Matador Resources Company · NYSE:MTDR
Matador Resources — Q2 2022 Earnings Presentation
39 slides from Matador Resources's earnings presentation, Jul 26, 2022
Slide 1: Second Quarter 2022 Earnings Release
Second Quarter 2022 Earnings Release July 26, 2022
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
Slide 3: Chairman’s Remarks
Chairman’s Remarks July 26, 2022
Slide 4: Q2 2022 Highlights
SLIDE A Q2 2022 Highlights Doubled the Dividend Now $0.40/share per annum Reduced Debt No outstanding borrowings on revolving credit facility Repurchased $158 million in bonds(1) Increased Production Record 110,750 BOE per day in Q2 Record Financial Results Oil and natural gas reve
Slide 5: Growing Production while Decreasing Costs!
SLIDE B Growing Production while Decreasing Costs! Daily Oil and Natural Gas Production Drilling & Completion CapEx BOE/day $/foot Q2 2022 production at all-time high! 110,750 $1,750 $1,558 $1,520 120,000 $1,427 Oil Natural Gas Q2 2022 D&C/ft 93,969 93,210 $1,500 near all-time lows! 90,033 87,288 10
Slide 6: Continued Progress in All Parts of San Mateo’s Midstream Business
Continued Progress in All Parts of San Mateo’s SLIDE C Midstream Business (51% Owned by Matador) San Mateo Average Water Handling San Mateo Average Natural Gas Gathering (MBbl/d) (MMcf/d) Q2 2022 up 1% sequentially; Record Quarter! Q2 2022 up 10% sequentially; Record Quarter! 400 up 24% YoY 400 up 1
Slide 7: Revolver Borrowings Outstanding – Quarterly Results
SLIDE D Revolver Borrowings Outstanding – Quarterly Results No RBL Borrowings Outstanding! ($ in millions) $2,000 $1,500 $1,000 Borrowing Base $800 Lowest leverage since IPO! $600 $400 $200 $0 Free Cash Flow(1): 2021: $487 $246 $454 Leverage Ratio(2): 0.2x 2.8x 2.9x 2.5x 1.8x 1.3x 1.1x 0.8x 0.5x Rea
Slide 8: Summary and Updated 2022 Guidance
Summary and Updated 2022 Guidance SLIDE E (as Provided on July 26, 2022) Actual February 22, 2022 %YoY July 26, 2022 %YoY Guidance Metric 2021 Results 2022 Guidance Range Change(1) 2022 Guidance Range Change(1) Total Oil Production 17.8 million Bbl 21.0 to 22.0 million Bbl + 21% 21.4 to 22.0 million
Slide 9: Operational and Financial Results
Operational and Financial Results July 26, 2022
Slide 10: Matador Resources Company Overview
Matador Resources Company Overview Market Snapshot NYSE Symbol MTDR Market Capitalization(1) $6.1 billion Avg. Daily Production – Q1 2022 110.8 MBOE/d DELAWARE BASIN HAYNESVILLE/ Net Debt / LTM Adj. EBITDA(2)(3) – Q2 2022 ~0.5x 124,800 net acres COTTON VALLEY Adj. Free Cash Flow(2) – Q2 2022 $453.8
Slide 11: 2022 Priorities and Milestones
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
Slide 12: Strong Results for Second Quarter 2022
Strong Results for Second Quarter 2022 • Generated adjusted free cash flow(1) of $454 million in Q2 2022 – Above Company Expectations! Record Financial • Oil and natural gas revenues of $893 million, Adjusted EBITDA(1) of $664 million and San Mateo Adjusted Results EBITDA(1) of $53 million – All Com
Slide 13: Q2 2022 Selected Operating and Financial Results
Q2 2022 Selected Operating and Financial Results Three Months Ended June 30, March 31, June 30, 2022 2022 2021 (1) Net Production Volumes: Oil (MBbl) 5,855 4,820 4,855 Natural gas (Bcf) 25.3 21.8 21.8 Total oil equivalent (MBOE) 10,078 8,457 8,482 (1) Average Daily Production Volumes: Oil (Bbl/d) 64
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) Record Quarter! (BOE/d) Record Quarter! 110,750 Q2 2022 BOE up 18% sequentially; Q2 2022 BOE up 18% sequentially; 105,141 120,000 up 19% YoY 120,000 up
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: Recently drilled four Boros wells – expected to
Slide 16: 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: D&C CapEx/ft “Remote” Simul-Frac WTI Oil Price Remote Simul-Frac is an operation to simultaneously Q2 2022 D&C/ft co
Slide 17: Horizontal Wells Completed and Turned to Sales – Q2 2022
Horizontal Wells Completed and Turned to Sales – Q2 2022 During the second quarter of 2022, Matador turned to sales a total of 29 gross (7.7 net) horizontal wells in its various Delaware Basin operating areas. This total included 11 gross (6.4 net) operated wells in the Rustler Breaks asset area h
Slide 18: Further Strengthening Balance Sheet
Further Strengthening Balance Sheet Repurchased $158 million in Bonds Senior Notes Outstanding @ 5.875% Coupon ($ in millions) (As of July 25, 2022) $1,200 Repurchased $158 million to date! $1,100 $1,050 $1,000 -$144 -$14 $906 $900 $892 $800 $700 $600 March 31, 2022 June 30, 2022 July 25, 2022 18
Slide 19: Hedging Profile – Remainder of 2022
Hedging Profile – Remainder of 2022(1) Oil Collars Midland-Cushing Basis Swaps Natural Gas Collars ~50% hedged for Q3-Q4 2022 ~25% hedged for Q3-Q4 2022 ~75% hedged for Q3 2022 ~50-55% hedged for Q4 2022 $110 $110 $6.70 $65 $65 $3.50 $14.00 $6.00 $7.61 $138 $138 $7.00 $3.68 $70 $70 $3.50 $14.00 $6.0
Slide 20: Strategic Acquisition of Summit’s Gas System (Pronto Midstream)
Strategic Acquisition of Summit’s(1) Gas System (Pronto Midstream) Deal Highlights Purchase Price(2) $75 million Natural Gas Processing Plant 60 million cubic feet per day (MMcf/d) Natural Gas Gathering System ~45 miles of pipeline; 3 compressor stations Takeaway Capacity to Waha 50 MMcf/d(3) on the
Slide 21: San Mateo – Differentiated Midstream Asset Continues to Add Value
San Mateo – Differentiated Midstream Asset Continues to Add Value to Matador(1) Matador owns 51% of San Mateo Water Oil Natural Gas Natural Gas Oil Water (3) (4) 2022 Note: Figures (i) reflect the combined Adjusted EBITDA for San Mateo and San Mateo II prior to their October 2020 merger, including a
Slide 22: 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 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
Slide 24: Full Year 2022 Guidance
Full Year 2022 Guidance July 26, 2022
Slide 25: Updated Oil and Natural Gas Production Guidance
Updated Oil and Natural Gas Production Guidance As Provided on July 26, 2022 +22% 37,300 37,600 +17% 31,454 Total (MBOE) 27,514 95.0 95.5 Natural Gas 81.7 (Bcf) 69.5 +20% 21,500 21,700 Oil 15,931 17,840 (MBbl) 2020 2021 2022E Original 2022E Updated (1) (2) Guidance Guidance ~75,200 BOE/d Avg ~86,200
Slide 26: 2022 Production Guidance Increased
2022 Production Guidance Increased As Provided on July 26, 2022 Despite divestments and production deferments to 2023 from accelerated Rodney Robinson and offset operator completions, Matador increased its full year 2022 production guidance. Full Year Total Production Forecast (MMBOE) 38.2 38.135 MM
Slide 27: 2022 Capital Investment Plan Summary
2022 Capital Investment Plan Summary(1) (As Provided on July 26, 2022) Full Year 2022E CapEx(2) – $815 to $895 million (Delaware: Adding 7th operated rig beginning in Q3 2022) 2022E Wells Turned to Sales February 2022 July 2022 Guidance(3) Guidance(1) Gross Net Drilling, Completing, Equipping $640 t
Slide 28: 2022 D/C/E Capital Expenditure Guidance Revisions
2022 D/C/E Capital Expenditure Guidance Revisions As Provided on July 26, 2022 Increases to D/C/E CapEx guidance driven primarily by activity acceleration in the Rodney Robinson leasehold in western Lea County, New Mexico and strategic acreage trades. Increases associated with service cost inflation
Slide 29: Managing Costs Well in 2022: Driven by Efficiency Gains and Execution
Managing Costs Well in 2022: Driven by Efficiency Gains and Execution Drilling & Completion Improvements Capital Efficiency Drilling & Completion (D&C) CapEx/ft(1)(2) ($/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%
Slide 30: 2022E Operating Cost Estimates (Unit Costs per BOE)
2022E Operating Cost Estimates (Unit Costs per BOE) (As of and as Provided on July 26, 2022) Matador provides the following updated estimates for its 2022 unit operating costs as shown below 2021 Q1 2022 Q2 2022 2022E Production taxes, transportation and processing 1 $5.69 $7.07 $8.50 $7.75 to $8.
Slide 31: Appendix
aN, ¢ Matador | RESOURCES COMPANY tins Appendix MITDR NYSE
Slide 32: 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
Slide 33: 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 ~$158 million in Q2/Q3 2022 Q2 2022 LEVERAGE RATIO Strong, supportive bank group REDUCED TO 0.5x(1) led by Royal Bank of Canada Lowest since IPO (Q1 2012) Debt Maturities (
Slide 34: 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 35: 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
Slide 36: 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 37: 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 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,
Slide 39: 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
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