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July 2016 Investor Presentatiion – Matador Resources Company

Matador Resources Company · Jul 18, 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. July 2016 Investor Presentatiion – Matador Resources Company – slide 1
    Investor Presentation July 2016 NYSE: MTDR
  2. July 2016 Investor Presentatiion – Matador Resources Company – slide 2
    Company Overview Exchange: Ticker NYSE: MTDR Shares Outstanding(1) 93.3 million common shares Share Price(1) 22.05/share Market Capitalization(1) 2.1 billion Actual Actual % YoY 2014 Results 2015 Results 2016 Guidance…
  3. July 2016 Investor Presentatiion – Matador Resources Company – slide 3
    Matador Resources Company Operations Overview Market Capitalization(1) 2.1 billion Avg. Daily Production(2) 27,300 BOE/d 33% of total production Almost no oil Oil (% total)(2) 13,700 Bbl/d (50%) 63% of total natural gas Natural…
  4. July 2016 Investor Presentatiion – 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 13,700 Bbl/d Oil Production (6% oil) (50% oil)(3) +33-fold 27 MMBOE 90 MMBOE Proved Reserves (4% oil) (56% oil)…
  5. July 2016 Investor Presentatiion – Matador Resources Company – slide 5
    Matadors Production Growth History Average Daily Oil Production Average Daily Natural Gas Production (Bbl/d) (MMcf/d) 13,847 13,700 81.1 81.7 75.9 76.5 74.2 12,306 12,617 73.8 72.1 11,206 11,547 11,473 9,095 39.8 41.9 5,843…
  6. July 2016 Investor Presentatiion – Matador Resources Company – slide 6
    Matadors Reserves Volumes at an All-Time High at March 31, 2016 Delaware Basin 246.2 million, 24% Haynesville/CV 51.9 million, 10% Haynesville/CV Haynesville/CV 42.3 million, 8% 193.4 million, 18% Delaware Basin 314.5 million,…
  7. July 2016 Investor Presentatiion – Matador Resources Company – slide 7
    Committed to Maintaining Strong Balance Sheet Preserved and enhanced liquidity through April 2015 equity and Senior Notes offerings, sale of certain Loving County midstream assets for 143 million(1) in October 2015 and March 2016…
  8. July 2016 Investor Presentatiion – Matador Resources Company – slide 8
    Delaware Basin Southeast New Mexico and West Texas
  9. July 2016 Investor Presentatiion – Matador Resources Company – slide 9
    Delaware Basin Acreage Position and Recent Operations and Results TWIN LAKES Recently completed 43,500 gross / 30,400 net acres Being completed Awaiting completion Currently being drilled ARROWHEAD 47,600 gross / 16,900 net acres…
  10. July 2016 Investor Presentatiion – Matador Resources Company – slide 10
    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…
  11. July 2016 Investor Presentatiion – Matador Resources Company – slide 11
    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 (71.1 net) locations are PUD locations at…
  12. July 2016 Investor Presentatiion – Matador Resources Company – slide 12
    Improving Drilling Times Wolfcamp A Wells, Loving County, TX 2014 Average 2015 Average 50 YE 2016 Planned 43.0 2016 YTD Average 40 2016 Record Well Drilling Days 30 24.2 20 18.0 18.3 17.3 10 0 Wolfcamp A Wells…
  13. July 2016 Investor Presentatiion – Matador Resources Company – slide 13
    Improving Drilling Times Second Bone Spring Wells, Loving County, TX 2015 Average YE 2016 Planned 25 2016 YTD Average 21.8 2016 Record Well 20 Drilling Days 15 13.0 12.6 12.6 10 5 0 Second Bone Spring Wells Loving…
  14. July 2016 Investor Presentatiion – Matador Resources Company – slide 14
    Improving Drilling Times Wolfcamp A Wells, Eddy County, NM 2014 Average 2015 Average YE 2016 Planned 30 2016 YTD Average 24.5 25 2016 Record Well 20.1 Drilling Days 20 17.7 14.0 13.8 15 10 5 0 Wolfcamp A Wells Eddy…
  15. July 2016 Investor Presentatiion – Matador Resources Company – slide 15
    Improving Drilling Times Wolfcamp B Wells, Eddy County, NM 2014 Average 2015 Average 45 41.3 YE 2016 Planned 2016 YTD Average 40 2016 Record Well 35 32.0 30 Drilling Days 25 21.7 20 18.0 17.5 15 10 5 0 Wolfcamp B…
  16. July 2016 Investor Presentatiion – Matador Resources Company – slide 16
    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 6% 12% Fluids Casing/ 3% 12% Cement 4.0 10% 3.6 17% 3.0…
  17. July 2016 Investor Presentatiion – Matador Resources Company – slide 17
    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 Exceeded YE 2016…
  18. July 2016 Investor Presentatiion – Matador Resources Company – slide 18
    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…
  19. July 2016 Investor Presentatiion – Matador Resources Company – slide 19
    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% 2.0 75% 1.8 Approaching YE 2016…
  20. July 2016 Investor Presentatiion – Matador Resources Company – slide 20
    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…
  21. July 2016 Investor Presentatiion – Matador Resources Company – slide 21
    Evolution of Delaware Basin Frac Design Reservoir Specific Bone Spring 350 ft. Gen 1 Gen 2 Gen 3 50 ft. 2,000 lbs/ft 1,333 lbs/ft 2,100 lbs/ft Coupled 500 Mlbs 40 Bbl/ft 20 Bbl/ft 40 Bbl/ft 50 cluster 75 cluster 50 cluster…
  22. July 2016 Investor Presentatiion – Matador Resources Company – slide 22
    Dissolvable Technologies 3.625 I.D. Est. savings of over 45,000 by eliminating coiled tubing unit (CTU) drillout Substitute for conventional ball and seat frac plugs Large bore flow-through plug - 3.625 I.D. Ball and seat both…
  23. July 2016 Investor Presentatiion – Matador Resources Company – slide 23
    Improving Completion Performance Diverting Agent Case Study Initial Case Study Results: Ongoing Studies: Tested diverting agent on two offset Wolfcamp wells with Pumped diverting agent on five Loving County near identical frac designs…
  24. July 2016 Investor Presentatiion – Matador Resources Company – slide 24
    Wolf Prospect Area Continued Focus on Wolfcamp Development in 2016 First Half of 2016 Accomplishments Billy Burt 90-TTT-B33 WF 201H Wolfcamp A-Y Achieved YE2016 drilling time targets for both Wolfcamp and Diverting agent used…
  25. July 2016 Investor Presentatiion – Matador Resources Company – slide 25
    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-XY 5.5 6.5 650 1,100 65 80% Total Est. Full Development…
  26. July 2016 Investor Presentatiion – Matador Resources Company – slide 26
    Wolf Area Wolfcamp A-XY Wells Performing Above Expectations 10,000 Dorothy White 1H has produced 565 MBOE (68% oil) in 30 months Norton Schaub 84TTTB33 WF 1H has produced 465 MBOE (66% oil) in 24 months Billy Burt 90TTTB33 WF 203H…
  27. July 2016 Investor Presentatiion – Matador Resources Company – slide 27
    Wolf Second Bone Spring Wells Performing Above Expectations 10,000 Dorothy White 82TTTB33 WF 126H has produced 115 MBOE (56% oil) in 12 months Dick Jay 92TTTB01 WF 124H has produced 65 MBOE (66% oil) in 4 months Dorothy White…
  28. July 2016 Investor Presentatiion – Matador Resources Company – slide 28
    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…
  29. July 2016 Investor Presentatiion – Matador Resources Company – slide 29
    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-XY 5.5 - 6.5 650 1,100 65 80% Wolfcamp AXY 2nd Bone Spring 200 100…
  30. July 2016 Investor Presentatiion – Matador Resources Company – slide 30
    Rustler Breaks Focus on Wolfcamp Development in 2016 First Half of 2016 Accomplishments Achieved YE2016 drilling time targets for both Wolfcamp A- Scott Walker 204H XY and Wolfcamp B on recent wells 24 hr IP: 504 BOE/d (70% oil)…
  31. July 2016 Investor Presentatiion – Matador Resources Company – slide 31
    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-XY 5.0 6.0 600 800 80 85% Wolfcamp B 5.5 6.5 800 1,000 40…
  32. July 2016 Investor Presentatiion – Matador Resources Company – slide 32
    Rustler Breaks 6 Wells Producing From 3 Zones on Multi-Well Pad West (Section 14) East (Section 13) INTER-Formational Stacked Pay Gamma Ray 3 producing wells Multi-Well Pad 3 producing wells Resistivity Bone Spring Lime Upper…
  33. July 2016 Investor Presentatiion – Matador Resources Company – slide 33
    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 YE 2016 could result in 13.00/BOE net(1) 13.5 million total costs 9.00/BOE net(1) 10…
  34. July 2016 Investor Presentatiion – Matador Resources Company – slide 34
    Rustler Breaks Wolfcamp A-XY Wells Performing Above Expectations Guitar 1024S28E RB 202H has produced 220 MBOE (76% oil) in 16 months 10,000 Tiger 1424S28E RB 204H has produced 250 MBOE (76% oil) in 13 months Dr. K 2423S27E RB 203H…
  35. July 2016 Investor Presentatiion – Matador Resources Company – slide 35
    Rustler Breaks Wolfcamp B Wells Performing Above Expectations 10,000 Rustler Breaks 1224S27E 224H has produced 275 MBOE (40% oil) in 26 months Tiger 1424S28E RB 224H has produced 295 MBOE (41% oil) in 16 months Janie Conner…
  36. July 2016 Investor Presentatiion – Matador Resources Company – slide 36
    Rustler Breaks Estimated Returns by Formation Formation Development Well Cost(1)(2) (millions) EUR(3) (MBOE) % Oil Wolfcamp A-XY 5.0 6.0 600 800 80 85% Wolfcamp B 5.5 6.5 800 1,000 40 50% Rustler Breaks - Wolfcamp A-XY (85%…
  37. July 2016 Investor Presentatiion – Matador Resources Company – slide 37
    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…
  38. July 2016 Investor Presentatiion – Matador Resources Company – slide 38
    Ranger/Arrowhead Bone Spring and Wolfcamp Development in 2016 Iggles 21 State Com 1H - Tested 1,300 BOE/d (90% oil) Pickard State RN 124H Gobbler 5 B2PM 1H - IP 594 BOE/d (92% oil) - Tested 2,300 BOE/d (80% oil) Cookie Tosser State…
  39. July 2016 Investor Presentatiion – Matador Resources Company – slide 39
    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…
  40. July 2016 Investor Presentatiion – Matador Resources Company – slide 40
    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…
  41. July 2016 Investor Presentatiion – Matador Resources Company – slide 41
    Ranger Area Bone Spring Wells Continued Strong Performance 10,000 Ranger State 3320S35E RN 121H produced 262 MBOE (91% oil) in 32 months Ranger State 3320S35E RN 122H produced 90 MBOE (91% oil) in 14 months Pickard State 2018S34E RN…
  42. July 2016 Investor Presentatiion – Matador Resources Company – slide 42
    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 (43,500 gross and 30,400 net acres) Super-charged area…
  43. July 2016 Investor Presentatiion – Matador Resources Company – slide 43
    Midstream
  44. July 2016 Investor Presentatiion – Matador Resources Company – slide 44
    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…
  45. July 2016 Investor Presentatiion – Matador Resources Company – slide 45
    Wolf - Loving County, TX Significant Midstream Footprint Gas Gathering Water Gathering Salt Water Disposal Oil Gathering Matador Acreage Note: All acreage at June 30, 2016. 47
  46. July 2016 Investor Presentatiion – Matador Resources Company – slide 46
    Rustler Breaks - Eddy County, NM Repeating the Proven Wolf Model Natural gas gathering and compression 12-inch gathering line operational in Q2 2016 Cryogenic natural gas processing plant expected to be operational in Q3 2016 Water…
  47. July 2016 Investor Presentatiion – Matador Resources Company – slide 47
    Rustler Breaks Cryogenic Processing Plant 60 MMcf per day inlet capacity Plant project is 90% complete Critical path - Electrical installation Evaluating natural gas liquids (NGL) outlet options 49
  48. July 2016 Investor Presentatiion – Matador Resources Company – slide 48
    Midstream Business Has Experienced Strong Growth in Recent Years Longwood Pipeline System Longwood Gathering Volumes (Miles) (Mcf/d of Natural Gas / Bbl/d of Oil/Water) 100 Longwood Gathering Volume 90 60,000 6,000 Poly Pipe 80…
  49. July 2016 Investor Presentatiion – Matador Resources Company – slide 49
    2016 Capital Investment Plan Update
  50. July 2016 Investor Presentatiion – Matador Resources Company – slide 50
    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 throughout 2016 Continue to improve…
  51. July 2016 Investor Presentatiion – Matador Resources Company – slide 51
    2016 Capital Investment Plan Summary We estimate our capital budget in 2016 to be approximately 325 million (down 33% from 2015(1)) We expect to have sufficient liquidity to fund our 2016 capital investments 118 million in cash and…
  52. July 2016 Investor Presentatiion – Matador Resources Company – slide 52
    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% as compared to 2015 We expect to outspend cash flow by 230…
  53. July 2016 Investor Presentatiion – Matador Resources Company – slide 53
    Matadors 2016 Delaware Basin Operated Drilling Plan: 3-Rig Case(1) TWIN LAKES 42,700 gross / 30,300 net acres Wolf/Loving Area 20 gross (16.8 net) wells planned for 2016 ARROWHEAD 18 gross (15.8 net) wells on production, including…
  54. July 2016 Investor Presentatiion – Matador Resources Company – slide 54
    2016 Capital Investment Plan Summary 2016E CapEx 2016E CapEx of 325 million (3 rigs in the Delaware Basin throughout 2016) Decrease of 33% from 2015 capital expenditures of 325 million 482 million(1) Includes estimated efficiency and…
  55. July 2016 Investor Presentatiion – Matador Resources Company – slide 55
    2016 Oil and Natural Gas Production and Adjusted EBITDA Estimates Oil and Natural Gas Production 2016E Oil Production 2016E CapEx: D&C / Facilities: 260 MM Estimated oil production of 4.9 to 5.1 million barrels Midstream / Land: 65…
  56. July 2016 Investor Presentatiion – Matador Resources Company – slide 56
    Hedging Profile Remainder of 2016 Hedges(1) Oil: 1.4 million barrels of oil hedged for remainder of 2016 at weighted average floor and ceiling prices of 42/Bbl and 61/Bbl, respectively Over 50% of oil hedged for remainder of 2016…
  57. July 2016 Investor Presentatiion – Matador Resources Company – slide 57
    Credit Agreement Status Strong, supportive bank group led by Royal Bank of Canada (group includes eight banks) Borrowing base set at 300 million on May 3, 2016 based on December 31, 2015 reserves and using commodity price estimates…
  58. July 2016 Investor Presentatiion – Matador Resources Company – slide 58
    Delaware Basin Sensitivities to Oil Price(1) and Cost Savings Ranger/Arrowhead - 2nd Bone Spring (90% oil) Wolf - Wolfcamp A-XY (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 200…
  59. July 2016 Investor Presentatiion – Matador Resources Company – slide 59
    Summary and 2016 Guidance (as Affirmed May 3, 2016) Plan to run 3 rigs in the Delaware Basin throughout 2016 Delaware Basin drilling expected to focus on Wolf and Rustler Breaks Wolfcamp development and further delineation of Ranger,…
  60. July 2016 Investor Presentatiion – Matador Resources Company – slide 60
    Appendix
  61. July 2016 Investor Presentatiion – Matador Resources Company – slide 61
    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;…
  62. July 2016 Investor Presentatiion – Matador Resources Company – slide 62
    Eagle Ford Oil Bank EAGLE FORD EAST EAGLE FORD ACREAGE TOTALS Measured Depth: 17,000 18,000 Nickel Ranch 39,000 gross / 28,100 net acres 80-acre spacing Hennig Uvalde Medina Gonzales Lewton San Antonio Love EAGLE FORD…
  63. July 2016 Investor Presentatiion – Matador Resources Company – slide 63
    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…
  64. July 2016 Investor Presentatiion – Matador Resources Company – slide 64
    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…
  65. July 2016 Investor Presentatiion – Matador Resources Company – slide 65
    Spectrum of Unconventional Play Types In general there is no consensus on the what an unconventional reservoir is At Matador, we think of an unconventional reservoir as a spectrum of play types. The distribution and quality of these play…
  66. July 2016 Investor Presentatiion – Matador Resources Company – slide 66
    New Rig Technology for Horizontal Drilling Saving Time and Money 7,500 psi Pressure Rating Estimated reduction in drilling time of 20 to 25% in the lateral on Wolfcamp wells Telescoping Flex-joint Estimated reduction in drilling…
  67. July 2016 Investor Presentatiion – Matador Resources Company – slide 67
    Future Bit Technology The Evolution of the PDC bit Matador continues to be at the forefront of new bit technology Smith Bits latest technology StingBlade design StingBlade design features Alternating Stinger/PDC cutters…
  68. July 2016 Investor Presentatiion – Matador Resources Company – slide 68
    Optimizing Artificial Lift Operations Across the Delaware Basin Optimizing Gas Lift Operations Numerous 2nd Bone Spring wells on gas lift Accelerates production while reducing LOE Lower maintenance costs than beam pump Helps wells…
  69. July 2016 Investor Presentatiion – Matador Resources Company – slide 69
    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…
  70. July 2016 Investor Presentatiion – Matador Resources Company – slide 70
    Board of Directors Expertise and Stewardship Board Members Professional Experience Business Expertise - Vice President / Engineering and Co-founder, North Plains Energy, LLC Reynald A. Baribault Oil and Gas Exploration & - President…
  71. July 2016 Investor Presentatiion – Matador Resources Company – slide 71
    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…
  72. July 2016 Investor Presentatiion – 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. July 2016 Investor Presentatiion – 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. July 2016 Investor Presentatiion – 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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