DALLAS--(BUSINESS WIRE)--Nov. 6, 2013--
Matador Resources Company (NYSE: MTDR) ("Matador" or the "Company"), an
independent energy company engaged in the exploration, development,
production and acquisition of oil and natural gas resources, with an
emphasis on oil and natural gas shale and other unconventional plays and
with a current focus on its Eagle Ford operations in South Texas and its
Permian Basin operations in Southeast New Mexico and West Texas, today
reported financial and operating results for the three and nine months
ended September 30, 2013. Headlines include the following:
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Record oil production of 617,000 Bbl for the quarter ended
September 30, 2013, resulting in a year-over-year increase of 104%
from 303,000 Bbl produced in the quarter ended September 30, 2012, a
sequential increase of 38% from 447,000 Bbl produced in the quarter
ended June 30, 2013.
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Record oil and natural gas revenues of $81.9 million for the
quarter ended September 30, 2013, a year-over-year increase of 115%
from $38.0 million reported for the quarter ended September 30, 2012,
and a sequential increase of 41% from $58.2 million for the quarter
ended June 30, 2013.
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Record Adjusted EBITDA of $61.5 million for the third quarter of
2013, a year-over-year increase of 115% from $28.6 million reported
for the third quarter of 2012, and a sequential increase of 51% from
$40.8 million for the second quarter of 2013.
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Record oil and natural gas revenues of $199.4 million for the nine
months ended September 30, 2013, a year-over-year increase of 93% from
$103.3 million for the nine months ended September 30, 2012.
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Record Adjusted EBITDA of $142.9 million for the nine months ended
September 30, 2013, a year-over-year increase of 83% from $77.9
million for the nine months ended September 30, 2012.
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Record total proved oil and natural gas reserves of 44.2 million
BOE at September 30, 2013, including 13.9 million Bbl of oil and 182.0
Bcf of natural gas, with a PV-10 of $538.6 million (Standardized
Measure of $486.1 million). Proved oil reserves increased 65% to 13.9
million Bbl at September 30, 2013, as compared to 8.4 million Bbl at
September 30, 2012, and increased 32%, as compared to 10.5 million Bbl
at December 31, 2012.
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Acquired approximately 49,000 gross (32,800 net) acres primarily in
Lea and Eddy Counties, New Mexico between January 1 and November 6,
2013, bringing the Company's total acreage position in the Permian
Basin in Southeast New Mexico and West Texas to approximately 64,900
gross (40,400 net) acres.
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Increased previously announced 2013 annual oil production guidance
from 1.8 to 2.0 million Bbl to 2.0 to 2.1 million Bbl.
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Increased previously announced 2013 annual natural gas production
guidance from 11.0 to 12.0 billion cubic feet to 12.0 to 13.0 billion
cubic feet.
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Increased previously announced 2013 annual oil and natural gas
revenues guidance from $220 to $240 million to $250 to $270 million.
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Increased previously announced 2013 annual Adjusted EBITDA guidance
from $155 to $175 million to $180 to $190 million.
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The Company will hold an Analyst Day in Dallas, Texas, on December
12, 2013 at 10:00 a.m. Central Time to discuss its 2014 operational
plan, capital budget and forecasts and its Permian Basin position.
Third Quarter 2013 Financial Results
Joseph Wm. Foran, Matador's Chairman, President and CEO, commented, "We
are pleased to announce that the third quarter of 2013 was a record
quarter for Matador, both financially and operationally. Our average
daily oil production and average daily oil equivalent production for the
third quarter were the best quarterly figures in the Company’s history,
and for the second time this year, we have the pleasure of increasing
guidance. Our third quarter growth reflects year-over-year increases of
more than 100% in both oil production and Adjusted EBITDA. Furthermore,
these achievements were accomplished while keeping debt essentially flat
as compared to last year except for the approximately $40 million
invested to build our Permian Basin acreage position.
"Our total acreage position continues to grow across all our major
operating areas. Between January 1 and November 6, 2013, we have added
significantly to our leasehold position in the Permian Basin, acquiring
approximately 49,000 gross (32,800 net) acres in this area, primarily in
Lea and Eddy Counties, New Mexico. We consider the majority of this
acreage to be prospective for multiple oil and liquids-rich targets,
including the Wolfcamp and Bone Spring plays. We also have been actively
acquiring attractive acreage in both the Eagle Ford shale in South Texas
and the Haynesville shale in Northwest Louisiana. Between July 1 and
November 6, 2013, we have added approximately 1,250 gross (1,250 net)
acres in South Texas and approximately 1,190 gross (1,190 net) acres in
Northwest Louisiana. We expect to continue adding to our leasehold
positions in all these areas throughout the remainder of 2013 as
opportunities arise.
"In September we successfully completed a public offering of 9,775,000
shares of our common stock, including the full exercise of the
underwriters' option to purchase an additional 1,275,000 shares. We
raised $149.1 million in this offering, receiving net proceeds of
approximately $141.7 million after discounts, commissions and other
offering costs. This money has helped us move company-wide from two
drilling rigs to three drilling rigs, including two full-time drilling
rigs in the Eagle Ford shale in South Texas and one full-time drilling
rig in the Permian Basin in Southeast New Mexico and West Texas. The net
proceeds from this offering, combined with the increase to $350 million
in the borrowing base under our revolving credit facility, has put the
Company in an excellent financial position with close to $200 million in
cash and liquidity available under our revolving credit facility at
November 6, 2013."
Production and Revenues
Three Months Ended September 30, 2013 Compared to Three Months Ended
September 30, 2012
The third quarter of 2013 was marked by a notable increase in oil
production. Both the average daily oil equivalent production of 13,482
BOE and the average daily oil production of 6,703 Bbl for the third
quarter of 2013 were the best quarterly figures in Matador’s history.
More specifically, oil production was approximately 617,000 Bbl of oil,
or 6,703 Bbl of oil per day, during the third quarter of 2013, an
increase of 38% sequentially, as compared to approximately 447,000 Bbl
of oil, or 4,916 Bbl of oil per day, in the second quarter of 2013, and
an increase of 104%, as compared to approximately 303,000 Bbl of oil, or
3,291 Bbl of oil per day, in the third quarter of 2012. Average daily
oil equivalent production increased to 13,482 BOE per day (50% oil) in
the third quarter of 2013 from 8,838 BOE per day (37% oil) during the
comparable period of 2012. These year-over-year increases in the
Company's average daily oil equivalent production and, in particular,
the Company's average daily oil production, are directly attributable to
the success of the Company's ongoing drilling operations in the Eagle
Ford shale.
The 22% increase in Matador's natural gas production to 3.7 Bcf during
the third quarter of 2013, as compared to 3.1 Bcf during the third
quarter of 2012, was primarily attributable to several new high-volume
Eagle Ford wells completed in the eastern portion of the Company's
acreage late in the second quarter of 2013. Approximately 55% of the
natural gas produced in the third quarter of 2013 was liquids-rich
natural gas from the Eagle Ford shale, as compared to only about 12% of
total natural gas production in the third quarter of 2012. In the third
quarter of 2013, the Company's weighted average price realized for its
Eagle Ford natural gas production, including the uplift from natural gas
liquids ("NGLs"), was approximately $6.01 per Mcf, as compared to $3.13
per Mcf realized for its Haynesville natural gas production.
Total quarterly realized revenues, including realized loss on
derivatives, increased 95% to $80.7 million for the three months ended
September 30, 2013, as compared to $41.4 million for the three months
ended September 30, 2012. Oil and natural gas revenues increased 115% to
$81.9 million in the third quarter of 2013 from $38.0 million during the
comparable period of 2012. This increase in oil and natural gas revenues
includes an increase in oil revenues of $34.2 million and an increase in
natural gas revenues of $9.7 million between the respective periods. Oil
revenues increased 114% to $64.2 million for the three months ended
September 30, 2013, as compared to $30.1 million for the three months
ended September 30, 2012. This increase in oil revenues reflects the
104% increase in oil production between the comparable periods, while
the increase in natural gas revenues reflects the 22% increase in
natural gas production between the respective periods and the 82%
increase in the weighted average natural gas price, including NGLs,
realized by Matador to $4.71 per Mcf during the third quarter of 2013
compared to $2.59 per Mcf realized during the third quarter of 2012.
Nine Months Ended September 30, 2013 Compared to Nine Months Ended
September 30, 2012
Oil production increased 93% from approximately 788,000 Bbl of oil, or
2,876 Bbl of oil per day, during the first nine months of 2012 to
approximately 1,524,000 Bbl of oil, or 5,584 Bbl of oil per day, during
the first nine months of 2013. This increase in oil production is
attributable to ongoing drilling operations and improvements in frac
design and production techniques used in the Eagle Ford shale. Average
daily oil equivalent production increased 36% from 8,534 BOE per day
(34% oil) during the first nine months of 2012 to 11,663 BOE per day
(48% oil) during the first nine months of 2013. Natural gas production
not only increased 7% from 9.3 Bcf for the first nine months of 2012, to
approximately 10.0 Bcf during the first nine months of 2013, but also
38% of the natural gas produced in the nine months ended September 30,
2013 was liquids-rich natural gas from the Eagle Ford shale, as compared
to 11% during the nine months ended September 30, 2012.
Total realized revenues increased 74% (despite a realized loss on
derivatives of $0.5 million) from $114.4 million for the nine months
ended September 30, 2012 to $198.8 million for the nine months ended
September 30, 2013. Oil and natural gas revenues increased 93% from
$103.3 million during the first nine months of 2012 to $199.4 million
during the comparable period of 2013. This increase in oil and natural
gas revenues included an increase in oil revenues of $76.5 million and
an increase in natural gas revenues of $19.6 million between the
respective periods. Oil revenues increased 94% from $81.0 million for
the nine months ended September 30, 2012 to $157.5 million for the nine
months ended September 30, 2013. Natural gas revenues increased 88% from
$22.2 million for the nine months ended September 30, 2012 to $41.8
million for the nine months ended September 30, 2013.
Adjusted EBITDA
Adjusted EBITDA, a non-GAAP financial measure, increased 115% to $61.5
million for the three months ended September 30, 2013, as compared to
$28.6 million for the three months ended September 30, 2012.
Sequentially, Adjusted EBITDA increased 51% to $61.5 million, as
compared to $40.8 million reported for the second quarter of 2013.
Adjusted EBITDA increased 83% to $142.9 million for the nine months
ended September 30, 2013, as compared to $77.9 million during the
comparable period in 2012.
For a definition of Adjusted EBITDA and a reconciliation of net
income (GAAP) and net cash provided by operating activities (GAAP) to
Adjusted EBITDA (non-GAAP), please see “Supplemental Non-GAAP Financial
Measures” below.
Proved Reserves and PV-10
At September 30, 2013, Matador's estimated total proved oil and natural
gas reserves were 44.2 million BOE, including 13.9 million Bbl of oil
and 182.0 Bcf of natural gas (30.3 million BOE), with a PV-10 of $538.6
million (Standardized Measure of $486.1 million) compared to estimated
total proved reserves of 20.9 million BOE, including 8.4 million Bbl of
oil and 74.9 Bcf of natural gas (12.5 million BOE), with a PV-10 of
$363.6 million (Standardized Measure of $333.9 million) at September 30,
2012. Sequentially, Matador's estimated total proved oil and natural gas
reserves increased 14% from 38.9 million BOE, including 12.1 million Bbl
of oil and 160.8 Bcf of natural gas (26.8 million BOE), with a PV-10 of
$522.3 million (Standardized Measure of $477.6 million) at June 30,
2013. Estimated proved oil reserves increased 65% to 13.9 million Bbl at
September 30, 2013, as compared to 8.4 million Bbl at September 30, 2012.
The unweighted arithmetic average of first-day-of-the-month natural gas
prices required to be used to estimate natural gas reserves at
September 30, 2013 increased to $3.605 per MMBtu, as compared to $2.826
per MMBtu at September 30, 2012 and $3.444 per MMBtu at June 30, 2013.
As a result of the improvement in natural gas prices over the past year,
Matador added approximately 100 Bcf (16.7 million BOE) of proved
undeveloped natural gas reserves in the Haynesville shale in Northwest
Louisiana to its total estimated proved reserves in the second and third
quarters of 2013, which are reflected in the Company's estimated total
proved reserves at September 30, 2013. The reserves estimates in all
periods presented were prepared by the Company's engineering staff and
audited by Netherland, Sewell & Associates, Inc., independent reservoir
engineers.
For a reconciliation of Standardized Measure (GAAP) to PV-10
(non-GAAP), please see “Supplemental Non-GAAP Financial Measures” below.
Net Income (Loss)
For the quarter ended September 30, 2013, Matador reported net income of
approximately $20.1 million and earnings of $0.35 per common share, as
compared to a net loss of approximately $9.2 million and a loss of $0.17
per common share for the quarter ended September 30, 2012. The Company's
earnings per share for the quarter ended September 30, 2013 were
unfavorably impacted by a non-cash unrealized loss on derivatives of
$9.3 million but favorably impacted by a low effective tax rate
resulting from the reversal of the full valuation allowance against its
net federal deferred tax assets maintained in previous quarters.
For the nine months ended September 30, 2013, Matador reported net
income of approximately $29.7 million and earnings of $0.53 per common
share compared to a net loss of approximately $12.1 million and a loss
of $0.23 per common share for the nine months ended September 30, 2012.
For the nine months ended September 30, 2013, the Company's earnings per
share were unfavorably impacted by a non-cash unrealized loss on
derivatives of $6.6 million and by a non-cash full-cost ceiling
impairment charge to operations of $21.2 million recorded during the
first quarter of 2013, but were favorably impacted by a low effective
tax rate as described above.
Quarterly Sequential Financial Results
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Oil production increased 38% to approximately 617,000 Bbl, or about
6,703 Bbl of oil per day, in the third quarter of 2013 from
approximately 447,000 Bbl, or about 4,916 Bbl of oil per day, in the
second quarter of 2013.
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Oil and natural gas revenues increased 41% to $81.9 million in the
third quarter of 2013 from $58.2 million in the second quarter of
2013. The Company realized a weighted average oil price of $104.15 per
Bbl and a weighted average natural gas price of $4.71 per Mcf during
the third quarter of 2013, as compared to $99.77 per Bbl and $4.38 per
Mcf, respectively, during the second quarter of 2013.
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Adjusted EBITDA increased 51% to $61.5 million in the third quarter of
2013, as compared to $40.8 million reported in the second quarter of
2013.
Operating Expenses Update
Production Taxes and Marketing
Production taxes and marketing expenses increased to $6.6 million (or
$5.29 per BOE) for the three months ended September 30, 2013, as
compared to $2.8 million (or $3.47 per BOE) for the three months ended
September 30, 2012. This increase was primarily due to the increase in
oil and natural gas revenues by approximately 115% during the three
months ended September 30, 2013, as compared to the three months ended
September 30, 2012. The majority of these increases on both an absolute
and a unit-of-production basis was attributable to production taxes
associated with the increase in oil production and associated oil
revenues during the three months ended September 30, 2013 resulting from
drilling operations in the Eagle Ford shale in South Texas. Production
taxes on a unit-of-production basis on the Company's oil and natural gas
production in Texas are effectively higher than the production taxes on
a unit-of-production basis on the Company's production in Louisiana. As
a result, the shift in Matador's focus from the Haynesville shale in
Northwest Louisiana to the Eagle Ford shale in South Texas has also
caused its production taxes on a unit-of-production basis to increase.
Lease Operating Expenses (“LOE”)
Lease operating expenses increased on an absolute basis to $8.6 million
(or $6.91 per BOE) but decreased on a per unit basis for the three
months ended September 30, 2013, as compared to $6.5 million (or $7.98
per BOE) for the three months ended September 30, 2012. Lease operating
expenses also decreased sequentially from $10.1 million (or $10.53 per
BOE) in the second quarter of 2013. The year-over-year increase in total
LOE was primarily attributable to the overall increase in oil production
and the higher lifting costs associated with oil production between the
comparable periods, as well as to the increased percentage of oil being
produced, which was 50% of total production by volume in the third
quarter of 2013, compared to only 37% of total production by volume in
the third quarter of 2012. The decrease of approximately 13% on a per
unit basis to $6.91 per BOE for the three months ended September 30,
2013, as compared to $7.98 per BOE for the three months ended
September 30, 2012, was attributable to the continued improvement in
operating efficiencies in the Company's Eagle Ford properties in South
Texas. During 2012, the Company frequently produced new wells through
rental test equipment monitored by 24-hour contract personnel on an
extended basis until permanent facilities were in place, resulting in
higher operating costs. As the Company drills new wells on existing
properties where the production facilities are already in place or where
they can be installed relatively quickly, the Company typically does not
incur these types of expenses. Additional factors contributing to the
decrease in LOE on a per unit basis were a decrease in workover costs
primarily attributable to the Company's initial use of gas lift rather
than rod pumps on most of its recent Eagle Ford wells and a decrease in
per barrel salt water disposal costs in the quarter.
Depletion, depreciation and amortization (“DD&A”)
Total depletion, depreciation and amortization expenses increased to
$26.1 million for the three months ended September 30, 2013 from $21.7
million for the three months ended September 30, 2012. On a
unit-of-production basis, however, DD&A expenses decreased to $21.06 per
BOE for the three months ended September 30, 2013, or a decrease of
about 21%, from $26.66 per BOE for the three months ended September 30,
2012. The increase in DD&A expenses was attributable to the increase in
oil and natural gas production by approximately 53% to 1,240 MBOE from
813 MBOE during the respective periods, but was offset by the decrease
in the DD&A rate on a per unit basis. This decrease on a
unit-of-production basis was primarily attributable to the 112% increase
in proved oil and natural gas reserves to 44.2 million BOE at
September 30, 2013 from 20.9 million BOE at September 30, 2012.
General and administrative (“G&A”)
Total general and administrative expenses increased to $5.4 million (or
$4.35 per BOE) for the three months ended September 30, 2013, as
compared to $3.4 million (or $4.23 per BOE) for the three months ended
September 30, 2012. The increase in G&A expenses for the three months
ended September 30, 2013 was primarily attributable to an increase in
non-cash stock-based compensation costs of $1.3 million to $1.2 million
for the three months ended September 30, 2013, as compared to $(0.1)
million for the three months ended September 30, 2012. The remaining
increase was due to additional payroll expenses associated with
personnel added between the respective periods to support the Company's
increased operations. The increase in stock-based compensation expense
was attributable to the continued vesting of awards granted in 2012 and
2013, as well as the increased fair value of the Company's
liability-based stock options during the three months ended
September 30, 2013 as a result of the increase in Matador's underlying
stock price during the same period. G&A expenses increased by
approximately 3% on a unit-of-production basis to $4.35 per BOE for the
three months ended September 30, 2013, as compared to $4.23 per BOE for
the three months ended September 30, 2012. On a unit-of-production
basis, G&A expenses remained relatively unchanged as the increase in
costs was offset by the 53% increase in oil and natural gas production
between the respective periods.
Operations Update
During the first quarter of 2013, Matador had two contracted drilling
rigs operating full-time in South Texas and virtually all of our
operated drilling and completion activities there were focused on the
Eagle Ford shale. In late April 2013, one of these contracted drilling
rigs was moved to Southeast New Mexico to begin a three-well exploration
program testing portions of the Company's leasehold acreage in the
Permian Basin in Southeast New Mexico and West Texas, while the second
contracted drilling rig continued to operate in the Eagle Ford in South
Texas. In mid-August 2013, the Company added a third contracted drilling
rig to its drilling program and returned to operating two contracted
drilling rigs in the Eagle Ford shale play. Matador expects to operate
two contracted drilling rigs in the Eagle Ford shale for the remainder
of 2013 and throughout 2014. As a result of recent acreage acquisitions
in Southeast New Mexico and West Texas, encouraging preliminary
indications from its drilling program and the production results from
nearby properties, the Company now intends to operate one contracted
drilling rig in the Permian Basin for the remainder of 2013 and
throughout 2014. At November 6, 2013, the two Eagle Ford rigs were
operating in La Salle and Karnes Counties, Texas, respectively, and the
Permian Basin rig was operating in Loving County, Texas.
During the first nine months of 2013, Matador's operations were focused
primarily on the exploration and development of its Eagle Ford shale
properties in South Texas. During the nine months ended September 30,
2013, the Company completed and began producing oil and natural gas from
16 gross (16.0 net) operated and 4 gross (1.5 net) non-operated Eagle
Ford shale wells. The Company also participated in 5 gross (0.4 net)
non-operated Haynesville shale wells in Northwest Louisiana and one
non-operated test of the Buda formation in South Texas (approximately
21% working interest).
In late April 2013, Matador initiated an exploration program testing
portions of its leasehold position in the Permian Basin in Southeast New
Mexico and West Texas. As these are the first wells Matador has drilled
in this area, the Company is collecting additional well log, core and
other petrophysical data on these initial test wells and evaluating and
testing a number of zones in order to determine its operational plan and
drilling schedule for the Company's Permian rig for 2014. At November 6,
2013, Matador is flowing back the Ranger 33 State Com #1H after
completion of a horizontal lateral drilled in the Second Bone Spring
sand. The Company completed the 4,300-ft horizontal lateral with 18 frac
stages, including approximately 165,000 Bbl of fluid and 7.5 million
pounds of sand (6.6 million pounds of white sand and 900,000 pounds of
resin-coated tail in). Although only about 10% of the load water has
been recovered at November 6, 2013, the well continues to meet or exceed
expectations at this point. Matador is also continuing to evaluate
geological data and potential completion intervals in a number of
horizons in the Ranger 12 State #1 vertical well, and is currently
flowing the well back after performing a completion in the Avalon Shale.
At November 6, 2013, Matador was drilling a third exploration well on
its Permian leasehold, the Dorothy White #1H well in Loving County,
Texas, which is a horizontal well testing the Upper Wolfcamp. After this
test, this drilling rig will move to our Indian Draw area to drill the
Rustler Breaks 12-24-27 #1H well in Eddy County, New Mexico. The Company
expects to have additional results to report from its first three
appraisal wells at its Analyst Day on December 12, 2013.
During the three months ended September 30, 2013 specifically, Matador
completed and began producing oil and natural gas from 5 gross (5.0 net)
operated and 2 gross (0.7 net) non-operated Eagle Ford shale wells. The
Company completed three operated Eagle Ford wells on its Sickenius lease
in Karnes County, Texas, one well on its Pena lease in northwest La
Salle County, Texas and one well on its Hennig lease in Gonzales County,
Texas. The two non-operated wells were completed on the Company's Troutt
acreage in central La Salle County. The Sickenius and Pena wells began
producing in early to mid-July, and the Hennig and Troutt wells began
producing in early to mid-September. Matador plans to continue its
practice of drilling and fracturing multiple wells from a single pad
site, as well as shutting in offsetting producing wells during
fracturing operations in the Eagle Ford, and anticipates that up to 20%
of its production may be shut in at various times during the fourth
quarter of 2013.
During the second quarter of 2013, Matador completed the Martin Ranch
#35H, its first 40-acre test well in La Salle County, Texas. During the
first four months of production, this well has produced approximately
36,000 Bbl of oil and was still averaging about 200 Bbl of oil per day
just prior to shut in on October 15, 2013 in preparation for a
fracturing operation on an offsetting well. Due to the encouraging
results of this test well, the Company drilled and completed two
additional 40-acre wells on its Newman lease in La Salle County, Texas
and drilled four additional 40-acre wells on its Martin Ranch lease,
which it expects to be completed in November 2013. Early in the third
quarter of 2013, Matador began producing the Sickenius #3H and Sickenius
#4H, a pair of 50-acre spaced wells in Karnes County, Texas. During the
first three months of production, these wells have each produced
approximately 35,000 Bbl of oil and are still averaging about 300 Bbl of
oil per day. The Company is also encouraged by the initial performance
of these down-spaced wells, and as a result, has drilled and completed
two additional 40-acre wells on its Danysh lease in Karnes County,
Texas. Although the preliminary data shows possible communication
between all down-spaced test wells, they continue to outperform 80-acre
spaced wells completed with older frac designs. The Company plans
additional 40-acre tests on its Northcut and Pawelek properties during
the fourth quarter of 2013.
Acreage Acquisitions
Matador began the year with approximately 15,900 gross (7,600 net) acres
in the Permian Basin in Southeast New Mexico and West Texas. Between
January 1 and November 6, 2013, Matador has acquired an additional
approximately 49,000 gross (32,800 net) acres in this area, primarily in
Lea and Eddy Counties, New Mexico. Including these acreage acquisitions,
at November 6, 2013, Matador’s total Permian Basin acreage position in
Southeast New Mexico and West Texas is approximately 64,900 gross
(40,400 net) acres.
Matador has also been actively acquiring attractive acreage in both
South Texas and Northwest Louisiana. Between July 1 and November 6,
2013, Matador has acquired approximately 1,250 gross (1,250 net) acres
in South Texas and approximately 1,190 gross (1,190 net) acres in
Northwest Louisiana. Matador expects to continue adding to its leasehold
position in each of these operating areas throughout the remainder of
2013 and in 2014.
Liquidity Update
On September 10, 2013, Matador completed a public offering of 9,775,000
shares of common stock, including 1,275,000 shares issued pursuant to
the underwriters’ exercise of their option to purchase additional
shares. After deducting underwriting discounts, commissions and direct
offering costs totaling approximately $7.4 million, Matador received net
proceeds of approximately $141.7 million. The Company intends to use
these net proceeds primarily to fund a portion of its capital
expenditures, including for the addition of a third rig to its drilling
program. The Company also intends to use net proceeds from this offering
to fund the acquisition of additional acreage in the Eagle Ford shale,
the Permian Basin and the Haynesville shale and for other general
working capital needs. Pending such uses, Matador used $130.0 million of
the net proceeds to repay outstanding borrowings under its revolving
credit facility (the "Credit Agreement") in September 2013, which
amounts may be reborrowed in accordance with the terms of that facility.
The remaining $11.7 million of the offering net proceeds was used to
fund working capital requirements.
On August 7, 2013, the borrowing base under the Credit Agreement was
increased to $350.0 million from $280.0 million, based on the lenders'
review of Matador's proved oil and natural gas reserves at June 30,
2013. At September 30, 2013, Matador had cash and certificates of
deposits totaling approximately $6.4 million and the Company had $145.0
million of outstanding long-term borrowings and approximately $0.3
million in outstanding letters of credit. These borrowings bore interest
at an effective interest rate of 4.0% per annum. The Company expects to
access future borrowings under the Credit Agreement to fund its
remaining 2013 and 2014 capital expenditure requirements in excess of
amounts available from the Company's operating cash flows. Subsequent to
September 30, 2013, the Company borrowed an additional $15.0 million to
fund a portion of its working capital requirements and the acquisition
of additional leasehold interests. At November 6, 2013, the Company had
$160.0 million in borrowings outstanding under the Credit Agreement and
approximately $0.3 million in outstanding letters of credit issued
pursuant to the Credit Agreement.
Matador's preliminary 2014 capital expenditure budget is estimated
between $425.0 million and $450.0 million and includes approximately
$400.0 million for drilling and completing oil and natural gas
exploration and development wells with the remainder allocated to lease
acquisitions, seismic data, pipelines and other infrastructure. As a
result of the receipt of the net proceeds received from the September
2013 public equity offering, current availability and anticipated
increases in the borrowing base under the Credit Agreement, and
anticipated increases in oil and natural gas production and related
revenues, excluding any possible significant acquisitions, the Company
expects to have sufficient future borrowing capacity under the Credit
Agreement and cash flows from operations to fund capital expenditure
requirements for the remainder of 2013 and for 2014.
Hedging Positions
From time to time, Matador uses derivative financial instruments to
mitigate its exposure to commodity price risk associated with oil,
natural gas and natural gas liquids prices and to protect its cash flows
and borrowing capacity.
At November 6, 2013, Matador had the following hedges in place, in the
form of costless collars and swaps, for the remainder of 2013.
-
Approximately 0.3 million Bbl of oil at a weighted average floor price
of $88/Bbl and a weighted average ceiling price of $106/Bbl.
-
Approximately 0.8 Bcf of natural gas at a weighted average floor price
of $3.19/MMBtu and a weighted average ceiling price of $4.45/MMBtu.
-
Approximately 2.0 million gallons of natural gas liquids at a weighted
average price of $1.20/gallon.
At November 6, 2013, Matador also had the following hedges in place, in
the form of costless collars and swaps, for 2014.
-
Approximately 2.3 million Bbl of oil at a weighted average floor price
of $88/Bbl and a weighted average ceiling price of $99/Bbl.
-
Approximately 8.4 Bcf of natural gas at a weighted average floor price
of $3.32/MMBtu and a weighted average ceiling price of $5.15/MMBtu.
-
Approximately 5.8 million gallons of natural gas liquids at a weighted
average price of $1.28/gallon.
2013 Guidance Update and Increase
Matador provides the following guidance increase for 2013 compared to
guidance previously revised upwards on May 8, 2013, including (1) an
increase in estimated total oil production from 1.8 to 2.0 million Bbl
to 2.0 to 2.1 million Bbl, (2) an increase in estimated total natural
gas production from 11.0 to 12.0 billion cubic feet to 12.0 to 13.0
billion cubic feet, (3) an increase in estimated oil and natural gas
revenues from $220 to $240 million to $250 to $270 million, (4) an
increase in estimated Adjusted EBITDA from $155 to $175 million to $180
to $190 million and (5) no change to estimated capital spending of $370
million, which was increased effective September 4, 2013 in connection
with the Company's equity offering.
This marks the second time this year the Company has increased its 2013
guidance since announcing its initial guidance at Analyst Day on
December 6, 2012. Matador is increasing its guidance in response to its
year-to-date drilling and operational results, which are tracking above
expectations and earlier guidance. The increased guidance for 2013
estimated oil production of 2.0 to 2.1 million Bbl represents a
significant year-over-year increase in oil production of 67% to 75%, as
compared to the 1.2 million Bbl of oil produced in 2012.
The Company would also like to reiterate its second quarter guidance
commentary from August 7, 2013. At that time, the Company cautioned that
production and financial results were likely to be uneven for the
remainder of 2013 and subject to various operating conditions and
operating practices followed by Matador. The Company intends to continue
drilling and completing multiple Eagle Ford shale wells from single pads
from time to time with its walking rig and also intends to continue its
practice of shutting in producing wells while it conducts hydraulic
fracturing operations on multi-well pads. Accordingly, Matador estimates
that up to 20% of its production capacity may be shut in at various
times during the fourth quarter. In addition, the Company's decision to
employ a split drilling schedule between the Eagle Ford in South Texas
and the Permian Basin in Southeast New Mexico and West Texas prior to
the addition of the third contracted drilling rig to the Company's
drilling program and the decision to methodically test the efficacy of
downspacing in the Eagle Ford shale have contributed to the unevenness
of the Company's production results during 2013. As a result of these
operational decisions and other operational procedures, and in
accordance with its previous guidance, Matador estimates that its
production may decline by as much as 10% during the fourth quarter of
2013. The Company also anticipates an increase in production again
during the first quarter of 2014 as compared to the fourth quarter of
2013 as well as a sequential increase in the first six months of 2014 as
compared to the last six months of 2013. Matador continues to believe
that these operational practices will lead to better overall well
performance, improved and accelerated well recoveries and operational
efficiencies that are increasing rates of return by saving hundreds of
thousands of dollars per well and increasing production and ultimate
recoveries. Matador believes that a six-month to six-month comparison is
a better way to evaluate the Company's progress due to its high growth
rate, size and operating practices. Matador has averaged 64% growth each
sequential six month period since its initial public offering in
February 2012, increasing oil production to 1.1 million Bbl or
approximately 5,800 Bbl per day for the six month period ended
September 30, 2013 from 0.2 million Bbl or approximately 1,300 Bbl per
day for the six month period ended March 31, 2012, the quarter in which
Matador went public.
Matador Analyst Day
Matador will be hosting an Analyst Day on Thursday, December 12, 2013 at
10:00 a.m. Central Time at the Hilton Dallas Lincoln Centre in Dallas,
Texas. The meeting will include an overview of its 2014 operational
plan, capital budget and forecasts, plus an update on geology and
drilling and completion techniques in its areas of operation. The call
will be available via webcast and additional details will be released
closer to the date.
Conference Call Information
The Company will host a conference call on Thursday, November 7, 2013,
at 9:00 a.m. Central Time to discuss the third quarter 2013 financial
and operational results. To access the conference call, domestic
participants should dial (800) 510-9691 and international participants
should dial (617) 614-3453. The participant passcode is 66901007. The
conference call will also be available through the Company's website at www.matadorresources.com
on the Presentations & Webcasts page under the Investors tab. Domestic
participants accessing the telephonic replay should dial (888) 286-8010
and international participants should dial (617) 801-6888. The
participant passcode is 36737549. The replay for the event will also be
available on the Company's website at www.matadorresources.com
through Wednesday, November 27, 2013.
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 an emphasis on oil and natural gas shale and
other unconventional plays. Its current operations are focused primarily
on the oil and liquids-rich portion of the Eagle Ford shale play in
South Texas and the Wolfcamp and Bone Spring plays in the Permian Basin
in Southeast New Mexico and West Texas. Matador also operates in the
Haynesville shale and Cotton Valley plays in Northwest Louisiana and
East Texas. In addition, Matador has a large exploratory leasehold
position in Southwest Wyoming and adjacent areas of Utah and Idaho where
it is testing the Meade Peak shale.
For more information, visit Matador Resources Company at www.matadorresources.com.
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, and such forward-looking statements may not prove to
be accurate. These forward-looking statements involve certain risks and
uncertainties, including, but not limited to, the following risks
related to financial and operational performance: general economic
conditions; our ability to execute our business plan, including whether
our drilling program is successful; 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 current reserves; 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 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 most
recent Annual Report on Form 10-K and any subsequent Quarterly Reports
on Form 10-Q. 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 press release, except as
required by law, including the securities laws of the United States and
the rules and regulations of the SEC. 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.
|
|
|
|
|
|
|
Matador Resources Company and Subsidiaries
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
|
|
|
|
|
|
|
|
(In thousands, except par value and share data)
|
|
September 30,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash
|
|
$
|
6,330
|
|
|
$
|
2,095
|
|
|
|
Certificates of deposit
|
|
|
40
|
|
|
|
230
|
|
|
|
Accounts receivable
|
|
|
|
|
|
|
Oil and natural gas revenues
|
|
|
26,722
|
|
|
|
24,422
|
|
|
|
Joint interest billings
|
|
|
2,600
|
|
|
|
4,118
|
|
|
|
Other
|
|
|
1,077
|
|
|
|
974
|
|
|
|
Derivative instruments
|
|
|
1,037
|
|
|
|
4,378
|
|
|
|
Deferred income taxes
|
|
|
1,948
|
|
|
|
—
|
|
|
|
Lease and well equipment inventory
|
|
|
687
|
|
|
|
877
|
|
|
|
Prepaid expenses
|
|
|
3,250
|
|
|
|
1,103
|
|
|
|
Total current assets
|
|
|
43,691
|
|
|
|
38,197
|
|
|
|
Property and equipment, at cost
|
|
|
|
|
|
|
Oil and natural gas properties, full-cost method
|
|
|
|
|
|
|
Evaluated
|
|
|
951,736
|
|
|
|
763,527
|
|
|
|
Unproved and unevaluated
|
|
|
213,084
|
|
|
|
149,675
|
|
|
|
Other property and equipment
|
|
|
29,219
|
|
|
|
27,258
|
|
|
|
Less accumulated depletion, depreciation and amortization
|
|
|
(445,193
|
)
|
|
|
(349,370
|
)
|
|
|
Net property and equipment
|
|
|
748,846
|
|
|
|
591,090
|
|
|
|
Other assets
|
|
|
|
|
|
|
Derivative instruments
|
|
|
995
|
|
|
|
771
|
|
|
|
Deferred income taxes
|
|
|
—
|
|
|
|
411
|
|
|
|
Other assets
|
|
|
2,288
|
|
|
|
1,560
|
|
|
|
Total other assets
|
|
|
3,283
|
|
|
|
2,742
|
|
|
|
Total assets
|
|
$
|
795,820
|
|
|
$
|
632,029
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
20,280
|
|
|
$
|
28,120
|
|
|
|
Accrued liabilities
|
|
|
50,048
|
|
|
|
59,179
|
|
|
|
Royalties payable
|
|
|
10,352
|
|
|
|
6,541
|
|
|
|
Derivative instruments
|
|
|
4,178
|
|
|
|
670
|
|
|
|
Advances from joint interest owners
|
|
|
10
|
|
|
|
1,515
|
|
|
|
Income taxes payable
|
|
|
980
|
|
|
|
—
|
|
|
|
Deferred income taxes
|
|
|
—
|
|
|
|
411
|
|
|
|
Other current liabilities
|
|
|
87
|
|
|
|
56
|
|
|
|
Total current liabilities
|
|
|
85,935
|
|
|
|
96,492
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
Borrowings under Credit Agreement
|
|
|
145,000
|
|
|
|
150,000
|
|
|
|
Asset retirement obligations
|
|
|
6,147
|
|
|
|
5,109
|
|
|
|
Deferred income taxes
|
|
|
3,609
|
|
|
|
—
|
|
|
|
Other long-term liabilities
|
|
|
2,463
|
|
|
|
1,324
|
|
|
|
Total long-term liabilities
|
|
|
157,219
|
|
|
|
156,433
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
Common stock - $0.01 par value, 80,000,000 shares authorized;
66,927,261 and 56,778,718 shares issued; and 65,625,418 and
55,577,667 shares outstanding, respectively
|
|
|
670
|
|
|
|
568
|
|
|
|
Additional paid-in capital
|
|
|
548,051
|
|
|
|
404,311
|
|
|
|
Retained earnings (deficit)
|
|
|
14,710
|
|
|
|
(15,010
|
)
|
|
|
Treasury stock, at cost, 1,301,843 and 1,201,051 shares, respectively
|
|
|
(10,765
|
)
|
|
|
(10,765
|
)
|
|
|
Total shareholders’ equity
|
|
|
552,666
|
|
|
|
379,104
|
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
795,820
|
|
|
$
|
632,029
|
|
|
|
|
|
|
|
|
Matador Resources Company and Subsidiaries
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas revenues
|
|
$
|
81,868
|
|
|
$
|
38,008
|
|
|
$
|
199,367
|
|
|
$
|
103,250
|
|
|
|
Realized (loss) gain on derivatives
|
|
|
(1,165
|
)
|
|
|
3,371
|
|
|
|
(519
|
)
|
|
|
11,147
|
|
|
|
Unrealized loss on derivatives
|
|
|
(9,327
|
)
|
|
|
(12,993
|
)
|
|
|
(6,626
|
)
|
|
|
(1,149
|
)
|
|
|
Total revenues
|
|
|
71,376
|
|
|
|
28,386
|
|
|
|
192,222
|
|
|
|
113,248
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Production taxes and marketing
|
|
|
6,559
|
|
|
|
2,822
|
|
|
|
15,107
|
|
|
|
7,605
|
|
|
|
Lease operating
|
|
|
8,569
|
|
|
|
6,491
|
|
|
|
29,608
|
|
|
|
17,511
|
|
|
|
Depletion, depreciation and amortization
|
|
|
26,127
|
|
|
|
21,680
|
|
|
|
74,593
|
|
|
|
52,799
|
|
|
|
Accretion of asset retirement obligations
|
|
|
86
|
|
|
|
59
|
|
|
|
248
|
|
|
|
170
|
|
|
|
Full-cost ceiling impairment
|
|
|
—
|
|
|
|
3,596
|
|
|
|
21,229
|
|
|
|
36,801
|
|
|
|
General and administrative
|
|
|
5,395
|
|
|
|
3,439
|
|
|
|
14,146
|
|
|
|
11,321
|
|
|
|
Total expenses
|
|
|
46,736
|
|
|
|
38,087
|
|
|
|
154,931
|
|
|
|
126,207
|
|
|
|
Operating income (loss)
|
|
|
24,640
|
|
|
|
(9,701
|
)
|
|
|
37,291
|
|
|
|
(12,959
|
)
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
Net loss on asset sales and inventory impairment
|
|
|
—
|
|
|
|
—
|
|
|
|
(192
|
)
|
|
|
(60
|
)
|
|
|
Interest expense
|
|
|
(2,038
|
)
|
|
|
(144
|
)
|
|
|
(4,919
|
)
|
|
|
(453
|
)
|
|
|
Interest and other income
|
|
|
66
|
|
|
|
55
|
|
|
|
181
|
|
|
|
157
|
|
|
|
Total other expense
|
|
|
(1,972
|
)
|
|
|
(89
|
)
|
|
|
(4,930
|
)
|
|
|
(356
|
)
|
|
|
Income (loss) before income taxes
|
|
|
22,668
|
|
|
|
(9,790
|
)
|
|
|
32,361
|
|
|
|
(13,315
|
)
|
|
|
Income tax provision (benefit)
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
902
|
|
|
|
188
|
|
|
|
980
|
|
|
|
188
|
|
|
|
Deferred
|
|
|
1,661
|
|
|
|
(781
|
)
|
|
|
1,661
|
|
|
|
(1,430
|
)
|
|
|
Total income tax provision (benefit)
|
|
|
2,563
|
|
|
|
(593
|
)
|
|
|
2,641
|
|
|
|
(1,242
|
)
|
|
|
Net income (loss)
|
|
$
|
20,105
|
|
|
$
|
(9,197
|
)
|
|
$
|
29,720
|
|
|
$
|
(12,073
|
)
|
|
|
Earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
0.35
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.53
|
|
|
$
|
(0.23
|
)
|
|
|
Class B
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
0.35
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.53
|
|
|
$
|
(0.23
|
)
|
|
|
Class B
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
58,016
|
|
|
|
55,271
|
|
|
|
55,766
|
|
|
|
53,379
|
|
|
|
Class B
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
140
|
|
|
|
Total
|
|
|
58,016
|
|
|
|
55,271
|
|
|
|
55,766
|
|
|
|
53,519
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
58,152
|
|
|
|
55,271
|
|
|
|
55,889
|
|
|
|
53,379
|
|
|
|
Class B
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
140
|
|
|
|
Total
|
|
|
58,152
|
|
|
|
55,271
|
|
|
|
55,889
|
|
|
|
53,519
|
|
|
|
|
|
|
Matador Resources Company and Subsidiaries
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
|
|
|
|
|
|
(In thousands)
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
Operating activities
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
29,720
|
|
|
$
|
(12,073
|
)
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities
|
|
|
|
|
|
|
Unrealized loss on derivatives
|
|
|
6,626
|
|
|
|
1,149
|
|
|
|
Depletion, depreciation and amortization
|
|
|
74,593
|
|
|
|
52,799
|
|
|
|
Accretion of asset retirement obligations
|
|
|
248
|
|
|
|
170
|
|
|
|
Full-cost ceiling impairment
|
|
|
21,229
|
|
|
|
36,801
|
|
|
|
Stock-based compensation expense
|
|
|
2,763
|
|
|
|
(223
|
)
|
|
|
Deferred income tax provision (benefit)
|
|
|
1,661
|
|
|
|
(1,430
|
)
|
|
|
Net loss on asset sales and inventory impairment
|
|
|
192
|
|
|
|
60
|
|
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(886
|
)
|
|
|
(8,718
|
)
|
|
|
Lease and well equipment inventory
|
|
|
198
|
|
|
|
(285
|
)
|
|
|
Prepaid expenses
|
|
|
(2,148
|
)
|
|
|
179
|
|
|
|
Other assets
|
|
|
(728
|
)
|
|
|
(650
|
)
|
|
|
Accounts payable, accrued liabilities and other current liabilities
|
|
|
(10,702
|
)
|
|
|
6,105
|
|
|
|
Royalties payable
|
|
|
3,812
|
|
|
|
4,065
|
|
|
|
Advances from joint interest owners
|
|
|
(1,505
|
)
|
|
|
1,782
|
|
|
|
Income taxes payable
|
|
|
980
|
|
|
|
188
|
|
|
|
Other long-term liabilities
|
|
|
1,139
|
|
|
|
406
|
|
|
|
Net cash provided by operating activities
|
|
|
127,192
|
|
|
|
80,325
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Oil and natural gas properties capital expenditures
|
|
|
(257,216
|
)
|
|
|
(212,702
|
)
|
|
|
Expenditures for other property and equipment
|
|
|
(3,058
|
)
|
|
|
(5,297
|
)
|
|
|
Purchases of certificates of deposit
|
|
|
(61
|
)
|
|
|
(416
|
)
|
|
|
Maturities of certificates of deposit
|
|
|
251
|
|
|
|
1,485
|
|
|
|
Net cash used in investing activities
|
|
|
(260,084
|
)
|
|
|
(216,930
|
)
|
|
|
Financing activities
|
|
|
|
|
|
|
Repayments of borrowings under Credit Agreement
|
|
|
(130,000
|
)
|
|
|
(123,000
|
)
|
|
|
Borrowings under Credit Agreement
|
|
|
125,000
|
|
|
|
116,000
|
|
|
|
Proceeds from issuance of common stock
|
|
|
149,069
|
|
|
|
146,510
|
|
|
|
Swing sale profit contribution
|
|
|
—
|
|
|
|
24
|
|
|
|
Cost to issue equity
|
|
|
(6,933
|
)
|
|
|
(11,599
|
)
|
|
|
Proceeds from stock options exercised
|
|
|
—
|
|
|
|
2,660
|
|
|
|
Taxes paid related to net share settlement of stock-based
compensation
|
|
|
(9
|
)
|
|
|
—
|
|
|
|
Payment of dividends - Class B
|
|
|
—
|
|
|
|
(96
|
)
|
|
|
Net cash provided by financing activities
|
|
|
137,127
|
|
|
|
130,499
|
|
|
|
Increase (decrease) in cash
|
|
|
4,235
|
|
|
|
(6,106
|
)
|
|
|
Cash at beginning of period
|
|
|
2,095
|
|
|
|
10,284
|
|
|
|
Cash at end of period
|
|
$
|
6,330
|
|
|
$
|
4,178
|
|
|
|
|
|
|
|
|
Matador Resources Company and Subsidiaries
|
|
|
|
SELECTED OPERATING DATA - UNAUDITED
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Net Production Volumes:(1)
|
|
|
|
|
|
|
|
|
|
Oil (MBbl)
|
|
|
617
|
|
|
303
|
|
|
1,524
|
|
|
788
|
|
Natural gas (Bcf)
|
|
|
3.7
|
|
|
3.1
|
|
|
10.0
|
|
|
9.3
|
|
Total oil equivalent (MBOE)(2),(3)
|
|
|
1,240
|
|
|
813
|
|
|
3,184
|
|
|
2,338
|
|
Average daily production (BOE/d)(3)
|
|
|
13,482
|
|
|
8,838
|
|
|
11,663
|
|
|
8,534
|
|
Average Sales Prices:
|
|
|
|
|
|
|
|
|
|
Oil, with realized derivatives (per Bbl)
|
|
$
|
101.69
|
|
$
|
100.56
|
|
$
|
102.24
|
|
$
|
104.25
|
|
Oil, without realized derivatives (per Bbl)
|
|
$
|
104.15
|
|
$
|
99.33
|
|
$
|
103.34
|
|
$
|
102.86
|
|
Natural gas, with realized derivatives (per Mcf)
|
|
$
|
4.81
|
|
$
|
3.57
|
|
$
|
4.35
|
|
$
|
3.47
|
|
Natural gas, without realized derivatives (per Mcf)
|
|
$
|
4.71
|
|
$
|
2.59
|
|
$
|
4.20
|
|
$
|
2.39
|
|
Operating Expenses (per BOE):
|
|
|
|
|
|
|
|
|
|
Production taxes and marketing
|
|
$
|
5.29
|
|
$
|
3.47
|
|
$
|
4.74
|
|
$
|
3.25
|
|
Lease operating
|
|
$
|
6.91
|
|
$
|
7.98
|
|
$
|
9.30
|
|
$
|
7.49
|
|
Depletion, depreciation and amortization
|
|
$
|
21.06
|
|
$
|
26.66
|
|
$
|
23.43
|
|
$
|
22.58
|
|
General and administrative
|
|
$
|
4.35
|
|
$
|
4.23
|
|
$
|
4.44
|
|
$
|
4.84
|
|
|
|
|
|
|
|
|
|
|
|
(1) Production volumes and proved reserves reported in two streams:
oil and natural gas, including both dry and liquids-rich natural gas.
|
|
(2) Thousands of barrels of oil equivalent.
|
|
(3) Estimated using a conversion ratio of one Bbl of oil per six Mcf
of natural gas.
|
|
|
|
|
|
|
|
|
|
SELECTED ESTIMATED PROVED RESERVES DATA - UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30,
|
|
At December 31,
|
|
At September 30,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
2012
|
|
|
Estimated proved reserves:(1),(2)
|
|
|
|
|
|
|
|
Oil (MBbl)
|
|
|
13,878
|
|
|
|
10,485
|
|
|
|
8,411
|
|
|
Natural Gas (Bcf)
|
|
|
182.0
|
|
|
|
80.0
|
|
|
|
74.9
|
|
|
Total (MBOE)(3)
|
|
|
44,211
|
|
|
|
23,819
|
|
|
|
20,894
|
|
|
Estimated proved developed reserves:
|
|
|
|
|
|
|
|
Oil (MBbl)
|
|
|
6,859
|
|
|
|
4,764
|
|
|
|
3,783
|
|
|
Natural Gas (Bcf)
|
|
|
56.9
|
|
|
|
54.0
|
|
|
|
53.4
|
|
|
Total (MBOE)(3)
|
|
|
16,338
|
|
|
|
13,771
|
|
|
|
12,686
|
|
|
Percent developed
|
|
|
37.0
|
%
|
|
|
57.8
|
%
|
|
|
60.7
|
%
|
|
Estimated proved undeveloped reserves:
|
|
|
|
|
|
|
|
Oil (MBbl)
|
|
|
7,019
|
|
|
|
5,721
|
|
|
|
4,628
|
|
|
Natural Gas (Bcf)
|
|
|
125.1
|
|
|
|
26.0
|
|
|
|
21.5
|
|
|
Total (MBOE)(3)
|
|
|
27,873
|
|
|
|
10,048
|
|
|
|
8,208
|
|
|
PV-10 (in millions)
|
|
$
|
538.6
|
|
|
$
|
423.2
|
|
|
$
|
363.6
|
|
|
Standardized Measure (in millions)
|
|
$
|
486.1
|
|
|
$
|
394.6
|
|
|
$
|
333.9
|
|
|
|
|
|
|
|
|
|
|
(1) Numbers in table may not total due to rounding.
|
|
(2) Production volumes and proved reserves reported in two streams:
oil and natural gas, including both dry and liquids-rich natural gas.
|
|
(3) Thousands of barrels of oil equivalent, estimated using a
conversion ratio of one Bbl of oil per six Mcf of natural gas.
|
|
|
Supplemental Non-GAAP Financial Measures
Adjusted EBITDA
This press release includes the non-GAAP financial measure of Adjusted
EBITDA. Adjusted EBITDA is a supplemental non-GAAP financial measure
that is used by management and external users of consolidated financial
statements, such as industry analysts, investors, lenders and rating
agencies. “GAAP” means Generally Accepted Accounting Principles in the
United States of America. The Company believes Adjusted EBITDA helps it
evaluate its operating performance and compare its results of operations
from period to period without regard to its financing methods or capital
structure. The Company defines Adjusted EBITDA as earnings before
interest expense, income taxes, depletion, depreciation and
amortization, accretion of asset retirement obligations, property
impairments, unrealized derivative gains and losses, certain other
non-cash items and non-cash stock-based compensation expense, and net
gain or loss on asset sales and inventory impairment. Adjusted EBITDA is
not a measure of net income (loss) or net cash provided by operating
activities as determined by GAAP.
Adjusted EBITDA should not be considered an alternative to, or more
meaningful than, net income (loss) or net cash provided by operating
activities as determined in accordance with GAAP or as an indicator of
the Company's operating performance or liquidity. Certain items excluded
from Adjusted EBITDA are significant components of understanding and
assessing a company's financial performance, such as a company's cost of
capital and tax structure. Adjusted EBITDA may not be comparable to
similarly titled measures of another company because all companies may
not calculate Adjusted EBITDA in the same manner. The following table
presents the calculation of Adjusted EBITDA and the reconciliation of
Adjusted EBITDA to the GAAP financial measures of net income (loss) and
net cash provided by operating activities, respectively, that are of a
historical nature. Where references are forward-looking or prospective
in nature, and not based on historical fact, the table does not provide
a reconciliation. The Company could not provide such reconciliation
without undue hardship because the forward-looking Adjusted EBITDA
numbers included in this press release are estimations, approximations
and/or ranges. In addition, it would be difficult for the Company to
present a detailed reconciliation on account of many unknown variables
for the reconciling items.
|
|
|
Three Months
Ended June 30,
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(In thousands)
|
|
|
2013
|
|
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
|
|
Unaudited Adjusted EBITDA Reconciliation to Net Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
25,119
|
|
|
$
|
20,105
|
|
$
|
(9,197
|
)
|
|
$
|
29,720
|
|
$
|
(12,073
|
)
|
|
Interest expense
|
|
|
1,609
|
|
|
|
2,038
|
|
|
144
|
|
|
|
4,919
|
|
|
453
|
|
|
Total income tax provision (benefit)
|
|
|
32
|
|
|
|
2,563
|
|
|
(593
|
)
|
|
|
2,641
|
|
|
(1,242
|
)
|
|
Depletion, depreciation and amortization
|
|
|
20,234
|
|
|
|
26,127
|
|
|
21,680
|
|
|
|
74,593
|
|
|
52,799
|
|
|
Accretion of asset retirement obligations
|
|
|
80
|
|
|
|
86
|
|
|
59
|
|
|
|
248
|
|
|
170
|
|
|
Full-cost ceiling impairment
|
|
|
—
|
|
|
|
—
|
|
|
3,596
|
|
|
|
21,229
|
|
|
36,801
|
|
|
Unrealized (gain) loss on derivatives
|
|
|
(7,526
|
)
|
|
|
9,327
|
|
|
12,993
|
|
|
|
6,626
|
|
|
1,149
|
|
|
Stock-based compensation expense
|
|
|
1,032
|
|
|
|
1,239
|
|
|
(51
|
)
|
|
|
2,763
|
|
|
(223
|
)
|
|
Net loss on asset sales and inventory impairment
|
|
|
192
|
|
|
|
—
|
|
|
—
|
|
|
|
192
|
|
|
60
|
|
|
Adjusted EBITDA
|
|
$
|
40,772
|
|
|
$
|
61,485
|
|
$
|
28,631
|
|
|
$
|
142,931
|
|
$
|
77,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(In thousands)
|
|
|
2013
|
|
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
|
|
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
51,684
|
|
|
$
|
43,280
|
|
$
|
28,799
|
|
|
$
|
127,192
|
|
$
|
80,325
|
|
|
Net change in operating assets and liabilities
|
|
|
(12,553
|
)
|
|
|
15,265
|
|
|
(500
|
)
|
|
|
9,840
|
|
|
(3,072
|
)
|
|
Interest expense
|
|
|
1,609
|
|
|
|
2,038
|
|
|
144
|
|
|
|
4,919
|
|
|
453
|
|
|
Current income tax provision
|
|
|
32
|
|
|
|
902
|
|
|
188
|
|
|
|
980
|
|
|
188
|
|
|
Adjusted EBITDA
|
|
$
|
40,772
|
|
|
$
|
61,485
|
|
$
|
28,631
|
|
|
$
|
142,931
|
|
$
|
77,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PV-10
PV-10 is a non-GAAP financial measure and generally differs from
Standardized Measure, the most directly comparable GAAP financial
measure, because it does not include the effects of income taxes on
future net revenues. PV-10 is not an estimate of the fair market value
of the Company's properties. Matador and others in the industry use
PV-10 as a measure to compare the relative size and value of proved
reserves held by companies and of the potential return on investment
related to the companies' properties without regard to the specific tax
characteristics of such entities. The PV-10 at September 30, 2013, June
30, 2013, December 31, 2012 and September 30, 2012 may be reconciled to
the Standardized Measure of discounted future net cash flows at such
dates by reducing PV-10 by the discounted future income taxes associated
with such reserves. The discounted future income taxes at September 30,
2013, June 30, 2013, December 31, 2012 and September 30, 2012 were, in
millions, $52.5, $44.7, $28.6 and $29.7, respectively.
Source: Matador Resources Company
Matador Resources Company
Mac Schmitz, 972-371-5225
mschmitz@matadorresources.com
