Matador Resources Company · NYSE:MTDR
Matador Resources — Investor Presentation (September 2013)
43 slides from Matador Resources's investor presentation, Sep 18, 2013
Slide 1: Investor Presentation September 2013
Investor Presentation September 2013
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: Company Summary
RESOURCES COMPANY Company Summary
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
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
Slide 6: Matador's Continued Growth
T h o u s a n d Bb l TOTAL OIL AND TOTAL OIL PRODUCTION (1) NATURAL GAS REVENUES (1) ADJUSTED EBITDA (1)(2) $8.1 $18.4 $15.2 $23.6 $49.9 $115.9 $165.0 2007 2008 2009 2010 2011 2012 2013E $14.0 $30.6 $19.0 $34.0 $67.0 $156.0 $230.0 2007 2008 2009 2010 2011 2012 2013E 22 37 30 33 154 1,214 1,900 2007
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 12.7 MBOE/d(8) 6,200 Bbl/d of oil(8) 49% oil(8) Proved Reserves 27 MMBOE 1.1 MMBbl of oil 4% oil 39 M
Slide 8: Matador key statistics
8 Total Enterprise Value(1) Over $1.25 billion Average Daily Production(2) 12,689 BOE/d Oil (% total) 6,200 Bbl/d (49%) Natural Gas (% total) 38.9 MMcf/d (51%) Proved Reserves @ 6/30/2013 38.9 million BOE % Proved Developed 42% % Oil 31% PV-10(3) $522.3 million 2013E CapEx $370 million % South Texas
Slide 9: Investment Highlights
9 Investment Highlights Strong Growth Profile with Increasing Focus on Oil / Liquids Average daily production CAGR of 55% since 2008 with 15x growth in oil production since IPO ~98% of 2013E capital expenditure program focused on oil / liquids exploration and development High Quality Asset Base
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 Q2 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 $88.13 oil $3.44 gas P V -1 0 (1 ) , mil li o n s 10 SEC Pricing Oil, $/Bbl G
Slide 11: Proved Reserves Value Growth
12/31/2012 12/31/2011 11 Proved Reserves Value Growth (1) PV-10 is a non-GAAP financial measure. For a reconciliation of Standardized Measure (GAAP) to PV-10 (non-GAAP), see Appendix. (2) Oil prices in $/Bbl; natural gas prices in $/MMBtu. 6/30/2013 Proved Oil (MBbl) 3,794 10,485 12,128 Proved Natur
Slide 12: Eagle Ford South Texas
RESOURCES COMPANY Eagle Ford South Texas
Slide 13: Significant Eagle Ford Exposure
13 Significant Eagle Ford Exposure (1) For the year ended December 31, 2011. (2) During the months of June and July 2013. (3) At September 1, 2013. (4) Identified and engineered Tier 1 and Tier 2 locations identified for potential future drilling, including specified production units and estimated l
Slide 14: Eagle Ford Properties
14 Eagle Ford Properties Note: All acreage at September 1, 2013. Uvalde Medina Zavala Frio Dimmit La Salle Webb Bexar Atascosa McMullen Live Oak Bee Goliad Dewitt Gonzales Wilson EAGLE FORD EAST 7,713 gross / 6,611 net acres EOG OPERATED, MTDR WI ~21% 9,508 gross / 1,778 net acres GLASSCOCK (WINN) R
Slide 15: Eagle Ford Well Costs and Estimated Ultimate Recovery
15 Eagle Ford Well Costs and Estimated Ultimate Recovery (“EUR”) Note: All acreage at September 1, 2013. EUR’s represent typical range of results over last 12 months by area. Well costs reflect actual costs of all 2013 wells by area. See pages 17-19 for additional information. Uvalde Medina Zavala F
Slide 16: Operational Improvements
Overview 16 Operational Improvements Note: “2013 YTD” and “Last Well” – As of September 1, 2013. Year classification is based on spud date. (1) Excludes any/all wells drilled with a pilot hole. Drilling days are from spud to total depth. (2) Excludes any/all wells drilled with a pilot hole. (3) Refl
Slide 17: Eagle Ford West
DRILLING DAYS (1) FRAC STAGE COST TOTAL WELL COST (2) ($ in thousands) ($ in millions) $9.9 $7.8 $6.8 $6.3 2011 2012 2013 YTD Last Well $247.9 $126.2 $123.4 $105.5 2011 2012 2013 YTD Last Well 19.2 12.6 11.4 8.3 2011 2012 2013 YTD Last Well 17 Eagle Ford “West” 8,000’ – 9,000’ True Vertical Depth
Slide 18: Eagle Ford Central
DRILLING DAYS (1) FRAC STAGE COST TOTAL WELL COST (2) ($ in thousands) ($ in millions) $11.0 $9.4 $7.5 $7.1 2011 2012 2013 YTD Last Well $159.5 $130.1 $119.3 $120.4 2011 2012 2013 YTD Last Well 18.8 20.1 15.4 13.9 2011 2012 2013 YTD Last Well 18 Eagle Ford “Central” (3) 10,500’ – 11,500’ True Vert
Slide 19: Eagle Ford East
DRILLING DAYS (1) FRAC STAGE COST TOTAL WELL COST (2) ($ in thousands) ($ in millions) $10.4 $8.4 $8.3 2012 2013 YTD Last Well $219.7 $215.3 $214.6 2012 2013 YTD Last Well 24.7 18.2 16.6 2012 2013 YTD Last Well 19 Eagle Ford “East” (3) 12,500’ – 13,500’ True Vertical Depth ~330°F 2-String or 3
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
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.
Slide 22: Well Improvement with Evolution of Frac Design
22 Well Improvement with Evolution of Frac Design Example 1: Eagle Ford “East” Offsetting Wells Example 2: Eagle Ford “Central” Offsetting Wells Example 3: Eagle Ford “Central” Offsetting Wells Example 4: Eagle Ford “West” Offsetting Wells 0 100 200 300 400 500 600 700 800 0 10,000 20,000 30,000 40,
Slide 23: Permian Basin Southeast New Mexico and West Texas
Permian Basin Southeast New Mexico and West Texas
Slide 24: Increasing Exposure to the Permian
24 Gross Acres(1) 50,756 acres Net Acres(1) 32,899 acres Increasing Exposure to the Permian Foothold of existing production and reserves Acreage position in good neighborhoods, surrounded by other operators’ ongoing drilling Company considers ~43,100 gross (~32,300 net) acres to be prospective
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
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 years cum: 60 MBbl; 640 MMcf Wolf Energy Dorothy White #1 (Vertical well) 3rd BS / Upr Wolfcamp 17 years cum: 25 MBbl; 92 MMcf Shell Johnson 1-88 Lov
Slide 27: Haynesville & Cotton Valley Northwest Louisiana and East Texas
Haynesville & Cotton Valley Northwest Louisiana and East Texas
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
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 June 30, 2013. (2) NYMEX gas price, less property-specific differentials. $22 $30 $38 $
Slide 30: Gracie Wyoming, Utah and Idaho
Gracie Wyoming, Utah and Idaho
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 September 1, 2013. Crawford Federal #1H completion scheduled for fall 2013
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
Slide 33: Financial Overview
RESOURCES COMPANY Financial Overview
Slide 34: 2013 Revenue and Adjusted EBITDA Guidance
34 2013 Revenue and Adjusted EBITDA(1)(2) Estimated oil and natural gas revenues of $220 to $240 million − Mid-point is an increase of 47% from $156.0 million in 2012 Estimated Adjusted EBITDA(1)(2) of $155 to $175 million − Mid-point is an increase of 42% from $115.9 million in 2012 Adjusted
Slide 35: Matador's Continued Growth
$18.4 $15.2 $23.6 $49.9 $115.9 $148.1 2008 2009 2010 2011 2012 6/30/2013 LTM 1.5 2.3 3.9 7.0 9.0 10.7 2008 2009 2010 2011 2012 1H 2013 Matador’s Continued Growth 35 Average Daily Production(1) (MBOE/d) Oil Production Mix(1) (% of Average Daily Production) Oil & Natural Gas Revenues ($ in millions) A
Slide 36: 2013 and 2014 Hedging Profile
36 2013 and 2014 Hedging Profile At September 1, 2013, Matador had: 0.6 million barrels of oil hedged for remainder of 2013 at a weighted average floor and ceiling of $88/Bbl and $106/Bbl, respectively 2.5 Bcf of natural gas hedged for remainder of 2013 at a weighted average floor and ceiling of
Slide 37: Appendix
RESOURCES COMPANY Appendix
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
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
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 6/24/2012 IP: 350 Bbl/d 500 Mcf/d 13 mo.cum: 215,772 Bbl 147 MMcf Dan Hughes Buchanan 1H 4/1/2013 IP: 756 Bbl/d 556 Mcf/d 2 mo.cum: 38,348 Bbl 16 MMcf Dan Hughes Heitz 302 5H 8
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
Slide 42: Adjusted EBITDA Reconciliation
42 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. LTM at (In thousands) 2007 2008 2009 2010 2011 2012
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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