Matador Resources Company · NYSE:MTDR
Matador Resources — Q1 2023 Earnings Presentation
48 slides from Matador Resources's earnings presentation, Apr 26, 2023
Slide 1: First Quarter 2023 Earnings Release
First Quarter 2023 Earnings Release April 25, 2023
Slide 2: Investor Relations Contact and Disclosure Statements
Investor Relations Contact and Disclosure Statements Safe Harbor Statement – This presentation and statements made by representatives of Matador Investor Relations Contact Resources Company (“Matador” or the “Company”) during the course of this presentation includes “forward- looking statements” wit
Slide 3: Chairman's Remarks
Chairman’s Remarks April 25, 2023
Slide 4: Matador Resources Company – Company Highlights
SLIDE A Matador Resources Company – Company Highlights DELAWARE BASIN Strong, Proven Management Team 150,000 Net Acres (+16% since 12/31/22) 40-Year Track Record TWIN LAKES Strong, Simple Balance Sheet Low Leverage and Continued Free Cash Flow ARROWHEAD RANGER Synergistic Midstream Business Differen
Slide 5: Matador + Advance: +30% Pro Forma Reserves Increase
SLIDE B Matador + Advance: +30% Pro Forma Reserves Increase(1) Total Proved Reserves: 463.1 million BOE (59% oil) pro forma at 12/31/2022 356.7 million BOE 55% Oil Standardized Measure = $6.98 PV-10(2) = $9.13 billion 356.7 Million BOE (Total Proved Reserves) +106.4 Million BOE (Total Proved Reserve
Slide 6: Synergistic Midstream Assets Continue to Add Value to Matador
San Mate and – Synergistic Midstream Assets SLIDE C Continue to Add Value to Matador(1) Ranger Stebbins Gathering Assets ~500 miles of three-stream pipelines(1) (oil, natural gas and water) Rustler Breaks Processing Capacity 520 MMcf per day(2) Wolf Salt Water Disposal 460,000 Bbl per day of designe
Slide 7: Borrowings Outstanding: Prioritizing Debt Repayment Following Advance Acquisition
Borrowings Outstanding SLIDE D Prioritizing Debt Repayment Following Advance Acquisition Anticipate RBL Borrowings Revolver Borrowings Completely Repaid in 2H 2024(2) 6.0x ($ in millions) Senior Notes (Bond Debt) Revolver Borrowings Leverage (1) $2,000 Senior Notes 6.0x $1,899 $1,800 5.0x $1,600 $1,
Slide 8: "Horseshoe" Wells: 2-Mile Value in 1-Mile Section
SLIDE E “Horseshoe” Wells: 2-Mile Value in 1-Mile Section Up to 50% time savings(1) $10MM cost savings(1) Increases value of the acreage 1-mile section 1-mile section 1-mile section 1-mile section 8 (1) Savings of drilling and completing two two-mile “horseshoe” wells, as compared to four one-
Slide 9: Steady Oil Production Growth
SLIDE F Steady Oil Production Growth Approaching 150,000 BOE/d! 143,000 Total (MBOE/d) 111,735 334.0 Natural Gas (MMcf/d) 296.5 87,500 Oil (Bbl/d) 62,316 (1) Q4 22 Q2 23E Q4 23E (1) As of and as provided on February 21, 2023. Estimates only include production revenues from the Advance properties fol
Slide 10: 40 Years of Generating Shareholder Value
SLIDE G 40 YEARS OF GENERATING SHAREHOLDER VALUE 1983 2003 Today “Matador I” “Matador II” Initial Capital: $270,000 Initial Capital: $6 million Sale Price: $388 million Current Market Cap: $6 billion(1) 10 (1) Closing share price as of April 24, 2023.
Slide 11: Operational and Financial Results
Operational and Financial Results April 25, 2023
Slide 12: Q1 2023 Highlights
Q1 2023 Highlights Stronger-Than-Expected Quarterly Production 106,654 BOE per day: Beat Guidance!(1) Now expect 2023 total production to be near high end of previously announced guidance range of 44.35 to 46.25 million BOE(1) Closed Advance Acquisition Added 18,500 net acres (99% HBP) M
Slide 13: Matador Resources Company Overview
Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Capitalization(1) $6.1 billion Avg. Daily Production – Q1 2023 106.7 MBOE/d HAYNESVILLE/ Net Debt / LTM Adj. EBITDA(2)(3) – Q1 2023 ~0.15x DELAWARE BASIN 150,000 net acres COTTON VALLEY Adj. Free Cash Flow(2) – Q1 2023 $57.2
Slide 14: Significant 2023 Milestones – Timeline
Significant 2023 Milestones – Timeline 1 8 Rodney Robinson wells turning to sales in 1H 2023 2 Close the Advance acquisition in 1H 2023 3 8 Stateline wells turning to sales in 1H 2023 4 21 wells turning to sales on Advance properties in 2H 2023 5 18 Stebbins wells turning to sales in 2H 2023 6
Slide 15: Average Daily Total Production
Better than Expected Production in Q1 2023! Oil, natural gas and total production were all better than expected! − Oil equivalent production of 106,654 BOE per day is better than Guidance by 6% and up 14% year-over-year. − Oil production of 58,941 Bbl per day − Natural gas production of 286.3 mill
Slide 16: An Integrated E&P and Midstream Strategy: Progress in All Areas
An Integrated E&P and Midstream Strategy: Progress in All Areas Average Daily Total Production Average Daily Total Delaware Basin Production (BOE/d) (BOE/d) Q1 2023 BOE down 5% sequentially; Q1 2023 BOE down 5% sequentially; 140,000 up 14% YoY up 13% YoY Oil Natural Gas 140,000 120,000 110,750 111,7
Slide 17: Delivering Strong Well Results All Around the Delaware Basin
Delivering Strong Well Results All Around the Delaware Basin! TWIN LAKES DELAWARE BASIN ~48,100 gross / ~27,000 net acres 150,000 Net Acres CURRENT DELAWARE BASIN ACTIVITY ARROWHEAD ~59,700 gross / ~22,600 net acres RANGER Stateline: Drilling four Voni Wolfcamp B wells ~60,200 gross / ~34,600 net
Slide 18: Matador's Strategic Bolt-On Acquisition of Advance Energy
Matador’s Strategic Bolt-On Acquisition of Advance Energy ACQUISITION DETAILS Advance Acquisition Highlights TWIN LAKES Price: $1.6 billion(1) Strategic bolt-on in the core of the Northern Delaware Basin Effective Date: 1/1/2023 18,500 net acres 99% Held-by-Production Closed: 4/12/2023
Slide 19: Horizontal Wells Completed and Turned to Sales – Q1 2023
Horizontal Wells Completed and Turned to Sales – Q1 2023 During the first quarter of 2023, Matador turned to sales a total of 70 gross (19.1 net) horizontal wells across its various operating areas. This total was comprised of 24 gross (18.0 net) operated wells and 46 gross (1.1 net) non-operated
Slide 20: Summary and 2023 Guidance
Summary and 2023 Guidance (as Provided on February 21, 2023) Actual %YoY Guidance Metric 2023 Guidance Range 2022 Results Change(1) Total Oil Production 21.9 million Bbl 26.4 to 27.3 million Bbl + 22% Total Natural Gas Production 99.3 Bcf 107.7 to 113.7 Bcf + 11% Expect to be Total Oil Equivalent Pr
Slide 21: Matador's 2023 Production Profile
Matador’s 2023 Production Profile Profitable Growth at a Measured Pace ~143,000 BOE/d in Q4 2023 +28% YoY 18% 124,110 120,000 22% 105,465 100,000 14% 86,176 80,000 75,175 59% Oil 60,000 57% Oil 57% 40,000 58% Oil Oil 20,000 0 (1) 2020 2021 2022 2023E Note: Estimates only include production revenues
Slide 22: 2023 Capital Investment Plan Summary
2023 Capital Investment Plan Summary(1) (As Provided on February 21, 2023) Full Year 2023E CapEx(2) – $1.425 billion – Midpoint (Delaware: Incorporated 8th operated rig at close of Advance acquisition) 2023E Wells Turned to Sales 2023 Guidance Gross Net Drilling, Completing, Equipping $1.18 to $1.32
Slide 23: 2023E Operating Cost Estimates
2023E Operating Cost Estimates (Unit Costs per BOE)(1) (As of and as Provided on April 25, 2023) 2021 2022 Q1 2023 2023E 1 Production taxes, transportation and processing (“PTTP”) $5.69 $7.33 $5.78 $6.00 to $6.50 2 Lease operating (“LOE”) $3.46 $4.08 $4.63 $5.25 to $5.75 3 Plant and other midstream
Slide 24: Q2 2023 Commodity Price Differentials
Q2 2023 Commodity Price Differentials Q1 2023 Q2 2023E Actual Actual Realized Commodity Prices Benchmark(1) Differential Guidance(2) Realized Price Differential Oil Prices, per Bbl $75.99 $75.74 -$0.25 -$1.50 to -$0.50 (Below Benchmark) Natural Gas Prices, per Mcf $2.74 $3.93 +$1.19 +$0.25 to +$1.25
Slide 25: San Mateo Midstream Outperformed Expectations
San Mateo Midstream Outperformed Expectations! Adjusted EBITDA(1) and oil, natural gas and water volumes were all better than expected! − Adjusted EBITDA of $48.7 million is better than expected and up 8% year-over-year − Natural gas processing volumes of ~352 MMcf per day – RECORD QUARTER! − Natu
Slide 26: Record San Mateo Midstream Results
Record San Mateo Midstream Results in 2022 (San Mateo is 51% Owned by Matador) San Mateo Average Natural Gas Gathering San Mateo Average Natural Gas Processing (MMcf/d) (MMcf/d) Q1 2023 up 9% sequentially; Record Quarter! Q1 2023 up 7% sequentially; Record Quarter! 400 up 25% YoY 400 up 39% YoY 352
Slide 27: San Mateo – Synergistic Midstream Asset
San Mateo – Synergistic Midstream Asset Matador owns 51% of San Mateo(1) $250 Water Oil $198 San Mateo's Adjusted EBITDA ($ in Natural Gas $200 $185 $154 $150 Natural millions)(2) Gas $113 $96 $100 Oil $62 $50 $31 Water $12 $4 $0 (3) 2015 2016 2017 2018 2019 2020 2021 2022 2023E Note: Figures (i) re
Slide 28: Simple Balance Sheet – No Near-Term Debt Maturities
Simple Balance Sheet – No Near-Term Debt Maturities SIGNIFICANT LIQUIDITY PAYING DOWN DEBT >$600 million at April 25, 2023 Key objective in 2023 BORROWING BASE OF $2.25 B ELECTED COMMITMENT INCREASED Advance Assets not yet included $1.25 billion effective March 31, 2023 Debt Maturities ($ in million
Slide 29: ESG Stewardship
ESG Stewardship April 25, 2023
Slide 30: Committed to ESG Stewardship
Committed to Environmental, Social and Governance (ESG) Stewardship Matador is committed to increasing the long-term value of its shares in a responsible manner. Matador’s aim has always been to reliably and profitably provide the energy that society needs in a manner that is safe, protects the envi
Slide 31: Committed to ESG Stewardship: Metrics
Committed to Environmental, Social and Governance (ESG)(1) Stewardship ENVIRONMENTAL Increased transportation on pipeline Continued reduction of Increased use of non-fresh water, per-barrel emissions(2) including recycled water >40% >60% >95% >70% reduction in direct reduction in of total water of w
Slide 32: Appendix
aN, ¢ Matador tier RESOURCES COMPANY Appendix April 25, 2023 NYSE
Slide 33: Delaware Basin Extended Lateral Well Location Inventory
Delaware Basin Extended Lateral Well Location Inventory • Matador has identified up to 4,382 gross (1,468 net) remaining potential locations as of December 31, 2022, for future drilling in the Delaware Basin − Location counts assume extended lateral lengths whenever viable, and the total locations h
Slide 34: YE 2022 Total Proved Reserves
YE 2022 Total Proved Reserves as of December 31, 2022 YE SEC Commodity Price: $90.15/Bbl and $6.36/MMBtu Total Proved Reserves: 356.7 Million BOE Standardized Measure: $7.0 Billion PV-10(1): $9.1 Billion EF Oil PD Hay/CV Gas PUD Del 97% 62% Delaware 55% Oil Developed By Basin Reserves Mix % Develope
Slide 35: Matador's Proved Reserves: 356.7 Million BOE
Matador’s Proved Reserves: 356.7 Million BOE at December 31, 2022 Haynesville/CV Haynesville/CV Haynesville/CV 3.5 MMBOE, 1% 5.7 MMBOE, 2% 6.1 MMBOE, 2% Delaware Delaware Delaware 312.0 MMBOE, 97% 346.8 MMBOE, 97% 261.9 MMBOE, 97% Eagle Ford Eagle Ford Eagle Ford 4.9 MMBOE, 2% 5.7 MMBOE, 2% 3.8 MMBO
Slide 36: Q1 2023 Selected Operating and Financial Results
Q1 2023 Selected Operating and Financial Results Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Net Production Volumes:(1) Oil (MBbl) 5,305 5,733 4,820 Natural gas (Bcf) 25.8 27.3 21.8 Total oil equivalent (MBOE) 9,599 10,280 8,457 Average Daily Production Volumes:(1) Oil (Bbl/d)
Slide 37: Matador Resources and San Mateo Credit Facilities
Increased $475 million (+61%) in March 2023! Matador Resources and San Mateo Credit Facilities Matador Credit Agreement Summary Bank group led by Truist Bank Last Elected Borrowings Letters of Credit Financial Covenant: Facility Maturity Borrowing Financial Covenant: Reserves Borrowing Outstanding O
Slide 38: San Mateo Assets and Operations – "Three-Pipe" Offering
San Mateo(1) Assets and Operations – “Three-Pipe” Offering Eddy County, NM Assets Loving County, TX Assets 1 Mile Greater Stebbins Area Wolf Loving ~43 miles Reeves Loving Ward 1 Mile Rustler Breaks Eddy Lea Natural Gas Gathering and Processing 460 MMcf/d of designed natural gas cryogenic processi
Slide 39: Pronto Assets and Operations
Pronto Assets and Operations Strategically Expanding Lea County Footprint Advance Acquisition Midstream Assets and Opportunities Acquired ~35 mi of in-field gas and water gathering pipelines Acquired an active Devonian Salt Water Disposal well with strong proven injection capacity Potential co
Slide 40: Record Setting MAXCOM Results – Celebrating 5 Years
Record Setting MAXCOM Results – Celebrating 5 Years 211 Matador Drilling Records and $33 Million Estimated Savings To Date Delaware Drilling Records Spud to Total Depth: 9.5 days Spud to Total Depth – 2 Mile Lateral: 9.7 Days Spud to Total Depth – 2.4 Mile Lateral: 15.7 Days Longest Well: 24
Slide 41: Hedging Profile – Remainder of 2023
Hedging Profile – Remainder of 2023(1) Waha-Henry Hub Basis Swaps 5,000 4,550 4,600 4,600 4,500 4,000 Gas Volume Hedged (MMBtu) 3,500 3,000 2,500 Swap Swap Swap at at at -$1.85 -$1.85 -$1.85 2,000 1,500 1,000 500 0 Q2 2023 Q3 2023 Q4 2023 Prices in $/MMBtu 41 (1) As of March 31, 2023.
Slide 42: Adjusted EBITDA & Adjusted Free Cash Flow Reconciliations
Adjusted EBITDA & Adjusted Free Cash Flow Reconciliations 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 consoli
Slide 43: Adjusted EBITDA Reconciliation – Matador Resources Company
Adjusted EBITDA Reconciliation – Matador Resources Company The following table presents the calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively. (In thousands) 3Q 2020
Slide 44: Adjusted EBITDA Reconciliation – San Mateo (100%)
Adjusted EBITDA Reconciliation – San Mateo(1) (100%) The following table presents the calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income and net cash provided by (used in) operating activities, respectively, for San Mateo Midstream,
Slide 45: 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 and net cash provided by (used in) operating activities, respectively, for San Mateo Midstream, LLC. Year End
Slide 46: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Matador Resources Company The following table presents the calculation of adjusted free cash flow and the reconciliation of adjusted free cash flow to the GAAP financial measure of net cash provided by operating activities. Three Months Ended (In thousands) Mar
Slide 47: 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,
Slide 48: PV-10 Reconciliation - Matador
PV-10 Reconciliation - Matador 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 income. PV-10 is not an estimate of the fair market value of th
Matador Resources Company — Q1 2023 Earnings Presentation on 6ix