Matador Resources Company · NYSE:MTDR

Matador Resources — Investor Presentation (November 2019)

60 slides from Matador Resources's investor presentation, November 2019

  1. Slide 1: Investor Presentation

    Investor Presentation November 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

    oN, § Matador {Wor 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) $1.8B Delaware Basin Q3 Avg. Daily Production 69.6 MBOE/d Assets Haynesville/ Q3 Net Debt / Adj. EBITDA(2) 2.4x Cotton Valley Assets YE 2018 Proved Reserves 215 MMBOE MATADOR HEADQUARTERS DALLAS, TEXAS Eagle Ford Asset

  5. Slide 5: Investment Highlights — Matador Resources Company (NYSE: MTDR)

    Investment Highlights — Matador Resources Company (NYSE: MTDR) Interests Aligned with Shareholders • Matador Named Executive Officers (NEOs) on average hold almost 5x more company stock than NEOs at peer companies(1) — see slide 6 High Quality Acreage Position and Operating Performance • Matador is

  6. Slide 6: Matador's Significant Executive Officer % Ownership vs. Peer Group

    Matador’s Significant Executive Officer % Ownership vs. Peer Group Interests Aligned with Shareholders  Over the past 12 months, approximately 85 directors, special advisors and employees, or about one-third of the staff, have bought Matador stock on the open market Joseph Wm. Foran Matthew V. Hair

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

    Matador Has Made Significant Progress Since its IPO – Both Technically and Financially At IPO(1): February 7, 2012 Today(2) Difference Share Price $12.00 $15.56(3) +30% 414 Bbl/d ~39,800 Bbl/d Oil Production (6% oil) +96-fold (57% oil) 27 MMBOE 215 MMBOE Proved Reserves (4% oil) (57% oil)(4) +8-fold

  8. Slide 8: Headlines and Highlights for Third Quarter 2019

    Headlines and Highlights for Third Quarter 2019 •Oil production of ~39,800 Bbl/d, up 8% from ~36,800 Bbl/d in Q2 2019 – Record Quarter! Record Production •Gas production of ~179.2 MMcf/d, up 22% from ~147.1 MMcf/d in Q2 2019 – Record Quarter! •Total production of ~69,600 BOE/d, up 14% from ~61,300 B

  9. Slide 9: Selected Operating and Financial Results

    Selected Operating and Financial Results Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 Net Production Volumes:(1) Oil (MBbl) 3,659 3,346 2,973 Natural gas (Bcf) 16.5 13.4 12.3 Total oil equivalent (MBOE) 6,407 5,577 5,025 Average Daily Production Volumes:(1) Oil (Bbl/d) 39,7

  10. Slide 10: Q3 2019 Volumes At Record Levels

    Q3 2019 Volumes At Record Levels Average Daily Oil Production Average Daily Total Production (Bbl/d) (BOE/d) 39,776 BOE up 14% sequentially; up 27% YoY 36,767 69,645 Oil up 8% sequentially; up 23% YoY 34,517 40,000 33,479 32,317 61,290 70,000 59,941 29,740 35,000 Oil Natural Gas 55,536 54,625 52,937

  11. Slide 11: Significant Growth in All Parts of San Mateo's Delaware Midstream Business

    Significant Growth in All Parts of San Mateo’s Delaware Midstream Business (51% Owned by Matador) San Mateo Average Natural Gas Gathering San Mateo Average Water Disposal (MMcf/d) (MBbl/d) 250 200 186 190 Up 12% sequentially; Up 2% sequentially; 216 180 170 up 66% YoY up 22% YoY 192 155 153 200 160

  12. Slide 12: Significant Asset Growth per Share of Matador Stock

    Significant Asset Growth per Share of Matador Stock  In addition to ~1.1 Bbl of oil and ~4.7 Mcf of natural gas standing behind each share of stock, Matador has ~132,700 net leasehold and mineral acres in the Delaware Basin and owns 51% of San Mateo, an oil, natural gas and water midstream company

  13. Slide 13: Environmental, Social and Governance (ESG)

    Environmental, Social and Governance (ESG) Environmental Social Governance Commitment Reducing greenhouse to a proactive safety gas (GHG) emissions Certification of code culture with a total using advanced of conduct by all recordable incident rate capture and control employees well below the indust

  14. Slide 14: Operations and Delaware Basin Update

    Operations and Delaware Basin Update NYSE: MTDR

  15. Slide 15: 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 ~132,700 Net Acres EDDY LEA LEA LEA LEA EDDY EDDY EDDY LOVING LOVING LOVING LOVING Matador Acreage Matador Acreage Matador Acreage Matador Acreage Note: All acreage as of

  16. Slide 16: Delaware Basin Acreage Position and Recent Operations and Results

    Delaware Basin Acreage Position and Recent Operations and Results Matador Acreage TWIN LAKES Running six rigs in Delaware Basin ~44,100 gross / ~31,200 net acres  Rustler Breaks: One to three rigs (at times) drilling primarily Wolfcamp A-XY and Wolfcamp B wells – few Rustler Breaks completions in H

  17. Slide 17: Matador Delaware Frac Design – Larger Completions for Less Money

    Matador Delaware Frac Design – Larger Completions for Less Money Completion 2018 2019 Metric Average Average(1) ~42 ~52 Bbl/ft Bbl/ft Fluid (Bbl/ft) ~30% ~90% In-Basin Sand (%) ~22 26+ Stages/mile Stages/mile Stages/mile $830/ft ~$605/ft Completion Cost/ft (1) Metrics from all operated horizontal De

  18. Slide 18: Regional Sand: Increasing Use to Enhance Operational Efficiency

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

  19. Slide 19: A Step Change in Capital Efficiency: YTD Progress and Current Expectations

    A Step Change in Capital Efficiency: YTD Progress and Current Expectations Average Lateral Length and % of Longer Laterals CapEx per Foot(1) and Lateral Footage Turned to Sales 100% 700,000 $1,700 Average Lateral Length Lateral Feet Turned to Sales Average Drilling & Completions CapEx/foot, $/ft(1)

  20. Slide 20: Two-Mile Laterals – Maximizing Returns

    Two-Mile Laterals – Maximizing Returns  10% increase in completed lateral footage by capturing 850 feet of additional pay  Time spent drilling in productive rock increased from 18% to 43%  Increased well recovery and reduced total cost 2 – one-mile Wolfcamp A wells Lease Line Perforation Zone ~4,

  21. Slide 21: Continuing to Drill Delaware Basin Wells More Efficiently

    Continuing to Drill Delaware Basin Wells More Efficiently 1,400 91 In H1 2019, Matador Drilled Over 1.3 Million Feet (Annualized) 1,310 84 at the Fastest ROP(1) Achieved by the Company 1,231 80 77 1,200 78 72 1,030 1,000 65 60 Rate of Penetration, ft/hr Drilling Footage, 1000 ft 800 52 684 41 600 39

  22. Slide 22: Increased Use of Recycled Water in Fracturing Operations – Q3 2019

    Increased Use of Recycled Water in Fracturing Operations – Q3 2019 Planned Arrowhead Recycling Facility Potential to recycle >2.5 million in 2020 Planned Antelope Ridge Facility Potential to recycle ~2.0 million Bbl in 2020 ~12 Bbl(1) of recycled produced water utilized for fracture Planned Statelin

  23. Slide 23: Delaware Basin Asset Areas

    Delaware Basin Asset Areas NYSE: MTDR

  24. Slide 24: Rustler Breaks Asset Area – Eddy County, New Mexico

    Rustler Breaks Asset Area – Eddy County, New Mexico Asset Summary and Recent Highlights Black River Cryogenic Natural Gas Processing Plant and Salt Water Disposal Wells − Approximately 44,600 gross (25,300 net) acres − Producing from twelve intervals, including Break Sand(1), Brushy Canyon(2), 1st B

  25. Slide 25: Stateline Asset Area – Eddy County, New Mexico

    Stateline Asset Area – Eddy County, New Mexico STATELINE ~2,800 gross / ~ 2,800 net acres Asset Summary and Highlights Paduca 7 1H Mewbourne − Approximately 2,800 gross/net acres with 87.5% net 45 month cum: 823 MBOE (40% oil) revenue interest acquired in September 2018 BLM lease Snapping 2 State 13

  26. Slide 26: Antelope Ridge Asset Area – Lea County, New Mexico

    Antelope Ridge Asset Area – Lea County, New Mexico BLM Acreage - “Rodney Robinson” Asset Summary and Highlights Red Tank 30 31 St Com #34H − Approximately 20,800 gross (17,500 net) acres, including Oxy 4,800 net acres with 87.5% NRI added in September 2018 18 month Cum: 525 MBOE (82% oil) BLM lease

  27. Slide 27: Wolf and Jackson Trust Asset Areas – Loving County, Texas

    Wolf and Jackson Trust Asset Areas – Loving County, Texas Asset Summary and Recent Highlights − Approximately 15,000 gross (10,700 net) acres − Producing from four primary intervals, including 2nd Bone Spring, Wolfcamp A-XY, Wolfcamp A-Lower and Wolfcamp B − Plan to run one rig in Wolf/Jackson Trust

  28. Slide 28: Arrowhead and Ranger Asset Areas – Eddy and Lea Counties, NM

    Arrowhead and Ranger Asset Areas – Eddy and Lea Counties, NM Virgo 24 23 B2AD Fed Com #1H 1st Bone Spring Mewbourne (2-mile) 11 month cum: 346 MBOE (86% oil) 2nd Bone Spring Baroque “BTQ” Fed Com #1H 3rd Bone Spring Yates Petroleum (EOG) Mallon 27 Fed Com #1H, #2H, #3H 41 month cum: 875 MBOE (69% oi

  29. Slide 29: Twin Lakes Asset Area – Lea County, New Mexico

    Twin Lakes Asset Area – Lea County, New Mexico Chug Bug State Com #1H NE Kemnitz #233H Reed 24 25 B State #1H D. Culbertson State #234H Olivine 5-16-37 TL State #1 DGP Wolfcamp D (1.0-mile lateral) Continental Wolfcamp D (1.0-mile lateral) Vertical Strawn Completion Wolfcamp D (1.3-mile lateral) 24-

  30. Slide 30: San Mateo Midstream Operations and Plans

    San Mateo Midstream Operations and Plans

  31. Slide 31: 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  Eleven salt water disposal wells (SWDs)  Loving County, TX oil terminal facility cryogenic proce

  32. Slide 32: Significant Growth in All Parts of San Mateo's Delaware Midstream Business

    Significant Growth in All Parts of San Mateo’s Delaware Midstream Business (51% Owned by Matador) San Mateo Average Natural Gas Gathering San Mateo Average Water Disposal (MMcf/d) (MBbl/d) 250 200 186 190 Up 12% sequentially; Up 2% sequentially; 216 180 170 up 66% YoY up 22% YoY 192 155 153 200 160

  33. Slide 33: 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 − Ten commercial SWDs (11th expected Q1 2020) Greater Stebbins Area − San Mateo II (Formed February 2019):

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

    San Mateo – Recent Highlights and Performance  October 2019 – Expanded credit facility for a second time to $375 million from $325 million (originally entered into $250 million facility in December 2018)  October 2019 – Eighth commercial SWD in Eddy County, NM online • San Mateo has eleven commerc

  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 ~54% of the Company’s Central Delivery Points Delaware Basin oil production in Q3 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  In late September 2019, Matador began transporting most of its Delaware Basin residue EnLink’s Lobo Plant natu

  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 has continued to buy NGLs at tailgate of the Black River Processing Pl

  39. Slide 39: 2019 Capital Investment Plan

    2019 Capital Investment Plan NYSE: MTDR

  40. Slide 40: Updated 2019 Guidance (as Revised on October 29, 2019)

    Updated 2019 Guidance (as Revised on October 29, 2019)  Plan to run six rigs in the Delaware Basin throughout remainder of 2019  Four rigs in Rustler Breaks and Antelope Ridge, one rig in Wolf/Jackson Trust and one rig in Ranger/Arrowhead/Twin Lakes  Increasing oil, natural gas and oil equivalent

  41. Slide 41: Updated 2019 Capital Investment Plan Summary

    Updated 2019 Capital Investment Plan Summary (as of October 29, 2019)  2019E D/C/E CapEx Guidance of $640 to $680 million and 2019E Wells Turned to Sales Midstream CapEx Guidance of $70 to $90 million(3) Original Guidance(1) Updated Guidance(2) − Affirmed full year 2019 D/C/E and midstream capital

  42. Slide 42: Delaware Basin Operated Horizontal Well Completions in 2019

    Delaware Basin Operated Horizontal Well Completions in 2019(1)  At October 29, 2019, Matador expects to complete 86 gross (70.8 net) operated wells in 2019, including four gross (4.0 net) vertical wells, seven gross (6.9 net) Eagle Ford wells and one gross (1.0 net) Austin Chalk well in 2019  Mata

  43. Slide 43: South Texas Asset Area

    South Texas Asset Area  All wells in the 2018–2019 nine-well program are on production (eight Eagle Ford and one Austin Chalk)  Combined drilling and completion costs for the nine-well program are significantly under budget with an estimated $7.5 million of savings from operational efficiencies 

  44. Slide 44: Haynesville Asset Area – 2019 Non-Operated Drilling Program

    Haynesville Asset Area – 2019 Non-Operated Drilling Program Haynesville / Cotton Valley 2019 Haynesville Non-Op Program ~24,600 gross / ~21,900 net acres − Matador expects to participate in 29 gross (1.7 net) Pace 24-13HC 1 & 2 Alt and non-operated Haynesville wells in 2019 – most at J M Pearce 24-1

  45. Slide 45: Reserves-Based Credit Agreement Borrowing Base Affirmed at $900 million

    Reserves-Based Credit Agreement Borrowing Base Affirmed at $900 million in October 2019  Strong, supportive bank group led by Royal Bank of Canada  Facility size of $1.5 billion; matures in October 2023  Borrowing base affirmed at $900 million in October 2019 based on June 30, 2019 reserves revie

  46. Slide 46: San Mateo I Credit Facility Increased by $50 million to $375 million

    San Mateo I Credit Facility Increased by $50 million to $375 million in October 2019  Led by The Bank of Nova Scotia and including all banks in Matador’s reserves-based credit facility  Covers San Mateo I only, not San Mateo II  Facility increased $50 million to $375 million from $325 million in

  47. Slide 47: Hedging Profile – Remainder of 2019, 2020, 2021 and 2022

    Hedging Profile – Remainder of 2019, 2020, 2021 and 2022(1)  Oil (WTI) Costless Collars: ~2.0 million Bbl hedged for remainder of 2019 at weighted average floor and ceiling prices of $50/Bbl and $71/Bbl, respectively; ~4.9 million Bbl hedged for 2020 at weighted average floor and ceiling prices of

  48. Slide 48: Appendix

    oN, § Matador {Wor RESOURCES COMPANY Appendix NYSE: MTDR

  49. Slide 49: Wells Completed and Turned to Sales – Q3 2019

    Wells Completed and Turned to Sales – Q3 2019  During the third quarter of 2019, the Delaware Basin accounted for 39 gross (22.6 net) wells completed and turned to sales, including 27 gross (22.2 net) operated and 12 gross (0.4 net) non-operated wells Operated Non-Operated Total Gross Operated Asse

  50. Slide 50: 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

  51. Slide 51: 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

  52. Slide 52: 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  Team approach including both engineers and geologists  Geosteering  Drilling in better rock with approximately 95% of the horizontal “In Reservoir”  Able to monitor and make immed

  53. Slide 53: 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

  54. Slide 54: 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)

  55. Slide 55: 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)

  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. Year Ended Dec

  57. Slide 57: 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

  58. Slide 58: 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

  59. Slide 59: Adjusted Net Income and Adjusted Earnings Per Diluted Common Share

    Adjusted Net Income and Adjusted Earnings Per Diluted Common Share This presentation includes the non-GAAP financial measures of adjusted net income and adjusted earnings per diluted common share. These non-GAAP items are measured as net income attributable to Matador Resources Company shareholders,

  60. Slide 60: 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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