Matador Resources Company · NYSE:MTDR

Matador Resources — Investor Presentation (November 2013)

43 slides from Matador Resources's investor presentation, Nov 12, 2013

1. Slide 1: Investor Presentation November 2013

   Investor Presentation November 2013

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

3. Slide 3: Company Summary

   RESOURCES COMPANY Company Summary

4. Slide 4: Company Overview

   4 Company Overview Completed IPO of 14,883,334 shares (12,209,167 primary) including overallotment at $12.00/share in March 2012 and Follow-on Offering of 9,775,000 shares including overallotment at $15.25/share in September 2013 Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 65.6 million common

5. Slide 5: Matador History

    Founded by Joe Foran in 1983 – most participants are still shareholders today.  Foran Oil funded with $270,000 in contributed capital from 17 friends and family members  Sold to Tom Brown, Inc.(1) in June 2003 for an enterprise value of $388 million in an all-cash transaction Foran Oil & Matador

6. Slide 6: Matador's Continued Growth

   T h o u s a n d Bb l Matador’s Continued Growth 6 (1) 2013 estimates at midpoint of guidance range as updated on November 6, 2013. Guidance includes actual results for the nine months ended September 30, 2013 and estimated results for the remainder of 2013. Estimated average realized prices for oil

7. Slide 7: Matador Execution History – IPO vs. Today

   Matador Execution History – IPO (February 7, 2012) vs. Today Grow with a focus on the Eagle Ford to create a more balanced portfolio Production  7.1 MBOE/d  414 Bbl/d of oil  6% oil  13.5 MBOE/d  6,700 Bbl/d of oil  50% oil Proved Reserves  27 MMBOE  1.1 MMBbl of oil  4% oil  44 MMBOE  13

8. Slide 8: Matador key statistics

   8 Total Enterprise Value(1) Over $1.5 billion Average Daily Production(2) 11,663 BOE/d Oil (% total) 5,584 Bbl/d (48%) Natural Gas (% total) 36.5 MMcf/d (52%) Proved Reserves @ 9/30/2013 44.2 million BOE % Proved Developed 37% % Oil 31% PV-10(3) $538.6 million 2013E CapEx $370 million % South Texas

9. Slide 9: Investment Highlights

   9 Investment Highlights Strong Growth Profile with Increasing Focus on Oil / Liquids  Average daily production CAGR of 54% since 2008 with 16x growth in oil production since IPO  ~97% of 2013E capital expenditure program focused on oil / liquids exploration and development High Quality Asset Base

10. Slide 10: Growth in PV-10 from SEC Proved Reserves

    $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 2008 2009 2010 2011 2012 Q3 2013 Growth in PV-10(1) from SEC Proved Reserves $57.65 oil $3.87 gas $75.96 oil $4.38 gas $92.71 oil $4.12 gas $91.21 oil $2.76 gas $91.69 oil $3.61 gas P V -1 0 (1 ) , m il li o n s 10 SEC Pricing Oil, $/Bbl

11. Slide 11: SEC Proved Reserves Value Growth By Area

    11 SEC Proved Reserves Value Growth By Area Eagle Ford $130 million, 52% Haynesville $96.6 million, 39% Cotton Valley $19.5 million, 8% SE New Mexico $2.4 million, 1% Sept. 30, 2013 PV-10(1): $538.6 million $91.69 oil $3.61 gas (1) PV-10 is a non-GAAP financial measure. For a reconciliation of Stand

12. Slide 12: Eagle Ford South Texas

    RESOURCES COMPANY Eagle Ford South Texas

13. Slide 13: Significant Eagle Ford Exposure

    13 Significant Eagle Ford Exposure (1) For the year ended December 31, 2011. (2) For the nine months ended September 30, 2013. (3) At November 6, 2013. (4) Identified and engineered Tier 1 and Tier 2 locations identified for potential future drilling, including specified production units and estimat

14. Slide 14: Eagle Ford Properties

    14 Eagle Ford Properties Note: All acreage at November 6, 2013. Uvalde Medina Zavala Frio Dimmit La Salle Webb Bexar Atascosa McMullen Live Oak Bee Goliad Dewitt Gonzales Wilson EAGLE FORD EAST 7,570 gross / 6,360 net acres EOG OPERATED, MTDR WI ~21% 9,508 gross / 1,777 net acres GLASSCOCK (WINN) RA

15. Slide 15: Eagle Ford Well Costs and Estimated Ultimate Recovery

    15 Eagle Ford Well Costs and Estimated Ultimate Recovery (“EUR”) Note: All acreage at November 6, 2013. EUR’s represent typical range of results over last 12 months by area. Well costs reflect actual costs of all 2013 wells by area. See pages 17-19 for additional information. Karnes Uvalde Medina Za

16. Slide 16: Operational Improvements

    $9.9 $7.8 $6.5 $5.6 2011 2012 2013YTD Last Well $11.0 $9.4 $7.3 $7.0 2011 2012 2013YTD Last Well $10.4 $8.3 $8.2 2012 2013YTD Last Well Overview 16 Operational Improvements Note: “2013 YTD” and “Last Well” – As of November 6, 2013. Year classification is based on spud date. (1) Excludes any/all well

17. Slide 17: Eagle Ford West

    17 Eagle Ford “West”  8,000’ – 9,000’ True Vertical Depth  ~240°F (3)  2-String Casing Design  White Sand Note: “2013 YTD” and “Last Well” – As of November 6, 2013. Year classification is based on spud date. (1) Excludes any/all wells drilled with a pilot hole. Drilling days are from spud to tot

18. Slide 18: Eagle Ford Central

    18 Eagle Ford “Central” (3)  10,500’ – 11,500’ True Vertical Depth  ~300°F  2-String Casing Design  White Sand DRILLING DAYS (1) FRAC STAGE COST TOTAL WELL COST (2) ($ in thousands) ($ in millions) $11.0 $9.4 $7.3 $7.0 2011 2012 2013 YTD Last Well $159.5 $130.1 $121.2 $120.9 2011 2012 2013 YTD L

19. Slide 19: Eagle Ford East

    19 Eagle Ford “East” (3)  12,500’ – 13,500’ True Vertical Depth  ~330°F  2-String or 3-String Casing Design  Premium Proppant(3) Note: “2013 YTD” and “Last Well” – As of November 6, 2013. Year classification is based on spud date. (1) Excludes any/all wells drilled with a pilot hole. Drilling da

20. Slide 20: Batch Drilling – Reducing Well Costs and Well Times Further

    Batch Drilling – Reducing Well Costs and Well Times Further 20 Time Savings •Rig Moves ~2 Days •Drilling Efficiencies ~1 Day Total Per Well Time Savings ~3 Days Cost Savings •Rig Moves ~$115,000 •Location ~$60,000 •Drilling Efficiencies ~$125,000 Total Per Well Cost Savings ~$300,000 Approx. $300,00

21. Slide 21: Evolution of Matador Frac Design

    21 Evolution of Matador Frac Design Note: Figure depicts proppant and fluid volume pumped per 300 ft. of horizontal wellbore. (1) Mlbs = thousands of pounds of proppant pumped.

22. Slide 22: Well Improvement with Evolution of Frac Design

    22 Well Improvement with Evolution of Frac Design Example 1: Rate(1) vs. Cum. Oil Production Example 2: Rate(1) vs. Cum. Oil Production Example 1: Cum. Oil Production vs. Time Example 2: Cum. Oil Production vs. Time Note: DOFP = Date of first production. (1) Oil rate shown is a five day trailing ave

23. Slide 23: Permian Basin Southeast New Mexico and West Texas

    Permian Basin Southeast New Mexico and West Texas

24. Slide 24: Increasing Exposure to the Permian

    24 Gross Acres(1) 64,893 acres Net Acres(1) 40,425 acres Increasing Exposure to the Permian  Foothold of existing production and reserves  Acreage position in good neighborhoods, surrounded by other operators’ ongoing drilling  Targeting 107 gross (74.5 net) engineered drilling locations(2)  Cur

25. Slide 25: Ranger Prospect Area: Proposed Wolfbone Exploration Program

    Ranger Prospect Area: Proposed Wolfbone Multi-Zone Exploration Program and Surrounding Results 7 7 5 0 8 0 0 0 8 2 5 0 8 5 0 0 8 7 5 0 9 0 0 0 9 2 5 0 9 5 0 0 9 7 5 0 1 0 0 0 0 1 0 2 5 0 1 0 5 0 0 1 0 7 5 0 1 1 0 0 0 1 1 2 5 0 1 1 5 0 0 0 150 GR (CTR) 0.2 2000 LLD 0.2 2000 LLS Log Depth(ft) Log Dept

26. Slide 26: Wolf Leasehold: Proposed Wolfbone Exploration Program

    Wolf Leasehold: Proposed Wolfbone Multi-Zone Exploration Program and Surrounding Results Wolf Energy Wolf #1 (Vertical well) 3rd BS / Upr Wolfcamp 33.5 years cum: 61 MBbl; 642 MMcf Wolf Energy Dorothy White #1 (Vertical well) 3rd BS / Upr Wolfcamp 17 years cum: 25 MBbl; 92 MMcf Shell Johnson 1-88 Lo

27. Slide 27: Haynesville & Cotton Valley

    Haynesville & Cotton Valley Northwest Louisiana and East Texas

28. Slide 28: Significant Option Value on Natural Gas

    Significant Option Value on Natural Gas  Balanced portfolio of assets provides optionality should natural gas prices continue to recover  Significant acreage position in the Haynesville play  Also prospective for the Cotton Valley, Travis Peak and other shallow formations  97% of Haynesville acr

29. Slide 29: Haynesville Total Resource Potential – Price Sensitivity

    29 Haynesville Total Resource Potential – Price Sensitivity (1) PV-10 is a non-GAAP measure. For a reconciliation of Standardized Measure (GAAP) to PV-10 (non-GAAP), see Appendix. All PV-10 values estimated as of September 30, 2013. (2) NYMEX gas price, less property-specific differentials. $22 $30

30. Slide 30: Gracie Wyoming, Utah and Idaho

    Gracie Wyoming, Utah and Idaho

31. Slide 31: Matador Gracie Project Total Prospect Acreage

    Matador Gracie Project Total Prospect Acreage IDAHO UTAH W YO M IN G W Y O M IN G ID A H O U T A H WYOMING 76,497 gross acres 36,004 net acres Crawford Federal #1H 31 Note: All acreage at November 6, 2013. Matador acreage shown in red.

32. Slide 32: Southwest Wyoming Stratigraphy and Target Zones

    Southwest Wyoming Stratigraphy and Target Zones Lamberson, Paul, 1982, The Fossil Basin and its Relationship to the Absaroka Thrust System, Wyoming and Utah, RMAG 13% TOC Meade Peak Shale Cretaceous Shales 2% TOC Crawford Federal #1:  Drilled straight hole in late 2011  Encountered 161’ Meade Peak

33. Slide 33: Financial Overview

    RESOURCES COMPANY Financial Overview

34. Slide 34: Matador's Continued Growth

    $18.4 $15.2 $23.6 $49.9 $115.9 $181.0 2008 2009 2010 2011 2012 9/30/2013 LTM 1.5 2.3 3.9 7.0 9.0 11.7 2008 2009 2010 2011 2012 First 9 mo. 2013 7% 4% 2% 6% 37% 48% 2008 2009 2010 2011 2012 First 9 mo. 2013 $30.6 $19.0 $34.0 $67.0 $156.0 $252.1 2008 2009 2010 2011 2012 9/30/2013 LTM Matador’s Continu

35. Slide 35: 2013 Financial Guidance

    $19.0 $34.0 $67.0 $156.0 $260.0 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 2009 2010 2011 2012 2013E $15.2 $23.6 $49.9 $115.9 $185.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 60 $180.0 $200.0 2009 2010 2011 2012 2013E 35 2013 Oil and Natural Gas Revenues(1)  Estimated oil and natural gas

36. Slide 36: 2013 and 2014 Hedging Profile

    36 2013 and 2014 Hedging Profile At November 6, 2013, Matador had:  0.3 million barrels of oil hedged for remainder of 2013 at weighted average floor and ceiling of $88/Bbl and $106/Bbl, respectively  0.8 Bcf of natural gas hedged for remainder of 2013 at weighted average floor and ceiling of $3.1

37. Slide 37: Appendix

    RESOURCES COMPANY Appendix

38. Slide 38: Proven Management Team – Experienced Leadership

    Proven Management Team – Experienced Leadership 38 Management Team Background and Prior Affiliations Industry Experience Matador Experience Joseph Wm. Foran Founder, Chairman and CEO - Matador Petroleum Corporation, Foran Oil Company and James Cleo Thompson Jr. 33 years Since Inception David E. Lanc

39. Slide 39: Board of Directors and Special Board Advisors

    Board of Directors and Special Board Advisors – Expertise and Stewardship 39 Board Members and Advisors Professional Experience Business Expertise Dr. Stephen A. Holditch Director - Professor Emeritus and Former Head of Dept. of Petroleum Engineering, Texas A&M University - Founder and Former Presid

40. Slide 40: Southwest Glasscock Ranch Buda Production History

    Southwest Glasscock Ranch Buda Production History Global Geophysical 3D Seismic Survey Area Outline Dan Hughes Heitz 302 3H 8/18/2012 IP: 350 Bbl/d 500 Mcf/d 14 mo.cum: 250,333 Bbl 262,009 Mcf TX American Resources Buchanan 1H 5/3/2013 IP: 756 Bbl/d 556 Mcf/d 5 mo.cum: 76,989 Bbl 78,077 Mcf Dan Hugh

41. Slide 41: Adjusted EBITDA Reconciliation

    41 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

42. Slide 42: Adjusted EBITDA reconciliation to Net Income (Loss)

    Nine Months Ended LTM at (In thousands) 2007 2008 2009 2010 2011 2012 9/30/2013 9/30/2013 Unaudited Adjusted EBITDA reconciliation to Net Income (Loss): Net (loss) income ($300) $103,878 ($14,425) $6,377 ($10,309) ($33,261) $29,720 $8,532 Interest expense - - - 3 683 1,002 4,919 5,468 Total income t

43. Slide 43: PV-10 Reconciliation

    43 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

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