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October 2014 Investor Presentation – Matador Resources Company

Matador Resources Company · Oct 1, 2014 · 64 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. October 2014 Investor Presentation – Matador Resources Company – slide 1
    Investor Presentation October 2014 NYSE: MTDR
  2. October 2014 Investor Presentation – Matador Resources Company – slide 2
    Company Summary
  3. October 2014 Investor Presentation – Matador Resources Company – slide 3
    Matador History Predecessor Entities Foran Oil & Matador Petroleum Founded by Joe Foran in 1983 most participants are still shareholders today Foran Oil funded with 270,000 in contributed capital from 17 friends and family members…
  4. October 2014 Investor Presentation – Matador Resources Company – slide 4
    Company Overview Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 73.3 million common shares Share Price(2) 22.07/share Market Capitalization(1)(2) 1.6 billion 2012 Actual 2013 Actual 2014 Guidance Capital Spending 335…
  5. October 2014 Investor Presentation – Matador Resources Company – slide 5
    Matadors Execution History Doing What We Say Matador continues to execute on its core strategy of acquiring great assets, retaining a best-in-class workforce, maintaining a strong balance sheet and generating significant shareholder…
  6. October 2014 Investor Presentation – Matador Resources Company – slide 6
    Delivering Strong Results Q2 2014 Achievements 2014 Capital Budget and Guidance Oil Production Company Record 570 million capital budget for 2014 8,809 Bbl/d; 79% growth versus Q2 2013 Adjusted EBITDA(1) of 270 to 290 million Oil &…
  7. October 2014 Investor Presentation – Matador Resources Company – slide 7
    Matador Resources Company Overview Market Capitalization(1) 1.6 billion Average Daily Production(2) 16,100 BOE/d Oil (% total) 9,100 Bbl/d (57%) Natural Gas (% total) 41.8 MMcf/d (43%) Proved Reserves 6/30/14 57.2 million BOE % Proved…
  8. October 2014 Investor Presentation – Matador Resources Company – slide 8
    Asset Highlights Permian Basin Eagle Ford Shale Haynesville Shale Exploratory and Delineation Program Development Program Natural Gas Bank Currently running a two-rig drilling Currently running a two walking rig 25,000 net acres in…
  9. October 2014 Investor Presentation – Matador Resources Company – slide 9
    Keys to Matadors Success People We have a strong, committed technical and financial team in place, and we continue to make additions and improvements to our staff, our capabilities and our process Board and Special Advisor additions…
  10. October 2014 Investor Presentation – Matador Resources Company – slide 10
    Eagle Ford South Texas
  11. October 2014 Investor Presentation – Matador Resources Company – slide 11
    2014 South Texas Plan Details 2014 projected capital expenditures of 318 million or 56% of total 2-rig program with almost all of the 2014 South Texas capital budget directed to the Eagle Ford shale Drill and/or complete or…
  12. October 2014 Investor Presentation – Matador Resources Company – slide 12
    Eagle Ford Overview Operations Summary 94 gross (80.6 net) wells(1) producing from the Eagle Ford Proved Reserves 6/30/14 21.4 million BOE An increase in oil production from 330 Bbl/d(2) in % Proved Developed 59% 2011 to 7,600…
  13. October 2014 Investor Presentation – Matador Resources Company – slide 13
    Eagle Ford Measured Depths and Well Costs EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST Nickel Ranch 39,243 gross / 29,165 net acres Measured Depth: 17,000 18,000 Hennig Well Costs: 8-10 million 80-acre spacing Uvalde Medina Gonzales San…
  14. October 2014 Investor Presentation – Matador Resources Company – slide 14
    Operational Improvements (Normalized) Overview Eagle Ford Drilling Costs / Drilled Foot(1) West Central East Over the past two years, made significant progress and increased 271 258 260 knowledge of how to drill, complete 242 and…
  15. October 2014 Investor Presentation – Matador Resources Company – slide 15
    Evolution of Matador Eagle Ford Frac Design Gen 2 Gen 3 Gen 4 Gen 5 Gen 6 650 Mlbs 515 Mlbs Proppant 500 Mlbs 405 Mlbs Pumped(1) 375 Mlbs Fluid Volume 11,750 Bbl 11,750 Bbl Pumped 7,825 Bbl 9,550 Bbl 5,770 Bbl 300 ft.…
  16. October 2014 Investor Presentation – Matador Resources Company – slide 16
    Frac Generation Comparison (all wells normalized to 5,000 horizontal) 120,000 120,000 110,000 GEN 2 (80 Acre) GEN 2 (80 Acre) 110,000 100,000 GEN 4 (80 Acre) GEN 4 (80 Acre) 100,000 90,000 GEN 5 (80 Acre) 90,000 GEN 5 (80 Acre)…
  17. October 2014 Investor Presentation – Matador Resources Company – slide 17
    Downspacing Comparison (all wells normalized to 5,000 horizontal) 60000 60000 Average 40 Acre (Gen 5-6) Average 40 Acre (Gen 5-6) 50000 Average 80 Acre (Gen 2-4) 50000 Average 80 Acre (Gen 2-4) Cumulative Oil Production (Bbl)…
  18. October 2014 Investor Presentation – Matador Resources Company – slide 18
    Improvement in Drilling Efficiency Moving Towards Batch Drilling Single Well Drilling PAD Drilling BATCH Drilling EXPLORATION 2010 1/3 RIG 60 to 70% increase 2011 2/3 RIG in Rig Efficiency from 2012 to 2014E 2012 2 RIGS 2013 1…
  19. October 2014 Investor Presentation – Matador Resources Company – slide 19
    Compressing Drill Times Improving rig fleet High tech, fast moving, faster drilling, walking style rigs Improving Rate of Penetration (ROP) Bit selection and development Bottom Hole Assembly (BHA) selection Rotary steerable…
  20. October 2014 Investor Presentation – Matador Resources Company – slide 20
    Progression of Drilling Rig Technology from 2010 to 2014 Advancing Rig Technology HYDRAULIC CATWALK AC DRIVE ROUND 1600 HP INTEGRATED APEX RIG BOP WALKING RIG ELECTRIC SYSTEM BOTTOM MUD PUMPS TOP DRIVE (FAST MOVE) HANDLER…
  21. October 2014 Investor Presentation – Matador Resources Company – slide 21
    Artificial Lift Reducing Natural Production Declines Flowing Rod Pumping Gas Lifting Benefits of Gas Lift Accelerates production Accelerated Production Reduces LOE 300 Bbl/d Lower maintenance Helps wells recover faster from…
  22. October 2014 Investor Presentation – Matador Resources Company – slide 22
    Buda Wells Activity Since January 1, 2010 Potential Test TX American Blackbrush O&G Resources 10 Buda Completions Buchanan-1H May 2011 May 2014 5/3/2013 Cum: 250 MBbl Blackbrush O&G 14 mo avg:: 1.4 Bcf Oppenheimer-101H 285 Bbl/d…
  23. October 2014 Investor Presentation – Matador Resources Company – slide 23
    Permian Basin Southeast New Mexico and West Texas
  24. October 2014 Investor Presentation – Matador Resources Company – slide 24
    2014 Permian Basin Plan Details 2014 projected capital expenditures of 190 million or 33% of total Continue 2-rig program working in Lea and Eddy Counties, NM and Loving County, TX Drill and/or complete or participate in 14 gross…
  25. October 2014 Investor Presentation – Matador Resources Company – slide 25
    Permian Basin TWIN LAKES Permian Basin Total 38,982 gross / 27,456 net acres Gross Acres 98,440 acres Net Acres 64,982 acres INDIAN DRAW / RUSTLER BREAKS Successful performance of first 3 initial horizontal wells(1) 21,023 gross /…
  26. October 2014 Investor Presentation – Matador Resources Company – slide 26
    Technology Transfer and Application from Eagle Ford to Permian New rigs arriving in 2015 have even more advanced technology than current Eagle Ford rigs Walking packages, hydraulic catwalks, reconfiguration of rig layouts, high…
  27. October 2014 Investor Presentation – Matador Resources Company – slide 27
    Permian Basin Petroleum Systems and the Wolfcamp Kitchens West East DELAWARE BASIN CENTRAL BASIN MIDLAND BASIN PLATFORM 23,000 Wolfcamp Sediment Fill Simpson Source Kitchens Now Unconventional Resource Plays 70,000…
  28. October 2014 Investor Presentation – Matador Resources Company – slide 28
    Wolf-Bone Geological Setting, Predicting Where the Better Rocks Are 265 mya End of Bone Springs Warmer Delaware Basin Delaware Mountain Group San Andres 1st, 2nd, 3rd Bone Spring Sands Yeso Abo Sands confined to channels…
  29. October 2014 Investor Presentation – Matador Resources Company – slide 29
    Targeting Multiple Benches in Permian Appraisal Program GR RES Brushy Canyon Sand Bone Spring Lime Matador has successfully Upper Avalon Shale drilled Lower Avalon Shale horizontal wells targeting five First Bone Spring Sand…
  30. October 2014 Investor Presentation – Matador Resources Company – slide 30
    Wolf / Loving Prospect Area Johnson 44-02S-B53 204H Location of Matador wells Wolfcamp A IP: 1,286 BOE/d Dorothy White 1H 793 Bbl/d; 3.0 MMcf/d Loving Wolfcamp A 11,183 gross (7,155 net) acres 9 mo.cum: 226,000 BOE (68% oil) 50…
  31. October 2014 Investor Presentation – Matador Resources Company – slide 31
    Ranger / Querecho Plains Prospect Area Jim Rolfe 22-18-34 RN State 131Y 3rd Bone Spring Sand Currently completing Location of Matador wells Pickard State 20-18-34 2H Wolfcamp D IP: 270 BOE/d 232 Bbl/d; 225 Mcf/d Pickard State…
  32. October 2014 Investor Presentation – Matador Resources Company – slide 32
    Indian Draw / Rustler Breaks Prospect Area Rustler Breaks 12-24-27 1H Location of Matador wells Wolfcamp B 4 mo.cum: 86,000 BOE (45% oil) 21,023 gross (14,785 net) acres Mewbourne Oil Co. Layla 35 MD Fee 1H 108 gross (82.8 net)…
  33. October 2014 Investor Presentation – Matador Resources Company – slide 33
    Twin Lakes Prospect Area Saunders Denton Location of Matador well Penn/Perm Caudill Wolfcamp/Devonian 43 MMBbl, 62 Bcf Penn/Perm 157 MMBbl, 78 Bcf 8.1 MMBbl, 6.0 Bcf Dean Penn/Perm 9.5 MMBbl, 6.0 Bcf 38,982 gross (27,456 net)…
  34. October 2014 Investor Presentation – Matador Resources Company – slide 34
    Twin Lakes Area Cross Section A A Wolfcamp D 400ft TEST VOLUMES: 268 Bbl/d oil TEST VOLUMES: 350 Mcf/d gas 118 Bbl/d oil No water 625 Mcf/d gas 1,155 Bbl/d water 35
  35. October 2014 Investor Presentation – Matador Resources Company – slide 35
    Matador Permian Basin First Generation Frac Designs Bone Spring Wolfcamp 550 Mlbs 600 Mlbs Proppant Pumped(1) Fluid Volume 11,750 Bbl 11,750 Bbl Pumped 300 ft. Geometry of the Frac 0 ft. Note: Figure depicts…
  36. October 2014 Investor Presentation – Matador Resources Company – slide 36
    Haynesville Shale
  37. October 2014 Investor Presentation – Matador Resources Company – slide 37
    2014 Tier 1 Haynesville Shale Plan 2014 projected capital expenditures of 62 million or about 11% of total Estimated participation in up to 56 gross (7.8 net) non-operated wells Chesapeake may drill up to 30 gross (6.3 net to Matador)…
  38. October 2014 Investor Presentation – Matador Resources Company – slide 38
    Significant Option Value on Natural Gas Elm Grove Area TIER 3: 2 4 Bcf NW Louisiana / East Texas(1) BOSSIER TIER 2: 4 6 Bcf Proved Reserves(2) 187.0 Bcfe CADDO 3,600 BOE/d BIENVILLE Daily Production(3) (99% natural gas) TIER 1: 6…
  39. October 2014 Investor Presentation – Matador Resources Company – slide 39
    Elm Grove Tier 1 Haynesville Chesapeake Operated 300 275 10 Bcf - 7.0mm D&C Cost 250 10 Bcf - 8.0mm D&C Cost 225 10 Bcf - 9.0mm D&C Cost Estimated Rate of Return, % 200 175 150 125 100 75 Matadors Advantaged…
  40. October 2014 Investor Presentation – Matador Resources Company – slide 40
    2014 Capital Investment Plan
  41. October 2014 Investor Presentation – Matador Resources Company – slide 41
    Summary and 2014 Guidance Continue 4-rig program full-time in 2H 2014 2 rigs in the Eagle Ford and 2 rigs in the Permian Eagle Ford development expected to be the major driver of our growth in 2014 Permian drilling program designed…
  42. October 2014 Investor Presentation – Matador Resources Company – slide 42
    2014 Capital Investment Plan Summary Continue 4-rig program full time in H2 2014: 2 rigs in the Eagle Ford and 2 rigs in the Permian 2014E capital expenditures of 570 million Eagle Ford development expected to be the major driver of…
  43. October 2014 Investor Presentation – Matador Resources Company – slide 43
    Funding for 2014 Capital Investment Plan Anticipate funding 2014 capital expenditures through proceeds from May 2014 equity offering, operating cash flows and borrowings under revolving credit facility 0.7 million barrels of oil…
  44. October 2014 Investor Presentation – Matador Resources Company – slide 44
    Investment Highlights Strong Growth Profile YE2011 to 2014E oil production CAGR of 176%(1) with expected year-over-year growth of 52%(1) in 2014 with Increasing Focus on Oil / Liquids 89% of 2014E CapEx program focused on oil /…
  45. October 2014 Investor Presentation – Matador Resources Company – slide 45
    Appendix
  46. October 2014 Investor Presentation – Matador Resources Company – slide 46
    Oil Production and Revenues Through Q2 2014 Average Daily Oil Production Average Daily Natural Gas Production (Bbl/d) (MMcf/d) 8,809 9,000 50.0 44.6 Q2 increase with NM, non-op production All-time high oil production in Q2 7,344…
  47. October 2014 Investor Presentation – Matador Resources Company – slide 47
    Quarterly Performance Metrics Through Q2 2014 Average Daily Equivalent Production Oil and Natural Gas Revenues (BOE/d) ( in mm) 99.1 100.0 16,500 15,424 15,000 10 to 15% shut-in at times during Q2 All-time high in Q2 81.9 13,482…
  48. October 2014 Investor Presentation – Matador Resources Company – slide 48
    Quarterly Expense Metrics Through Q2 2014 Production Taxes and Marketing Lease Operating (per BOE) (per BOE) 6.50 11.17 11.11 10.53 7.00 12.00 Reflects growth in oil Another solid LOE 5.61 production/revenues; some…
  49. October 2014 Investor Presentation – Matador Resources Company – slide 49
    Matador Provides Growth on a Per Share(1) Basis PV-10(2) per Share Adjusted EBITDA(3)(4) per Share ( per share) ( per share) 11.15 3.99 7.84 3.26 5.82 2.15 2.92 1.17 1.75 0.58 0.38 2009 2010 2011 2012 2013 2009 2010…
  50. October 2014 Investor Presentation – Matador Resources Company – slide 50
    Matadors Continued Growth Average Daily Production Oil Production Mix (MBOE/d) (% of Average Daily Production) 11.7 50% 9.0 37% 7.0 3.9 2.3 1.5 7% 6% 4% 2% 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013…
  51. October 2014 Investor Presentation – Matador Resources Company – slide 51
    Semi-Annual Performance Metrics Through 2014 Oil Production Oil Equivalent Production (Bbl in thousands) (BOE in thousands) 3,475 1,787 1,463 2,475 2,341 1,225 1,944 1,768 908 1,525 729 1,277 485 84 (2) (3) 2H 2011…
  52. October 2014 Investor Presentation – Matador Resources Company – slide 52
    Semi-Annual Performance Metrics and Hypothetical 2015 Stress Case Scenario For 2015, assumes: Oil at 80 per Bbl; 570mm CapEx; Rigs: 1 Eagle Ford + 4 Permian + Non-Op Haynesvi lle Oil Production Total Oil and Natural Gas Production (Bbl…
  53. October 2014 Investor Presentation – Matador Resources Company – slide 53
    Credit Agreement Status Strong, supportive bank group led by RBC Borrowing base at 450 million, based on July 31, 2014 reserves, increased from 385 million based on December 31, 2013 reserves, and increased from 125 million at time…
  54. October 2014 Investor Presentation – Matador Resources Company – slide 54
    Hedging Profile Hedges in Place for Remainder of 2014 and 2015 At October 14, 2014, Matador had: Oil Hedges (Costless Collars) 2014 2015 0.7 million barrels of oil hedged for Total Volume Hedged by Ceiling 663,800 Bbl 1,680,000 Bbl…
  55. October 2014 Investor Presentation – Matador Resources Company – slide 55
    SEC Proved Reserves Value Growth By Area Haynesville/CV Permian 147.3 million, 18% 83.1 million, 10% Haynesville/CV Permian 82.9 million, 13% 31.9 million, 5% Haynesville/CV Permian 52.2 million, 10% 2.9 million, 1% Eagle…
  56. October 2014 Investor Presentation – Matador Resources Company – slide 56
    MTDR Trading versus PV-10 Growth since IPO 32.00 900.0 28.00 800.0 700.0 24.00 600.0 20.00 MTDR Closing Price PV-10, in millions 500.0 16.00 400.0 12.00 300.0 8.00 200.0 4.00 100.0 0.00 0.0 IPO…
  57. October 2014 Investor Presentation – Matador Resources Company – slide 57
    MTDR Trading versus BOE/d Production since IPO 32.00 20,000 28.00 17,500 24.00 15,000 Daily Oil Equivalent Production, BOE/d 20.00 12,500 MTDR Closing Price 16.00 10,000 12.00 7,500 8.00 5,000 4.00…
  58. October 2014 Investor Presentation – Matador Resources Company – slide 58
    MTDR Trading versus Growing Permian Acreage since IPO 32.00 70,000 28.00 60,000 24.00 Permian Acreage Position, Net Acres 50,000 20.00 MTDR Closing Price 40,000 16.00 30,000 12.00 20,000 8.00 10,000…
  59. October 2014 Investor Presentation – Matador Resources Company – slide 59
    Board of Directors and Special Advisors Expertise and Stewardship Board Members Professional Experience Business Expertise David M. Laney - Past Chairman, Amtrak Board of Directors Law and Investments Lead Director - Former Partner,…
  60. October 2014 Investor Presentation – Matador Resources Company – slide 60
    Proven Management Team Experienced Leadership Industry Matador Management Team Background and Prior Affiliations Experience Experience Joseph Wm. Foran - Matador Petroleum Corporation, Foran Oil Company and James Cleo 33 years Since…
  61. October 2014 Investor Presentation – Matador Resources Company – slide 61
    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…
  62. October 2014 Investor Presentation – Matador Resources Company – slide 62
    Adjusted EBITDA Reconciliation The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities,…
  63. October 2014 Investor Presentation – Matador Resources Company – slide 63
    Adjusted EBITDA Reconciliation The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities,…
  64. October 2014 Investor Presentation – Matador Resources Company – slide 64
    Adjusted EBITDA Reconciliation The following table presents our calculation of Adjusted EBITDA and reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities,…

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