8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported) October 1, 2018

 

 

Matador Resources Company

(Exact name of registrant as specified in its charter)

 

 

 

Texas   001-35410   27-4662601

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

5400 LBJ Freeway, Suite 1500, Dallas, Texas   75240
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (972) 371-5200

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 7.01 Regulation FD Disclosure.

On October 1, 2018, Matador Resources Company (the “Company”) issued a press release (the “Notes Offering Press Release”) announcing that, subject to market and other conditions, the Company intends to commence a private offering of $250 million in aggregate principal amount of senior notes due 2026 (the “Additional Notes”). The Additional Notes are being offered as additional notes to the Company’s existing $750 million aggregate principal amount of 5.875% Senior Notes due 2026 that the Company issued in a private placement on August 21, 2018. A copy of the Notes Offering Press Release is attached hereto as Exhibit 99.1 and incorporated into this Item 7.01 by reference.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 8.01 Other Events.

The Company is focused primarily on the exploration, delineation and development of its Delaware Basin acreage position in Loving County, Texas and Lea and Eddy Counties, New Mexico. The Company began 2018 operating six drilling rigs in the Delaware Basin and continued to do so through September 30, 2018. The Company expects to operate those six rigs in the Delaware Basin through the remainder of 2018, including three rigs in the Rustler Breaks asset area, one rig in the Wolf/Jackson Trust asset areas, one rig in the Ranger/Arrowhead and Twin Lakes asset areas and one rig in the Antelope Ridge asset area. The Company has continued to build significant optionality into its drilling program. Three of its rigs operate on longer-term contracts with remaining average terms between 12 and 15 months. The other three rigs are on short-term contracts with remaining obligations of six months or less. This affords the Company the ability to modify its drilling program as management may determine necessary based on changing commodity prices and other factors.

Effective October 1, 2018, the Company added a seventh operated drilling rig to its drilling program on a short-term contract. This seventh drilling rig will be deployed initially in South Texas to drill up to ten wells, primarily in the Eagle Ford shale. This rig is expected to operate in South Texas throughout the fourth quarter of 2018 and into early 2019. At that time, subject to commodity prices and other economic circumstances, the Company anticipates moving this rig to the Delaware Basin, most likely to either the Arrowhead or Antelope Ridge asset areas. The Company then expects to operate this seventh rig in the Delaware Basin throughout the remainder of 2019.

By initially deploying this seventh rig in South Texas over the next several months, the Company will be able to add to its oil production in South Texas during a time when its realized oil price in the Gulf Coast region is expected to be significantly higher than its realized oil price in the Delaware Basin. Further, given the results of the five-well Eagle Ford program the Company drilled in 2017, the Company anticipates strong economic returns from this drilling program. In addition, drilling these wells in South Texas provides the Company with the opportunity to test and establish the prospectivity of new formations, such as the Austin Chalk, which the Company has not previously tested on its South Texas leasehold. Finally, this short drilling program should enable the Company to satisfy several near-term lease expiration obligations. Upon completion of this program, the Company’s South Texas leasehold should be approximately 94% held by production, with no additional lease expirations before mid-2020.

The first few wells in this South Texas drilling program are expected to be completed and placed on production in late November and early December 2018. As a result, the Company expects the initial production from these wells will have a limited impact on its fourth quarter and full-year 2018 production estimates, but the Company expects these wells will add to its oil and natural gas production, reserves and cash flow in 2019 and beyond. The Company anticipates an increase of approximately 4%, or $25.0 to $30.0 million, to its drilling and completions capital expenditures for full-year 2018 as a result of adding this seventh drilling rig during the fourth quarter.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

  

Description of Exhibit

99.1    Notes Offering Press Release, dated October 1, 2018.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    MATADOR RESOURCES COMPANY
Date: October 1, 2018     By:   /s/ Craig N. Adams
    Name:   Craig N. Adams
    Title:   Executive Vice President
EX-99.1

Exhibit 99.1

MATADOR RESOURCES COMPANY ANNOUNCES OFFERING OF $250 MILLION OF ADDITIONAL SENIOR NOTES DUE 2026

DALLAS—(BUSINESS WIRE)—October 1, 2018—Matador Resources Company (NYSE: MTDR) (“Matador”) announced today that, subject to market conditions, it intends to offer $250 million of senior unsecured notes due 2026 (the “Additional Notes”) in a private placement to eligible purchasers. The Additional Notes are being offered as additional notes to Matador’s existing $750 million aggregate principal amount of 5.875% Senior Notes due 2026 that Matador issued in a private placement on August 21, 2018. The Additional Notes and the notes issued on August 21, 2018 will be treated as a single class of debt securities and will have identical terms, other than the issue date.

Matador intends to use the net proceeds from the offering to repay outstanding borrowings under its revolving credit facility and for general corporate purposes.

The Additional Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Additional Notes may be resold by the initial purchasers pursuant to Rule 144A and Regulation S under the Securities Act.

This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy any of these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Matador Resources Company

Matador is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Its current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, Matador conducts midstream operations, primarily through its midstream joint venture, San Mateo Midstream, LLC, in support of its exploration, development and production operations and provides natural gas processing, oil transportation services, natural gas, oil and salt water gathering services and salt water disposal services to third parties.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward- looking statements” are statements related to future, not past, events. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a


current or historical fact. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “could,” “believe,” “would,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “should,” “continue,” “plan,” “predict,” “potential,” “project,” “hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements include, but are not limited to, statements about the intended use of offering proceeds and other statements that are not historical facts. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, the following risks related to financial and operational performance: general economic conditions; Matador’s ability to execute its business plan, including whether its drilling program is successful; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and natural gas liquids; its ability to replace reserves and efficiently develop current reserves; costs of operations; delays and other difficulties related to producing oil, natural gas and natural gas liquids; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions; availability of sufficient capital to execute its business plan, including from future cash flows, increases in its borrowing base and otherwise; weather and environmental conditions; the operating results of Matador’s midstream joint venture’s expansion of the Black River cryogenic processing plant; the timing and operating results of the buildout by Matador’s midstream joint venture of oil, natural gas and water gathering and transportation systems and the drilling of any additional salt water disposal wells; and other important factors which could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. For further discussions of risks and uncertainties, you should refer to Matador’s filings with the Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of Matador’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Matador undertakes no obligation to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except as required by law, including the securities laws of the United States and the rules and regulations of the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

Source: Matador Resources Company

Matador Resources Company

Mac Schmitz, 972-371-5225

Capital Markets Coordinator

investors@matadorresources.com