Matador Resources Company · NYSE:MTDR

Matador Resources — Q3 2021 Earnings Presentation

34 slides from Matador Resources's earnings presentation, Oct 27, 2021

  1. Slide 1: Third Quarter 2021 Earnings Release

    Third Quarter 2021 Earnings Release October 26, 2021

  2. 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 include “forward- looking statements” with

  3. Slide 3: Matador Resources Company Overview

    Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Capitalization(1) $5.2 billion Avg. Daily Production – Q3 2021 90.0 MBOE/d DELAWARE BASIN Net Debt / LTM Adj. EBITDA(2)(3) – Q3 2021 ~1.3x 120,700 net acres HAYNESVILLE/ COTTON VALLEY Adj. Free Cash Flow(2) – Q3 2021 $147.5 m

  4. Slide 4: Matador's Significant Officer % Ownership vs. Peer Group

    Matador’s Significant Officer % Ownership vs. Peer Group Interests Aligned with Shareholders Joseph Wm. Foran Matthew V. Hairford David E. Lancaster Craig N. Adams Billy E. Goodwin Founder, Chairman President and EVP and CFO EVP and COO EVP and COO and CEO Chair of the Operating – Land, Legal and –

  5. Slide 5: Chairman's Remarks

    Chairman’s Remarks October 26, 2021

  6. Slide 6: Strong Results for Third Quarter 2021

    SLIDE A Strong Results for Third Quarter 2021 Strong Financial • Generated adjusted free cash flow(1) of $147.5 million in Q3 2021 Results and Doubled • Record oil and natural gas revenues of $461.5 million and record Adjusted EBITDA(1) of $293.8 million Dividend • Doubled quarterly cash dividend to

  7. Slide 7: San Mateo – Differentiated Midstream Asset Continues to Add Value

    San Mateo – Differentiated Midstream Asset SLIDE B Continues to Add Value to Matador(1) 2015-2016 2017-2018 2019-2020 2021+ ► Initial midstream build-out ► San Mateo I formed in ► San Mateo II formed in ► Adj. free cash flow(2) in the Delaware Basin February 2017 – Owned February 2019 – Owned genera

  8. Slide 8: Revolver Borrowings Outstanding – Quarterly Results

    Revolver Borrowings Outstanding – Quarterly Results SLIDE C Paying Down Debt Remains a Key Objective in 2021 ($ in millions) Letters of Credit $1,000 Revolver Borrowings Outstanding $900 Borrowing Base $900 $800 $200 million Elected Commitment $700 $700 $355 million repaid from end of Q3 2020 throug

  9. Slide 9: 2021 Priorities and Milestones – Executing Well Through Q3

    SLIDE D 2021 Priorities and Milestones – Executing Well Through Q3 2021 Priorities Significant 2021 Milestones - Timeline 1 Deliver Free Cash Flow 1 4 Rodney Robinson wells to sales • 39 Stateline asset area wells currently 2 First 13 Voni (Stateline) wells to sales online 2 Pay Down Debt 3 4 Greate

  10. Slide 10: Delivering Strong Well Results All Around the Delaware Basin

    SLIDE E Delivering Strong Well Results All Around the Delaware Basin! Matador Acreage TWIN LAKES CURRENT DELAWARE ~35,100 gross / ~21,600 net acres BASIN ACTIVITY  Stateline: 13 new Boros wells turned to sales in Q3 2021; drilling underway on the ARROWHEAD ~65,200 gross / ~26,100 net acres next 11

  11. Slide 11: A Step Change in Capital Efficiency

    A Step Change in Capital Efficiency: SLIDE F Record Low Costs in 2020  Even Lower in 2021E Drilling & Completion (D&C) CapEx/ft(1) Percentage of Two-Mile Laterals ($/ft) $1,528 98% -24% 74% $1,165 TOTAL -27% FOOTAGE TOTAL $850 510,000’ AVG. -20% FOOTAGE 465,000’ LATERAL ~ $680 LENGTH 4,700’ 5,700’

  12. Slide 12: Operational and Financial Results

    Operational and Financial Results October 26, 2021

  13. Slide 13: Q3 2021 Selected Operating and Financial Results

    Q3 2021 Selected Operating and Financial Results Three Months Ended Year Ended September 30, June 30, September 30, 2021 2021 2020 Net Production Volumes:(1) Oil (MBbl) 4,669 4,855 3,895 Natural gas (Bcf) 21.7 21.8 16.9 Total oil equivalent (MBOE) 8,283 8,482 6,715 Average Daily Production Volumes:(

  14. Slide 14: 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) Q3 2021 BOE down 3% sequentially; Q3 2021 BOE down 4% sequentially; 93,210 90,033 up 23% YoY up 27% YoY 87,461 100 ,00 0 100 ,00 0 84,048 83,18

  15. Slide 15: Wells Turned to Sales – Q3 2021

    Wells Turned to Sales – Q3 2021  During the third quarter of 2021, Matador turned to sales a total of 21 gross (17.2 net) wells in its various operating areas. This total was comprised of 17 gross (16.5 net) operated wells and 4 gross (0.7 net) non-operated wells. The 17 operated wells included the

  16. Slide 16: 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 Natural Gas and Oil Pipelines – IN SERVICE! Reeves Loving Ward 1 Mile Rustler Breaks Eddy Lea Natural Gas Gathering and Processing Processing

  17. Slide 17: Continued Progress in All Parts of San Mateo's Midstream Business

    Continued Progress in All Parts of San Mateo’s Midstream Business (51% Owned by Matador) San Mateo Average Water Handling San Mateo Average Natural Gas Gathering(1) (MBbl/d) (MMcf/d) Q3 2021 up 1% sequentially; Q3 2021 down 2% sequentially; 300 up 21% YoY 281 284 300 up 28% YoY 260 262 252 248 250 2

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

    Hedging Profile – Remainder of 2021 and 2022(1) Oil Collars, Swaps, Puts Midland-Cushing Basis Swaps Natural Gas Collars ~65-70% hedged for Q4 2021 ~50% hedged for Q4 2021 ~70% hedged for Q4 2021 WTI Collars 6,000 16.0 WTI Swaps 5,520 13.9 3,000 2,880 14.0 5,000 Natural Gas Volume Hedged (Bcf) 510 $

  19. Slide 19: Full Year 2021 Guidance

    Full Year 2021 Guidance October 26, 2021

  20. Slide 20: Summary and Updated 2021 Guidance

    Summary and Updated 2021 Guidance (as Provided on October 26, 2021) Actual July 27, 2021 %YoY October 26, 2021 %YoY Guidance Metric 2020 Results 2021 Guidance(1) Change(2) 2021 Guidance Change(2) Total Oil Production 15.9 million Bbl 17.2 to 17.8 million Bbl + 10% 17.4 to 17.6 million Bbl + 10% Tota

  21. Slide 21: 2021 Oil and Natural Gas Production Estimates

    2021 Oil and Natural Gas Production Estimates(1) Total Oil and Natural Gas Production 2021E CapEx(1)(2) (Midpoint): Natural Gas, Bcf 13% D/C/E: $550 MM Oil, MBbl 30,450 30,950 2021E Oil Production – 10% Growth YoY Midstream(3): $40 MM Total: $590 MM 27,514 16%  Estimated oil production of 17.4 to 1

  22. Slide 22: 2021 Capital Investment Plan Summary

    2021 Capital Investment Plan Summary(1) Full Year 2021E CapEx(2) – $570 to $610 million 2021E Wells Turned to Sales CapEx Guidance Range Gross Net Midpoint Drilling, Completing, Equipping $535 to $565 million Unchanged Operated 49 45.6 Operated D/C/E $442 to $464 million Non-Operated 65 4.7 Non-Op $

  23. Slide 23: 2021E Operating Cost Estimates (Unit Costs per BOE)

    2021E Operating Cost Estimates (Unit Costs per BOE)  Matador provides the following updated estimates for its 2021 unit operating costs as shown below 2020 Q1 2021 Q2 2021 Q3 2021 2021E Production taxes, transportation and processing 1 $3.39 $5.13 $5.17 $5.90 $5.50 to $6.00 (“PTTP”) 2 Lease operati

  24. Slide 24: Appendix

    ay, ¢ Matador fies RESOURCES COMPANY Appendix MIDR NYSE

  25. Slide 25: Investment Highlights – Matador Resources Company

    Investment Highlights – Matador Resources Company Positioned for Continued Free Cash Flow and Differentiated Growth • Generated adjusted free cash flow(1) of $147.5 million in Q3 2021 and grew total production by ~14% year-over-year in 2020 Returning Value to Shareholders • Doubled quarterly cash di

  26. Slide 26: Simple Balance Sheet – No Near-Term Debt Maturities

    Simple Balance Sheet – No Near-Term Debt Maturities REPAID $375 MILLION PAYING DOWN DEBT in borrowings since September 30, 2020 is a key objective for 2021 Q3 2021 LEVERAGE RATIO Strong, supportive bank group REDUCED TO 1.3x (1)(2) led by Royal Bank of Canada Debt Maturities ($ in millions) $1,500 $

  27. Slide 27: Matador Resources and San Mateo Credit Facilities

    Increased June 2021! Matador Resources and San Mateo 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

  28. Slide 28: Delaware Basin Extended Lateral Well Location Inventory

    Delaware Basin Extended Lateral Well Location Inventory Location counts have an Matador anticipates operating Matador has identified average lateral length of ~8,500’ 2,091 GROSS / 1,298 NET 4,359 GROSS / 1,502 NET of these locations(2) locations(1) for future drilling on Almost all intervals assume

  29. Slide 29: 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

  30. Slide 30: 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) 1Q 2016

  31. Slide 31: 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 (loss) and net cash provided by (used in) operating activities, respectively, for San Mateo Mids

  32. Slide 32: 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 (loss) and net cash provided by (used in) operating activities, respectively, for San Mateo Mids

  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 (loss) attributable to Matador Resources Company shareh

  34. Slide 34: 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 Year E (In thousan

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