Matador Resources Company · NYSE:MTDR

Matador Resources — Q3 2022 Earnings Presentation

38 slides from Matador Resources's earnings presentation, Oct 26, 2022

  1. Slide 1: Third Quarter 2022 Earnings Release

    Third Quarter 2022 Earnings Release October 25, 2022

  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: Chairman's Remarks

    Chairman’s Remarks October 25, 2022

  4. Slide 4: Q3 2022 Highlights

    SLIDE A Q3 2022 Highlights  Reducing Debt  Reduced $775 million(1) since Q3 2020 – Over 50% Reduction!  Repurchased $300 million(1) in bonds  Better-Than-Expected Production  105,200 BOE per day in Q3: +4% vs. Guidance!(2)  Increasing Shareholder Return  Fixed Dividend now $0.40/share per ann

  5. Slide 5: San Mateo – Differentiated Midstream Assets Continue to Add Value to Matador

    San Mate and – Differentiated Midstream Assets Continue to Add Value to Matador(1) SLIDE B Third-Party Midstream Services Revenues(2) San Mateo Average Water Handling ($ in millions) (MBbl/d) Record Quarter! Record Quarter! $30 400 348 358 344 $24.7 350 $25 313 $21.9 284 $20.5 300 281 $19.9 $19.7 $2

  6. Slide 6: Borrowings Outstanding – Quarterly Results

    SLIDE C Borrowings Outstanding – Quarterly Results Over Half of Borrowings Repaid Since Q3 2020 ($ in millions) Revolver Borrowings $1,600 Senior Notes (Bond Debt) 6.0x $1,525 $1,490 $1,390 $1,400 $1,290 5.0x $475 $440 $1,200 $340 $1,170 $1,150 $240 $1,100 $120 $100 $50 4.0x $1,000 $906 $800 $757 $7

  7. Slide 7: MTDR's Corporate Credit Ratings Upgraded in September 2022

    SLIDE D MTDR’s Corporate Credit Ratings Upgraded in September 2022  Moody’s, S&P, and Fitch Corporate Ratings all upgraded  Matador is now a “double B” company across the board S&P / Fitch Moody’s (Previous) (Upgraded) (Previous) (Upgraded) (Previous) (Upgraded) BB Ba2 BB- Ba3 Ba3 BB- BB- B+ B1 B1

  8. Slide 8: Growing Production while Decreasing Costs!

    SLIDE E Growing Production while Decreasing Costs! Daily Oil and Natural Gas Production Drilling & Completion CapEx BOE/day $/foot 110,750 105,214 120,000 $1,750 $1,558 $1,520 93,969 93,210 Oil Natural Gas 90,033 Daily Production, BOE/d 87,288 100,000 $1,500 83,183 (1) $1,222 73,983 D&C CapEx/ft 73,

  9. Slide 9: Updated Oil and Natural Gas Production Guidance

    Updated Oil and Natural Gas Production Guidance SLIDE F As Provided on October 25, 2022 Previous Updated Estimate Estimate +21% YoY 37,600 38,000 +19% YoY 31,454 Total (MBOE) 27,514 95.5 97.0 81.7 Natural Gas (Bcf) 69.5 +22% YoY 21,700 21,850 Oil 15,931 17,840 (MBbl) 2020 2021 2022E July 2022E Updat

  10. Slide 10: Operational and Financial Results

    Operational and Financial Results October 25, 2022

  11. Slide 11: Matador Resources Company Overview

    Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Capitalization(1) $8.0 billion Avg. Daily Production – Q3 2022 105.2 MBOE/d DELAWARE BASIN HAYNESVILLE/ Net Debt / LTM Adj. EBITDA(2)(3) – Q3 2022 ~0.2x 124,800 net acres COTTON VALLEY Adj. Free Cash Flow(2) – Q3 2022 $269.1

  12. Slide 12: 2022 Priorities and Milestones – Free Cash Flow, Operational Excellence and Shareholder Returns

    2022 Priorities and Milestones – Free Cash Flow, Operational Excellence and Shareholder Returns 2022 Priorities Significant 2022 Milestones - Timeline Deliver Free Cash Flow 1 Next 11 Voni (Stateline) wells to sales • Grow production to >100,000 BOE/d Pay Down Debt 2 9 Rodney Robinson wells to sales

  13. Slide 13: Q3 2022 Selected Operating and Financial Results

    Q3 2022 Selected Operating and Financial Results Three Months Ended September 30, June 30, September 30, 2022 2022 2021 Net Production Volumes:(1) Oil (MBbl) 5,535 5,855 4,669 Natural gas (Bcf) 24.9 25.3 21.7 Total oil equivalent (MBOE) 9,680 10,078 8,283 Average Daily Production Volumes:(1) Oil (Bb

  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 2022 BOE down 5% sequentially; Q3 2022 BOE down 5% sequentially; 140,000 up 17% YoY 140,000 up 19% YoY 110,750 105,214 105,212 Oil Natural G

  15. Slide 15: Delivering Strong Well Results All Around the Delaware Basin!

    Delivering Strong Well Results All Around the Delaware Basin! TWIN LAKES Matador Acreage ~42,500 gross / ~22,400 net acres CURRENT DELAWARE ARROWHEAD RANGER ~40,500 gross / ~23,100 net acres BASIN ACTIVITY ~61,300 gross / ~22,900 net acres  Stateline: Turned to sales four Boros wells in Q3 2022 2 U

  16. Slide 16: Horizontal Wells Completed and Turned to Sales – Q3 2022

    Horizontal Wells Completed and Turned to Sales – Q3 2022  During the third quarter of 2022, Matador turned to sales a total of 53 gross (20.4 net) horizontal wells across its various operating areas. This total was comprised of 20 gross (18.5 net) operated wells and 33 gross (1.9 net) non-operated

  17. Slide 17: Further Strengthening Balance Sheet

    Further Strengthening Balance Sheet Repurchased $300 million in Bonds $1,200 Repurchased $300 million to date! $1,100 $1,050 $1,000 -$144 $906 $900 -$149 -$7 $800 $757 $750 $700 $600 March 31, 2022 June 30, 2022 September 30, 2022 October 25, 2022 17

  18. Slide 18: Hedging Profile – Remainder of 2022

    Hedging Profile – Remainder of 2022(1) Oil Collars Midland-Cushing Basis Swaps Natural Gas Collars ~50% hedged for Q4 2022 ~25% hedged for Q4 2022 ~50-55% hedged for Q4 2022 $110 20.0 2,700 $65 1,380 1,400 18.0 2,500 Natural Gas Volume Hedged (Bcf) 1,200 16.0 Oil Volume Hedged (MBbl) $7.61 Oil Volum

  19. Slide 19: Successful Transition of Pronto Midstream in Q3 2022

    Successful Transition of Pronto Midstream in Q3 2022 Optimized and Transitioned Pronto Midstream Assets Closing Date June 30, 2022 Fully Transitioned to MTDR September 30, 2022 Optimized Plant Performance Increased Ethane Recovery Rates Strategic Location Obtaining Right of Way to connect to San Mat

  20. Slide 20: San Mateo – Differentiated Midstream Asset Continues to Add Value to Matador

    San Mateo – Differentiated Midstream Asset Continues to Add Value to Matador(1) Matador owns 51% of San Mateo $200 $185 Water $175 $180 Oil $165 Natural Gas $154 San Mateo's Adjusted EBITDA(2) $160 Natural $140 Gas ($ in millions) $120 $113 $96 $100 Oil $80 $62 $60 Water $40 $31 $20 $12 $4 $0 2015 2

  21. Slide 21: 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

  22. Slide 22: 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 (MBbl/d) (MMcf/d) Q3 2022 up 3% sequentially; Record Quarter! Q3 2022 down 3% sequentially; 400 up 26% YoY 400 up 15% YoY 348 358 344 350

  23. Slide 23: Committed to Environmental, Social and Governance (ESG) Stewardship

    Committed to Environmental, Social and Governance (ESG) Stewardship Matador is committed to creating long-term value for its stakeholders in a responsible manner by pursuing sound growth and earnings objectives and exercising prudence in the uses of its assets and resources. In December 2021, Matado

  24. Slide 24: Full Year 2022 Guidance

    Full Year 2022 Guidance October 25, 2022

  25. Slide 25: Summary and Updated 2022 Guidance

    Summary and Updated 2022 Guidance (as Provided on October 25, 2022) Actual July 26, 2022 %YoY October 25, 2022 %YoY Guidance Metric 2021 Results 2022 Guidance Range Change(1) 2022 Guidance Range Change(1) Total Oil Production 17.8 million Bbl 21.4 to 22.0 million Bbl + 22% 21.7 to 22.0 million Bbl +

  26. Slide 26: 2022 Capital Investment Plan Summary

    2022 Capital Investment Plan Summary(1) (As Provided on October 25, 2022) Full Year 2022E CapEx(2) – $815 to $895 million 2022E Wells Turned to Sales Actual October 2022 % YoY 2021 Results Guidance Change(3) Gross Net Drilling, Completing, Equipping $513 million $765 to $835 million +56% Operated 81

  27. Slide 27: Managing Costs Well in 2022: Driven by Efficiency Gains and Execution

    Managing Costs Well in 2022: Driven by Efficiency Gains and Execution Drilling & Completion Improvements Capital Efficiency Drilling & Completion (D&C) CapEx/ft(1)(2) ($/ft) Percentage of Two-Mile Laterals Avg. Lateral 4,700’ 5,700’ 8,800’ 10,500’ 9,900’ Length $1,528 +21% +54% +19% -6% 98% 90% -24%

  28. Slide 28: 2022E Operating Cost Estimates (Unit Costs per BOE)

    2022E Operating Cost Estimates (Unit Costs per BOE) (As of and as Provided on October 25, 2022)  Matador provides the following updated estimates for its 2022 unit operating costs as shown below 2021 Q3 2022 2022E 1 Production taxes, transportation and processing (“PTTP”) $5.69 $7.64 $7.50 to $8.00

  29. Slide 29: Appendix

    ay, {Matador fies RESOURCES COMPANY Appendix MIDR NYSE

  30. Slide 30: Matador Resources and San Mateo Credit Facilities

    Increased by 48% in April 2022! Reduced to $0 in April 2022! Matador Resources and San Mateo Credit Facilities Matador Credit Agreement Summary Bank group led by Royal Bank of Canada Last Elected Borrowings Letters of Credit Financial Covenant: Facility Maturity Borrowing Financial Covenant: Reserve

  31. Slide 31: Simple Balance Sheet – No Near-Term Debt Maturities

    Simple Balance Sheet – No Near-Term Debt Maturities NO REVOLVER BORROWINGS REPURCHASING BONDS Repaid $475 million since Q3 2020 ~$300 million YTD Q3 2022 LEVERAGE RATIO Strong, supportive bank group REDUCED TO 0.2x(1) Lowest since IPO (Q1 2012) led by Royal Bank of Canada Debt Maturities ($ in milli

  32. Slide 32: Maintaining Low CapEx During High Commodity Prices

    Maintaining Low CapEx During High Commodity Prices Continued Improvement in Execution and Efficiency Gains Drilling & Completion (D&C) CapEx/ft(1) Operational Improvement Spotlight: $1,750 D&C CapEx/ft $120 “Remote” Simul-Frac WTI Oil Price  Remote Simul-Frac is an operation to simultaneously $1,50

  33. Slide 33: 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

  34. Slide 34: 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 2013

  35. Slide 35: 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,

  36. Slide 36: 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

  37. Slide 37: 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 Ended (In tho

  38. Slide 38: 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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