 Investor
Presentation March 2012
Exhibit 99.1 |
 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) including overallotment at
$12.00/share in March 2012 Exchange: Ticker
NYSE: MTDR
Shares Outstanding
55.27 million common shares
Share Price as of March 20, 2012
$11.84/share
Market Capitalization as of March 20, 2012
$654.4 million
2012 Guidance Summary
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 |
 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
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
Daily
production
has
increased
over
4x
(2)
Adjusted
EBITDA
(3)
has
more
than
doubled
(2)
Proved
reserves
have
increased
9x
(4)
Predecessor Entities
(1)
Tom Brown purchased by Encana in 2004
(2) Year ended December 31, 2011 compared to year ended December 31,
2008 (3)
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
28
(4) At December 31, 2011 as compared to at December 31, 2008
Matador Today |
 4
Daily Production
(1)
55 MMcfe/d
% Oil
33%
Proved Reserves @ 12/31/11
193.2 Bcfe
% Proved Developed
33.7%
% Oil
12% (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
(2)
236,263 acres
Net Acreage
(2)
197,764 acres
Identified Drilling
Locations
(2)
818 gross / 313 net
Eagle Ford / Austin Chalk
(2)
213 gross / 173 net
Haynesville / Cotton Valley
(2)
605 gross / 140 net
(1)
Average daily production from March 1 to March 15, 2012
(2)
As of September 30, 2011
Matador Resources Snapshot |
 5
Investment Highlights
Strong Growth Profile with Increasing Focus on Oil / Liquids
Oil
production
up
almost
five-fold
in
2011
and
projected
to
increase
nearly
10x
in
2012
94%
(1)
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
and
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)
(2)
140
net
drilling
locations
across
25,500
net
acres
in
Haynesville
(104)
and
Cotton
Valley
(36)
(2)
Strong
Financial
Position
and
Long-Term
Institutional,
Industry
and
Individual
Shareholders
Proven
Management,
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
year
ended
December
31,
2011
was
$0.47
per
Mcfe,
a
23%
reduction
since
year
end
2010
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)
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 (2)
As of September 30, 2011 |
 Leverage to Eagle Ford (Net Eagle Ford Acres / EV)
(Net Acres / $mm)
6
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 2012 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
03/20/2012
2012E Capex
% Eagle Ford
44.4
43.3
42.9
32.2
31.8
27.6
24.9
23.5
21.3
16.8
14.9
9.5
9.0
6.0
3.7
SFY
MTDR
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% |
 Highlights
7
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
Good reputation with land and mineral owners
80% of Eagle Ford acreage HBP or not burdened with lease expirations before
2013 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 |
 8
Eagle Ford and Austin Chalk Properties
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
Note:
All
acreage
values
are
as
of
September
30,
2011 |
 9
Eagle Ford and Austin Chalk 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; Four additional operated
wells in completion phase
94%
(5)
of 2012E capital expenditure
program focused on oil / liquids
exploration and development
Drilling locations are based on 120 acre
spacing
Anticipate oil production to constitute
approx. 35-40% of our total production
volume and oil revenues to constitute
approx. 75-80% of our total oil and
natural gas revenues in 2012
Proved Reserves @ 12/31/11
4.7 MMBoe
% Proved Developed
37.9%
% Oil / Liquids
78.1%
Daily Production
(1)
3,000+ Boe/d
Gross Acres
(2)
52,053 acres
Net Acres
(2)
28,906 acres
Eagle Ford
(2)(3)
28,906 acres
Austin Chalk
(2)(3)
14,849 acres
Identified Drilling Locations
(2)
173.1 net
2012E Anticipated Drilling
27.6 net wells
2012E CapEx Budget
$268.5 million
% HBP or no short term expirations
(4)
80%
(1)
Average
daily
production
from
March
1
to
March
15,
2012
(2)
As
of
September
30,
2011
(3)
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
(4)
80%
of
Eagle
Ford
acreage
HBP
or
not
burdened
with
lease
expirations
before
2013
(5)
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 |
 10
Eagle Ford East (Dewitt, Gonzales, Wilson and Karnes Counties)
Acreage
Position
(1)
6,270 gross / 4,874 net
Producing Wells
Lewton #1H
Wells drilled in Q1 2012
Sickenius #1H
Danysh #1H
Danysh #2H
Pawelek #1H (drilling)
Running one rig throughout
2012
San Antonio
(1) Acreage as of September 30, 2011 |
   11
Eagle Ford West (Dimmit, La Salle and Zavala Counties)
Acreage Position
(1)
13,472 gross / 10,510 net
Wells Drilled
Martin Ranch #1H, #2H,
#3H, #4H, #5H, #6H, #7H,
#8H
Affleck #1H
JCM Jr Minerals #1H
Northcut #1H
Northcut #2H (drilling)
Running one rig throughout
2012
San Antonio
(1) Acreage as of September 30, 2011 |
   12
Martin Ranch Overview
Approximate Current Production
Martin Ranch #1H –
235 Bbls/d and 0.8 MMcf/d
12-month production of 138,000 barrels
Martin Ranch #2H –
545 Bbls/d and 1.35 MMcf/d
Martin Ranch #3H –
650 Bbls/d and 0.3 MMcf/d
Martin Ranch #5H –
715 Bbls/d and 0.15 MMcf/d
Wells Drilled, Completed and Producing
Martin Ranch #4H
Martin Ranch #6H
Martin Ranch #7H
Martin Ranch #8H
5 additional wells scheduled for 2012
San Antonio
2,485 gross / 2,483 net acres |
 13
Emerging Multi-Pay Area in Eagle Ford Oil Fairway and MTDR Acreage
|
 14
Multi-Pay Fairway: Productive and Prospective Pay Zones
Austin Chalk
Eagle Ford
Buda
Georgetown
Del Rio
Edwards
Glen Rose
Rodessa
Pearsall
Sligo
Olmos
Navarro
ANCC |
 15
South Texas Multi-Pay Petroleum Systems:
Petroleum Charge focus towards Glasscock Ranch
Note: Information for Pearsall Oil Field sourced from public information
|
 16
Northwest Louisiana / East Texas Properties Overview
Proved Reserves @ 12/31/11
164.6 Bcfe
% Proved Developed
32.7%
% Natural Gas
99.8%
Daily
Production
(1)
38.8 MMcfe/d
Gross
Acres
(2)
29,128 acres
Net Acres
(2)
25,477 acres
Haynesville
(2) (3)
14,705 acres
Cotton Valley
(2) (3)
23,236 acres
Identified Drilling Locations
(2)
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 year ended December 31, 2011
(2)
As of September 30, 2011
(3) 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 Participated in over 110 operated and
non-operated Haynesville wells at December 31, 2011
Haynesville proved reserves grew from zero at year end
2008 to 164.6 Bcfe at December 31, 2011
LA Wildlife H#1 and Williams 17 H#1 operated wells
produced approximately 3.4 Bcfe (9.3 MMcfe/d) and
1.83 Bcfe (6.7 MMcfe/d) in their first 12 and 9 months,
respectively
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. |
 Highlights
17
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
Commentary
Oil Production Growth Over Time (Bbls/d)
18
Approximately 90% of 2012E
capital budget focused on Eagle
Ford (84%) and
Austin Chalk (6%)
Oil production up about five-fold
year-over-year at December 31,
2011
Oil production expected to
increase nearly 10x in 2012
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
From March 1, 2012 through
March 15, 2012, oil production in
excess of 3,000 bbl per day
Strong Growth Profile Focused on Liquids
(1) From March 1, 2012 through March 15, 2012, oil production in excess of 3,000 bbl per day |
 Diversified Investor Composition
19
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 |
 Business Strategy to Deliver Growth and Value
20
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 |
 21
Matador Today
Gross
Acres
(1)
144,368 acres
Net Acres
(1)
135,862 acres
2012E CapEx Budget
$2.5 million
Matador Today
Gross Acres
(1)
10,714 acres
Net Acres
(1)
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 $20 million in 2012 to acquire acreage in oil-
focused opportunities
Southeast New Mexico / West Texas
(1)
As of September 30, 2011 |
 22
Financial Performance
Oil and Natural Gas Revenues
($ in mm)
Total
Realized
Revenues
(2)
($ in mm)
Adjusted
EBITDA
(1)
($ in mm)
Average Daily Production
(MMcfe/d)
Note: CAGR stands for compounded annual growth rate (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 28
(2) Includes realized gain on derivatives |
 23
Selected Historical Financials
(Revenues and Adjusted EBITDA in millions)
(2) 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 28
(1) 2011 numbers unaudited
Year Ended December 31,
2009
2010
2011
Production Summary
Oil Production (MBbls)
30.0
33.0
154.0
Gas Production (Bcf)
4.8
8.4
14.5
Total Annual Production (Bcfe)
5.0
8.6
15.4
Realized Prices (Including hedges)
Oil ($/ Bbl)
$57.72
$76.39
$93.80
Natural Gas ($/ Mcf)
$5.17
$4.38
$4.11
Revenues
(1)
Oil and Gas Production Revenues
$19.0
$34.0
$67.0
Realized Oil & Gas Hedging Gain / (Loss)
7.6
5.3
7.1
Unrealized Oil & Gas Hedging Gain / (Loss)
(2.4)
3.1
5.1
Total Revenues
$24.3
$42.5
$79.2
Operating Expenses ($/ Mcfe)
Lease Operating
$0.94
$0.61
$0.47
Production Taxes and Marketing
0.22
0.23
0.41
General and Administrative
1.42
1.13
0.87
Total Expenses
$2.58
$1.97
$1.75
Adjusted EBITDA
(2)
$15.2
$23.6
$49.9 |
 24
Hedging Profile
Oil Hedges
2012
2013
Total Volume Hedged by Ceiling (Bbl)
1,180,000
1,260,000
Weighted Average Price ($ / 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 |
 25
Financial Flexibility
Plan
to
fund
2012
capital
budget
with
a
portion
of
IPO
net
proceeds,
anticipated
cash
flows
from
operations
and
available
borrowings
under
credit
facility
Intend
to
seek
redeterminations
of
borrowing
base
as
a
result
of
any
increases
in
oil
and
natural
gas
proved
reserves
during
the
year
-
May,
November
and
one
additional
redetermination
available
in
2012
Borrowing
base
of
$125
million,
based
on
February
2012
redetermination
-
19%
of
current
market
capitalization
(1)
$15
million
in
debt
outstanding
as
of
March
19,
2012
(1) As of March 20, 2012 close |
 26
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
|
 Appendix |
 28
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. Year Ended December 31,
(In thousands)
2008
2009
2010
2011
Unaudited Adjusted EBITDA reconciliation to Net Income (Loss):
Net income (loss)
$103,878
($14,425)
$6,377
($10,309)
Interest expense
-
-
3
683
Total income tax provision (benefit)
20,023
(9,925)
3,521
(5,521)
Depletion, depreciation and amortization
12,127
10,743
15,596
31,754
Accretion of asset retirement obligations
92
137
155
209
Full-cost ceiling impairment
22,195
25,244
-
35,673
Unrealized (gain) loss on derivatives
(3,592)
2,375
(3,139)
(5,138)
Stock option and grant expense
605
622
824
2,362
Restricted stock grants
60
34
74
44
Net (gain)/loss on asset sales and inventory impairment
(136,977)
379
224
154
Adjusted EBITDA
$18,411
$15,184
$23,635
$49,911
Year Ended December 31,
(In thousands)
2008
2009
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
$61,868
Net change in operating assets and liabilities
(17,888)
15,717
(2,230)
(12,594)
Interest expense
-
-
3
683
Current income tax provision (benefit)
10,448
(2,324)
(1,411)
(46)
Adjusted EBITDA
$18,411
$15,184
$23,635
$49,911
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. |
 Board
of Directors and Special Board Advisors 29
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 R. Scott, Jr.
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 |
 Experienced Leadership
30
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., Diamond
Shamrock
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 |