EQUITY

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

EQUITY

EQUITY

Stock-based Compensation

During the nine months ended September 30, 2021, the Company granted awards to certain of its employees of 334,649 service-based restricted stock units to be settled in cash, which are liability instruments, and 366,500 performance-based stock units and 334,876 shares of restricted stock, which are equity instruments. The performance-based stock units vest in an amount between zero and 200% of the target units granted based on the Company’s relative total shareholder return over the three-year period ending December 31, 2023, as compared to a designated peer group. The service-based restricted stock units to be settled in cash vest ratably over three years, and the equity instruments are eligible to vest after three years. The fair value of these awards was approximately $43.3 million on the grant date.

Common Stock Dividend

The Company’s Board of Directors (the “Board”) declared a quarterly cash dividend of $0.025 per share of common stock in each of the first three quarters of 2021. The dividend, which totaled $2.9 million in each quarter, was paid on March 31, 2021, June 3, 2021 and September 3, 2021. In October 2021, the Board amended the Company’s dividend policy to increase the quarterly dividend and declared a quarterly cash dividend of $0.05 per share of common stock payable on December 1, 2021 to shareholders of record as of November 10, 2021.

San Mateo Distributions and Contributions

During the three months ended September 30, 2021 and 2020, San Mateo distributed $17.6 million and $11.2 million, respectively, to the Company and $16.9 million and $10.8 million, respectively, to a subsidiary of Five Point Energy LLC, the Company’s joint venture partner (“Five Point”). During the nine months ended September 30, 2021 and 2020, San Mateo distributed $47.7 million and $34.2 million, respectively, to the Company and $45.8 million and $32.8 million, respectively, to Five Point.

During the three and nine months ended September 30, 2021, there were no contributions to San Mateo by either the Company or Five Point. During the three months ended September 30, 2020, the Company contributed $36.8 million and Five Point contributed $31.9 million of cash to San Mateo. During the nine months ended September 30, 2020, the Company contributed $59.7 million and Five Point contributed $99.0 million of cash to San Mateo, of which $23.1 million was paid to carry Matador’s proportionate interest in San Mateo. The portion of the amount contributed by Five Point to carry Matador’s proportionate interest was recorded in “Additional paid-in capital” in the Company’s interim unaudited condensed consolidated balance sheets for the nine ended September 30, 2020, net of the $4.8 million deferred tax impact to Matador related to this equity contribution.

Performance Incentives

Five Point paid to the Company $6.0 million in performance incentives during the three months ended September 30, 2021. No performance incentives were paid by Five Point to the Company during the three months ended September 30, 2020. Five Point paid to the Company $37.6 million and $14.7 million in performance incentives during the nine months ended September 30, 2021 and 2020, respectively. These performance incentives are recorded when received, net of the $1.3 million and $3.1 million deferred tax impact to Matador during the nine months ended September 30, 2021 and 2020, respectively, in “Additional paid-in capital” in the Company’s interim unaudited condensed consolidated balance sheets. These performance incentives for the three and nine months ended September 30, 2021 and 2020 are also denoted as “Contributions related to formation of San Mateo” under “Financing activities” in the Company’s interim unaudited condensed consolidated statements of cash flows and changes in shareholders’ equity.