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IPAA OGIS 2015 NEW YORK – Matador Resources Company

Matador Resources Company · Apr 21, 2015 · 75 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. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 1
    Investor Presentation April 2015 NYSE: MTDR
  2. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 2
    Company Summary
  3. IPAA OGIS 2015 NEW YORK – 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. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 4
    Company Overview Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 85.2 million common shares Share Price(2) 27.24/share Market Capitalization(1)(2) 2.3 billion 2014 Actual 2015 Guidance(3) % Change Capital Spending 610…
  5. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 5
    Matador Resources Company Operations Overview Market Capitalization(1) 2.3 billion Avg. Daily Production Q4 2014(2) 20,807 BOE/d +74%* 30% of total production Almost no oil Oil (% total) 11,062 Bbl/d (53%) 65% of total natural gas…
  6. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 6
    Matadors Execution History Doing What We Say Matador continues to execute on its core strategy of acquiring great assets, developing a highly professional, committed workforce, maintaining a strong balance sheet and generating…
  7. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 7
    Oil and Natural Gas Proved Reserves and PV-10(1) Growth By Area Permian 246.2 million, 24% Permian Permian 31.9 million, 5% 2.0 million, 1% Haynesville/CV 82.9 million, 13% Haynesville/CV 27.6 million, 6% Haynesville/CV 193.4…
  8. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 8
    Financial Strategy Be prudent with our investors capital Reduced drilling program from 5 rigs at YE2014 to 2 rigs currently due to lower commodity prices, with primary focus on Permian (Delaware) Basin 2015E CapEx highest in Q1 2015…
  9. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 9
    Matadors Continued Production Growth Average Daily Oil Production Average Daily Natural Gas Production (Bbl/d) (MMcf/d) 14,000 80.0 9,095 39.8 41.9 34.1 35.4 5,843 23.0 3,317 91 422 (1) (1) 2010 2011 2012 2013 2014…
  10. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 10
    Matador Has Experienced Strong Reserves and Adjusted EBITDA(1) Growth in Recent Years Growth in PV-10(2) Over Last 5 Years PV-10(2) per Share 1,200 ( per share) 14.86 SEC Pricing 91.48 oil 1,100 Oil, /Bbl 4.35 gas Gas, /MMBtu…
  11. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 11
    Previous Oil Price Declines Have Created Opportunities for Matador(1) Comparison of Major Oil Corrections and Major Matador Turning Points Since 1980 Length of Oil Price % Increase in Oil % Change in Decline Price Date Event Oil…
  12. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 12
    Keys to Matadors Success Over Last 35 Years(1) 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 processes Board and…
  13. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 13
    Matador Resources Investment Highlights High Quality Asset Base in Attractive Areas with Multi-year Drilling Inventory Attractive Growth Company with Oil / Liquids Focus Strong Financial Position with Low Debt and Substantial…
  14. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 14
    Permian Basin Southeast New Mexico and West Texas
  15. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 15
    Delaware Basin A World Class Hydrocarbon System West East DELAWARE BASIN CENTRAL BASIN MIDLAND BASIN PLATFORM 23,000 Wolfcamp Sediment Fill Simpson Source Kitchens Now Unconventional Resource Plays 70,000 square mile…
  16. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 16
    Permian Basin Acreage Position and Recent Test Results TWIN LAKES Permian Basin Total 42,538 gross / 29,073 net acres Gross Acres 152,370 acres Net Acres 85,375 acres RUSTLER BREAKS Successful performance of initial horizontal…
  17. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 17
    Delaware Basin Combination Attributes Concho CTA State Com 4H: 1,063 BOE per day 830 Bbl oil + 1.4 MMcf natural gas per day (first 30 days) TWIN LAKES Concho CTA State Com 3H: 992 BOE per day 830 Bbl oil + 1.0 MMcf natural gas per…
  18. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 18
    Combination Acreage a Strategic Fit CTA State Com 3H - IP(30): 992 BOE/d (84% Oil) - 37.6 MBO Cum to date (46 days) CTA State Com 1 Type Log CTA State Com 4H - IP(30): 1,063 BOE/d (78% Oil) - 26.3 MBO Cum to date (33…
  19. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 19
    Matador is a Significant Delaware Basin Player Matadors 85,400 net acres place it among the largest operators in the Delaware Basin Matador holds largest Delaware Basin acreage position among small and mid-cap publicly traded energy…
  20. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 20
    Matadors Acreage Among Other Significant Delaware Basin Activity Northern Delaware (HEYCO and Ranger Prospect Areas) Lea/Eddy Counties, NM Other Operators Eddy Lea NW Shelf Concho EOG Chevron Concho Devon Mewbourne…
  21. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 21
    4,000 feet of Hydrocarbon Column Creates Opportunity Determining Good, Better, Best important as potential INTER-Formational Stacked Pay exceeds inter-formational stacked pay GR RES Bone Spring Lime 2015 program will expand on…
  22. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 22
    2015 Permian Basin Drilling Plan 36 gross (23.7 net) wells planned in 2015 - TWIN LAKES 42,538 gross / 29,073 net acres 2015 Permian Basin Program 33 gross (21.0 net) wells turned to sales Estimated capital expenditures of 245…
  23. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 23
    Wolf Inventory Multi-Pay Development Potential Development Well D&C(1) CapEx EUR(2) (MBOE) Bone Spring 7 8 million 450 600 Wolfcamp 9 10 million 650 1,100 Full Development Spacing Pattern (Cross-Section View) Gross Wells 1…
  24. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 24
    Wolf Area Wolfcamp X/Y Wells Performing Above Expectations 10000 Dorothy Dorothy WhiteWhite 1H 1H has produced has produced 310,000 310,000 BOE BOE (66%(66% oil) oil) inin12.5 12.5months months X Norton Norton Schaub…
  25. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 25
    Rustler Breaks Inventory Multi-Pay Development Inventory Development Well D&C(1) CapEx EUR(2) (MBOE) Bone Spring 6 7 million 350 650 Wolfcamp 7 8 million 500 900 Full Development Spacing Pattern (Cross-Section View) Gross Wells…
  26. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 26
    Rustler Breaks Area Wolfcamp B Well Performing Above Expectations 10000 Rustler Breaks 12-24-27 1H has produced 134,000 BOE (43% oil) in 9 months Wolfcamp B horizontal well in Rustler Breaks Area - Eddy County, NM Daily Production…
  27. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 27
    Ranger Inventory Multi-Well Development Potential Development Well D&C(1) CapEx EUR(2) (MBOE) Bone Spring 7 8 million 400 600 Wolfcamp 8 9 million 200 800* * Based on Volumetrics and 4-8% Recovery Factor Full Development…
  28. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 28
    Ranger Area Second Bone Spring Wells Performing Above Expectations 10000 Ranger 33 State Com 1H has produced 184,000 BOE (91% oil) in 15 months Pickard State 20-18-34 1H has produced 71,000 BOE (92% oil) in 6 months 2nd Bone Spring…
  29. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 29
    Significant Delaware Basin Inventory Matador has identified 1,445 gross (960 net) locations(1) TWIN LAKES Chaves This inventory does not yet include the HEYCO properties or Twin Lakes locations RUSTLER BREAKS Formation Gross…
  30. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 30
    Permian Basin Economics Oil Price Sensitivities Ranger 33 400-700 MBOE ROR vs Oil Price Dorothy White 700-1000 MBOE ROR vs Oil Price 250 100 700 MBOE, 7.5 MM D&C 1000 MBOE, 9.6 MM D&C 90 700 MBOE, 6 MM D&C 1000 MBOE, 8 MM D&C 200…
  31. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 31
    Latest Technology: Simultaneous Operations (Sim-Ops) Capable Rigs Conventional Drilling Configuration Sim-Ops Capable with V-door turned 90 Drilling rig must leave location Space available for frac prior to frac operations…
  32. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 32
    New Rig Improvements 7,500 psi Pressure Rating Estimated reduction in drilling time of 15 to 20% in the lateral on Wolfcamp wells Telescoping Flex-joint Estimated reduction in drilling time of 12 to 18 hours per well Integrated…
  33. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 33
    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…
  34. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 34
    Total Prospective Equivalent Oil Price Uplifts 80.00 H2O Equivalent Rig Recycle Realization Drilling Improvements 3.00 0.90 74.00 70.00 Midstream Spread Rate 3.00 SWD 4.50 Frac 60.00 Savings 5.10 7.50 50.00 50.00 WTI Oil…
  35. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 35
    Evolution of Permian Basin Frac Design Reservoir Specific Bone Spring 375 ft. Gen 1 Gen 2 75 ft. 2,000 lbs/ft 1,333 lbs/ft Coupled 500 Mlbs 40 Bbl/ft 20 Bbl/ft 7,500 Bbl 50 cluster spacing 75 cluster spacing Upper…
  36. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 36
    Microseismic in Wolf Prospect Fractures generate sonic events as they propagate through the rock 80-acre spacing appears optimal for Wolfcamp X/Y Microseismic uses downhole geophones installed development in offset horizontals to…
  37. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 37
    Midstream
  38. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 38
    Longwood Gathering and Disposal Systems(1) in Delaware Basin Longwood Gathering and Disposal Systems Activities Loving County, Texas Natural gas gathering and compression Water gathering Salt water disposal Oil gathering Cryogenic…
  39. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 39
    Midstream Initiatives Growing into Respectable Stand-Alone Business Expect to spend 38 million on midstream initiatives in the Permian Basin in 2015 Matador expects Longwood to be able to support its own sources of financing…
  40. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 40
    Loving County, Texas Biggest Midstream Project to Date Natural gas gathering and compression Cryogenic natural gas processing plant Water gathering Salt water disposal Oil gathering SWD = Salt Water Disposal 41
  41. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 41
    Eagle Ford Oil Bank
  42. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 42
    Eagle Ford Overview EAGLE FORD EAST Nickel EAGLE FORD ACREAGE TOTALS 3,700 gross / 2,900 net acres Ranch 39,871 gross / 29,731 net acres Measured Depth: 17,000 18,000 Hennig Well Costs: 8-10 million 2015 CapEx 90 million 80-acre…
  43. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 43
    Eagle Ford 2014 Accomplishments Increased net oil production rate by 44% from 6,400 Bbl/d in Q4 2013 to 9,100 Bbl/d in Q4 2014 Added 2,900 net acres, more than replacing 2014 Eagle Ford drilled inventory of 36 net wells (See chart…
  44. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 44
    Eagle Ford Drilling Cost Reductions Batch mode cut costs by 10% vs pad drilling 21% vs single well drilling Shaved 2.5 days per well 219/ft Modern rigs 194/ft 173/ft Latest technology & equipment /ft Improved drilling…
  45. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 45
    Evolution of Matador Eagle Ford Frac Design Gen 2 Gen 3 Gen 4 Gen 5 Gen 6 Gen 7 Proppant 650 Mlbs 650 Mlbs Pumped(1) 515 Mlbs 500 Mlbs 375 Mlbs 405 Mlbs Fluid Volume Pumped 9,550 Bbl 11,750 Bbl 11,750 Bbl 11,750 Bbl 5,770 Bbl…
  46. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 46
    Eagle Ford Completions Industry Comparison Matador designs some of the biggest fracs in the Eagle Ford Average 2014 Lateral Length (ft) 3,500 5,380 5,040 6,430 6,970 5,450 5,500 5,690 4,910 7,360 4,830 6,360 5,110 5,510 4,590 5,220…
  47. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 47
    Eagle Ford Completions Cost Reductions Non-frac completion costs cut by: 318 Toe Prep 50% since Q1 2012 (savings of Drill Out over 750,000 per well(1)) Frac Auxiliary Cut toe-prep costs by 70% 238 Cut drill out costs by 47% Cut…
  48. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 48
    Haynesville Shale Gas Bank
  49. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 49
    Haynesville Chesapeake Elm Grove Operations Successful 2014 non-op drilling program, primarily by Chesapeake at Elm Grove 17 gross (3.8 net) wells with estimated recoveries of 8 to 12 Bcf and well costs of 7 to 8 million (below…
  50. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 50
    Economics of Tier 1 Wells (10 Bcf) Haynesville at Elm Grove 500 Matadors Advantaged Economics NRIs of 85% to 90% on many properties due to ORRIs 450 Improved pricing/differentials of 0.70/MMBtu due to taking gas in kind Longer…
  51. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 51
    2015 Capital Investment Plan
  52. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 52
    2015 Capital Investment Plan Reduced Drilling Program in 2015 Reduced drilling program from 5 rigs to 2 rigs due to lower commodity prices, with primary focus on Permian (Delaware) Basin Currently operating 2 rigs both in the…
  53. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 53
    2015 Capital Investment Plan Summary 2015E CapEx of 350 million 2015E CapEx by Expense Type Decrease of 43% from 2014 CapEx of 610 million Facilities, Infrastructure, Etc. Estimated service cost reductions of 15 to 20% as observed…
  54. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 54
    Commodity Price and CapEx Estimates Significantly Impact Forecasts Sensitivity of 2015E Adjusted EBITDA(1) to Oil Price Relatively small improvements in oil price and cost reductions can significantly improve financial forecasts and…
  55. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 55
    2015 Production Estimates Oil Equivalent Growth of 41% 2015E Oil Production Oil Production Growth (Bbl/d) Estimated oil production of 4.0 to 4.2 million barrels 12,000 11,223 23% increase from 2014 despite decreased drilling 10,000…
  56. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 56
    2015 Financial Estimates Oil and Natural Gas Revenues(2) (millions) 2015E Revenues and Adjusted EBITDA(1)(2) Realized Oil and Natural Gas Prices, /Bbl and /Mcf Revenues and Adjusted EBITDA(1)(2) growth significantly impacted 76.39…
  57. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 57
    Summary and 2015 Guidance Moving from 5 rigs to 2 rigs in 2015; currently operating 2 rigs in Delaware Basin Possible addition of a third drilling rig in the Permian Basin in the next six to nine months(1) Permian drilling focused on…
  58. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 58
    Matador Resources Investment Highlights 85,400 net acres and 960 net engineered drilling locations in the Permian Basin prospective for the liquids-rich Wolfcamp, High Quality Asset Bone Spring and other targets; Matador holds largest…
  59. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 59
    Appendix
  60. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 60
    Hedging Profile 2015 Hedges(1) Oil Hedges: 2.4 million barrels of oil hedged for 2015 at weighted average floor and ceiling prices of 72/Bbl and 90/Bbl, respectively Approximately 59% of oil hedged for 2015(2) Natural Gas Hedges:…
  61. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 61
    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,…
  62. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 62
    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 34 years Since…
  63. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 63
    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…
  64. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 64
    Understanding the Petroleum Systems for Maximum Oil Recovery Rock Mechanics and Completion Strategy Varies Conventional Unconventional Decoupled Coupled Micro-Coupled In-Situ Source Rock and Reservoir Bone Spring Bone Spring…
  65. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 65
    North Ranger-Twin Lakes Area Pennsylvanian/Wolfcamp D Production Distribution Townsend Field 166 wells A 25 million Bbl, 49 Bcf Kemnitz Field 94 wells 19 million Bbl, 78 Bcf Sanmal and Leamex Fields Wolfcamp/ Kemnitz & Lea…
  66. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 66
    Pennsylvanian/Wolfcamp D Hybrid Production Target Interval 30025300490000 30025257790000 30025019240000 30025397370000 30025414070000 30025416140000 AVRA OIL COMPANY ELK OIL COMPANY UNION OIL CML EXPLORATION CML EXPLORATION Pickard 2H…
  67. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 67
    WTI Oil Price and Service Prices Frac Index Price reductions of 31% ...equivalent to a 7.50/Bbl uplift in oil prices /Bbl Drilling Spread Rate reductions of 18% ...equivalent to a 4.50/Bbl uplift in oil prices Note: Frac…
  68. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 68
    Infrastructure Development Saltwater disposal savings Oil pipeline fee reduction 1.30/Bbl of produced water ...equivalent to a 5.10/Bbl uplift in oil prices ...an uplift of 0.90/Bbl in oil prices 69
  69. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 69
    Potential Water Recycling Savings for Loving County Potential savings of up to 600,000 per well ...equivalent to a 3.00/Bbl uplift in oil prices Produced Purchase Water Frac Water Recycling Frac Additives Saltwater…
  70. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 70
    Strong Balance Sheet Metrics Relative to Peers(1) Compares Well to Permian Peers FY 2014 Net Debt / Proved Reserves ( / BOE) FY 2014 Net Debt / LTM Adjusted EBITDA (2) 4.0x 11.44 10.33 9.62 9.44 8.97 Average 7.01 Average…
  71. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 71
    Credit Agreement Status Strong, supportive bank group led by Royal Bank of Canada Borrowing base at 375 million based on December 31, 2014 reserves Bank group affirmed 375 million conforming borrowing base in April 2015 Retained full…
  72. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 72
    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…
  73. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 73
    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,…
  74. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 74
    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,…
  75. IPAA OGIS 2015 NEW YORK – Matador Resources Company – slide 75
    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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