EQUITY

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

EQUITY

EQUITY

Stock-based Compensation

During the nine months ended September 30, 2023, the Company granted awards to certain of its employees of 228,550 service-based restricted stock units to be settled in cash, which are liability instruments, and 143,500 performance-based stock units and 272,010 service-based 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, 2025, as compared to a designated peer group. The service-based restricted stock and restricted stock units vest over a three-year period. The fair value of these awards was approximately $38.9 million on the grant date.

Common Stock Dividend

The Board of Directors (the “Board”) declared a quarterly cash dividend of $0.15 per share of common stock in each of the first, second and third quarters of 2023. The first quarter dividend, which totaled $17.8 million, was paid on March 9, 2023 to shareholders of record as of February 27, 2023. The second quarter dividend, which totaled $17.9 million, was paid on June 1, 2023 to shareholders of record as of May 11, 2023. The third quarter dividend, which totaled $17.8 million, was paid on September 1, 2023 to shareholders of record as of August 11, 2023. On October 19, 2023, the Board amended the Company’s dividend policy to increase the quarterly dividend to $0.20 per share of common stock for future dividend payments and also declared a quarterly cash dividend of $0.20 per share of common stock payable on December 1, 2023 to shareholders of record as of November 10, 2023.

San Mateo Distributions and Contributions

During the three months ended September 30, 2023 and 2022, San Mateo distributed $17.3 million and $23.5 million, respectively, to the Company and $16.7 million and $22.5 million, respectively, to a subsidiary of Five Point Energy LLC (“Five Point”), the Company’s joint venture partner in San Mateo. During the nine months ended September 30, 2023 and 2022, San Mateo distributed $63.6 million and $70.1 million, respectively, to the Company and $61.1 million and $67.4 million, respectively, to Five Point. During the nine months ended September 30, 2023, the Company contributed $25.5 million and Five Point contributed $24.5 million of cash to San Mateo. During the three months ended September 30, 2023 and the three and nine months ended September 30, 2022, there were no contributions to San Mateo by either the Company or Five Point.

Performance Incentives

Five Point paid to the Company $9.0 million of performance incentives during the three months ended September 30, 2023. No performance incentives were paid by Five Point to the Company during the three months ended September 30, 2022. Five Point paid to the Company $23.7 million and $22.8 million of performance incentives during the nine months ended September 30, 2023 and 2022, respectively. These performance incentives are recorded when received, net of the $1.9 million deferred tax impact to Matador for the three months ended September 30, 2023 and net of the $5.0 million and $4.8 million deferred tax impact to Matador for the nine months ended September 30, 2023 and 2022, respectively, in “Additional paid-in capital” in the Company’s interim unaudited condensed consolidated balance sheets. These performance incentives for the nine months ended September 30, 2023 and 2022 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.