Matador Resources Company · NYSE:MTDR

Matador Resources — Investor Presentation (March 2014)

58 slides from Matador Resources's investor presentation, Mar 21, 2014

  1. Slide 1: March 2014 Investor Presentation

    March 2014 Investor Presentation NYSE: MTDR Exhibit 99.1

  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

    Company Summary

  4. Slide 4: 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

  5. Slide 5: Company Overview

    5 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) 65.7 million common

  6. Slide 6: 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  12.0 MBOE/d  6,612 Bbl/d of oil  55% oil Proved Reserves  27 MMBOE  1.1 MMBbl of oil  4% oil  51.7 MMBOE 

  7. Slide 7: Matador's Continued Growth

    T h o u s a n d B b l Matador’s Continued Growth – 30 Year History 7 (1) 2014 estimates at midpoint of guidance range as provided on December 12, 2013. Estimated average realized prices for oil and natural gas used in these estimates were $95.00/Bbl and $4.25/Mcf, respectively, for the period Januar

  8. Slide 8: 2013 was an Excellent Year for Matador

    2013 was an Excellent Year for Matador! 8  Technical improvements in all aspects of our Eagle Ford operations resulting in better wells for less money!  Drilling times and costs per well decreased significantly  Improved hydraulic fracture treatment designs yielding better EURs per well  Flowbac

  9. Slide 9: Keys to Matador's Success

    Keys to Matador’s Success 9  People  We have a strong, committed technical and financial team in place, and we continue to make additions and improvements to our staff and our capabilities  Board and Special Advisor additions have strengthened Board skills and stewardship  Properties  Matador’s

  10. Slide 10: Matador Resources Company Overview

    10 Matador Resources Company Overview Market Capitalization(1) $1.5 billion Average Daily Production(2) 11,740 BOE/d Oil (% total) 5,843 Bbl/d (50%) Natural Gas (% total) 35.4 MMcf/d (50%) Proved Reserves @ 12/31/13 51.7 million BOE % Proved Developed 33% % Oil 32% 2014E CapEx $440 million % South T

  11. Slide 11: Eagle Ford South Texas

    a‘, {Mata ador ee ee Eagle Ford South Texas

  12. Slide 12: 2014 South Texas Plan Details

    2014 South Texas Plan Details 12  2014 projected capital expenditures of ~$318 million or ~72% of total  2-rig program with almost all of the 2014 South Texas capital budget directed to the Eagle Ford shale  Drill and/or complete or participate in 50 gross (47.0 net) wells; 43 gross (40.0 net) we

  13. Slide 13: Eagle Ford Overview

    13 Eagle Ford Overview (1) At December 31, 2013, includes two wells producing small volumes of oil from the Austin Chalk formation and two wells producing small quantities of natural gas from the San Miguel formation in Zavala County, Texas. (2) For the twelve months ended December 31, 2011. (3) For

  14. Slide 14: Eagle Ford Well Costs and Estimated Ultimate Recovery

    14 Eagle Ford Well Costs and Estimated Ultimate Recovery (“EUR”) Karnes Uvalde Medina Zavala Frio Dimmit La Salle Webb Atascosa McMullen Live Oak Bee Goliad Dewitt Gonzales Wilson Matador Resources Acreage San Antonio Glasscock Ranch Shelton Newman Martin Ranch Northcut Affleck Troutt Sutton MRC/EOG

  15. Slide 15: Operational Improvements

    Overview 15 Operational Improvements (Normalized) Eagle Ford Drilling Costs / Drilled Foot(1) Eagle Ford Completion Costs / Completed Foot(2) West Central East West Central East  Over the past two years, made significant progress and increased knowledge of how to drill, complete and produce Eagle F

  16. Slide 16: Improvement in Drilling Efficiency – Moving Towards Batch Drilling

    0 50,000 100,000 150,000 200,000 250,000 300,000 2014 2013 2012 2011 2010 Lateral Feet Drilled 16 La eral Fee Single Well Drilling PAD Drilling BATCH Drilling EXPLORATION DEVELOPMENT 1/3 RIG 2/3 RIG 2 RIGS 1 1/2 RIGS 2 RIGS 60-70% increase in Rig Efficiency from 2012 – 2014E! Improvement in Drilling

  17. Slide 17: Benefits of Gas Lift

    17 Flowing Rod Pumping Gas Lifting 300 Bbl/d 100 Bbl/d Accelerated Production Benefits of Gas Lift • Accelerates production • Reduces LOE • Lower maintenance • Helps wells recover faster from offset fracs Artificial Lift Time

  18. Slide 18: Evolution of Matador Eagle Ford Frac Design

    Gen 2 Gen 3 Gen 4 Gen 5 5,770 Bbl 7,825 Bbl 9,550 Bbl 11,750 Bbl 375 Mlbs 500 Mlbs 405 Mlbs 515 Mlbs 0 ft. 300 ft. 11,750 Bbl 650 Mlbs Gen 6 Evolution of Matador Eagle Ford Frac Design 18 Note: Figure depicts proppant and fluid volume pumped per 300 ft. of horizontal wellbore. (1) Mlbs = thousands o

  19. Slide 19: Eagle Ford Well Performance by Frac Generation

    0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 Cum ula tiv e P ro du cti on (B bl) Time (Days) GEN 2 (80 Acre) GEN 4 (80 Acre) GEN 5 (80 Acre) 0 10,000 20,000 30,000 40,000 50,000 60,000 7

  20. Slide 20: Buda Wells Activity Since January 1, 2010

    Blackbrush O&G Oppenheimer-101H Comp May 2013 9 mo avg: 192 Bbl/d 451 Mcf/d Cum: 51,864 Bbl 121,728 Mcf Blackbrush O&G 9 Buda Completions May 2011 – Dec. 2013 Cum: 250 MBbl 1.26 Bcf Texas American Res Buchanan-1H Comp April 2013 9 mo avg: 377 Bbl/d 580 Mcf/d Cum: 101,897 Bbl 156,781 Mcf Dan A. Hughe

  21. Slide 21: Glasscock Ranch Seismic Mapping of Natural Fracture Trends

    Buda Productive Area Glasscock Ranch Seismic Mapping of Natural Fracture Trends Glasscock Ranch – Frio South Survey: Amplitude at Time Slice Near Top Buda Contango O&G Beeler 4H Oct. 2013 – Dec. 2013 Avg: 682 Bbl/d 3 mo.cum: 62 MBbl Wireline log results from MTDR Glasscock Ranch #2H delineation well

  22. Slide 22: Permian Basin

    Permian Basin Southeast New Mexico and West Texas

  23. Slide 23: 2014 Permian Basin Plan

    23  2014 projected capital expenditures of ~$109 million or ~25% of total  1-rig program (for now) working in Lea and Eddy Counties, NM and Loving County, TX  Drill and/or complete or participate in 12 gross (9.8 net) wells; 10 gross (8.3 net) wells turned to sales  Completion targets include va

  24. Slide 24: Permian Basin Acreage Position

    Permian Basin Total Gross Acres(1) 77,813 acres Net Acres(1) 50,121 acres Permian Basin Acreage Position (1) Total acreage in Southeast New Mexico and West Texas at March 13, 2014, including some tracts not shown on map. (2) Presented as of December 31, 2013. 24  Acreage position in good neighborho

  25. Slide 25: Wolf-Bone Geological Setting

    265 mya End of Bone Springs – Warmer! Delaware Basin San Andres Yeso Abo Delaware Mountain Group 1st, 2nd, 3rd Bone Spring Sands Sands confined to channels and distributary systems 1st, 2nd, 3rd Bone Spring Carbonates Wolfcamp “A” Carbonates Wolfcamp “D” Carbonates More limited in areal extent Wolfc

  26. Slide 26: Permian Basin Petroleum Systems and the Wolfcamp Kitchens

    DELAWARE BASIN CENTRAL BASIN PLATFORM MIDLAND BASIN Wolfcamp Simpson ~23,000’ Sediment Fill East West Source “Kitchens” Now Unconventional Resource Plays  70,000 square mile area  Up to 25,000 feet of multiple, stacked, petroleum systems  Extensive drilling, coring and geological studies since 19

  27. Slide 27: Ranger-Querecho Plains Prospect Area

    Ranger-Querecho Plains Prospect Area Concho Stratojet 31 State #3H 2nd Bone Spring 29 mo.cum: 386 MBbl; 456 MMcf Concho AirCobra 12 #2H 3rd Bone Spring 30 mo.cum: 333 MBbl; 257 MMcf Note: All acreage at March 13, 2014. Well information from public sources as of March 2014. (1) Presented as of Decemb

  28. Slide 28: Wolf Prospect Area

    Wolf Prospect Area Wolf Energy Wolf #1 (Vertical well) 3rd BS / Wolfcamp “A” 34 years cum: 61 MBbl; 642 MMcf OXY Reagan-McElvain #1H Wolfcamp “A” IP: 570 Bbl/d 2.6 MMcf/d 13 mo.cum: 120 MBbl; 315 MMcf Energen Grayling 1-69 I Wolfcamp “A” IP: 791 Bbl/d 7.3 MMcf/d 3,500 psi FTP 15 mo.cum: 127 MBbl; 84

  29. Slide 29: Indian Draw-Rustler Breaks Prospect Area

    Note: All acreage at March 13, 2014. Well information from public sources as of March 2014. (1) Presented as of December 31, 2013. 29 Location of Matador 2013/2014 test wells  14,174 gross (10,121 net) acres  108 gross (82.8 net) locations(1)  Primary Targets  Wolfcamp “B”  2nd Bone Spring  De

  30. Slide 30: Twin Lakes Prospect Area

    Twin Lakes Prospect Area Note: All acreage at March 13, 2014. Well information from public sources as of March 2014. 30  32,097 gross (21,831 net) acres  Primary Targets  Wolfcamp “D” (Cline)  Strawn  Abo  Other Potential Targets  Cisco/Canyon  Devonian  Glorieta/San Andres  1 well planned

  31. Slide 31: Twin Lakes Area Cross Section

    Twin Lakes Area Cross Section 31 A TEST VOLUMES: 268 Bbl/d oil 350 Mcf/d gas No water TEST VOLUMES: 118 Bbl/d oil 625 Mcf/d gas 1,155 Bbl/d water Wolfcamp “D”/Cline A’ ~400ft

  32. Slide 32: Matador Permian – First Generation Frac Designs

    Bone Spring 0 ft. 300 ft. Wolfcamp Matador Permian – First Generation Frac Designs 32 Note: Figure depicts proppant and fluid volume pumped per 300 ft. of horizontal wellbore. (1) Mlbs = thousands of pounds of proppant pumped. 550 Mlbs 600 Mlbs 11,750 Bbl 11,750 Bbl Fluid Volume Pumped Proppant Pump

  33. Slide 33: Permian Basin Stratigraphy and Lower Permian Petroleum Systems

    Bone Spring Lime Upper Avalon Shale Lower Avalon Shale First Bone Spring Sand Second Bone Spring Carbonate Second Bone Spring Sand Third Bone Spring Carbonate Wolfcamp “D”/ Cline Strawn Wolfcamp “A” Wolfcamp “B” Wolfcamp “C” Third Bone Spring Sand GR RE S Permian Basin Stratigraphy and Lower Permian

  34. Slide 34: Haynesville and Other Natural Gas Operations

    Haynesville and Other Natural Gas Operations

  35. Slide 35: 2014 Haynesville Shale Plan

    2014 Tier 1 Haynesville Shale Plan 35  2014 projected capital expenditures of ~$12 million or about 3% of total  Estimated participation in 26 gross (1.5 net) non-operated wells  2014 capital plan includes no Matador operated Haynesville wells  Haynesville/Cotton Valley acreage in Northwest Loui

  36. Slide 36: Significant Option Value on Natural Gas

    Significant Option Value on Natural Gas  Significant acreage position in the Haynesville  Recently added 3 sections to provide more operated drilling opportunities  Also prospective for the Cotton Valley, Travis Peak/Hosston and other shallow formations  Competitive well economics on Tier 1 Hayn

  37. Slide 37: Elm Grove Tier 1 Haynesville Economics

    0 25 50 75 100 125 150 175 200 225 250 275 300 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 E sti m a te d Ra te o f Re tu rn, % Natural Gas Price, $/Mcf 8 Bcf - $8.0mm D&C Cost 9 Bcf - $8.0mm D&C Cost 10 Bcf - $8.0mm D&C Cost 8 Bcf - $9.0mm D&C Cost 9 Bcf - $9.0mm D&C Cost 10 Bcf - $9.0mm D&C Cost 37

  38. Slide 38: Matador Gracie Prospect – Meade Peak Gas Shale

    Matador Gracie Prospect – Meade Peak Gas Shale IDAHO UTAH W Y O M IN G W Y OM IN G ID A H O U T A H WYOMING Crawford Federal #1H 38 Note: All acreage at March 13, 2014. Summary  76,496 gross (36,004 net) acres  Drilled Crawford Fed #1H in late 2012  Recently completed 5-stage fracture treatment 

  39. Slide 39: 2014 Capital Investment Plan

    2014 Capital Investment Plan

  40. Slide 40: Summary and 2014 Guidance

    40 Summary and 2014 Guidance (1) Estimated 2014 oil and natural gas revenues and Adjusted EBITDA based on production guidance range. Estimated average realized prices for oil and natural gas used in these estimates were $95.00/Bbl and $4.25/Mcf, respectively, for the period January through December

  41. Slide 41: 2014 Capital Investment Plan Summary

    41 2014 Capital Investment Plan Summary  Continue 3-rig program in 2014 – 2 rigs in Eagle Ford and 1 rig in Permian  2014 estimated capital expenditures of ~$440 million  Increase of ~17% from 2013 capital expenditures of $374 million  Eagle Ford development will continue to be the major driver

  42. Slide 42: 2014E Oil and Natural Gas Production

    42 2014E Oil Production  Estimated oil production of 2.8 to 3.1 million barrels  Increase of 40 to 50% from 2013, despite an average of 5 to 10% of oil production shut-in throughout 2014  Oil production growth to over 9,000 Bbl/d by YE 2014  Estimated 87% of oil production from Eagle Ford and 13

  43. Slide 43: 2014E Revenues and Adjusted EBITDA

    43 2014E Revenues and Adjusted EBITDA(1)(2)  Revenues and Adjusted EBITDA(1) growth impacted by lower 2014 realized oil price estimate − 2014 realized oil price of $95/Bbl vs ~$100/Bbl realized in 2013 − 2014 realized natural gas price of $4.25/Mcf similar to 2013  Estimated oil and natural gas re

  44. Slide 44: 2014 Anticipated Drilling and First Sales

    2014 Anticipated Drilling 2014 Anticipated First Sales(1) 2014E CapEx Gross Wells(2) Net Wells(2) Gross Wells(2) Net Wells(2) (in millions) Total Total % Total Total % Total % South Texas Eagle Ford 49 46.0 78.4% 42 39.0 78.3% $300.1 68.2% Buda 1 1.0 1.7% 1 1.0 2.0% $4.8 1.1% Facilities/Pipelines/Et

  45. Slide 45: Funding for 2014 Capital Investment Plan

    Funding for 2014 Capital Investment Plan 45  Anticipate funding 2014 capital expenditures through operating cash flows and borrowings under revolving credit facility  2.4 million barrels of oil (80 to 85% of estimated oil production) hedged for 2014, protecting cash flows below ~$88/Bbl oil price

  46. Slide 46: 2014 South Texas Drilling Plan – 2-Rig Program

    46 2014 South Texas Drilling Plan – 2-Rig Program Note: All acreage at March 13, 2014. Uvalde Medina Zavala Frio Dimmit La Salle Webb Bexar Atascosa McMullen Live Oak Bee Goliad De Witt Gonzales Wilson EAGLE FORD CENTRAL/EAST 7,570 gross / 6,360 net acres EOG OPERATED, MTDR WI ~21% 9,508 gross / 1,7

  47. Slide 47: 2014 Permian Basin Drilling Plan

    E D D Y L E A LOVING 47 Indian Draw/Rustler Breaks 12,276 gross / 8,852 net acres  Estimated capital expenditures of ~$109 million  12 gross (9.8 net) wells planned for 2014, with 10 gross (8.3 net) wells turned to sales  Ranger/Querecho Plains − 6 gross (4.5 net) wells testing 1st, 2nd and 3rd B

  48. Slide 48: Appendix

    = AN, jMatadar RESOURCES COMPANY Appendix

  49. Slide 49: 2014 Hedging Profile

    49 2014 Hedging Profile – Hedges in Place for Remainder of 2014 At March 12, 2014, Matador had:  2.0 million barrels of oil hedged for remainder of 2014 at weighted average floor and ceiling of $88/Bbl and $99/Bbl, respectively  9.9 Bcf of natural gas hedged for remainder of 2014 at weighted avera

  50. Slide 50: Matador's Continued Growth

    $18.4 $15.2 $23.6 $49.9 $115.9 $191.8 2008 2009 2010 2011 2012 2013 $30.6 $19.0 $34.0 $67.0 $156.0 $269.0 2008 2009 2010 2011 2012 2013 7% 4% 2% 6% 37% 50% 2008 2009 2010 2011 2012 2013 1.5 2.3 3.9 7.0 9.0 11.7 2008 2009 2010 2011 2012 2013 Matador’s Continued Growth Average Daily Production (MBOE/d

  51. Slide 51: Recent Semi-Annual Performance Metrics Through Year-End 2013

    Recent Semi-Annual Performance Metrics Through Year-End 2013 Oil Equivalent Production (BOE in thousands) Adjusted EBITDA(1) ($ in millions) Oil and Natural Gas Revenues ($ in millions) Oil Production (Bbl in thousands) 84 485 729 908 1,225 2H 2011 1H 2012 2H 2012 1H 2013 2H 2013 1,277 1,525 1,768 1

  52. Slide 52: Board of Directors and Special Advisors

    Board of Directors and Special Advisors – Expertise and Stewardship 52 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 President, S

  53. Slide 53: Proven Management Team

    Proven Management Team – Experienced Leadership 53 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 Matthew V. Ha

  54. Slide 54: Credit Agreement Status

    TIER Conforming Borrowing Base Utilization LIBOR Margin BASE Margin Commitment Fee Tier One x < 25% 150 bps 50 bps 37.5 bps Tier Two 25% < or = x < 50% 175 bps 75 bps 37.5 bps Tier Three 50% < or = x < 75% 200 bps 100 bps 50 bps Tier Four 75% < or = x < 90% 225 bps 125 bps 50 bps Tier Five 90% < or

  55. Slide 55: Adjusted EBITDA Reconciliation

    55 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

  56. Slide 56: Adjusted EBITDA Reconciliation

    56 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. (In thousands) 2008 2009 2010 2011 2012 2013 Unaudi

  57. Slide 57: Adjusted EBITDA Reconciliation

    57 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. (In thousands) 12/31/2011 6/30/2012 12/31/2012 6/30

  58. Slide 58: PV-10 Reconciliation

    58 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

Matador Resources — Investor Presentation (March 2014) on 6ix