 2020 guidance projection $600 $205 million $520
Slide 6: A Step Change in Capital Efficiency: Updated 2020 Expectations
SLIDE C 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 Lateral Feet Turned to Sales $1,700 83% (2) Average Drilling & Completions CapEx/foot, $/ft(1) 9,000 8,800 Aver
Slide 7: Elements of 2020 Cost Savings & Cash Flow Enhancements
SLIDE D Elements of 2020 Cost Savings & Cash Flow Enhancements $360 Million Potential Improvement vs. Original Guidance Cost Savings + Cash Enhancements Already Realized YTD ($ in millions) Expected Remaining Cost Savings + Cash Enhancements for H2 2020 Total Expected 2020 Cost Savings + Cash Flow E
Slide 8: A Tightly Integrated Strategy: Growing E&P and Midstream Together
SLIDE E 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) Q4 2020E BOE up 9% sequentially; up 8% YoY Q4 2020E BOE up 12% sequentially; up 21% YoY 79,400 74,250 73,749 73,302 72,989 8
Slide 9: Operational and Financial Results
Operational and Financial Results October 27, 2020
Slide 10: Strong Results for Third Quarter 2020
Strong Results for Third Quarter 2020 • Oil production of ~42,300 Bbl/d, up 6% from ~39,800 Bbl/d in Q3 2019 – Above Guidance! Strong Production • Natural gas production of ~183.9 MMcf/d, up 3% from ~179.2 MMcf/d in Q3 2019 – Above Guidance! • Total production of ~73,000 BOE/d, up 5% from ~69,600 BO
Slide 11: Q3 2020 Selected Operating and Financial Results
Q3 2020 Selected Operating and Financial Results Three Months Ended September 30, June 30, September 30, 2020 2020 2019 Net Production Volumes:(1) Oil (MBbl) 3,895 3,920 3,659 Natural gas (Bcf) 16.9 16.5 16.5 Total oil equivalent (MBOE) 6,715 6,670 6,407 Average Daily Production Volumes:(1) Oil (Bbl
Slide 12: Delaware Basin – Continuing to Deliver Strong Well Results
Delaware Basin – Continuing to Deliver Strong Well Results! Matador Acreage Reduced operated rigs in Delaware TWIN LAKES ~43,900 gross / ~24,500 net acres Basin from six to three at the end of Q2 2020 – expect to run three rigs for remainder of 2020 ARROWHEAD During remainder of 2020: ~66,000 gross
Slide 13: 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
Slide 14: Matador Federal Acreage and Permitting Update
Matador Federal Acreage and Permitting Update % of Total • At June 30, 2020, Delaware Leasehold Federal Leasehold Delaware Asset Area County Delaware (net acres) (net acres) Leasehold Matador held approximately 127,600 Antelope Ridge Lea 16,300 8,500 7% net leasehold and mineral Rustler Breaks Eddy
Slide 15: Wells Completed and Turned to Sales – Q3 2020
Wells Completed and Turned to Sales – Q3 2020 During Q3 2020, Matador completed and turned to sales 27 gross (19.3 net) wells in its various operating areas, including 20 gross (19.1 net) operated wells and 7 gross (0.2 net) non-operated wells. Of the 20 operated wells turned to sales, 18 were t
Slide 16: 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 17: Continued Progress in All Parts of San Mateo's Delaware Midstream Business
Continued Progress in All Parts of San Mateo’s Delaware Midstream Business (51% Owned by Matador) San Mateo Average Water Handling San Mateo Average Natural Gas Gathering(1) (MBbl/d) (MMcf/d) Up 8% sequentially; 250 233 300 Down 1% sequentially; up 13% YoY 213 216 217 down 11% YoY 262 206 200 250 20
Slide 18: San Mateo – Recent Highlights and Performance
San Mateo – Recent Highlights and Performance October 2020 – Matador and Five Point(1) completed the successful merger of San Mateo I and San Mateo II into a single entity Q3 2020 – San Mateo II expansion projects completed, including: • Expansion of the Black River Processing Plant to designed
Slide 19: Hedging Profile – Remainder of 2020, 2021 and 2022
Hedging Profile – Remainder of 2020, 2021 and 2022(1) Oil Collars, Swaps, Puts Midland-Cushing Basis Swaps Natural Gas Collars ~70-75% hedged for Q4 2020 ~60% hedged for Q4 2020 ~60% hedged for Nov 2020 – Dec 2020 9,000 16.0 WTI Collars 6,240 8,400 15.0 6,000 WTI Swaps 8,000 14.0 Natural Gas Volume
Slide 20: Updated Full Year 2020 Guidance
Updated Full Year 2020 Guidance October 27, 2020
Slide 21: Summary and Updated 2020 Guidance
Summary and Updated 2020 Guidance (as Provided on October 27, 2020) Three rigs operating in the Delaware Basin during Q4 2020 – expect 53 gross (45.7 net) operated wells in 2020 − Operating three rigs in the Delaware Basin during Q4 2020, two of which are anticipated to be operating in the Stateli
Slide 22: Updated 2020 Capital Investment Plan Summary vs. Prior Guidance
Updated 2020 Capital Investment Plan Summary vs. Prior Guidance Updated 2020 CapEx Guidance(1)(2)(3) – $560 million (down $5 million vs. Prior Guidance of $565 million(4)) (Delaware: Moved from 6 to 3 operated rigs by end of Q2 2020) 2020E Wells Turned to Sales Midstream $95 million(3) Prior Guidanc
Slide 23: 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 12% D/C/E: $465 MM Midstream(3): $95 MM Oil, MBbl 27,150 2020E Oil Production – 13% Growth YoY 26,700 Total: $560 MM 24,164 12% • Estimated oil production of 15.7 to 1
Slide 24: 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 93 gross (47.9 net) wells. Matador expects the Delaware Basin to account for 89 gross (47.9 net) wells, including 53 gross (45.7 net) operated and 36 gross (2.2 net)
Slide 25: Appendix
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Slide 26: Matador Resources and San Mateo I Credit Facilities
Reaffirmed October 2020! 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 D
Slide 27: 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
Slide 28: 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)
Slide 29: Adjusted EBITDA Reconciliation Continued – Consolidated
Adjusted EBITDA Reconciliation Continued 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
Slide 30: 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
Slide 31: 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
Slide 32: Adjusted Net (Loss) Income and Adjusted (Loss) Earnings Per Diluted Common Share
Adjusted Net (Loss) Income and Adjusted (Loss) Earnings Per Diluted Common Share This presentation includes the non-GAAP financial measures of adjusted net (loss) income and adjusted (loss) earnings per diluted common share. These non-GAAP items are measured as net (loss) income attributable to Mata
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