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August 2014 Investor Presentation – Matador Resources Company

Matador Resources Company · Aug 14, 2014 · 60 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. August 2014 Investor Presentation – Matador Resources Company – slide 1
    Investor Presentation August 2014 NYSE: MTDR
  2. August 2014 Investor Presentation – Matador Resources Company – slide 2
    Company Summary
  3. August 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. August 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) 26.91/share Market Capitalization(1)(2) 2.0 billion 2012 Actual 2013 Actual 2014 Guidance(3) Capital Spending 335…
  5. August 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. August 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. August 2014 Investor Presentation – Matador Resources Company – slide 7
    Matador Resources Company Overview Market Capitalization(1) 2.0 billion Average Daily Production(2) 15,424 BOE/d Oil (% total) 8,809 Bbl/d (57%) Natural Gas (% total) 39.7 MMcf/d (43%) Proved Reserves 6/30/14 57.2 million BOE % Proved…
  8. August 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. August 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. August 2014 Investor Presentation – Matador Resources Company – slide 10
    Eagle Ford South Texas
  11. August 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. August 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) % Proved Developed 59% in 2011 to 7,800…
  13. August 2014 Investor Presentation – Matador Resources Company – slide 13
    Eagle Ford Measured Depths and Well Costs Nickel EAGLE FORD ACREAGE TOTALS EAGLE FORD EAST Ranch 40,615 gross / 29,149 net acres Measured Depth: 17,000 18,000 Hennig Well Costs: 8-10 million 80-acre spacing Uvalde Medina Gonzales San…
  14. August 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…
  15. August 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. August 2014 Investor Presentation – Matador Resources Company – slide 16
    Frac Generation Comparison (all wells normalized to 5,000 horizontal) 120,000 120,000 110,000 GEN2(80Acre) GEN2(80Acre) 110,000 100,000 GEN4(80Acre) GEN4(80Acre) 100,000 90,000 GEN5(80Acre) 90,000 GEN5(80Acre) 80,000…
  17. August 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. August 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. August 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. August 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. August 2014 Investor Presentation – Matador Resources Company – slide 21
    Artificial Lift 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 offset fracs 100 Bbl/d Time Note:…
  22. August 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 Comp…
  23. August 2014 Investor Presentation – Matador Resources Company – slide 23
    Permian Basin Southeast New Mexico and West Texas
  24. August 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. August 2014 Investor Presentation – Matador Resources Company – slide 25
    Permian Basin TWIN LAKES Permian Basin Total 37,702 gross / 26,408 net acres Gross Acres 94,045 acres Net Acres 61,951 acres INDIAN DRAW / RUSTLER BREAKS Estimated 241 gross (177.7 net) engineered drilling 18,148 gross / 13,376…
  26. August 2014 Investor Presentation – Matador Resources Company – slide 26
    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…
  27. August 2014 Investor Presentation – Matador Resources Company – slide 27
    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…
  28. August 2014 Investor Presentation – Matador Resources Company – slide 28
    Targeting Multiple Benches in Permian Appraisal Program GR RES Brushy Canyon Sand Bone Spring Lime Matador is presently Upper Avalon Shale drilling its fifth Lower Avalon Shale horizontal target in First Bone Spring Sand separate…
  29. August 2014 Investor Presentation – Matador Resources Company – slide 29
    Wolf / Loving Prospect Area Location of Matador wells Loving Dorothy White 1H Wolfcamp A 11,183 gross (7,155 net) acres 7 mo.cum: 175,000 BOE (66% oil) 50 gross (35.4 net) locations(1) OXY Regan-McElvain 1H Wolfcamp A IP: 570…
  30. August 2014 Investor Presentation – Matador Resources Company – slide 30
    Ranger / Querecho Plains Prospect Area Location of Matador wells Pickard State 20-18-34 2H Wolfcamp D Still in flowback period of its completion operations Pickard State 20-18-34 1H 14,635 gross (10,202 net) acres 2nd Bone Spring…
  31. August 2014 Investor Presentation – Matador Resources Company – slide 31
    Indian Draw / Rustler Breaks Prospect Area Rustler Breaks 12-24-27 1H Location of Matador wells Wolfcamp B 3 mo.cum: 72,000 BOE (45% oil) 18,148 gross (13,376 net) acres Mewbourne Oil Co. Layla 35 MD Fee 1H 108 gross (82.8 net)…
  32. August 2014 Investor Presentation – Matador Resources Company – slide 32
    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 37,702 gross (26,408 net)…
  33. August 2014 Investor Presentation – Matador Resources Company – slide 33
    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 34
  34. August 2014 Investor Presentation – Matador Resources Company – slide 34
    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. 0 Note: Figure depicts proppant and fluid volume pumped per…
  35. August 2014 Investor Presentation – Matador Resources Company – slide 35
    Haynesville Shale
  36. August 2014 Investor Presentation – Matador Resources Company – slide 36
    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)…
  37. August 2014 Investor Presentation – Matador Resources Company – slide 37
    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 3,069 BOE/d BIENVILLE Daily Production(3) (99% natural gas) TIER 1: 6…
  38. August 2014 Investor Presentation – Matador Resources Company – slide 38
    Elm Grove Tier 1 Haynesville Chesapeake Operated 300 10 Bcf - 7.0mm D&C Cost 275 10 Bcf - 8.0mm D&C Cost 250 10 Bcf - 9.0mm D&C Cost 225 8 Bcf - 7.0mm D&C Cost Estimated Rate of Return, % 200 8 Bcf - 8.0mm D&C Cost 8 Bcf -…
  39. August 2014 Investor Presentation – Matador Resources Company – slide 39
    2014 Capital Investment Plan
  40. August 2014 Investor Presentation – Matador Resources Company – slide 40
    Summary and 2014 Guidance(1) Continue 4-rig program full-time in H2 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…
  41. August 2014 Investor Presentation – Matador Resources Company – slide 41
    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…
  42. August 2014 Investor Presentation – Matador Resources Company – slide 42
    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 1.1 million barrels of oil…
  43. August 2014 Investor Presentation – Matador Resources Company – slide 43
    Investment Highlights Strong Growth Profile YE2011 to 2014E oil production CAGR of 172%(1) with expected year-over-year growth of 45%(1) in 2014 with Increasing Focus on Oil / Liquids 89% of 2014E CapEx program focused on oil /…
  44. August 2014 Investor Presentation – Matador Resources Company – slide 44
    Appendix
  45. August 2014 Investor Presentation – Matador Resources Company – slide 45
    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…
  46. August 2014 Investor Presentation – Matador Resources Company – slide 46
    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…
  47. August 2014 Investor Presentation – Matador Resources Company – slide 47
    Recent Semi-Annual Performance Metrics Through Mid-Year 2014 Oil Production Oil Equivalent Production (Bbl in thousands) (BOE in thousands) 2,475 1,463 2,341 1,225 1,944 1,768 908 1,525 1,277 729 485 84 2H 2011 1H…
  48. August 2014 Investor Presentation – Matador Resources Company – slide 48
    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…
  49. August 2014 Investor Presentation – Matador Resources Company – slide 49
    Historical Financials and Margins Year Ended December 31, 2011 2012 2013 Production Oil Production (MBbl) 154 1,214 2,133 Significant Natural Gas Production (Bcf) 14.5 12.5 12.9 increases in oil % Oil 6% 37% 50% production . . .…
  50. August 2014 Investor Presentation – Matador Resources Company – slide 50
    Increasing Cash Operating Margin 71.4% 66.9% 68.1% 59.2% 54.0% 62.57 51.60 44.70 35.13 31.97 27.45 28.80 17.27 19.27 16.24 2009 2010 2011 2012 2013 Revenue/BOE with Derivatives Cash Margin per BOE % Margin…
  51. August 2014 Investor Presentation – Matador Resources Company – slide 51
    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…
  52. August 2014 Investor Presentation – Matador Resources Company – slide 52
    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…
  53. August 2014 Investor Presentation – Matador Resources Company – slide 53
    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…
  54. August 2014 Investor Presentation – Matador Resources Company – slide 54
    Hedging Profile Hedges in Place for Remainder of 2014 and 2015 At August 6, 2014, Matador had: Oil Hedges (Costless Collars) 2014 2015 1.1 million barrels of oil hedged for Total Volume Hedged by Ceiling 1,106,200 Bbl 1,200,000 Bbl…
  55. August 2014 Investor Presentation – Matador Resources Company – slide 55
    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,…
  56. August 2014 Investor Presentation – Matador Resources Company – slide 56
    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…
  57. August 2014 Investor Presentation – Matador Resources Company – slide 57
    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…
  58. August 2014 Investor Presentation – Matador Resources Company – slide 58
    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,…
  59. August 2014 Investor Presentation – Matador Resources Company – slide 59
    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,…
  60. August 2014 Investor Presentation – Matador Resources Company – slide 60
    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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