Matador Resources Company · NYSE:MTDR
Matador Resources — Investor Presentation (April 2013)
54 slides from Matador Resources's investor presentation, Apr 15, 2013
Slide 1: Investor Presentation
Exhibit 99.2 Investor Presentation April 2013
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,
Slide 3: Company Summary
oN, ¢ Matador {We (eae TSCUREES Conran Company Summary
Slide 4: Company Overview
Company Overview Completed IPO of 14,883,334 shares (12,209,167 primary) including overallotment at $12.00/share in March 2012 Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 55.84 million common shares Share Price(1) $8.83/share Market Capitalization(1) $493.1 million 2012 Actual 2013 Guidance Ca
Slide 5: Matador History
Matador History Predecessor Entities Foran Oil & Matador Petroleum Founded by Joe Foran in 1983 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 Matador
Slide 6: Matador Resources Snapshot
Matador Resources Snapshot Daily Production @ 3/31/13(1) 10,900 BOE/d Oil Production (% total) 5,100 Bbl/d (47%) Gas Production (% total) 34.7 MMcf/d (53%) Proved Reserves @ 12/31/12 23.8 million BOE % Proved Developed 58% % Oil 44% 2013E CapEx $310 million % South Texas ~82% % Oil and Liquids ~98%
Slide 7: Investment Highlights
Investment Highlights Strong Financial Position and Prudent Risk Management High Quality Asset Base in Attractive Areas Eagle Ford provides immediate oil-weighted value and upside Expanding acreage position in Delaware Basin in West Texas Other key assets provide long-term option value on natural ga
Slide 8: Matador's Continued Growth
Matador’s Continued Growth TOTAL OIL AND (1) TOTAL OIL PRODUCTION NATURAL GAS REVENUES ADJUSTED EBITDA (1) Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net (loss) income andnet cash provided by operating activitie
Slide 9: Growth in PV-10 from Proved Reserves
Growth in PV-10 (1) from Proved Reserves $500 $450 $91.21 oil $2.76 gas $400 SEC Pricing Oil, $/Bbl Gas, $/MMBtu $350 $300 $92.71 oil $4.12 gas $250 $200 $150 $75.96 oil $4.38 gas $100 $57.65 oil $3.87 gas $41.00 oil $5.71 gas $50 $0 2008 (2) 2009 (2) 2010 (2) 2011 (2) 2012 (2) (1) PV-10 is a non-GA
Slide 10: Eagle Ford
a“, Wen Eagle Ford South Texas
Slide 11: Eagle Ford and Austin Chalk Overview
Eagle Ford and Austin Chalk Overview Drilled and completed 38 gross / 36.5 net operated wells to date(1) Proved Reserves @ 12/31/12 14.3 million BOE Acreage positioned in some of the most % Proved Developed 46% active counties for Eagle Ford and Austin Chalk % Oil / Liquids 72% Two rigs running, pri
Slide 12: Value of Proved Reserves Up 70% and Shifting to Oil Over Past Year
Value of Proved Reserves Up 70% and Shifting to Oil Over Past Year SE New Mexico Cotton Valley SE New Mexico $2.4 million, 1% $5.9 million, 1% $2.0 million, 0% Haynesville Cotton Valley $21.8 million, 5% $19.5 million, 8% Eagle Ford $130.2 million, 52% Haynesville $96.6 million, 39% Eagle Ford $393.
Slide 13: Eagle Ford Properties are in Good Neighborhoods
Eagle Ford Properties are in Good Neighborhoods Highlights Matador’s acreage in counties with robust transaction activity – “good neighborhoods” Transaction values ranging from $10,000 to $30,000 per acre Matador’s Eagle Ford position approximately 28,000 net acres Acreage in both the eastern and we
Slide 14: Eagle Ford Properties
Eagle Ford Properties EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST 41,279 gross / 27,697 net acres Bexar 7,707 gross / 6,307 net acres San Antonio Uvalde Medina Gonzales EOG OPERATED, MTDR WI ~21% 11,588 gross / 2,240 net acres Wilson GLASSCOCK (WINN) RANCH Atascosa Dewitt 8,891 gross / 8,891 net acres
Slide 15: 2012 Operated Eagle Ford Completion Results – 24 Hour IP Tests
2012 Operated Eagle Ford Completion Results – 24 Hour IP Tests Well Name County Completion Date Perforated Length (1) Top Perf (2) Frac Stages Oil IP (3)(4) Gas IP (3)(4) Oil Equiv IP (5) Choke Pressure Total (ft.) (ft.) (Bbl/day) (Mcf/day) (BOE/day) (inch) (psi) 2012 Wells Martin Ranch A 8H La Sall
Slide 16: Eagle Ford Well Costs Declined During 2012 – Western Acreage
Eagle Ford Well Costs Declined During 2012 – Western Acreage $12,000,000 Total Cost 5000' Normalized Cost $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 1 2 3 4 5 6 7 8 9 10 11 12 Note: Wells are displayed in chronological order. Wells drilled and completed using two casing strings. Well
Slide 17: Eagle Ford Well Costs Declined During 2012 – Eastern Acreage
Eagle Ford Well Costs Declined During 2012 – Eastern Acreage $12,000,000 Total Cost 5000' Normalized Cost $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 1 2 3 4 5 6 7 8 9 10 Note: Wells are displayed in chronological order. Wells drilled and completed using two casing strings. Well drill
Slide 18: Average Frac Stage Cost per Well
Average Frac Stage Cost per Well $450,000 Bauxite White Sand Resin-Coated Sand $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Note: Wells are displayed in chronological order; includes a
Slide 19: Eagle Ford Well Estimated ROR as a Function of EUR and Well Cost
Eagle Ford Well Estimated ROR as a Function of EUR and Well Cost $90.00/Bbl NYMEX oil; $3.00/Mcf NYMEX natural gas Note: Individual well economics only. NGL price differential +$1.85/Mcf. Oil price differential +$7.00/Bbl. 19
Slide 20: Recent Technical Advancements in the Eagle Ford
Recent Technical Advancements in the Eagle Ford Rotary Steerable Tools Drilling time in curve and lateral reduced by two days Measurement While Drilling (MWD) telemetry closer to drill bit Improves ability to stay in “sweet-spot” Removes sumps and high-angle curves Improved frac design Increases Sti
Slide 21: Drilling Times and Efficiencies
Drilling Times and Efficiencies First 4 Wells Recent Wells * Bold wells utilized rotary steerable systems Note: As of January 25, 2013 21
Slide 22: Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage
Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage Guadalupe Bexar San Antonio Uvalde Medina Gonzales Multi-Pay Fairway with Pearsall, Austin Chalk and Buda potential Wilson Dewitt Atascosa Karnes Zavala Frio Goliad OIL FAIRWAY Bee Dimmit La Salle McMullen Live Oak Matador Resources
Slide 23: Delaware Basin
Delaware Basin Southeast New Mexico and West Texas
Slide 24: Southeast New Mexico / West Texas
Southeast New Mexico / West Texas Gross Acres(1) 25,477 acres Net Acres(1) 15,117 acres Foothold of existing production and reserves Acreage position in good neighborhoods, INDIAN RANGER- surrounded by other operators’ ongoing DRAW QUERECHO drilling In March and April 2013, acquired approximately 9,
Slide 25: Wolfbone Play in the Delaware Basin Stratigraphic Column
Wolfbone Play in the Delaware Basin (West Texas) Stratigraphic Column Horizontal Targets Avalon Shale Depth: 7,900’ – 8,300’ (Oil Window) Density Porosity: 12-14% Thickness: 300-500 ft. Normal Pressure (0.45 psi/ft.) Total Organic Carbon (TOC) 5-8% XRD: 15-20% clay and 40-60% silica IP: 100-270 Bbl/
Slide 26: Ranger Prospect Area: Proposed Wolfbone Multi-Zone Exploration Program
Ranger Prospect Area: Proposed Wolfbone Multi-Zone Exploration Program and Surrounding Results Concho Condor State #1H 2 nd Bone Spring Amtex Energy IP (Oct 2012) Teapot 2H 339 BOPD 2 nd Bone Spring 1 mo.cum: Concho 52 MBO; 37 MMcf AirCobra 12 #2H 3 rd Bone Spring Cimarex Energy 17 mo.cum: Mallon 35
Slide 27: Wolf Leasehold: Proposed Wolfbone Multi-Zone Exploration Program
Wolf Leasehold: Proposed Wolfbone Multi-Zone Exploration Program and Surrounding Results Chesapeake Chesapeake Chesapeake Johnson 1-86 (1H) Johnson 1-88 Lov #1H Johnson 1-76 (1H) Wolfcamp Wolfcamp Wolfcamp 17 mo.cum: 10 mo.cum: 22 mo.cum: 122 MBO; 344 MMcf 72 MBO; 295 MMcf 140 MBO; 475 MMcf Chesapea
Slide 28: Haynesville & Cotton Valley
Haynesville & Cotton Valley Northwest Louisiana and East Texas
Slide 29: Tier 1 Haynesville and Elm Grove Cotton Valley Acreage Positions
Tier 1 Haynesville and Elm Grove Cotton Valley Acreage Positions – Almost all prospective Haynesville acreage is HBP TIER 3: 2 – 4 Bcf BOSSIER TIER 2: 4 – 6 Bcf CADDO BIENVILLE TIER 1: 6 – 10+ Bcf MTDR CV Horizontal T. Walker #1H Elm Grove Cotton Valley: Tier 1 Haynesville: 49 Net Locations 50 Net L
Slide 30: Haynesville Well Economics – Tier 1 Area
Haynesville Well Economics – Tier 1 Area Natural Gas Price, $/Mcf Note: Individual well economics only. D&C cost = drilling and completion cost. Natural gas price differential = ($0.85)/Mcf. 30
Slide 31: Cotton Valley Horizontal Well Economics
Cotton Valley Horizontal Well Economics Natural Gas Price, $/Mcf Note: Individual well economics only. D&C cost = drilling and completion cost. Natural gas price differential = (10%) 31
Slide 32: Gracie
Gracie Wyoming, Utah and Idaho
Slide 33: Matador Gracie Project Total Prospect Acreage
Matador Gracie Project Total Prospect Acreage WYOMING IDAHO UTAH Crawford Federal #1H 61,897 gross acres 30,492 net acres Crawford Federal #1H completion scheduled for summer 2013 Note: All acreage at April 9, 2013 33
Slide 34: Southwest Wyoming Stratigraphy and Target Zones
Southwest Wyoming Stratigraphy and Target Zones Crawford Federal #1: Drilled straight hole in late 2011 2% TOC Cretaceous Shales Encountered 161’Meade Peak with 46’ of main pay Recovered 50’ conventional core across pay zone TOC ave 4.52% (Maximum 14.2%) Thermally mature: Ro 1.69% 13% TOC Meade Peak
Slide 35: 2013 Capital Investment Plan
2013 Capital Investment Plan
Slide 36: 2013 Capital Investment Plan Highlights
2013 Capital Investment Plan Highlights 2013 projected capital expenditures of approximately $310 million Drill and complete or participate in 48 gross/31.3 net wells in 2013 Including 31.0 gross/25.8 net Eagle Ford Shale and 3.0 gross/3.0 net Bone Spring/Wolfcamp Also includes 3.0 gross/1.6 net exp
Slide 37: 2013 Production Expectations
2013 Production Expectations 2013 Oil Production Oil Production (1) (Bbl/d) 6,000 Estimated total oil production of 1.6 to First Quarter 2013 1.8 million barrels 5,000 Mid-point is an increase of 40% from 4,000 2012 3,000 Oil production expected to decline from 2,000 year-end 2012 levels in early 20
Slide 38: Funding for 2013 Capital Investment Plan
Funding for 2013 Capital Investment Plan Maintain financial discipline by anticipated funding of 2013 capital expenditures through operating cash flows and borrowings under revolving credit facility Most of 2013 Eagle Ford program is development drilling and largely de-risked by 2012 results As of A
Slide 39: Continued Oil/Liquids Focus to Fuel 2013 Growth
Continued Oil/Liquids Focus to Fuel 2013 Growth 2013 Anticipated Drilling 2013E CapEx Gross Wells Net Wells (in millions) Total Total % Total % South Texas Eagle Ford Shale 31.0 25.8 82.4% $217.0 70.1% Austin Chalk, Buda, Edwards 3.0 1.6 5.1% $5.9 1.9% Facilities/Pipelines/Etc. - - - $19.8 6.4% Area
Slide 40: 2013 South Texas Drilling Plan
2013 South Texas Drilling Plan EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST Nickel Ranch 41,279 gross / 27,697 net acres Bexar 7,707 gross / 6,307 net acres Hennig 1 (Austin Chalk) San Antonio # - Gross wells planned in 2013; All Matador dina Gonzales operated Eagle Ford wells unless noted Lewton other
Slide 41: Southeast NM / West Texas Acreage and 2013 Drilling Plan
Southeast NM / West Texas Acreage and 2013 Drilling Plan RANGER 4,308 gross / 2,727 net acres SOUTHEAST NM / WEST TEXAS PROSPECTIVE ACREAGE 17,795 gross / 13,049 net acres RANGER Ranger A1 Primary Targets: Wolfcamp/Bone Spring Ranger A2 Primary Target: 2nd Bone Spring Sand # - Matador operated wells
Slide 42: Recent Production and Operational Updates
Recent Production and Operational Updates First Quarter 2013 Production Q1 2013 oil and natural gas production of approximately 460,000 Bbl and 3.1 Bcf, respectively, compared to approximately 200,000 Bbl of oil and 3.2 Bcf of natural gas produced in Q1 2012 Q1 2013 production was approximately 10,9
Slide 43: 2013 Financial Expectations
2013 Financial Expectations 2013 Revenue and Adjusted EBITDA(1)(2) Oil and Natural Gas Revenues (2) (millions) Estimated oil and natural gas revenues of $200 to $220 million Mid-point is an increase of 35% from $156.0 million in 2012 Estimated Adjusted EBITDA(1)(2) of $140 to $160 million Mid-point
Slide 44: Appendix
oN, ¢ Matador {We (eae TSCUREES Conran Appendix
Slide 45: Board of Directors and Special Board Advisors – Expertise and Stewardship
Board of Directors and Special Board Advisors – Expertise and Stewardship Board Members Professional Experience Business Expertise and Advisors - Professor Emeritus and Former Head of Dept. of Petroleum Engineering, Texas A&M University Dr. Stephen A. Holditch - Founder and Former President S.A. Hol
Slide 46: Proven Management Team – Experienced Leadership
Proven Management Team – Experienced Leadership Industry Matador Management Team Background and Prior Affiliations Experience Experience Joseph Wm. Foran - Matador Petroleum Corporation, Foran Oil Company, Founder, Chairman and CEO 32 years Since Inception J Cleo Thompson Jr. and Thompson Petroleum
Slide 47: 2013 and 2014 Hedging Profile
2013 and 2014 Hedging Profile At April 9, 2013, Matador has: Oil Hedges (Costless Collars) 2013 2014 1.20 million barrels of oil hedged for Total Volume Hedged by Ceiling (Bbl) 1,020,000 1,680,000 remainder of 2013 at weighted average Weighted Average Price ($ / Bbl) $109.39 $98.55 floor and ceiling
Slide 48: Reserves Summary at December 31, 2012
Reserves Summary at December 31, 2012 Total proved reserves: 23.8 million BOE at December 31, 2012, including 10.5 million Bbl of oil and 80.0 Bcf of natural gas Oil reserves grew 176% to 10.5 million Bbl from 3.8 million Bbl at December 31, 2011 PV-10 (1) increased 70% to $423.2 million from $248.7
Slide 49: Financial Performance
Financial Performance Average Daily Production Oil and Natural Gas Revenues (BOE/d) ($ in mm) Adjusted EBITDA (1) Total Realized Revenues (2) ($ in mm) ($ in mm) (1) Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our ne
Slide 50: South Texas: Pearsall Play
South Texas: Pearsall Play CHK – Wilson C #1H 3.2 MMcf/d, 334 Bbl/d Cabot/Osaka JV 97 Bbls/MMcf Osaka 35% ($14,285/ac. – 17,500ac.) Abnd. For EGFD 6 Horiz. Drilled 3 Permits Schorp-White Ranch #101H 1st full mo. – 4,535 Bbl, 43MMcf RH Pickens #101H st 1 full mo. – 5,339 Bbl, 16MMcf Cheyenne Chilipit
Slide 51: Pearsall Field Area Buda / Eagle Ford / Chalk Activity
Pearsall Field Area Buda / Eagle Ford / Chalkleford Activity Note: All acreage at April 9, 2013. Well data from public information. 51
Slide 52: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation This presentation includes, and certain statements made during this presentation may include, the non-GAAP financial measure of Adjusted EBITDA. We believe Adjusted EBITDA helps us evaluate our operating performance and compare our results of operations from period to
Slide 53: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net (loss) income and cash provided by operating activities, respectively. Year Ended December 31, (In thousands) 2007 2008 2009 2010
Slide 54: 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 our pr
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