Matador Resources Company · NYSE:MTDR

Matador Resources — Q1 2020 Earnings Presentation

33 slides from Matador Resources's earnings presentation, Apr 30, 2020

  1. Slide 1: First Quarter 2020 Earnings Release

    First Quarter 2020 Earnings Release April 29, 2020 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: Chairman's Remarks

    Chairman's Remarks April 29, 2020 NYSE: MTDR

  4. Slide 4: Key Results vs. Consensus Estimates – 1st Quarter 2020

    SLIDE A Key Results vs. Consensus Estimates – 1st Quarter 2020 Metric Consensus MTDR Results Beat / Miss Oil Production, Bbl/d 39,900 40,600 BEAT by 2% Natural Gas Production, MMcf/d 179.6 183.2 BEAT by 2% Total Production, BOE/d 69,800 71,200 BEAT by 2% Adjusted EBITDA(1) (millions) $127.4 $140.6 B

  5. Slide 5: Key Results vs. Matador Guidance – 1st Quarter 2020

    SLIDE B Key Results vs. Matador Guidance(1) – 1st Quarter 2020 Lease Operating Total Oil Production Total Oil Equivalent Expenses (MBbl) Production (MBOE) ($/BOE) Actual: 3,697 . +3% Actual: 6,476 . +2% Actual: $4.77 . -5% Guidance: 3,600 Guidance: 6,337 Guidance: $5.00 San Mateo G&A Expenses D/C/E

  6. Slide 6: Updated 2020 Capital Investment Plan Summary vs. Original Guidance

    SLIDE C Updated 2020 Capital Investment Plan Summary vs. Original Guidance Original 2020 CapEx Guidance(1)(2)(3) – $815 million Updated 2020 CapEx Guidance(2)(3)(4) – $565 million (Delaware: 6 operated rigs) (Delaware: Moving from 6 to 3 operated rigs by end of Q2 2020) Midstream $95 million(3) Mids

  7. Slide 7: Revolver Borrowings Outstanding – Quarterly Projections

    SLIDE D Revolver Borrowings Outstanding – Quarterly Projections ($ in millions) Letters of Credit $1,000 Revolver Borrowings Outstanding $900 Borrowing Base $900 $800 $200 million $700 $700 Elected Commitment $600 $545 $180 million $520 $45 $500 $45 $440 $400 $361 $45 $46 $300 $500 $475 $200 $395 $3

  8. Slide 8: Consistent Growth in Proved Reserves per Share

    SLIDE E Consistent Growth in Proved Reserves per Share  Matador’s total proved reserves per share at all-time high of 2.2 BOE/share (1.3 Bbl of oil + 5.5 Mcf of natural gas)  Since Matador’s IPO, reserves have increased ~10x and oil reserves have increased 152x  Does not include value of 128,000

  9. Slide 9: Operational and Financial Results

    Operational and Financial Results April 29, 2020 NYSE: MTDR

  10. Slide 10: Highlights for First Quarter 2020

    Highlights for First Quarter 2020 • Oil production of ~40,600 Bbl/d, up 18% from ~34,500 Bbl/d in Q1 2019 – Above Guidance Strong Production • Natural gas production of ~183.2 MMcf/d, up 20% from ~152.5 MMcf/d in Q1 2019 – Above Guidance • Total production of ~71,200 BOE/d, up 19% from ~59,900 BOE/d

  11. Slide 11: Q1 2020 Selected Operating and Financial Results

    Q1 2020 Selected Operating and Financial Results Three Months Ended March 31, December 31, March 31, 2020 2019 2019 Net Production Volumes:(1) Oil (MBbl) 3,697 3,872 3,107 Natural gas (Bcf) 16.7 17.5 13.7 Total oil equivalent (MBOE) 6,476 6,785 5,395 Average Daily Production Volumes:(1) Oil (Bbl/d)

  12. Slide 12: A Tightly Integrated Strategy: Growing E&P and Midstream Together

    A Tightly Integrated Strategy: Growing E&P and Midstream Together Average Daily Total Production Average Daily Total Delaware Production (BOE/d) Delaware Basin (BOE/d) BOE down 4% sequentially; up 19% YoY BOE down 2% sequentially; up 15% YoY 61,493 60,268 73,749 56,422 71,161 69,645 52,619 51,785 60

  13. Slide 13: Delaware Basin – Continuing to Deliver Strong Well Results

    Delaware Basin – Continuing to Deliver Strong Well Results! Matador Acreage Reducing operated rigs in Delaware Basin TWIN LAKES ~44,400 gross / ~24,800 net acres from six to three by the end of Q2 2020  Rustler Breaks: One to two rigs (at times) drilling primarily Wolfcamp A-XY, Wolfcamp A- Lower a

  14. Slide 14: First Six Rodney Robinson Wells Online – Results Above Expectations

    First Six Rodney Robinson Wells Online – Results Above Expectations! BLM Acreage “Rodney Robinson” Rodney Robinson Summary and Highlights • First six wells turned to sales on the Rodney Robinson Acreage tract in the western portion of Antelope Ridge 1 2 Overview • Matador acquired this 1,200 gross a

  15. Slide 15: 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 Water Disposal San Mateo Average Natural Gas Gathering (MBbl/d) (MMcf/d) 250 300 Up 7% sequentially; Down 23% sequentially as anticipated; 262 up 19% YoY 203 up 12% YoY 190 190 250 200

  16. Slide 16: San Mateo – Recent Highlights and Performance

    San Mateo – Recent Highlights and Performance  March 2020 – 10th commercial SWD in Eddy County, NM online • Total of 13 commercial SWDs in Eddy County, NM and Loving County, TX with ~335,000 Bbl/d of designed disposal capacity  October 2019 – Expanded credit facility for a second time from $325 mi

  17. Slide 17: Strong, Simple Financial Position

    Strong, Simple Financial Position • Strong, supportive bank group led by Royal Bank of Canada • Facility size of $1.5 billion; matures in October 2023 • Based on December 2019 reserves review, borrowing base affirmed at $900 million in February 2020 (Spring 2020 redetermination)  Matador chose to i

  18. Slide 18: Hedging Profile – Remainder of 2020, 2021 and 2022

    Hedging Profile – Remainder of 2020, 2021 and 2022 Remainder of 2020, 2021 and 2022 Hedges(1)  Oil (WTI) Costless Collars: ~2.3 million Bbl hedged for the remainder of 2020 at weighted average floor and ceiling prices of $48/Bbl and $66/Bbl, respectively  Oil (WTI) Swaps: ~7.6 million Bbl hedged f

  19. Slide 19: Updated Full Year 2020 Guidance

    Updated Full Year 2020 Guidance April 29, 2020 NYSE: MTDR

  20. Slide 20: Summary and Updated 2020 Guidance (as Provided on April 29, 2020)

    Summary and Updated 2020 Guidance (as Provided on April 29, 2020)  Six rigs operating in the Delaware Basin dropping to three – expect 53 gross (45.9 net) operated wells in 2020  Released one rig at the end of March 2020 and a second at the end of April 2020  Anticipate releasing one additional o

  21. Slide 21: Updated 2020 Capital Investment Plan Summary vs. Original Guidance

    Updated 2020 Capital Investment Plan Summary vs. Original Guidance Original 2020 CapEx Guidance(1)(2)(3) – $815 million Updated 2020 CapEx Guidance(2)(3)(4) – $565 million (Delaware: 6 operated rigs) (Delaware: Moving from 6 to 3 operated rigs by end of Q2 2020) Midstream $95 million(3) 2020E Wells

  22. Slide 22: 2020 Oil and Natural Gas Production Estimates

    2020 Oil and Natural Gas Production Estimates(1) Total Oil and Natural Gas Production 2020E CapEx(1)(2) (Midpoint): Natural Gas, Bcf 2020E Oil Production – 9% Growth YoY 7% D/C/E: $470 MM Midstream(3): $95 MM Oil, MBbl 27,650 • Estimated oil production of 15.1 to 15.5 million barrels Total: $565 MM

  23. Slide 23: Wells Completed and Turned to Sales – 2020 Updated Guidance

    Wells Completed and Turned to Sales – 2020 Updated Guidance(1)  During full year 2020, Matador expects to complete and turn to sales 96 gross (48.6 net) wells. Matador expects the Delaware Basin to account for 93 gross (48.6 net) wells, including 53 gross (45.9 net) operated and 40 gross (2.7 net)

  24. Slide 24: Wells Completed and Turned to Sales – 2020 Updated Guidance

    Wells Completed and Turned to Sales – 2020 Updated Guidance(1)  In 2020, Matador expects to continue transitioning its operations to longer laterals greater than one mile. ‒ 83% of Matador’s gross operated horizontal wells completed and turned to sales in 2020 are expected to have lateral lengths g

  25. Slide 25: A Step Change in Capital Efficiency: Updated 2020 Expectations

    A Step Change in Capital Efficiency: Updated 2020 Expectations(1) Average Lateral Length and % of Longer Laterals CapEx per Foot(2) and Lateral Footage Turned to Sales 100% 600,000 $1,700 Lateral Feet Turned to Sales Average Lateral Length Average Drilling & Completions CapEx/foot, $/ft(2) 9,000 Ave

  26. Slide 26: 2020E Operating Cost Estimates (Unit Costs per BOE)

    2020E Operating Cost Estimates (Unit Costs per BOE)  At April 29, 2020, Matador provided updated estimates for its 2020 unit operating costs as shown below 2020E Q1 2020 2019 Production taxes, transportation and processing $2.75 to $3.25 $3.35 $3.82 Lease operating $4.25 to $4.75 $4.77 $4.85 Plant

  27. Slide 27: Appendix

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

  28. Slide 28: Matador Resources and San Mateo I Credit Facilities

    Matador Resources and San Mateo I Credit Facilities Matador Credit Agreement Summary Bank group led by Royal Bank of Canada Elected Borrowings Letters of Credit Financial Covenant: Maturity Borrowing Last Reserves Facility Size Borrowing Outstanding Outstanding Maximum Net Debt to Date Base Review C

  29. Slide 29: 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

  30. Slide 30: 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)

  31. Slide 31: 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

  32. Slide 32: 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

  33. Slide 33: 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,

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