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2016 Analyst Day – Matador Resources Company

Matador Resources Company · Feb 3, 2016 · 74 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. 2016 Analyst Day – Matador Resources Company – slide 1
    2016 Analyst Day Presentation Managing 2016... February 3, 2016 NYSE: MTDR
  2. 2016 Analyst Day – Matador Resources Company – slide 2
    Todays Agenda Welcome and Opening Remarks Joseph Wm. Foran, Chairman and CEO 2015 Summary and 2016 Capital Investment Plan David E. Lancaster, Executive Vice President and CFO Morning Break Delaware Basin Operations Update…
  3. 2016 Analyst Day – Matador Resources Company – slide 3
    Managing 2016 The Elephants in the Room Today Continue with 3 rigs or drop a rig Outspend How to fund outspend Maximizing shareholder value in a challenging environment 5
  4. 2016 Analyst Day – Matador Resources Company – slide 4
    Matador Has Made Tremendous Progress Since its IPO At IPO(1): Today(2) Difference February 7, 2012 414 Bbl/d 11,547 Bbl/d Oil Production (6% oil) (49% oil) +28-fold 27 MMBOE 85 MMBOE Proved Reserves (4% oil) (54% oil)…
  5. 2016 Analyst Day – Matador Resources Company – slide 5
    Attractive Wolfcamp Economics Yesterday, Today and in the Future 240% Return to 220% 75 oil with 200% 35% cost increase 180% 160% Rate Of Return 140% 120% Return to 100% Q4 2014 75 oil with 35% cost increase 80%…
  6. 2016 Analyst Day – Matador Resources Company – slide 6
    ROR Relationship to Well Cost(1) Savings and Improved EUR(2) Increasing Year Oil Price Model 30 1st 6 mo. 2016 40 2nd 6 mo. 2016 50 2017 60 2018 for life Rustler Breaks Assumes 2.50/Mcf natural gas Wolfcamp A-X/Y 6.0 million Well…
  7. 2016 Analyst Day – Matador Resources Company – slide 7
    2015 Summary and 2016 Capital Investment Plan David E. Lancaster Executive Vice President and CFO
  8. 2016 Analyst Day – Matador Resources Company – slide 8
    Matador Resources Company Operations Overview Market Capitalization(1) 1.4 billion Avg Daily Production YE 2015(2) 24,955 BOE/d 55%* 33% of total production Almost no oil Oil (% total) 12,306 Bbl/d (49%) 64% of total natural gas…
  9. 2016 Analyst Day – Matador Resources Company – slide 9
    Delaware Basin Inventory Continues to Increase Matador has identified up to 3,543 gross (1,417 net) potential locations(1) for future drilling on its Delaware Basin acreage Only 118 gross (72.3 net) locations are PUD locations at…
  10. 2016 Analyst Day – Matador Resources Company – slide 10
    Despite Low Commodity Prices, 2015 Was an Excellent Year for Matador Four key transactions improved our asset base and kept our balance sheet strong HEYCO merger in February 2015 added approximately 60,000 gross (20,000 net) acres in…
  11. 2016 Analyst Day – Matador Resources Company – slide 11
    Record Oil, Natural Gas and Total Production in 2015 Average Daily Oil Production Average Daily Natural Gas Production (Bbl/d) (MMcf/d) 12,306 75.9 Oil production up 35% YOY. Gas production up 81% YOY. 9,095 39.8 41.9 5,843…
  12. 2016 Analyst Day – Matador Resources Company – slide 12
    Matadors Reserves Volumes at an All-Time High at Year-End 2015 Haynesville/CV Delaware Basin 82.9 million, 13% 31.9 million, 5% Delaware Basin 246.2 million, 24% Haynesville/CV 51.9 million, 10% Haynesville/CV 193.4 million, 18%…
  13. 2016 Analyst Day – Matador Resources Company – slide 13
    Committed to Maintaining Strong Balance Sheet Preserved and enhanced liquidity through April 2015 equity and Senior Notes offerings and sale of certain Loving County midstream assets for 143 million(1) in October 2015 substantial…
  14. 2016 Analyst Day – Matador Resources Company – slide 14
    Strong Balance Sheet Metrics Relative to Peers(1) Q3 2015 Net Debt / Proved Reserves ( / BOE) Q3 2015 Net Debt / LTM Adjusted EBITDA(2) 9.82 4.8x 9.30 7.75 7.75 7.54 Average: 5.91 3.1x 3.0x Average: 2.3x…
  15. 2016 Analyst Day – Matador Resources Company – slide 15
    2015 Anticipated Results vs. 2015 Guidance (As Updated Nov. 4, 2015) Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 85.6 million common shares Share Price(1) 16.03/share Market Capitalization(1) 1.4 billion Actual Original…
  16. 2016 Analyst Day – Matador Resources Company – slide 16
    2016 Capital Investment Plan Summary We will keep the focus on our Delaware Basin assets and opportunities with the intent of creating and preserving long-term shareholder value Plan to run 3 rigs in 2016, but will consider dropping…
  17. 2016 Analyst Day – Matador Resources Company – slide 17
    2016 Capital Investment Plan Summary We will keep the focus on our Delaware Basin assets and opportunities with the intent of creating and preserving long-term shareholder value Plan to run 3 rigs in 2016, but will consider dropping…
  18. 2016 Analyst Day – Matador Resources Company – slide 18
    2016 Capital Investment Plan Summary We estimate our capital budget in 2016 to be approximately 325 million for the 3-rig case (down 32% from 2015(1)), declining to 277 million for the 2-rig case (down 42% from 2015(1)) We expect to…
  19. 2016 Analyst Day – Matador Resources Company – slide 19
    2016 Capital Investment Plan Summary We expect to grow oil production by about 11% and keep natural gas production close to flat; total BOE production growth of about 4% in the 3-rig program as compared to 2015 We expect to outspend…
  20. 2016 Analyst Day – Matador Resources Company – slide 20
    Matadors 2016 Delaware Basin Operated Drilling Plan: 3-Rig Case TWIN LAKES 42,300 gross / 29,900 net acres Wolf/Loving Area 21 gross (18.4 net) wells planned for 2016 ARROWHEAD 17 gross (15.2 net) wells on production, including…
  21. 2016 Analyst Day – Matador Resources Company – slide 21
    Detail of 2016E Capital Expenditures 2016 Anticipated 2015 Drilled, 2016 Anticipated Drilling, 2016 Anticipated Drilling & 2017 Anticipated 2016 Anticipated Completion(1) Completion Completion(2) First Sales(2) 2016E CapEx Gross Net…
  22. 2016 Analyst Day – Matador Resources Company – slide 22
    Delaware Basin Sensitivities to Oil Price(1) and Cost Savings Ranger/Arrowhead - 2nd Bone Spring (90% oil) Wolf - Wolfcamp A-X/Y (70% oil) 300 300 700 MBOE, 4.5 MM 1,000 MBOE, 5.5 MM 250 700 MBOE, 6.0 MM 250 1,000 MBOE, 6.5 MM 400…
  23. 2016 Analyst Day – Matador Resources Company – slide 23
    Single Wolfcamp B Well at Rustler Breaks Holds Up To 15 Potential Locations One producing Wolfcamp B well holds 320 surface acres and up to 15 additional potential locations for future development 320 - Acre Development Spacing…
  24. 2016 Analyst Day – Matador Resources Company – slide 24
    2016 Capital Investment Plan Summary 3 Delaware Basin Rigs 2016E CapEx 3-Rig Case 2016E CapEx of 325 million (3 rigs in the Delaware Basin throughout 2016) Decrease of 32% from 2015 estimated capital expenditures of 480 million(1)…
  25. 2016 Analyst Day – Matador Resources Company – slide 25
    2016 Capital Investment Plan Summary 3-Rig and 2-Rig Cases 2016E CapEx 3-Rig Case 2016E CapEx 2-Rig Case (3 rigs in the Delaware Basin throughout 2016) (3 rigs in the Delaware Basin in Q1 2016; 2 rigs in Q2-Q4 2016) 325 million 277…
  26. 2016 Analyst Day – Matador Resources Company – slide 26
    2016 Oil and Natural Gas Production Estimates Oil and Natural Gas Production 3-Rig Case 2016E Oil Production 3-Rig Case (3 rigs in the Delaware Basin throughout 2016) 2016E CapEx: Estimated oil production of 4.9 to 5.1 million…
  27. 2016 Analyst Day – Matador Resources Company – slide 27
    2016 Oil and Natural Gas Revenue Estimates Oil and Natural Gas Revenues 3-Rig Case 2016E Oil and Natural Gas Revenues (3 rigs in the Delaware Basin throughout 2016) 37% 400 368 Revenues impacted by lower estimated 2016 realized oil…
  28. 2016 Analyst Day – Matador Resources Company – slide 28
    2016 Adjusted EBITDA Estimates Adjusted EBITDA(1)(2) 3-Rig Case (3 rigs in the Delaware Basin throughout 2016) 2016E Adjusted EBITDA(1)(2) 400 Shows impact of EnLink transaction in 2015 Estimated Adjusted EBITDA(1)(2) of 120 to 130…
  29. 2016 Analyst Day – Matador Resources Company – slide 29
    Commodity Price and CapEx Estimates Significantly Impact Forecasts Sensitivity of 2016E Adjusted EBITDA(1) to Oil Price 196 Relatively small improvements in oil price and service 200 cost reductions can significantly improve…
  30. 2016 Analyst Day – Matador Resources Company – slide 30
    Hedging Profile 2016 Hedges(1) Oil: 1.6 million barrels of oil hedged for 2016 at weighted average floor and ceiling prices of 47/Bbl and 75/Bbl, respectively Approximately 31% of oil hedged for 2016 Natural Gas: 11.7 Bcf of natural…
  31. 2016 Analyst Day – Matador Resources Company – slide 31
    Credit Agreement Status Strong, supportive bank group led by Royal Bank of Canada Borrowing base reaffirmed on October 16, 2015 at 375 million based on June 30, 2015 reserves Maturity of credit facility extended from December 2016 to…
  32. 2016 Analyst Day – Matador Resources Company – slide 32
    Summary and Initial 2016 Guidance Plan to run 3 rigs in the Delaware Basin throughout 2016, but will reduce to 2 rigs as early as Q2 2016 if oil prices drop back and remain below 30 per barrel Delaware Basin drilling focused on Wolf…
  33. 2016 Analyst Day – Matador Resources Company – slide 33
    Delaware Basin Operations Update Matthew V. Hairford President David E. Lancaster Executive Vice President and CFO
  34. 2016 Analyst Day – Matador Resources Company – slide 34
    Delaware Basin Brushy Cyn. Understanding the Opportunities U. Avalon L. Avalon Most current unconventional plays target one or two zones across a trend area. 1st Bone Spring The Delaware Basin has over a dozen unique targets 2nd…
  35. 2016 Analyst Day – Matador Resources Company – slide 35
    Improved Wolfcamp Drilling Times Significantly in 2015 50 2014 Average 45 43 2015 Planned 40 35 2015 Best Well 35 32 Drilling Days 30 26 25 20 18 15 15 10 5 0 Loving County Wolfcamp Eddy County Wolfcamp…
  36. 2016 Analyst Day – Matador Resources Company – slide 36
    2015 Wolf Area Drilling Cost Improvements 8.0 19% 7.4 Rigs Labor/ 7.0 20% Supply 9% 24% 6.0 Rentals 8% 22% Directional Drilling Costs, millions 5.0 12% Fluids 6% Casing/ 3% 12% Cement 4.0 10% 3.6 17% 3.0…
  37. 2016 Analyst Day – Matador Resources Company – slide 37
    2016 Anticipated Wolf Area Drilling Cost Improvements 8.0 7.4 Efficiencies 7.0 59% 6.0 Service Costs Drilling Costs, millions 5.0 41% 4.0 3.6 Efficiencies 50% Service Costs 50% 3.0 3.0 2.0 51% Savings 17%…
  38. 2016 Analyst Day – Matador Resources Company – slide 38
    2015 Wolf Area Completion Cost Improvements 5.0 4.6 Stimulation 4.0 52% Completion Costs, millions Location Surface 15% Rentals 3.0 12% CTU Drillout 12% Wireline 9% 2.4 2.0 1.0 0.0 H2 2014 Stimulation…
  39. 2016 Analyst Day – Matador Resources Company – slide 39
    2016 Anticipated Wolf Area Completion Cost Improvements 5.0 4.6 Efficiencies 17% Service Costs 4.0 83% 83% Completion Costs, millions 3.0 2.4 Efficiencies 25% Service Costs 75% More to 2.0 75% 1.8 come 1.0…
  40. 2016 Analyst Day – Matador Resources Company – slide 40
    2016 Anticipated Wolf Area Total Drilling and Completion Cost Improvements 12.0 Efficiencies 12.0 100,000 Cost Reduction ROR Increase 2% 44% 10.0 Drilling and Completion Costs, millions Service Costs 8.0 56% 6.0…
  41. 2016 Analyst Day – Matador Resources Company – slide 41
    Wolf Prospect Area Continued Focus on Wolfcamp Development in 2016 2015 Accomplishments Reduced drilling times by 58% Reduced drilling and completion costs by 50% Generating repeatable results Norton Schaub ESP test a success First…
  42. 2016 Analyst Day – Matador Resources Company – slide 42
    Wolf Inventory Multi-Pay Development Potential Formation Development Well Costs(1)(2) (millions) EUR(3) (MBOE) % Oil 2nd Bone Spring 4.0 5.0 400 500 50 65% Wolfcamp A-X/Y 5.5 6.5 650 1,100 65 80% Total Est. Full Development…
  43. 2016 Analyst Day – Matador Resources Company – slide 43
    Drilling Wells in Batch Mode / Central Production Facilities Dick Jay / Barnett Development (Cross-Section View) Dick Jay / Barnett Development (Top-Down View) Dick Jay Pad Barnett Pad Barnett 2nd Bone Dick Jay 124H Spring…
  44. 2016 Analyst Day – Matador Resources Company – slide 44
    Wolf Area Wolfcamp A-X/Y Wells Continue Strong Performance Across Acreage 10,000 Dorothy White 1H has produced 480 MBOE (69% oil) in 24 months Norton Schaub 84TTTB33 WF 201H has produced 360 MBOE (68% oil) in 18 months Billy Burt…
  45. 2016 Analyst Day – Matador Resources Company – slide 45
    Wolf Estimated Returns by Formation Formation Development Well Cost(1)(2) (millions) EUR(3) (MBOE) % Oil 2nd Bone Spring 4.0 - 5.0 400 500 50 65% Wolfcamp A-X/Y 5.5 - 6.5 650 1,100 65 80% Wolfcamp AX/Y 2nd Bone Spring 200…
  46. 2016 Analyst Day – Matador Resources Company – slide 46
    Stacked Horizon Test at Jackson Trust Multi-Well Pad Delaware Basin Jackson Trust C 12-TTT-C24 021H Brushy Cyn. Preparing to run ESP Jackson Trust C 12-TTT-C24 101H Avalon Testing at 331 BOE/d on ESP (80% oil) and…
  47. 2016 Analyst Day – Matador Resources Company – slide 47
    Rustler Breaks Focus on Wolfcamp Development in 2016 2015 Accomplishments Identified multiple new horizons, particularly in the Wolcamp A-X/Y and Wolfcamp B Scott Walker 204H Reduced drilling times and well costs significantly 24…
  48. 2016 Analyst Day – Matador Resources Company – slide 48
    Rustler Breaks Inventory Multi-Pay Development Potential Formation Development Well Costs(1)(2) (millions) EUR(3) (MBOE) % Oil Bone Spring 3.0 4.0 300 600 80 85% Wolfcamp A-X/Y 5.0 6.0 600 800 80 85% Wolfcamp B 5.5 6.5 800 1,000 40…
  49. 2016 Analyst Day – Matador Resources Company – slide 49
    Rustler Breaks 5 Wells Producing From 3 Zones on Multi-Well Pad West (Section 14) East (Section 13) INTER-Formational Stacked Pay Gamma Ray Resistivity 3 producing wells Multi-Well Pad 2 producing wells Bone Spring Lime Upper…
  50. 2016 Analyst Day – Matador Resources Company – slide 50
    Rustler Breaks Well Cost Achievements Wolfcamp A Wolfcamp B 2nd Bone Spring Tiger 3 well stack costs: 19.5 million Combined Gross EUR: 2 MMBOE 2016 could result in 13.00/BOE net(1) 13.5 million total costs 9.00/BOE net(1) 10 8.6…
  51. 2016 Analyst Day – Matador Resources Company – slide 51
    Rustler Breaks Wolfcamp B Wells Performing Above Expectations 10,000 Rustler Breaks 1224S27E 224H has produced 233 MBOE (41% oil) in 20 months Tiger 1424S28E RB 224H has produced 218 MBOE (43% oil) in 9 months Janie Conner 1324S28E…
  52. 2016 Analyst Day – Matador Resources Company – slide 52
    Rustler Breaks Wolfcamp A-X/Y Wells Performing Above Expectations 10,000 Guitar 1024S28E RB 202H has produced 164 MBOE (78% oil) in 10 months Tiger 1424S28E RB 204H has produced 132 MBOE (81% oil) in 6 months Scott Walker 3622S27E…
  53. 2016 Analyst Day – Matador Resources Company – slide 53
    Rustler Breaks Estimated Returns by Formation Formation Development Well Cost(1)(2) (millions) EUR(3) (MBOE) % Oil Wolfcamp A-X/Y 5.0 6.0 600 800 80 85% Wolfcamp B 5.5 6.5 800 1,000 40 50% Rustler Breaks - Wolfcamp A-X/Y (85%…
  54. 2016 Analyst Day – Matador Resources Company – slide 54
    Single Wolfcamp B Well at Rustler Breaks Holds Up To 15 Potential Locations One producing Wolfcamp B well holds 320 surface acres and up to 15 additional potential locations for future development 320 - Acre Development Spacing…
  55. 2016 Analyst Day – Matador Resources Company – slide 55
    Ranger/Arrowhead Bone Spring and Wolfcamp Development in 2016 Iggles 21 State Com 1H - 1,300 BOE/d (90% oil) CTA State Com 3H, 4H, 5H, 6H - Avg. 956 BOE/d (85% oil) Pickard State RN 124H Gobbler 5 B2PM 1H - On flowback after frac…
  56. 2016 Analyst Day – Matador Resources Company – slide 56
    Ranger Inventory Multi-Well Development Potential Formation Development Well Costs(1)(2) (millions) EUR(3) (MBOE) % Oil Bone Spring 4.5 6.0 400 700 90 95% Wolfcamp 6.5 8.0 200 800* 80 85% * Based on Volumetrics and 4-8% Recovery…
  57. 2016 Analyst Day – Matador Resources Company – slide 57
    Arrowhead Inventory Multi-Well Development Potential Formation Development Well Costs(1)(2) (millions) EUR(3) (MBOE) % Oil Bone Spring 4.5 6.0 400 700 80 90% Wolfcamp 6.5 8.0 200 800* 80 85% * Based on Volumetrics and 4-8% Recovery…
  58. 2016 Analyst Day – Matador Resources Company – slide 58
    Ranger Area Bone Spring Wells Continued Strong Performance 10,000 Bone Spring Horizontals in Ranger Area Lea County, NM Ranger State 3320S35E RN 121H has produced 238 MBOE (91% oil) in 26 months (2nd Bone Spring) Ranger State…
  59. 2016 Analyst Day – Matador Resources Company – slide 59
    Testing New Oil Shale Play in Twin Lakes Prospect Pennsylvanian-Lower Wolfcamp D Oil Shale Porous Intervals 8% One of the primary source rocks for Twin Lakes prospect area (42,300 gross and 29,900 net acres) Super-charged area…
  60. 2016 Analyst Day – Matador Resources Company – slide 60
    Testing New Oil Shale Play in Twin Lakes Prospect Pennsylvanian-Lower Wolfcamp D Oil Shale Porous Intervals 8% One of the primary source rocks for Twin Lakes prospect area (42,300 gross and 29,900 net acres) Super-charged area…
  61. 2016 Analyst Day – Matador Resources Company – slide 61
    Midstream Operations and 2016 Plans Matthew D. Spicer Vice President and General Manager of Midstream Matthew V. Hairford President NYSE: MTDR
  62. 2016 Analyst Day – Matador Resources Company – slide 62
    Longwood Gathering and Disposal Systems(1) in Delaware Basin Loving County, TX Gas gathering Water gathering Salt water disposal Oil gathering Cryogenic gas processing plant Sold to EnLink Eddy County, NM Gas gathering and…
  63. 2016 Analyst Day – Matador Resources Company – slide 63
    Wolf - Loving County, TX Significant Midstream Footprint Gas Gathering Water Gathering Salt Water Disposal Oil Gathering Matador Acreage Note: All acreage at January 7, 2016. 65
  64. 2016 Analyst Day – Matador Resources Company – slide 64
    Rustler Breaks - Eddy County, NM Repeating the Proven Wolf Model Gas gathering and compression Cryogenic gas processing plant Water gathering (under evaluation) Salt water disposal (under evaluation) Matador Acreage Note: All…
  65. 2016 Analyst Day – Matador Resources Company – slide 65
    Midstream Initiatives Growing into Respectable Business Expect to spend 40 million on midstream initiatives in the Delaware Basin in 2016 Matador expects Longwood to be able to support its own sources of financing Monetization of…
  66. 2016 Analyst Day – Matador Resources Company – slide 66
    Eagle Ford Oil Bank EAGLE FORD EAST EAGLE FORD ACREAGE TOTALS Measured Depth: 17,000 18,000 Nickel Ranch 39,000 gross / 29,300 net acres 80-acre spacing Hennig Uvalde Medina Gonzales Lewton San Antonio Love EAGLE FORD…
  67. 2016 Analyst Day – Matador Resources Company – slide 67
    Haynesville Operations Elm Grove Development Chesapeake Operated 2015 Haynesville Non-Op Program Producing Wells 22 gross (1.9 net) wells turned to sales throughout Tier 1 Haynesville in 2015 Currently Drilling or Completing…
  68. 2016 Analyst Day – Matador Resources Company – slide 68
    Economics of Tier 1 Haynesville Well (10 Bcf) in Elm Grove 200 Matadors Advantaged Economics 175 NRIs of 85 to 90% on many properties due to ORRIs Improved pricing/differentials of 0.48/MMBtu due to taking gas in kind Longer…
  69. 2016 Analyst Day – Matador Resources Company – slide 69
    Board of Directors 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, Jackson Walker LLP…
  70. 2016 Analyst Day – Matador Resources Company – slide 70
    Special Board Advisors Expertise and Stewardship Special Board Advisors Professional Experience Business Expertise - Retired President North America, Archer Ronney F. Coleman Oilfield Services - Former Vice President North America…
  71. 2016 Analyst Day – Matador Resources Company – slide 71
    Proven Management Team Experienced Leadership Industry Matador Management Team Background and Prior Affiliations Experience Experience Joseph Wm. Foran - Matador Petroleum Corporation, Foran Oil Company, 35 years Since Inception…
  72. 2016 Analyst Day – Matador Resources Company – slide 72
    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,…
  73. 2016 Analyst Day – 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. 2016 Analyst Day – Matador Resources Company – slide 74
    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…

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