Matador Resources Company · NYSE:MTDR
Matador Resources — Investor Presentation (October 2012)
43 slides from Matador Resources's investor presentation, Oct 11, 2012
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation October 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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, as amended, and S
Slide 3: Company Overview
Company Overview Completed IPO of 14,883,334 shares (12,209,167 primary) including overallotment at $12.00/share in March 2012 Exchange: Ticker NYSE: MTDR Shares Outstanding 55.51 million common shares Share Price as of October 5, 2012 $9.79/share Market Capitalization as of October 5, 2012 $543.4 m
Slide 4: Matador Oil Facts: Second Quarter 2012
Matador Oil Facts: Second Quarter 2012 (1) On track to double Adjusted EBITDA for the second year in a row Record quarterly oil production of 285,000 Bbl, a sequential quarterly increase of 43% from 200,000 Bbl produced in first quarter of 2012 Record six-month oil production of 485,000 Bbl, a year-
Slide 5: Matador History
Matador History Predecessor Entities Matador Today Foran Oil & Matador Petroleum Matador Resources Company Founded by Joe Foran in 1983 Founded by Joe Foran in 2003 Foran Oil funded with $270,000 in contributed Attracted start-up capital from long-time shareholders; capital from 17 friends and famil
Slide 6: A Year of Growth
A Year of Growth AVERAGE DAILY OIL TOTAL REALIZED (1) EQUIVALENT PRODUCTION REVENUES ADJUSTED EBITDA (INCLUDING REALIZED GAIN ON DERIVATIVES) $74.1 8,738 $49.9 8,023 7,048 $40.8 $39.3 $27.9 3,926 $32.2 $23.6 $29.3 $26.7 $21.3 $18.4 $15.2 2,285 $14.2 1,506 $8.1 911 2007 2008 2009 2010 2011 2012 2012
Slide 7: Transition to Oil
Transition to Oil TOTAL OIL PRODUCTION OIL BY VOLUME OIL BY REVENUE 285 36% 82% 74% 200 27% 154 22% 7% 7% 6% 37 12% 12% 30 33 9% 4% 22 7% 2% 2007 2008 2009 2010 2011 2012 2012 2007 2008 2009 2010 2011 2012 2012 2007 2008 2009 2010 2011 2012 2012 1Q 2Q 1Q 2Q 1Q 2Q Year Ended December 31, Year Ended D
Slide 8: Financial Performance: Proven Management Team
Financial Performance: Proven Management Team Average Daily Production Oil and Natural Gas Revenues (BOE/d) ($ in mm) 10,000 $40.0 $36.1 8,738 CAGR: 53% 8,004 CAGR: 119% 8,000 $30.0 6,000 $20.9 $20.0 3,729 4,000 $10.0 $7.5 2,000 0 $0.0 2Q10 2Q11 2Q12 2Q10 2Q11 2Q12 Adjusted EBITDA (1) Total Realized
Slide 9: Strong Growth Profile Focused on Liquids
Strong Growth Profile Focused on Liquids Commentary Liquids Focused CapEx in 2012E 2012 Anticipated Drilling 2012E CapEx Gross Wells Net Wells (in millions) Q2 2012 oil production Total Total % Total % approximately 285,000 barrels South Texas Eagle Ford 28.0 25.6 86.8% $257.2 82.2% Austin Chalk 2.0
Slide 10: Leading Eagle Ford Exposure
Leading Eagle Ford Exposure Leverage to Eagle Ford (Net Eagle Ford Acres / EV) (Net Acres / $mm) 2012E Capex (1) Matador offers significant leverage % Eagle Ford and focus to the Eagle Ford SFY 51.0 57% Approximately 90% of Eagle Ford MTDR 48.1 84% acreage is in the prospective oil GDP 36.7 64% and
Slide 11: Eagle Ford Properties are in Good Neighborhoods
Eagle Ford Properties are in Good Neighborhoods Highlights MTDR acreage in counties with robust transaction activity – “good neighborhoods” Transaction values ranging from $10,000 to $30,000 per acre Our Eagle Ford position has grown to over 30,000 net acres Acreage in both the eastern and western a
Slide 12: Eagle Ford and Austin Chalk Properties
Eagle Ford and Austin Chalk Properties EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST Nickel Ranch 49,698 gross / 30,150 net acres Bexar 7,567 gross / 6,170 net acres Hennig San Antonio Uvalde Medina Gonzales Lewton EOG OPERATED, MTDR WI ~21% Finney 18,998 gross / 3,709 net acres Keseling Love Wilson Cow
Slide 13: Eagle Ford 24-Hour Stabilized Rates
Eagle Ford 24-Hour Stabilized Rates (1) (2)(3) (2)(3) (4) Well Name County Completion Date Perforated Length Frac Stages Oil IP Gas IP Oil Equiv IP Choke Pressure Total (ft.) (Bbl/day) (Mcf/day) (BOE/day) (inch) (psi) 2011 Wells JCM Jr. Minerals 1H La Salle 11/10/2010 3,774 15 164 3,648 772 15/64 3,
Slide 14: South Texas Multi-Pay Petroleum Systems: Petroleum Charge focus towards Glasscock Ranch
South Texas Multi-Pay Petroleum Systems: Petroleum Charge focus towards Glasscock Ranch Redhawk Area Matador Resources Acreage Note: All acreage at June 30, 2012 Oil and Gas Fields: Olmos/Navarro Austin Chalk Edwards Buda Wilcox Note: Information for Pearsall Oil Field sourced from public informatio
Slide 15: 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 16: Eagle Ford Well Costs Averaging 15% Less than 2012 Budget Estimates
Eagle Ford Well Costs Averaging 15% Less than 2012 Budget Estimates 14.0 Eastern Acreage Western Acreage 12.0 10.0 8.0 Budgeted Cost Actual Cost 6.0 4.0 2.0 0.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Note: 2012 Eagle Ford well drilling and completions costs only compared to budget estimates; costs d
Slide 17: Eagle Ford Well Costs – East Side
Eagle Ford Well Costs – East Side $14,000,000 Well Cost 5000' Normalized Cost $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 1 2 3 4 5 6 7 8 Note: Wells are displayed in chronological order. Well drilling and completions costs only; costs do not include pipelines and lease fa
Slide 18: Eagle Ford Well Costs – West Side
Eagle Ford Well Costs – West Side $14,000,000 Well Cost 5000' Normalized Cost $12,000,000 $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 Note: Wells are displayed in chronological order. Well drilling and completions costs only; costs do not include pipelines and
Slide 19: Average Frac Stage Cost per Well
Average Frac Stage Cost per Well $400,000 Bauxite Resin Coated Sand White Sand $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 Note: Wells are displayed in chronological order 18
Slide 20: 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 $12.0 40 20 0 100 200 300 400 500 600 700 Estimated Ultimate Recovery (EUR), MBOE Note: Individual well economics only.
Slide 21: Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage
Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage San Antonio Multi-Pay Fairway with Eagle Ford, Pearsall, Austin Chalk and Buda potential OIL FAIRWAY Matador Resources Acreage Note: All acreage at June 30, 2012 20
Slide 22: Wolfbone Play in the Delaware Basin (West Texas)
Wolfbone Play in the Delaware Basin (West Texas) Matador Resources ~4,900 gross / ~2,900 net acres Chesapeake Operated IP’s: 260 – 750 Bbl/d GAINES DAWSON 600 – 3,300 Mcf/d ANDREWS MARTIN PSL LOVING BLK C27 WINKLER MIDLAND G ECTOR CULBERSON REEVES WARD CRANE UPTON PECOS JEFF DAVIS Anadarko Operated
Slide 23: Wolfbone Play in the Delaware Basin Stratigraphic Column
Wolfbone Play in the Delaware Basin (West Texas) Stratigraphic Column Horizontal Targets Avalon Shale Depth: 7,900’ – 8,300’ (Oil Window) Density Porosity: 12-14% Thickness: 300-500 ft. Normal Pressure (0.45 psi/ft.) Total Organic Carbon (TOC) 5-8% XRD: 15-20% clay and 40-60% silica IP: 100-270 Bbl/
Slide 24: Hedging Profile
Hedging Profile Oil Hedges (Costless Collars) 4Q 2012 FY 2013 Total Volume Hedged by Ceiling (Bbl) 360,000 1,260,000 Weighted Average Price ($ / Bbl) $110.31 $110.26 Total Volume Hedged by Floor (Bbl) 360,000 1,260,000 Weighted Average Price ($ / Bbl) $90.83 $87.14 Natural Gas Hedges (Costless Colla
Slide 25: Natural Gas Liquids (NGLs)
Natural Gas Liquids (NGLs) Net NGL production of 163 Bbl/d and 476 Bbl/d for the first quarter and second quarter of 2012 respectively. Net NGL Production (Bbl/d) 500 476 400 300 200 163 100 0 1Q 2012 2Q 2012 Matador has recently finalized a natural gas gathering, transportation and processing agree
Slide 26: Financial Flexibility
Financial Flexibility Plan to fund 2012 capital budget with a portion of IPO net proceeds, anticipated cash flows from operations and available borrowings under credit facility Closed an amended and restated credit facility to increase the Company’s borrowing capacity to $200 million primarily as a
Slide 27: Strong Growth Profile Focused on Liquids
Strong Growth Profile Focused on Liquids Commentary Liquids Focused CapEx in 2012E 2012 Anticipated Drilling 2012E CapEx Gross Wells Net Wells (in millions) Q2 2012 oil production Total Total % Total % South Texas approximately 285,000 barrels Eagle Ford 28.0 25.6 86.8% $257.2 82.2% Austin Chalk 2.0
Slide 28: Investment Highlights
Investment Highlights Strong Growth Profile with Increasing Focus on Oil / Liquids High Quality Asset Base in Attractive Areas Significant Multi-year Drilling Inventory Strong Financial Position and Long-Term Institutional, Industry and Individual Shareholders Proven Management and Technical Team an
Slide 29: Appendix
a, § Matador Ay x RESOURCES CO MPANY 7 Appendix
Slide 30: 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. Year Ended December 31, Three Months Ended June 30, (I
Slide 31: 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 the Department of Petroleum Dr. Stephen A. Holditch Engineering, Texas A&M University Director Oil & Gas Operations - Founder
Slide 32: 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 33: Matador Resources Snapshot
Matador Resources Snapshot Daily Production(1) 8,738 BOE/d Oil Production (% total) 3,130 Bbl/d (36%) Proved Reserves @ 6/30/12 19.1 Million BOE % Proved Developed 64% % Oil 35% (and growing) 2012E CapEx $313 million % Eagle Ford 84% % Oil and Liquids 94% 2012E Anticipated Drilling 29.5 net wells Ea
Slide 34: 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 @ 6/30/12 8.8 Million BOE and Austin Chalk (including “Chalkleford”) % Proved Developed 47% Two rigs running, primarily focused on % Oil / Liquids 75% oil and liquids Daily Oil
Slide 35: Reducing Drilling & Completion Costs Increases ROR in Eagle Ford Wells
Reducing Drilling & Completion Costs Increases ROR in Eagle Ford Wells $8 MM D&C Cost $8 MM D&C Cost $100 NYMEX Oil $7 MM D&C Cost $90 NYMEX Oil $7 MM D&C Cost $8 MM D&C Cost $8 MM D&C Cost $70 NYMEX Oil $7 MM D&C Cost $80 NYMEX Oil $7 MM D&C Cost Note: Individual well economics only. D&C cost = dri
Slide 36: Haynesville Positioning
Haynesville Positioning Highlights Approximately 12,500 gross Southwest Pine Island Central Pine Island and 5,800 net acres in TIER 3 Haynesville Tier 1 core area Fee Minerals Bossier Webster Rudd #1H Almost all prospective Caddo Haynesville acreage is HBP – TIER 2 provides “natural gas bank” TIER 1
Slide 37: Haynesville Well Economics – Tier 1 Area
Haynesville Well Economics – Tier 1 Area 250 8 Bcf - $8.5 MM D&C Cost 225 9 Bcf - $8.5 MM D&C Cost 10 Bcf - $8.5 MM D&C Cost 200 8 Bcf - $9.5 MM D&C Cost 175 9 Bcf - $9.5 MM D&C Cost 10 Bcf - $9.5 MM D&C Cost 150 125 100 75 50 25 0 3 3.5 4 4.5 5 5.5 6 Natural Gas Price, $/Mcf Note: Individual well e
Slide 38: Business Strategy to Deliver Growth and Value
Business Strategy to Deliver Growth and Value Exploration and Development 2012E CapEx program focused on oil and liquids opportunities Balanced Portfolio Growing Eagle Ford and Delaware Basin contributes to a diversified portfolio mix between oil and natural gas Active, ongoing exploration effort co
Slide 39: Option Value in Large Unevaluated Acreage Positions
Option Value in Large Unevaluated Acreage Positions Wyoming, Utah and Idaho (Meade Peak Shale) Matador Today Gross Acres(1),(2) 107,122 acres Net Acres(1),(2) 100,670 acres 2012E CapEx Budget $2.5 million Initial test well drilled and cored through the Meade Peak shale Detailed petrophysical and roc
Slide 40: Selected Historical Financials
Selected Historical Financials (Revenues and Adjusted EBITDA in millions) Year Ended December 31, Three Months Ended June 30, 2009 2010 2011 2011 2012 Production Summary Oil Production (MBbl) 30 33 154 51 285 Gas Production (Bcf) 4.8 8.4 14.5 4.1 3.1 Total Production (MBOE) 830 1,433 2,571 728 795 R
Slide 41: Investment Highlights
Investment Highlights Strong Growth Profile with Increasing Focus on Oil / Liquids Oil production up almost five-fold in 2011 and projected to increase 8x to 9x in 2012 2012E capital expenditure program focused on oil and liquids exploration and development High Quality Asset Base in Attractive Area
Slide 42: Diversified Investor Composition Before July 31, 2012 Lock-up Expiration
Diversified Investor Composition Before July 31, 2012 Lock-up Expiration Given management’s significant equity position, interests are well aligned with public shareholders Unique and diverse investor base includes institutional and industry shareholders with significant experience investing in the
Slide 43: Matador Resources Company (“MTDR”)
Matador Resources Company (“MTDR”) 42
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