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) March 7, 2012
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)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On March 7, 2012, Matador Resources Company (the “Company”) announced its 2012 capital budget and 2012 guidance. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On March 7, 2012, the Company announced its 2012 capital budget and 2012 guidance. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The Company expects to make presentations concerning its business to potential investors. The materials to be utilized during the presentations are furnished as Exhibit 99.2 hereto.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act and will not be incorporated by reference into any filing under the Securities Act unless specifically identified therein as being incorporated therein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Description of Exhibit | |
| 99.1 | Press Release, dated March 7, 2012, announcing 2012 capital budget and 2012 guidance. | |
| 99.2 | Presentation Materials. | |
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: March 8, 2012 | By: | /s/ David E. Lancaster | ||||
| Name: David E. Lancaster | ||||||
| Title: Executive Vice President | ||||||
Exhibit Index
| Exhibit |
Description of Exhibit | |
| 99.1 | Press Release, dated March 7, 2012, announcing 2012 capital budget and 2012 guidance. | |
| 99.2 | Presentation Materials. | |
Exhibit 99.1
NEWS RELEASE
MATADOR RESOURCES COMPANY ANNOUNCES
2012 CAPITAL BUDGET AND 2012 GUIDANCE
DALLAS, Texas, March 7, 2012 – Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced its capital budget and operating plans for 2012 as well as its initial guidance for selected 2012 operating metrics.
2012 Guidance
Capital Spending and Operating Plans
As set forth in its initial public offering prospectus dated February 1, 2012, Matador’s 2012 capital budget is estimated to be approximately $313 million. The Company plans to direct approximately 94% or $295 million of its 2012 capital budget to opportunities prospective for oil and liquids opportunities, including the allocation of approximately 84% or $264 million specifically to the exploration, development and acquisition of additional interests in the Eagle Ford shale play in South Texas. Matador is running two rigs in South Texas currently and expects to run two rigs in that area throughout 2012. The Company plans to allocate the remaining 6% or approximately $18 million of its 2012 budget to natural gas related activities, primarily in the Haynesville shale in North Louisiana. The Company does not plan to drill any operated Haynesville wells in 2012.
Production
The Company estimates that its 2012 total oil production will be between 1.4 and 1.5 million barrels as compared to total oil production of approximately 154,000 barrels in 2011 and approximately 33,000 barrels in 2010. Daily oil production at the end of 2012 is anticipated to be between 5,000 and 5,500 barrels per day of oil. Total natural gas production for 2012 is expected to decline to between 12.5 and 13.5 billion cubic feet as compared to approximately 14.5 billion cubic feet in 2011. Matador anticipates that some of the decline in the Company’s Haynesville dry gas production will be offset by natural gas production associated with its Eagle Ford drilling activities which should enjoy higher effective pricing as compared to the Haynesville dry gas production due to its natural gas liquids (“NGL”) content.
Metrics and Range
| • | 2012 Estimated Total Oil Production – 1.4 to 1.5 million barrels |
| • | 2012 Estimated Exit Rate for Oil Production – 5,000 to 5,500 barrels per day |
| • | 2012 Estimated Total Natural Gas Production – 12.5 to 13.5 billion cubic feet |
-more-
Matador Resources Company Announces 2012
Capital Budget and 2012 Guidance
Page 2 of 3
Other Matters
Liquidity
The Company recently completed its initial public offering pursuant to which the Company received net proceeds of approximately $133.6 million, including the exercise of the underwriters’ over-allotment option. The Company used net proceeds to repay the $123.0 million outstanding under its revolving credit facility in full. On February 28, 2012, the Company’s borrowing base under its $400 million senior secured revolving credit facility was increased from $100 million to $125 million, and the Company currently has the entire $125 million in borrowing capacity available under the facility. Matador plans to fund its 2012 capital budget with the remaining net proceeds, anticipated cash flows from operations and available borrowings under its credit facility. During 2012, the Company intends to seek redeterminations of its borrowing base as a result of any increases in its oil and natural gas reserves during the year.
Hedging Positions
Matador has hedged 1.18 million barrels of its anticipated 2012 oil production using costless collars having a weighted average floor price of $90.51/bbl and a weighted average ceiling price of $109.84/bbl.
Matador has hedged 7.2 Bcf of its anticipated 2012 natural gas production using costless collars having a weighted average price floor of $4.44/MMBtu and a weighted average ceiling price of $5.78/MMBtu.
Management Comments
Mr. Joseph Wm. Foran, Matador’s Chairman and Chief Executive Officer, noted “Following the successful completion of Matador’s initial public offering, we expect another year of strong growth fueled by our ongoing drilling activities in the Eagle Ford shale play in South Texas. We will continue to execute upon our strategy to increase the oil component of our production and reserves and anticipate oil production to constitute approximately 35% to 40% of our total production volume and oil revenues to constitute approximately 75% to 80% of our total oil and natural gas revenues in 2012.”
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 a particular emphasis on oil and natural gas shale plays and other unconventional resource plays. Its current operations are located primarily in the Eagle Ford shale play in south Texas and the Haynesville shale play in northwest Louisiana and east Texas.
For more information visit Matador Resources Company on the Internet at www.matadorresources.com
Matador Resources Company Announces 2012
Capital Budget and 2012 Guidance
Page 3 of 3
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, 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” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results and future events could differ materially from those anticipated in such statements. These forward-looking statements involve certain risks and uncertainties and ultimately may not prove to be accurate, including, but not limited to, the following risks related to our financial and operational performance: general economic conditions; our ability to execute our business plan, including the success of our drilling program; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and natural gas liquids; our ability to replace reserves and efficiently develop our current reserves; our costs of operations; delays and other difficulties related to producing oil, natural gas and natural gas liquids; our ability to make acquisitions on economically acceptable terms; availability of sufficient capital to execute our business plan, including from our future cash flows, increases in our borrowing base and otherwise; weather and environmental concerns; 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 SEC filings, including the “Risk Factors” section of Matador’s Prospectus dated February 1, 2012. Matador undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release, except as required by law. 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.
Contact Information
Wade Massad
Executive Vice President – Capital Markets
972.371.5293
Email: wmassad@matadorresources.com
###
 Investor Presentation
March
2012
Exhibit 99.2 |
 1
Forward-Looking Statements
This presentation and statements made by representatives of Matador Resources Company
(“Matador” or the “Company”) during the course of this presentation include
“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, 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” and
similar expressions that are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words. Actual results and future
events could differ materially from those anticipated in such statements. These forward-looking statements involve
certain risks and uncertainties and ultimately may not prove to be accurate, including, but not
limited to, the following risks related to our financial and operational performance:
general economic conditions; our ability to execute our business plan, including the success of our drilling program;
changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and
natural gas liquids; our ability to replace reserves and efficiently develop our current
reserves; our costs of operations, delays and other difficulties related to producing oil, natural gas and natural
gas liquids; our ability to make acquisitions on economically acceptable terms; availability of
sufficient capital to execute our business plan, including from our future cash flows,
increases in our borrowing base and otherwise; weather and environmental conditions; 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 SEC filings, including the “Risk Factors” section of Matador’s Prospectus
dated February 1, 2012. Matador undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances occurring after the date of
this presentation, except as required by law. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this presentation. All
forward-looking statements are qualified in their entirety by this cautionary statement.
|
 2
Company Overview
Completed IPO of 14,883,334 shares (12,209,167 primary shares) including overallotment
at $12.00 per share in March 2012
Exchange: Ticker
NYSE: MTDR
Shares Outstanding
[1]
55.27 million common shares
Share Price
[1]
$11.14/share
Market Capitalization
[1]
$615.7 million
[1] As of March 7, 2012 close |
 Founded by Joe Foran in 1983
Foran Oil funded with $270,000 in
contributed capital from 17 friends and
family members
Rolled into Matador Petroleum Corporation
in 1988
Grown primarily through acquire and exploit
strategy
Delivered 21% average annual rate of
return over 15 years
Sold
to
Tom
Brown,
Inc.
(1)
in
June
2003
for
an enterprise value of $388 million in an all-
cash transaction
Foran Oil & Matador Petroleum
3
Matador History
Matador Resources Company
Predecessor Entities
Matador Today
Founded by Joe Foran in 2003
Attracted start-up capital from long-time
shareholders; diverse and unique shareholder
group including over 400 friends and
neighbors
Proven management, technical team and
Board of Directors
Grown entirely through drill bit, with focus on
unconventional reservoir plays
Strong growth since 2008
Early January 2012 production at 53.2
MMcfe/d
(2)
(20.3% oil versus 3.0% oil for
January 2011)
Daily
production
has
increased
over
4x
Adjusted EBITDA
(4)
has more than
doubled
(3)
Proved
reserves
have
increased
8x
(3)
(3)
(1) Tom Brown purchased by Encana in 2004
(2) Average daily production for first eleven days of January 2012
(3) As of September 30, 2011
(4) Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and
a reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, see slide 23 |
 2012
Guidance Summary 4
2012 Estimated Capital Spending
$313 million
2012 Estimated Total Oil Production
1.4 to 1.5 million barrels
2012 Estimated Exit Rate for Oil Production
5,000 to 5,500 barrels per day
2012 Estimated Total Natural Gas Production
12.5 to 13.5 billion cubic feet |
 5
Daily Production
(1)
53.2 MMcfe/d
% Oil
20%
Proved Reserves @ 9/30/11
161.8 Bcfe
% Proved Developed
35%
% Oil
4% (and growing)
2012E CapEx
$313 million
% Eagle Ford
84%
% Oil and Liquids
94%
2012E Anticipated Drilling
29.5 net wells
Eagle Ford / Austin Chalk
27.6 net wells
Haynesville
1.5 net wells
Gross Acreage
236,263 acres
Net Acreage
197,764 acres
Identified Drilling Locations
818 gross / 313 net
Eagle Ford / Austin Chalk
213 gross / 173 net
Haynesville/Cotton Valley
605 gross / 140 net
Matador Resources Snapshot
(1) Average
daily
production
for
first
eleven
days
of
January
2012. |
 6
Investment Highlights
Strong Growth Profile with Increasing Focus on Oil / Liquids
Total Production CAGR
(1)
of 75.9%
since 2008 and oil / liquids production CAGR of 113.4%
since Q1 ‘10
94%
(2)
of 2012E capital expenditure program focused on oil / liquids exploration and
development High Quality Asset Base in Attractive Areas
Eagle Ford provides immediate oil-weighted value and upside
Other key assets provide long-term option value on natural gas, with
Haynesville, Bossier, Cotton Valley assets all essentially HBP
Significant Multi-year Drilling Inventory
173 net drilling locations across 28,900 net acres in Eagle Ford
(157) and Austin Chalk (16)
140 net drilling locations across 25,500 net acres in Haynesville (104) and Cotton
Valley (36) Strong Financial Position and Long-Term Institutional, Industry
and Individual Shareholders Proven Management and Technical Team and Active
Board of Directors Management averaging over 25 years of industry experience
Board with extensive industry experience and expertise as well as
significant company ownership Strong record of stewardship for over 28
years Low Cost Operations
LOE for nine months ended September 30, 2011 was $0.49 per Mcfe,
a 65% reduction since 2008
Active Exploration Effort Using Science and Technology
Ongoing pipeline of new oil and natural gas opportunities, with strong emphasis on
science and technology to create value
(1)
(2)
Compound annual growth rate. CAGR based on production through 9/30/2011. Calculated as percent of
anticipated CapEx focused on oil weighted Eagle Ford and Austin Chalk drilling and acreage and includes $20 million to acquire oil prospective acreage in New Mexico
and West Texas.
|
 2012E Capex
% Eagle Ford
48.3
45.3
43.4
32.4
32.3
30.0
25.7
22.1
22.1
19.5
15.4
9.6
9.0
6.1
3.7
MTDR
SFY
NFX
SM
FST
GDP
PVA
CRZO
ROSE
MHR
CHK
PXD
APA
PXP
APC
84%
48%
34%
N/A
N/A
N/A
78%
92%
N/A
N/A
62%
25%
73%
85%
5.2%
Leverage to Eagle Ford (Net Eagle Ford Acres / EV)
(Net Acres / $mm)
7
Leading Eagle Ford Exposure
Matador offers significant leverage
and focus to the Eagle Ford
Approximately 85% of Eagle Ford
acreage is in the prospective oil and
liquids window
All 2012E Eagle Ford drilling focused
in the prospective oil and liquids
window
84% of 2012E estimated CapEx
allocated to Eagle Ford
One rig running in the eastern and
one in the western portions of the
Eagle Ford play
Eagle Ford acreage well-positioned
throughout the play
Note: Reflects companies with greater than 50 Bcfe of proved reserves. Data sourced from public
filings; stock price data as of 03/07/2012. |
 Highlights
8
Eagle Ford Properties are Well Positioned
MTDR acreage in counties with
robust transaction activity –
“good neighborhoods”
Transaction values ranging from
$10,000 to $25,000 / acre
Our Eagle Ford position has
grown to almost 30,000 net
acres
Acreage in both the eastern and
western areas of the play
Approximately 85% of acreage
in prospective oil and liquids
windows
Acreage offers potential for
Austin Chalk, Buda, Olmos,
Pearsall and other formations
Note: Information for precedent transactions based on public filings.
COMBO LIQUIDS /
GAS FAIRWAY
DRY GAS
FAIRWAY
OIL FAIRWAY
TALISMAN-STATOIL / SM ENERGY
June 2011
$14,610 / acre
SHELL / HARRISON RANCH
March 2010
$10,000 / acre
CNOOC / CHESAPEAKE
October 2010
$11,011 / acre
MARATHON / HILCORP
June 2011
$24,823 / acre
KKR / HILCORP
June 2010
$10,000 / acre
TALISMAN-STATOIL / ENDURING
October 2010
$13,660 / acre
RELIANT / PIONEER NEWPEK
June 2010
$11,070 / acre
PLAINS / HUGHES
October 2010
$9,633 / acre
TALISMAN / COMMON
March 2010
$9,730 / acre
HUNT / MARUBENI
January 2012
+$20,000 / acre
MITSUI / SM ENERGY
June 2011
$18,846 / acre
COMBO LIQUIDS /
GAS FAIRWAY
DRY GAS
FAIRWAY
OIL FAIRWAY
TALISMAN-STATOIL / SM ENERGY
June 2011
$14,610 / acre
SHELL / HARRISON RANCH
March 2010
$10,000 / acre
CNOOC / CHESAPEAKE
October 2010
$11,011 / acre
MARATHON / HILCORP
June 2011
$24,823 / acre
KKR / HILCORP
June 2010
$10,000 / acre
TALISMAN-STATOIL / ENDURING
October 2010
$13,660 / acre
RELIANT / PIONEER NEWPEK
June 2010
$11,070 / acre
PLAINS / HUGHES
October 2010
$9,633 / acre
TALISMAN / COMMON
March 2010
$9,730 / acre
HUNT / MARUBENI
January 2012
+$20,000 / acre
MITSUI / SM ENERGY
June 2011
$18,846 / acre
Good reputation with land and mineral owners
80% of Eagle Ford acreage HBP or not burdened with lease expirations before
2013 |
 Highlights
9
Eagle Ford Well Performance
IP rates and early performance
strong in our acreage
Matador has drilled and
completed eleven operated
Eagle Ford wells
Recent wells have exceeded
initial well performance
expectations
Matador production:
Martin Ranch #1H –
700
Bbls/d and 350 Mcf/d
Martin Ranch #2H –
1,310
Bbls/d and 1.8 MMcf/d (IP)
Martin Ranch #3H –
620
Bbls/d and 0.5 MMcf/d (IP)
Martin Ranch #5H –
810
Bbls/d and 0.6 MMcf/d (IP)
Lewton #1H –
600 Bbls/d
(cond.) and 2.7 MMcf/d
COMBO LIQUIDS /
GAS FAIRWAY
DRY GAS FAIRWAY
OIL FAIRWAY
PETROHAWK –
ULRICH B 1H
OIL IP: 993 Bbls/d
GAS IP: 1,767 Mcf/d
BURLINGTON –
MARALDO A403 1H
OIL IP: 2,208 Bbls/d
GAS IP: 5,813 Mcf/d
HUNT OIL –
MOCZYGEMBA 1H
OIL IP: 199 Bbls/d
GAS IP: 104 Mcf/d
HUNT OIL –
WARNKEN 1H
OIL IP: 454 Bbls/d
GAS IP: 82 Mcf/d
FOREST OIL –
HAESE 1H
OIL IP: 745 Bbls/d
GAS IP: 435 Mcf/d
EOG –
BEYNON UNIT 2H
OIL IP: 1,079 Bbls/d
GAS IP: 1,023 Mcf/d
PIONEER –
STRAUBE 1H
OIL IP: 577 Bbls/d
GAS IP: 6,600 Mcf/d
CRIMSON –
LITTLEPAGE MCBRIDE 1H
OIL IP: 354 Bbls/d
GAS IP: 235 Mcf/d
CHESAPEAKE –
TRAYLOR NORTH 2H
OIL IP: 405 Bbls/d
GAS IP: 78 Mcf/d
CHESAPEAKE –
LAZY A COTULLA 1H
OIL IP: 619 Bbls/d
GAS IP: 339 Mcf/d
CARRIZO –
BEAR CLAUSE RANCH 10H
OIL IP: 742 Bbls/d
GAS IP: 330 Mcf/d
EL PASO –
HIXON 3H
OIL IP: 341 Bbls/d
GAS IP: 814 Mcf/d
PETROHAWK –
MARTIN DORA 1716 1H
OIL IP: 2 Bbls/d
GAS IP: 9,464 Mcf/d
ANADARKO –
BRISCOE COCHINA
E.
RANCH 5H
OIL IP: 399 Bbls/d
GAS IP: 365 Mcf/d
COMBO LIQUIDS /
GAS FAIRWAY
DRY GAS FAIRWAY
OIL FAIRWAY
PETROHAWK –
ULRICH B 1H
OIL IP: 993 Bbls/d
GAS IP: 1,767 Mcf/d
BURLINGTON –
MARALDO A403 1H
OIL IP: 2,208 Bbls/d
GAS IP: 5,813 Mcf/d
HUNT OIL –
MOCZYGEMBA 1H
OIL IP: 199 Bbls/d
GAS IP: 104 Mcf/d
HUNT OIL –
WARNKEN 1H
OIL IP: 454 Bbls/d
GAS IP: 82 Mcf/d
FOREST OIL –
HAESE 1H
OIL IP: 745 Bbls/d
GAS IP: 435 Mcf/d
EOG –
BEYNON UNIT 2H
OIL IP: 1,079 Bbls/d
GAS IP: 1,023 Mcf/d
PIONEER –
STRAUBE 1H
OIL IP: 577 Bbls/d
GAS IP: 6,600 Mcf/d
CRIMSON –
LITTLEPAGE MCBRIDE 1H
OIL IP: 354 Bbls/d
GAS IP: 235 Mcf/d
CHESAPEAKE –
TRAYLOR NORTH 2H
OIL IP: 405 Bbls/d
GAS IP: 78 Mcf/d
CHESAPEAKE –
LAZY A COTULLA 1H
OIL IP: 619 Bbls/d
GAS IP: 339 Mcf/d
CARRIZO –
BEAR CLAUSE RANCH 10H
OIL IP: 742 Bbls/d
GAS IP: 330 Mcf/d
EL PASO –
HIXON 3H
OIL IP: 341 Bbls/d
GAS IP: 814 Mcf/d
PETROHAWK –
MARTIN DORA 1716 1H
OIL IP: 2 Bbls/d
GAS IP: 9,464 Mcf/d
ANADARKO –
BRISCOE COCHINA
E.
RANCH 5H
OIL IP: 399 Bbls/d
GAS IP: 365 Mcf/d
24-hour IP rates at Martin Ranch #2H, #3H and #5H range from
700 Boe/d to 1,600 Boe/d (>80% oil)
Martin Ranch #1H produced 111,000 Bbls oil in first eight
months
Note: Initial production information on third party wells is based on publicly available
information. |
 10
Eagle Ford and Austin Chalk Properties Overview
Acreage positioned in some of the most active
counties for Eagle Ford and Austin Chalk (including
“Chalkleford”)
Two rigs running, primarily focused on oil and
liquids
Eleven operated wells drilled, completed and
producing; Three additional operated wells in
completion phase
Approximately 3.5 MMBoe (2.8 MMBbls of oil and
4.2 Bcf of natural gas) added to Eagle Ford proved
reserves in Q4 2011
Proved Reserves @ 9/30/11
1.4 MMBoe
% Proved Developed
51.0%
% Oil / Liquids
64.7%
Daily Production
(1)
2,175 Boe/d
(78% Oil)
Gross Acres
52,053 acres
Net Acres
28,906 acres
Eagle Ford
(2)
28,906 acres
Austin Chalk
(2)
14,849 acres
Identified Drilling Locations
173.1 net
2012E Anticipated Drilling
27.6 net wells
2012E CapEx Budget
$268.5 million
% HBP
(3)
80%
COMBO LIQUIDS /
GAS FAIRWAY
DRY GAS FAIRWAY
OIL FAIRWAY
EOG OPERATED, MTDR WI = 21%
23,420 gross / 4,631 net acres
Lewton #1H
GLASSCOCK (WINN) RANCH
8,891 gross / 8,891 net acres
Martin Ranch #1H, #2H, #3H, #5H
EAGLE FORD WEST
13,472 gross / 10,510 net acres
EAGLE FORD EAST
6,270 gross / 4,874 net acres
EAGLE FORD ACREAGE TOTALS
52,053 gross / 28,906 net acres
Affleck #1H
JCM Jr. Minerals #1H
COMBO LIQUIDS /
GAS FAIRWAY
DRY GAS FAIRWAY
OIL FAIRWAY
EOG OPERATED, MTDR WI = 21%
23,420 gross / 4,631 net acres
Lewton #1H
GLASSCOCK (WINN) RANCH
8,891 gross / 8,891 net acres
Martin Ranch #1H, #2H, #3H, #5H
EAGLE FORD WEST
13,472 gross / 10,510 net acres
EAGLE FORD EAST
6,270 gross / 4,874 net acres
EAGLE FORD ACREAGE TOTALS
52,053 gross / 28,906 net acres
Affleck #1H
JCM Jr. Minerals #1H
Average daily production for first eleven days of January 2012. Some of the same leases cover the
net acres shown for Eagle Ford & Austin Chalk. Therefore, the sum for both formations is not
equal to the total net acreage.
80% of Eagle Ford acreage HBP or not burdened with lease expirations before 2013. (1)
(2)
(3) |
 11
Northwest Louisiana / East Texas Properties Overview
Proved Reserves @ 9/30/11
152.7 Bcfe
% Proved Developed
33.3%
% Natural Gas
99.7%
Daily Production
(1)
39.1 MMcfe/d
Gross Acres
29,128 acres
Net Acres
25,477 acres
Haynesville
(2)
14,705 acres
Cotton Valley
(2)
23,236 acres
Identified Drilling Locations
139.9 net wells
2012E Anticipated Drilling
1.5 net wells
2012E CapEx Budget
$13.5 million
% HBP
Over 90%
(1)
Production data for the nine months ended September 30, 2011.
(2)
Some of the same leases cover the net acres shown for Haynesville & Cotton
Valley. Therefore, the sum for both formations is not equal to the total net
acreage. Haynesville, Cotton Valley and Other Plays
Participated in over 80 operated and non-operated
Haynesville wells at September 30, 2011
Haynesville proved reserves grew from zero at YE
2008 to 136.6 Bcfe at September 30, 2011
LA Wildlife H#1 and Williams 17 H#1 operated wells
produced approximately 10 MMcfe/d and 7 MMcfe/d
in their first 11 and 8 months, respectively
Note: Matador operates two sections, including the LA Wildlife and the BLM
sections, in Tier 1; all other acreage in Tier 1 is non-operated. |
 Highlights
12
Haynesville Positioning
Approximately 12,000 gross and
5,500 net acres in Haynesville
Tier 1 core area
Almost all Tier 1 core acreage is
HBP, as is over 90% of all
prospective Haynesville acreage
–
provides “natural gas bank”
for
future development
MTDR active as both operator
and non-operator in Haynesville
play
Approximately 1,700 net acres
with Bossier potential
Haynesville acreage also
prospective for shallower targets
–
Cotton Valley, Hosston, in
many areas
Approximately 10,000 net HBP
acres prospective for Cotton
Valley Horizontal play at Elm
Grove / Caspiana
Tigner Walker H#1 Alt (CV)
LA Wildlife H#1 Alt. (HV)
Williams 17 H#1 (HV)
Tigner Walker H#1 Alt (CV)
LA Wildlife H#1 Alt. (HV)
Williams 17 H#1 (HV)
Note: Matador operates two sections, including the LA Wildlife and the BLM
sections, in Tier 1; all other acreage in Tier 1 is non-operated. |
 Liquids Focused CapEx in 2012E ($mm)
Commentary
Oil Production Growth Over Time (Bbls/d)
13
Approximately 90% of 2012E
capital budget focused on
Eagle Ford (84%) and
Austin Chalk (6%)
All 2012 Eagle Ford and
Austin Chalk drilling locations
targeting oil and liquids
Only 14% of our identified
Eagle Ford and 5% of our
identified Haynesville locations
being drilled in 2012
Oil production up about five-
fold year-over-year at
September 30, 2011
Early January 2012 oil
production approximately
1,800 Bbls/d
Strong Growth Profile Focused on Liquids
91
415
1,800
0
500
1,000
1,500
2,000
2010
09/30/2011
Jan-12
(1) Average daily production for first eleven days of January 2012.
(1)
2012E Anticipated Drilling
2012E CapEx
Gross Wells
% Total
Net Wells
% Total
($ in mm)
% Total
South Texas
30.0
53.6%
27.6
93.6%
$268.5
85.8%
NW LA / E Texas
25.0
44.6%
1.5
5.1%
13.5
4.3%
SE WY, NE UT, SE ID
1.0
1.8%
0.4
1.3%
2.5
0.8%
Other
--
--
--
--
28.5
9.1%
Total
56.0
100.0%
29.5
100.0%
$313.0
100.0% |
 Diversified Investor Composition
14
Given management’s significant equity position, interests are well aligned with
public shareholders Unique and diverse investor base includes institutional
and industry shareholders with significant experience investing in the oil
and gas sector Most initial capital was provided by investor base of
predecessor company, Matador Petroleum Corporation
99.2%
of
shares
outside
the
public
float
locked-up
for
180
days
following
February
1,
2012
Note: As of March 7, 2012 close.
Management
12.6%
of shares
Legacy Shareholders
60.5%
of shares
Public Float
26.9%
of shares |
 Matador Resources Company -
Management
15
Management Team
Background and Prior Affiliations
Industry
Experience
Matador
Experience
Joseph Wm. Foran
Founder, Chairman and CEO
-
Matador Petroleum Corporation, Foran Oil Company,
J Cleo Thompson Jr. and Thompson Petroleum Corp.
31 years
Since Inception
David E. Lancaster
EVP, COO and CFO
-
Schlumberger, S.A. Holditch & Associates, Inc,
32 years
Since 2003
Matthew V. Hairford
EVP, Operations
-
Samson, Sonat, Conoco
27 years
Since 2004
Wade I. Massad
EVP, Capital Markets
-
Cleveland Capital Management, LLC, KeyBanc Capital
Markets, RBC Capital Markets
22 years
Since 2010
David F. Nicklin
Executive Director, Exploration
-
ARCO, Senior Geological Assignments in UK, Angola,
Norway and the Middle East
40 years
Since 2007
Scott E. King
Co-Founder, VP, Geophysics
and New Ventures
-
Matador Petroleum Corporation, Enserch, BP, Sohio
28 years
Since Inception
Bradley M. Robinson
VP, Reservoir Engineering
-
Schlumberger, S.A. Holditch & Associates, Inc,
Marathon
34 years
Since Inception
Kathryn L. Wayne
Controller and Treasurer
-
Matador Petroleum Corporation, Mobil
27 years
Since Inception
Diamond Shamrock |
 Board
of Directors and Special Board Advisors 16
Board Members
and Advisors
Professional Experience
Business Expertise
Charles L. Gummer
Director
-
Former Chairman, President and CEO, Comerica Bank –Texas
Banking
Dr. Stephen A. Holditch
Director
-
Professor and Former Head of the Department of Petroleum
Engineering, Texas A&M University
-
Founder / President S.A. Holditch & Associates
-
Past President of Society of Petroleum Engineers
Oil & Gas Operations
David M. Laney
Director
-
Past Chairman, Amtrak Board of Directors
-
Former Partner, Jackson Walker LLP
Law
Gregory E. Mitchell
Director
-
President / CEO, Toot’n Totum Food Stores
Petroleum Retailing
Dr. Steven W. Ohnimus
Director
-
Retired VP and General Manager, Unocal Indonesia
Oil & Gas Operations
Michael C. Ryan
Director
-
Partner, Berens Capital Management
International Business and
Finance
Margaret B. Shannon
Director
-
Retired VP and General Counsel, BJ Services Co.
-
Former Partner, Andrews Kurth LLP
Law and
Corporate Governance
Marlan W. Downey
Special Board Advisor
-
Retired President, ARCO International
-
Former President, Shell Pecten International
-
Past President of American Association of Petroleum Geologists
Oil & Gas Exploration
Edward J. Scott
Special Board Advisor
-
Former Chairman, Amarillo Economic Development Corporation
-
Law Firm of Gibson, Ochsner & Adkins
Law, Accounting and Real
Estate Development
W.J. “Jack”
Sleeper
Special Board Advisor
-
Retired President, DeGolyer and MacNaughton (Worldwide
Petroleum Consultants)
Oil & Gas Executive
Management |
 Business Strategy to Deliver Growth and Value
17
Exploration and Development
Dedicating approximately 94%
(1)
of 2012E CapEx to oil and liquids opportunities
Approximately 80% of Eagle Ford and approximately 90% of Haynesville acreage either
HBP or not burdened by near-term lease expirations
Balanced Portfolio
Growing Eagle Ford contributes to a diversified portfolio mix between oil and
natural gas Active,
ongoing
exploration
effort
continues
to
identify
new
oil
prospects
and
opportunities
Pursue Opportunistic Acquisitions
Ability to identify high return, operated opportunities at attractive prices
History of significant acquisitions and joint ventures
Maintain Financial Discipline
Keep balance sheet strong and control expenses
Work with industry participants to control costs for non-operated
properties Leverage Industry Relationships
Leverage expertise of our industry partners, exchange data and information and
build upon existing relationships
Continue active participation in industry consortia and professional
societies Build Upon Director and Management Team Experience and Success in
Unconventional Plays (1)
Calculated as percent of anticipated capital expenditure focused on oil weighted Eagle Ford and Austin
Chalk and includes $20 million to acquire acreage for oil opportunities in New Mexico and West Texas. |
 18
Matador Today
Gross Acres
144,368 acres
Net Acres
135,862 acres
2012E CapEx Budget
$2.5 million
Matador Today
Gross Acres
10,714 acres
Net Acres
7,519 acres
Wyoming, Utah and Idaho (Meade Peak Shale)
Option Value in Large Unevaluated Acreage Positions
Initial test well drilled to 8,200 feet and cored through the
Meade Peak shale
Detailed petrophysical and rock properties testing in
progress
Carried participation interest provided by an affiliate of
Alliance Bernstein
Foothold of existing production and reserves
Budgeted $20 million in 2012 to acquire acreage in oil-
focused opportunities
Southeast New Mexico / West Texas |
 19
Financial Performance
Note: CAGR stands for compounded annual growth rate.
Revenue
($ in mm)
$32.9
$24.3
$42.5
$34.0
$57.8
$0.0
$20.0
$40.0
$60.0
$80.0
FY 2008
FY 2009
FY 2010
09/30/10
09/30/11
CapEx
($ in mm)
$107.1
$54.6
$160.7
$87.0
$108.0
$0.0
$50.0
$100.0
$150.0
$200.0
FY 2008
FY 2009
FY 2010
09/30/10
09/30/11
Adjusted EBITDA
(1)
($ in mm)
$18.4
$15.2
$23.6
$17.1
$37.6
$0.0
$15.0
$30.0
$45.0
$60.0
FY 2008
FY 2009
FY 2010
09/30/10
09/30/11
Average Daily Production
(MMcfe/d)
9.0
13.7
23.6
22.0
42.5
0.0
12.5
25.0
37.5
50.0
FY 2008
FY 2009
FY 2010
09/30/10
09/30/11
CAGR: 75.9%
(1) Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a
reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, see slide 23 |
 20
Selected Historical Financials
($ in millions)
(1) Adjusted EBITDA is a non-GAAP financial measure. For a definition of
Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net income and net cash provided by operating activities, see slide 23
Year Ended December 31,
Nine Months Ended September 30,
2008
2009
2010
2010
2011
Production Summary
Oil Production (MBbls)
37.0
30.0
33.0
24.0
113.0
Gas Production (Bcf)
3.1
4.8
8.4
5.9
10.9
Total Annual Production (Bcfe)
3.3
5.0
8.6
6.0
11.6
Realized Prices (Including hedges):
Oil ($/ Bbl)
$98.59
$57.72
$76.39
$74.59
$92.71
Natural Gas ($/ Mcf)
$8.32
$5.17
$4.38
$4.49
$4.19
Revenues:
Oil and Gas Production Revenues
$30.6
$19.0
$34.0
$25.2
$52.0
Realized Oil & Gas Hedging Gain / (Loss)
(1.3)
7.6
5.3
3.0
4.2
Unrealized Oil & Gas Hedging Gain / (Loss)
3.6
(2.4)
3.1
5.8
1.5
Total Revenues
$32.9
$24.3
$42.5
$34.0
$57.8
Operating Expenses ($ / Mcfe)
Lease Operating
$1.41
$0.94
$0.61
$0.63
$0.49
Production Taxes and Marketing
0.50
0.22
0.23
0.21
0.41
General and Administrative
2.50
1.42
1.13
1.13
0.81
Total Expenses
$4.41
$2.58
$1.97
$1.97
$1.71
Adjusted EBITDA
(1)
$18.4
$15.2
$23.6
$17.1
$37.6 |
 21
Hedging Profile
Oil Hedges
2012
2013
Total Volume Hedged by Ceiling (Bbl)
1,180,000
1,260,000
Weighted Average Price ($ / Bbl)
$109.84
$110.26
Total Volume Hedged by Floor (Bbl)
1,180,000
1,260,000
Weighted Average Price ($ / Bbl)
$90.51
$87.14
Natural Gas Hedges
2012
2013
Total Volume Hedged by Ceiling (Bcf)
7.20
1.05
Weighted Average Price ($ / MMBtu)
$5.78
$5.75
Total Volume Hedged by Floor (Bcf)
7.20
1.05
Weighted Average Price ($ / MMBtu)
$4.44
$4.50 |
 22
Liquidity
No debt outstanding as of February 2012
IPO net proceeds used to repay $123.0 million outstanding under the Company’s
revolving credit facility
Borrowing base of $125 million, based on February 2012 redetermination
Plan to fund 2012 capital budget with remaining IPO net proceeds, anticipated cash
flows from operations and available borrowings under its credit facility
Intend
to
seek
redeterminations
of
borrowing
base
as
a
result
of
any
increases
in
oil
and
natural
gas
reserves during the year |
 23
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, respectively. (In thousands)
2008
2009
2010
2010
2011
Unaudited Adjusted EBITDA reconciliation to Net Income (Loss):
Net income (loss)
$103,878
($14,425)
$6,377
$7,373
($13,725)
Interest expense
-
-
3
-
461
Total income tax provision (benefit)
20,023
(9,925)
3,521
4,043
(6,952)
Depletion, depreciation and amortization
12,127
10,743
15,596
10,931
22,578
Accretion of asset retirement obligations
92
137
155
107
158
Full-cost ceiling impairment
22,195
25,244
-
-
35,673
Unrealized (gain) loss on derivatives
(3,592)
2,375
(3,139)
(5,812)
(1,534)
Stock option and grant expense
605
622
824
466
855
Restricted stock grants
60
34
74
25
36
Net (gain)/loss on asset sales and inventory impairment
(136,977)
379
224
-
-
Adjusted EBITDA
$18,411
$15,184
$23,635
$17,133
$37,550
(In thousands)
2008
2009
2010
2010
2011
Unaudited Adjusted EBITDA reconciliation to Net Cash Provided
by Operating Activities:
Net cash provided by operating activities
$25,851
$1,791
$27,273
$21,390
$34,443
Net change in operating assets and liabilities
(17,888)
15,717
(2,230)
(2,846)
2,692
Interest expense
-
-
3
-
461
Current income tax (benefit) provision
10,448
(2,324)
(1,411)
(1,411)
(46)
Adjusted EBITDA
$18,411
$15,184
$23,635
$17,133
$37,550
Nine Months Ended September 30,
Year Ended December 31,
Year Ended December 31,
Nine Months Ended September 30,
We believe Adjusted EBITDA helps us evaluate our operating performance and compare our results of
operation from period to period without regard to our financing methods or capital structure. We
define Adjusted EBITDA as earnings before interest expense, income taxes, depletion, depreciation and
amortization, property impairments, unrealized derivative gains and losses, non-recurring
income and expenses and non-cash stock-based compensation expense, including stock option and
grant expense and restricted stock grants. Adjusted EBITDA is not a measure of net income (loss)
or cash flows as determined by GAAP. Adjusted EBITDA should not be considered an alternative to, or
more meaningful than, net income or cash flows from operating activities as determined in
accordance with GAAP or as an indicator of our operating performance or liquidity.
|
 24
Investment Highlights
Strong Growth Profile with Increasing Focus on Oil / Liquids
High Quality Asset Base in Attractive Areas
Significant Multi-year Drilling Inventory
Strong Financial Position and Long-Term Institutional, Industry and Individual
Shareholders
Proven Management and Technical Team and Active Board of Directors
Low Cost Operations
Active Exploration Effort Using Science and Technology
|