XML 63 R22.htm IDEA: XBRL DOCUMENT v2.4.1.9
Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
On February 27, 2015, the Company completed a business combination with Harvey E. Yates Company (“HEYCO”), a subsidiary of HEYCO Energy Group, Inc., through which it obtained certain oil and natural gas producing properties and undeveloped acreage located in Lea and Eddy Counties, New Mexico consisting of approximately 58,600 gross (18,200 net) acres (unaudited) located in Lea and Eddy Counties, New Mexico, strategically located between Matador’s existing acreage in its Ranger and Rustler Breaks prospect areas. HEYCO, headquartered in Roswell, New Mexico, was privately owned prior to the transaction. As consideration for the business combination, Matador paid approximately $33.6 million in cash and assumed debt obligations and issued 3,300,000 shares of Matador common stock and 150,000 shares of a new series of Matador Series A Convertible Preferred Stock (“Series A Preferred Stock”) to HEYCO Energy Group, Inc. (convertible into ten shares of common stock for each one share of Preferred Stock). Matador paid an additional $3.0 million for customary purchase price adjustments, including adjusting for production, revenues and operating and capital expenditures from September 1, 2014 to closing. 
Each one share of Series A Preferred Stock will automatically convert into ten shares of Matador common stock, subject to customary anti-dilution adjustments, upon the vote and approval by Matador’s shareholders of an amendment to Matador’s Amended and Restated Certificate of Formation to increase the number of shares of authorized Matador common stock. Each share of Series A Preferred Stock is entitled to ten votes on each matter submitted to Matador’s shareholders for vote. Beginning on August 27, 2015 and until such time as the Series A Preferred Stock is converted to common stock, the holders will be entitled to a quarterly dividend of $1.80 per share. Neither the issuance of the Series A Preferred Stock nor the common stock issued in connection with this business combination will be registered under the Securities Act of 1933, as amended, and neither the Series A Preferred Stock nor such common stock may be offered or sold in the United States absent such registration or an applicable exemption from registration requirements. As part of this transaction, the Company has entered into a registration rights agreement with HEYCO Energy Group, Inc. providing certain demand and piggyback registration rights, with demand registration rights exercisable on February 27, 2016.
In January 2015, the Company granted awards of 113,289 shares of restricted stock and options to purchase 607,995 shares of the Company’s common stock at an exercise price of $22.01 per share to certain of its employees. The fair value of these awards was approximately $8.4 million. All of these awards vest over a term of three years.
Subsequent to December 31, 2014, the Company has entered into several new commitments to participate in the drilling and completion of various non-operated wells. If all of the wells are drilled and completed as proposed, the Company’s minimum aggregate commitments for participation in these wells were approximately $17.1 million at February 27, 2015.