Matador Resources Company · NYSE:MTDR

Matador Resources — Investor Presentation (June 2019)

62 slides from Matador Resources's investor presentation, June 2019

  1. Slide 1: Investor Presentation

    Investor Presentation June 2019 NYSE: MTDR

  2. 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

  3. Slide 3: Company Summary

    aN, ( Matador % Mf RESOURCES COMPANY Company Summary NYSE: MTDR

  4. Slide 4: Matador Resources Company Overview

    Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Cap(1) $2.0B Delaware Basin Q1 Avg. Daily Production 59.9 MBOE/d Assets Haynesville/ Q1 Net Debt / Adj. EBITDA(2) 2.3x Cotton Valley YE 2018 Proved Reserves 215 MMBOE Assets MATADOR HEADQUARTERS DALLAS, TEXAS Eagle Ford Asset

  5. Slide 5: Matador's Significant Executive Officer % Ownership vs. Peer Group

    Matador’s Significant Executive Officer % Ownership vs. Peer Group Joseph Wm. Foran Matthew V. Hairford David E. Lancaster Craig N. Adams Billy E. Goodwin Founder, Chairman President and EVP and CFO EVP and COO – EVP and COO – and CEO Chair of the Land, Legal and Drilling, Operating Committee Admini

  6. Slide 6: Since Its IPO in February 2012 – Matador Has…

    Since Its IPO in February 2012 – Matador Has… Outperformed Peers and Crude Oil Increased Its Production Volumes 200% (1) (2) XOP Index Crude Oil Matador Peers Delaware Volumes Were Non-Existent at Time of IPO and 60 70.0% Were 45.2 MBOE/d (87% of Total Production) in 2018 150% 50 60.0% Daily Product

  7. Slide 7: Matador Has Made Tremendous Progress Since its IPO

    Matador Has Made Tremendous Progress Since its IPO – “We Do What We Say We Will Do” At IPO(1): February 7, 2012 Today(2) Difference Share Price $12.00 $16.99(3) +42% 414 Bbl/d ~34,500 Bbl/d Oil Production (6% oil) +83-fold (58% oil) 27 MMBOE 215 MMBOE Proved Reserves (4% oil) (57% oil)(4) +8-fold Pr

  8. Slide 8: Q1 2019 Volumes At Record Levels; Delaware Production Tops 50,000 BOE/d

    Q1 2019 Volumes At Record Levels; Delaware Production Tops 50,000 BOE/d Average Daily Oil Production Average Daily Total Production (Bbl/d) (BOE/d) Oil up 3% sequentially; up 30% YoY BOE up 8% sequentially; up 32% YoY 59,941 34,517 33,479 55,536 54,625 32,317 52,937 35,000 60,000 29,740 Oil Natural

  9. Slide 9: Consistent Proved Reserves per Share Growth

    Consistent Proved Reserves per Share Growth  Matador proved reserves per share at December 31, 2018 are at an all-time high despite a ~45% decrease in crude oil prices since mid-2014  Since Matador’s IPO, reserves per share have increased ~3.7x 2.00 Reflects Proved 215 MMBOE Reserves at 1.80 Decem

  10. Slide 10: Committed to Maintaining Strong Balance Sheet Through the Cycles

    Committed to Maintaining Strong Balance Sheet Through the Cycles  Preserved and enhanced liquidity through addition of San Mateo credit facility in December 2018, October 2018 Senior Notes tack-on offering, August 2018 Senior Notes refinancing and May 2018 equity offering  Strong financial positio

  11. Slide 11: Matador Screens Well Against Peers on Return Metrics

    Matador Screens Well Against Peers on Return Metrics “E&P” Return on Average Capital Employed Cash Return on Cash Invested (CROCI)(2) (ROACE)(1) 2018 2018 Peer 1 31% Peer 3 29% Peer 2 28% Peer 5 17% Peer 3 28% MTDR 14% 14% MTDR 22% 23% Peer 10 14% Peer 4 22% Peer 6 12% Peer 5 17% Peer 11 10% Peer 6

  12. Slide 12: Operations and Delaware Basin Update

    Operations and Delaware Basin Update NYSE: MTDR

  13. Slide 13: Expanding Opportunities in the Northern Delaware Basin

    Expanding Opportunities in the Northern Delaware Basin  Matador has been identifying new opportunities in the Northern Delaware Basin and has tested, or participated in testing, 16 discrete intervals across its acreage position 13

  14. Slide 14: Building Delaware Basin Position “One Brick at a Time”

    Building Delaware Basin Position “One Brick at a Time” 2012 2014 2016 Today ~7,500 Net Acres ~65,000 Net Acres ~94,700 Net Acres ~133,000 Net Acres LEA EDDY LOVING Matador Acreage Matador Acreage Matador Acreage Matador Acreage Note: All acreage as of September 30, 2012. Note: All acreage as of Octo

  15. Slide 15: Delaware Basin Acreage Position and Recent Operations and Results

    Delaware Basin Acreage Position and Recent Operations and Results Acreage Acquisitions in BLM Lease Sale TWIN LAKES Running six rigs in Delaware Basin ~44,300 gross / ~31,300 net acres Other Matador Acreage at March 31, 2019  Rustler Breaks: One to three rigs (at times) drilling primarily Wolfcamp

  16. Slide 16: Delaware Basin Inventory Continues to Increase

    Delaware Basin Inventory Continues to Increase – Added 52,000 Net Acres Since January 1, 2017!  Matador has identified up to 5,442 gross (2,472 net) potential locations(1) for future drilling (only locations yet to be drilled) on its Delaware Basin acreage – net identified locations up 26% since De

  17. Slide 17: Well Spacing in the Delaware Basin – Matador's Approach to Engineered Locations

    Well Spacing in the Delaware Basin – Matador’s Approach to Engineered Locations  Approximately 90% of the Company’s estimated 2019 capital expenditures for drilling, completing and equipping wells will be in the Delaware Basin ̶ Drilling program is based almost entirely on a wider 160-acre well spa

  18. Slide 18: Matador Delaware Basin Frac Design Evolution – Reservoir Specific

    Matador Delaware Basin Frac Design Evolution – Reservoir Specific Gen 1 Gen 2 Gen 3 Testing 2,000 lbs/ft 1,333 lbs/ft 2,000 lbs/ft 2.5k-3.0k lbs/ft 40 Bbl/ft 20 Bbl/ft 40 Bbl/ft 50+ Bbl/ft 50 ft cluster 75 ft cluster 50 ft cluster <50 ft cluster spacing spacing spacing spacing Slickwater/gel hybrid

  19. Slide 19: Regional Sand: Increasing Use to Enhance Operational Efficiency

    Regional Sand: Increasing Use to Enhance Operational Efficiency Implementation and Cost Savings $1,100 Potential Cost Savings, $000s Cost savings are linear with − Initial tests conducted to evaluate smaller Northern White $1,000 lateral length as Matador ramps 40/70 sand in stimulation designs in H

  20. Slide 20: A Step Change in Capital Efficiency: Longer Laterals and Increased Batch Drilling

    A Step Change in Capital Efficiency: Longer Laterals and Increased Batch Drilling − Recent strategic trades and acquisitions have Average Lateral Length and % of Longer Laterals opened the door for a significant step change in 100% lateral lengths greater than one mile Average Lateral Length % of 2

  21. Slide 21: A Step Change in Capital Efficiency: Driving Down D&C CapEx per Foot

    A Step Change in Capital Efficiency: Driving Down D&C CapEx per Foot(1) 600,000 $1,700 Lateral Feet Turned to Sales Average Drilling & Completions CapEx/foot, $/ft(1) (1) Assumes constant 530,000 Average D&C CapEx/ft rig count $1,600 500,000 Lateral Footage Turned to Sales, ft -14% 443,000 Decline i

  22. Slide 22: Continuing to Drill Wells More Efficiently

    Continuing to Drill Wells More Efficiently In 2018, Matador Drilled Over 1.2 Million Feet at its Fastest ROP(1) Achieved Note: Only horizontal wells drilled in the Delaware Basin. (1) Rate of penetration, or ROP, calculated by taking total footage drilled in the year and dividing by total drilling h

  23. Slide 23: Delaware Basin Asset Areas

    Delaware Basin Asset Areas NYSE: MTDR

  24. Slide 24: Rustler Breaks and Stateline Asset Areas – Eddy County, New Mexico

    Rustler Breaks and Stateline Asset Areas – Eddy County, New Mexico Asset Summary and Recent Highlights Black River Cryogenic Natural Gas Processing Plant and Salt Water Disposal Wells #1, #2, #3, #4, #5 and #6 − Approximately 48,700 gross (29,000 net) acres in Rustler Breaks − Added ~2,800 gross/net

  25. Slide 25: Antelope Ridge Asset Area – Lea County, New Mexico

    Antelope Ridge Asset Area – Lea County, New Mexico Asset Summary and Highlights Marlan Downey #111H 24-hr IP: 1,491 BOE/d (82% oil) − Approximately 20,500 gross (17,000 net) acres, including 4,800 net acres with 87.5% NRI added in September 2018 BLM lease sale Bill Alexander State Com #111H 24-hr IP

  26. Slide 26: Wolf and Jackson Trust Asset Areas – Loving County, Texas

    Wolf and Jackson Trust Asset Areas – Loving County, Texas Asset Summary and Recent Highlights − Approximately 14,400 gross (10,700 net) acres − Added ~1,300 strategic net acres in 2018 − Producing from four primary intervals, including 2nd Bone Spring, Wolfcamp A-XY, Wolfcamp A-Lower and Wolfcamp B

  27. Slide 27: Arrowhead and Ranger Asset Areas – Eddy and Lea Counties, NM

    Arrowhead and Ranger Asset Areas – Eddy and Lea Counties, NM Leo 15 B2DH Fed #1H 1st Bone Spring Mewbourne 48 month cum: 478 MBOE (70% oil) 2nd Bone Spring Baroque “BTQ” Fed Com #1H 3rd Bone Spring Yates Petroleum (EOG) Mallon 27 Fed Com #1H, #2H, #3H 37 month cum: 839 MBOE (70% oil) Wolfcamp A-XY C

  28. Slide 28: Twin Lakes Asset Area – Lea County, New Mexico

    Twin Lakes Asset Area – Lea County, New Mexico State LF 30 #4H NE Kemnitz #233H D. Culbertson State #234H Olivine 5-16-37 TL State #1 Cimarex Wolfcamp D (1.0-mile lateral) Wolfcamp D (1.0-mile lateral) Vertical Strawn Completion Wolfcamp D (1.0-mile lateral) 24-hr IP: 675 BOE/d (84% oil) 24-hr IP: 6

  29. Slide 29: San Mateo Midstream Operations and Plans

    San Mateo Midstream Operations and Plans

  30. Slide 30: Midstream Business Continues to Grow – San Mateo's “Three-Pipe” Offering

    Midstream Business Continues to Grow – San Mateo’s “Three-Pipe” Offering Gas Gathering and Processing Water Gathering and Disposal Oil Gathering and Transportation  260 MMcf/d of designed natural gas  Nine salt water disposal wells (SWDs) and  Loving County, TX oil terminal facility cryogenic pro

  31. Slide 31: Significant Growth in Delaware Midstream Business in Last Three Years

    Significant Growth in Delaware Midstream Business in Last Three Years Q1 2017 Q1 2018 Q1 2019 Growth(1) Designed Water Disposal 70,000 Bbl/d 160,000 Bbl/d 250,000 Bbl/d 3.6x Capacity Average Water Disposed 56,000 Bbl/d 100,000 Bbl/d 170,000 Bbl/d 3.0x Gathering Lines(2) >60 miles >90 miles >140 mile

  32. Slide 32: San Mateo Asset Overview – Including Planned San Mateo Expansion

    San Mateo Asset Overview – Including Planned San Mateo Expansion − San Mateo I (Formed February 2017): − Gas processing plant – 260 MMcf/d designed inlet capacity − Gas, oil and water gathering − Nine commercial SWDs (Tenth in progress) Greater Stebbins Area − San Mateo II (Formed February 2019): −

  33. Slide 33: Significant Midstream Value Created and More Opportunities Exist

    Significant Midstream Value Created and More Opportunities Exist $2,000  Matador’s midstream business has grown from negligible to >$1.0 billion(1) business, essentially self-funded  San Mateo continues to attract third-party volumes from producers across its three-pipe system (crude oil, natural

  34. Slide 34: San Mateo – Recent Highlights and Performance

    San Mateo – Recent Highlights and Performance  February 2019 – Matador entered into second strategic midstream transaction with Five Point Energy LLC to expand San Mateo’s operations in the Delaware Basin – see February 25, 2019 press release  February 2019 – Sixth commercial SWD in Eddy County, N

  35. Slide 35: Marketing Overview

    Marketing Overview NYSE: MTDR

  36. Slide 36: Crude Oil Marketing Overview

    Crude Oil Marketing Overview  Matador currently has on pipe almost all of its oil production from the Wolf and Rustler Breaks asset areas, which comprised ~67% of the Company’s Central Delivery Points Delaware Basin oil production in Q1 2019  Contracted a long-term, fixed transport rate Existing P

  37. Slide 37: Natural Gas Marketing Overview

    Natural Gas Marketing Overview  Matador believes it has sufficient firm capacity for Black River Processing Plant existing production and expected production volumes from future drilling  Matador currently sells residue gas at Waha via firm transport on Oasis, El Paso and Enterprise EnLink’s Lobo

  38. Slide 38: Natural Gas Liquids Marketing Overview

    Natural Gas Liquids Marketing Overview Matador Acreage  Completed NGL connection at the Black River Black River Processing Plant Processing Plant on EPIC’s Y-Grade pipeline EPIC Y-Grade Pipeline in March 2018  BP Energy Company expected to continue to buy NGLs at tailgate of the Black River Proces

  39. Slide 39: 2019 Capital Investment Plan

    2019 Capital Investment Plan NYSE: MTDR

  40. Slide 40: Summary and 2019 Guidance (as Provided on February 26, 2019)

    Summary and 2019 Guidance (as Provided on February 26, 2019)  Six rigs to operate in the Delaware Basin – expect to complete and turn to sales 73 gross (54.9 net) operated wells in 2019  Four rigs in Rustler Breaks and Antelope Ridge, one rig in Wolf/Jackson Trust and one rig in Ranger/Arrowhead/T

  41. Slide 41: Matador's 2019 Delaware Basin Operated Drilling Program

    Matador’s 2019 Delaware Basin Operated Drilling Program(1) Rustler Breaks TWIN LAKES ~44,300 gross / ~31,300 net acres − 24 gross (15.4 net) wells in progress for 2019 − 17 gross (11.3 net) wells turned to sales, including 1 Brushy Canyon, 1 1st Bone Spring, 6 Wolfcamp A- ARROWHEAD XY, 2 Wolfcamp A-

  42. Slide 42: South Texas Asset Area – Q4 2018 to Q2 2019 Program

    South Texas Asset Area – Q4 2018 to Q2 2019 Program  Drilling and completion operations concluded on the nine-well program (eight Eagle Ford and one Austin Chalk) in late May 2019  Seven of the nine wells have longer lateral lengths between 7,800 and 10,000 feet  With all wells now turned to sale

  43. Slide 43: 2019 Capital Investment Plan Summary

    2019 Capital Investment Plan Summary (as of February 26, 2019) 2019E CapEx(1)(2) – $695 to $755 million  2019E D/C/E CapEx of $640 to $680 million (Delaware: six rigs; Eagle Ford: 8 wells) − After February 2019 completion of the nine-well program in South Eagle Ford Texas, rig was released; Eagle F

  44. Slide 44: 2019 Oil and Natural Gas Production Estimates

    2019 Oil and Natural Gas Production Estimates(1) 2019E Oil Production – 18% Growth YoY Total Oil and Natural Gas Production  Estimated oil production of 12.9 to 13.3 million barrels 2019E CapEx(2) (Midpoint): Natural Gas, Bcf D/C/E: $660 MM Oil, MBbl − 18% increase from 2018 to midpoint of 2019 ran

  45. Slide 45: 2019 Revenues and Adjusted EBITDA Estimates

    2019 Revenues and Adjusted EBITDA Estimates(1) Oil and Natural Gas Revenues 2019E Oil and Natural Gas Revenues and Adjusted EBITDA(2)  Revenues and Adjusted EBITDA(2) negatively impacted by lower estimated 2019 realized oil and natural gas prices − 2019E realized oil price of ~$50/Bbl vs ~$57/Bbl r

  46. Slide 46: Reserves-Based Credit Agreement – Borrowing Base Increased!

    Reserves-Based Credit Agreement – Borrowing Base Increased!  Strong, supportive bank group led by Royal Bank of Canada  In October 2018, amended Credit Agreement increased facility size to $1.5 billion (from $500 million); maturity extended to October 2023  Borrowing base increased to $900 millio

  47. Slide 47: New San Mateo Credit Facility Closed December 2018

    New San Mateo Credit Facility Closed December 2018  Led by The Bank of Nova Scotia and supported by all banks in Matador’s reserves-based credit facility  Facility initially sized at $250 million and includes accordion feature, which could expand the commitments of the lenders to up to $400 millio

  48. Slide 48: Hedging Profile – Remainder of 2019 and 2020

    Hedging Profile – Remainder of 2019 and 2020(1)  Oil (WTI) Costless Collars: ~5.9 million Bbl hedged for remainder of 2019 at weighted average floor and ceiling prices of $50/Bbl and $71/Bbl, respectively; ~2.6 million Bbl hedged for 2020 at weighted average floor and ceiling prices of $49/Bbl and

  49. Slide 49: Appendix

    aN, ( Matador % Mf RESOURCES COMPANY Appendix NYSE: MTDR

  50. Slide 50: 2019 Capital Expenditures – Well Spud and Completion Detail

    2019 Capital Expenditures – Well Spud and Completion Detail(1) 2019 Anticipated 2018 Drilled, 2019 Anticipated Drilling, 2019 Anticipated Drilling & 2020 Anticipated 2019 Anticipated Completion(2) Completion Completion(3) First Sales(3) 2019E CapEx Gross Net Gross Net Gross Net Gross Net Wells(4) We

  51. Slide 51: Wells Completed and Turned to Sales – Q1 2019

    Wells Completed and Turned to Sales – Q1 2019  During the first quarter of 2019, the Delaware Basin accounted for 36 gross (13.1 net) wells completed and turned to sales, including 17 gross (11.6 net) operated and 19 gross (1.5 net) non-operated wells Operated Non-Operated Total Gross Operated Asse

  52. Slide 52: Matador's Proved Reserves ~215 Million BOE at December 31, 2018

    Matador’s Proved Reserves ~215 Million BOE at December 31, 2018(1) Reserves and Oil Production Doubled Over Last Two Years! Haynesville/CV Haynesville/CV Haynesville/CV 11.4 MMBOE, 8% 11.6 MMBOE, 5% 13.1 MMBOE, 12% Eagle Ford Eagle Ford 12.2 MMBOE, 6% Eagle Ford 12.4 MMBOE, 8% 13.3 MMBOE, 13% Delawa

  53. Slide 53: Haynesville Asset Area – 2019 Non-Operated Drilling Program

    Haynesville Asset Area – 2019 Non-Operated Drilling Program Haynesville / Cotton Valley 2019 Haynesville Non-Op Program ~25,500 gross / ~22,800 net acres − Matador expects to participate in 25 gross (1.7 net) Pace 24-13HC 1 & 2 Alt and non-operated Haynesville wells in 2019 J M Pearce 24-13HC 1 & 2

  54. Slide 54: Taking Operations to the Next Level: MAXCOM

    Taking Operations to the Next Level: MAXCOM  MAXCOM  Matador team dedicated to real-time, 24/7 operations support  Interdisciplinary team approach  MAXCOM Update  Over one year since MAXCOM operations began with twelve months in the new monitoring room  Team is fully operational  Drilling  G

  55. Slide 55: 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

  56. Slide 56: 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)

  57. Slide 57: 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)

  58. Slide 58: 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. Year Ended Dec

  59. Slide 59: 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 operating activities, respectively, for San Mateo Midstream, LLC and San Mate

  60. Slide 60: Return on Average Capital Employed (ROACE) Reconciliation

    Return on Average Capital Employed (ROACE) Reconciliation The following table presents our calculation of “E&P” ROACE and Total ROACE and a reconciliation of such measures to the corresponding GAAP financial measures. Return on Average Capital Employed ($ in thousands) For the Years Ended December 3

  61. Slide 61: Cash Return on Capital Invested (CROCI) Reconciliation

    Cash Return on Capital Invested (CROCI) Reconciliation The following table presents our calculation of CROCI and Total CROCI and a reconciliation of such measures to the corresponding GAAP financial measures. Cash Return on Capital Invested ($ in thousands) For the Years Ended December 31, 2018 2017

  62. Slide 62: 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 the Co

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