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Texas
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001-35410
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27-4662601
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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5400 LBJ Freeway, Suite 1500, Dallas, Texas
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75240
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(Address of principal executive offices)
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(Zip Code)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreement.
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Item 2.02
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Results of Operations and Financial Condition.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
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Item 7.01
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Regulation FD Disclosure.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit No.
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Description of Exhibit
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10.1
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Eighth Amendment to Third Amended and Restated Credit Agreement, dated as of October 31, 2016, by and among MRC Energy Company, as Borrower, the Lenders party thereto and Royal Bank of Canada, as Administrative Agent.
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99.1
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Press Release, dated November 1, 2016.
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MATADOR RESOURCES COMPANY
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Date: November 2, 2016
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By:
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/s/ Craig N. Adams
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Name:
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Craig N. Adams
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Title:
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Executive Vice President
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Exhibit No.
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Description of Exhibit
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10.1
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Eighth Amendment to Third Amended and Restated Credit Agreement, dated as of October 31, 2016, by and among MRC Energy Company, as Borrower, the Lenders party thereto and Royal Bank of Canada, as Administrative Agent.
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99.1
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Press Release, dated November 1, 2016.
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BORROWER:
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MRC ENERGY COMPANY,
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as Borrower
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By:
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/s/ David E. Lancaster
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Name:
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David E. Lancaster
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Title:
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Executive Vice President
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ROYAL BANK OF CANADA,
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as Administrative Agent
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By:
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/s/ Rodica Dutka
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Name:
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Rodica Dutka
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Title:
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Manager, Agency
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ROYAL BANK OF CANADA,
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as a Lender and as an Issuing Lender
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By:
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/s/ Kristan Spivey
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Name:
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Kristan Spivey
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Title:
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Authorized Signatory
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THE BANK OF NOVA SCOTIA,
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as a Lender
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By:
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/s/ Alan Dawson
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Name:
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Alan Dawson
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Title:
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Director
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BANK OF AMERICA, N.A.,
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as a Lender
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By:
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/s/ Raza Jafferi
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Name:
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Raza Jafferi
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Title:
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Vice President
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COMERICA BANK,
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as a Lender and as an Issuing Lender
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By:
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/s/ Robert C. Pitcock
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Name:
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Robert C. Pitcock
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Title:
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Relationship Manager
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SUNTRUST BANK,
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as a Lender
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By:
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/s/ Shannon Juhan
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Name:
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Shannon Juhan
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Title:
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Director
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BMO HARRIS FINANCING, INC.,
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|||
as a Lender
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By:
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/s/ Kevin Utsey
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Name:
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Kevin Utsey
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Title:
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Director
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WELLS FARGO BANK, N.A.,
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as a Lender
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By:
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/s/ Edward Markham
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Name:
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Edward Markham
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Title:
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Vice President
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IBERIABANK,
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as a Lender
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By:
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/s/ Moni Collins
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Name:
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Moni Collins
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Title:
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Senior Vice President
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LENDERS
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REVOLVING CREDIT
ALLOCATIONS
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REVOLVING CREDIT
PERCENTAGE
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Royal Bank of Canada
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$68,571,428.60
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17.1428571500%
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The Bank of Nova Scotia
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$64,155,844.15
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16.0389610375%
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Comerica Bank
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$55,064,935.06
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13.7662337650%
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Bank of America, N.A.
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$55,064,935.06
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13.7662337650%
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Suntrust Bank
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$55,064,935.06
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13.7662337650%
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BMO Harris Financing, Inc.
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$55,064,935.06
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13.7662337650%
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Wells Fargo Bank, N.A.
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$27,272,727.27
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6.8181818175%
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IBERIABANK
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$19,740,259.74
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4.9350649350%
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TOTALS
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$400,000,000.00
|
100.000000000%
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GUARANTORS:
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MATADOR RESOURCES COMPANY
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MRC ENERGY SOUTHEAST COMPANY, LLC
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MRC ENERGY SOUTH TEXAS COMPANY, LLC
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MRC PERMIAN COMPANY
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MRC ROCKIES COMPANY
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MATADOR PRODUCTION COMPANY
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LONGWOOD GATHERING AND DISPOSAL SYSTEMS GP, INC.
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DELAWARE WATER MANAGEMENT COMPANY, LLC
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LONGWOOD MIDSTREAM DELAWARE, LLC
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LONGWOOD MIDSTREAM SOUTHEAST, LLC
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LONGWOOD MIDSTREAM SOUTH TEXAS, LLC
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SOUTHEAST WATER MANAGEMENT COMPANY, LLC
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MRC DELAWARE RESOURCES, LLC
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DLK BLACK RIVER MIDSTREAM, LLC
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MRC PERMIAN LKE COMPANY, LLC
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BLACK RIVER WATER MANAGEMENT COMPANY, LLC
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By:
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Name:
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David E. Lancaster
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Title:
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Executive Vice President
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LONGWOOD GATHERING AND DISPOSAL SYSTEMS, LP
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By:
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Longwood Gathering and Disposal Systems GP, Inc., its General Partner
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By:
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Name:
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David E. Lancaster
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Title:
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Executive Vice President
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•
|
Net income (GAAP basis) of
$11.9 million
, or
$0.13
per diluted common share, as compared to a net loss of
$105.9 million
, or
$(1.15)
per diluted common share, in the
second quarter
of 2016 and a net loss of
$242.1 million
, or
$(2.86)
per diluted common share, in the
third quarter
of 2015.
|
•
|
Adjusted net income, a non-GAAP financial measure, of
$5.4 million
, or
$0.06
per diluted common share, in the
third quarter
of
2016
, as compared to adjusted net loss of
$1.3 million
, or
$(0.01)
per diluted common share, in the
second quarter
of 2016 and adjusted net income of
$2.6 million
, or
$0.03
per diluted common share, in the
third quarter
of 2015.
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•
|
Record average daily total production of approximately
29,400
barrels of oil equivalent (“BOE”) per day, an increase of
5%
sequentially, as compared to approximately
28,000
BOE per day in the
second quarter
of 2016 and an increase of
12%
year-over-year, as compared to approximately
26,100
BOE per day in the
third quarter
of 2015.
|
•
|
Record average daily oil production of approximately
15,000
barrels of oil per day, an increase of
11%
sequentially, as compared to approximately 13,500 barrels of oil per day in the second quarter of 2016 and an increase of
19%
year-over-year, as compared to approximately 12,600 barrels of oil per day in the third quarter of 2015.
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•
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Adjusted earnings before interest expense, income taxes, depletion, depreciation and amortization and certain other items (“Adjusted EBITDA”), a non-GAAP financial measure, of
$47.3 million
, an increase of
21%
sequentially, as compared to
$39.0 million
in the
second quarter
of 2016, and a decrease of
19%
year-over-year, as compared to
$58.0 million
in the
third quarter
of 2015.
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•
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Proved oil and natural gas reserves of
101.6 million
BOE at
September 30, 2016
, an all-time high, and an increase of
19%
from
85.1 million
BOE at December 31, 2015.
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•
|
On October 31, 2016, the borrowing base under Matador’s revolving credit facility was increased by Matador’s bank group from $300 million to $400 million.
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•
|
On
November 1, 2016
, Matador increased certain elements of its 2016 guidance for the second time this year, based on its 3-rig drilling program, as follows:
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◦
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Total natural gas production guidance increased from 28.0 to 29.0 billion cubic feet to 29.5 to 30.5 billion cubic feet;
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◦
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Total oil equivalent production guidance increased from 9.6 to 9.9 million BOE to 9.8 to 10.2 million BOE;
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◦
|
Expected capital expenditures were adjusted from $325 million to between $425 and
$450 million
, with the additional capital primarily being used for strategic acreage and minerals acquisitions and to accelerate a number of new midstream initiatives in the Delaware Basin; and
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◦
|
Adjusted EBITDA guidance increased from $130 to $140 million to $140 to $150 million based on actual results for the first nine months of 2016 and estimated oil and natural gas prices for the remainder of 2016 using oil and natural gas futures pricing as of late October 2016.
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|
Three Months Ended
|
|
||||||||||
September 30, 2016
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June 30, 2016
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September 30, 2015
|
|
|||||||
Net Production Volumes:
(1)
|
|
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|
||||||
Oil (MBbl)
(2)
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1,376
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|
1,230
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|
1,161
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|
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Natural gas (Bcf)
(3)
|
8.0
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7.9
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7.5
|
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|
|||
Total oil equivalent (MBOE)
(4)
|
2,703
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|
2,550
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|
2,405
|
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|
|||
Average Daily Production Volumes:
(1)
|
|
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|
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|
||||||
Oil (Bbl/d)
|
14,960
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13,516
|
|
|
12,617
|
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|
|||
Natural gas (MMcf/d)
(5)
|
86.5
|
|
|
87.0
|
|
|
81.1
|
|
|
|||
Total oil equivalent (BOE/d)
(6)
|
29,381
|
|
|
28,022
|
|
|
26,137
|
|
|
|||
Average Sales Prices:
|
|
|
|
|
|
|
||||||
Oil, without realized derivatives (per Bbl)
|
$
|
42.57
|
|
|
$
|
42.84
|
|
|
$
|
43.21
|
|
|
Oil, with realized derivatives (per Bbl)
|
$
|
43.18
|
|
|
$
|
43.29
|
|
|
$
|
57.90
|
|
|
Natural gas, without realized derivatives (per Mcf)
|
$
|
3.08
|
|
|
$
|
2.10
|
|
|
$
|
2.90
|
|
|
Natural gas, with realized derivatives (per Mcf)
|
$
|
3.08
|
|
|
$
|
2.34
|
|
|
$
|
3.28
|
|
|
Revenues (millions):
|
|
|
|
|
|
|
||||||
Oil and natural gas revenues
|
$
|
83.1
|
|
|
$
|
69.3
|
|
|
$
|
71.8
|
|
|
Third-party midstream services revenues
|
$
|
1.6
|
|
|
$
|
0.9
|
|
(12)
|
$
|
0.6
|
|
(12)
|
Realized gain on derivatives
|
$
|
0.9
|
|
|
$
|
2.5
|
|
|
$
|
19.9
|
|
|
Operating Expenses (per BOE):
|
|
|
|
|
|
|
||||||
Production taxes, transportation and processing
|
$
|
4.58
|
|
|
$
|
4.14
|
|
|
$
|
3.92
|
|
(13)
|
Lease operating
|
$
|
5.40
|
|
|
$
|
4.78
|
|
(14)
|
$
|
5.60
|
|
(15)
|
Plant and other midstream services operating
|
$
|
0.54
|
|
|
$
|
0.42
|
|
|
$
|
0.60
|
|
|
Depletion, depreciation and amortization
|
$
|
11.10
|
|
|
$
|
12.25
|
|
|
$
|
18.81
|
|
|
General and administrative
(7)
|
$
|
4.86
|
|
|
$
|
5.18
|
|
|
$
|
5.05
|
|
|
Total
(8)
|
$
|
26.48
|
|
|
$
|
26.77
|
|
|
$
|
33.98
|
|
|
Net income (loss) (millions):
(9)
|
$
|
11.9
|
|
|
$
|
(105.9
|
)
|
|
$
|
(242.1
|
)
|
|
Adjusted EBITDA (millions):
(10)
|
$
|
47.3
|
|
|
$
|
39.0
|
|
|
$
|
58.0
|
|
|
Earnings (loss) per share (diluted):
|
$
|
0.13
|
|
|
$
|
(1.15
|
)
|
|
$
|
(2.86
|
)
|
|
Adjusted earnings (loss) per share (diluted):
(11)
|
$
|
0.06
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.03
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
|
September 30,
2015 |
|
||||||
Estimated proved reserves:
(1)(2)
|
|
|
|
|
|
|
||||||
Oil (MBbl)
(3)
|
55,031
|
|
|
45,644
|
|
|
42,531
|
|
|
|||
Natural Gas (Bcf)
(4)
|
279.4
|
|
|
236.9
|
|
|
267.5
|
|
|
|||
Total (MBOE)
(5)
|
101,604
|
|
|
85,127
|
|
|
87,109
|
|
|
|||
Estimated proved developed reserves:
|
|
|
|
|
|
|
||||||
Oil (MBbl)
(3)
|
21,204
|
|
|
17,129
|
|
|
17,413
|
|
|
|||
Natural Gas (Bcf)
(4)
|
118.8
|
|
|
101.4
|
|
|
97.7
|
|
|
|||
Total (MBOE)
(5)
|
41,012
|
|
|
34,037
|
|
|
33,685
|
|
|
|||
Percent developed
|
40.4
|
%
|
|
40.0
|
%
|
|
38.7
|
%
|
|
|||
Estimated proved undeveloped reserves:
|
|
|
|
|
|
|
||||||
Oil (MBbl)
(3)
|
33,827
|
|
|
28,515
|
|
|
25,118
|
|
|
|||
Natural Gas (Bcf)
(4)
|
160.6
|
|
|
135.5
|
|
|
169.8
|
|
|
|||
Total (MBOE)
(5)
|
60,592
|
|
|
51,090
|
|
|
53,424
|
|
|
|||
Standardized Measure (in millions)
|
$
|
516.8
|
|
|
$
|
529.2
|
|
|
$
|
673.8
|
|
|
PV-10
(6)
(in millions)
|
$
|
524.7
|
|
|
$
|
541.6
|
|
|
$
|
692.7
|
|
|
(1)
|
Numbers in table may not total due to rounding.
|
(2)
|
Matador’s estimated proved reserves, Standardized Measure and PV-10 were determined using index prices for oil and natural gas, without giving effect to derivative transactions, and were held constant throughout the life of the properties. The unweighted arithmetic averages of the first-day-of-the-month prices for the period from October 2015 through September 2016 were
$38.17
per Bbl for oil and
$2.28
per MMBtu for natural gas, for the period from January 2015 through December 2015 were
$46.79
per Bbl for oil and
$2.59
per MMBtu for natural gas and for the period from October 2014 through September 2015 were
$55.73
per Bbl for oil and
$3.06
per MMBtu for natural gas. These prices were adjusted by property for quality, energy content, regional price differentials, transportation fees, marketing deductions and other factors affecting the price received at the wellhead. Matador reports its proved reserves in two streams, oil and natural gas, and the economic value of the natural gas liquids associated with the natural gas is included in the estimated wellhead natural gas price on those properties where the natural gas liquids are extracted and sold.
|
(3)
|
One thousand barrels of oil.
|
(4)
|
One billion cubic feet of natural gas.
|
(5)
|
One thousand barrels of oil equivalent, estimated using a conversion ratio of one barrel of oil per six thousand cubic feet of natural gas.
|
(6)
|
PV-10 is a non-GAAP financial measure. For a reconciliation of PV-10 (non-GAAP) to Standardized Measure (GAAP), please see “Supplemental Non-GAAP Financial Measures” below.
|
|
|
|
Initial Potential
|
|
Completed Lateral Length
|
|
||||||||||
|
|
|
Oil
|
|
Gas
|
|
BOE
|
|
% Oil
|
|
FCP
(1)
|
|
Choke
|
|
|
|
Well
|
Interval
|
|
(Bbl/d)
|
|
(MMcf/d)
|
|
(BOE/d)
|
|
|
|
(psi)
|
|
(inch)
|
|
(feet)
|
|
Guitar 10-24S-28E RB #222H
|
Wolfcamp B (Middle)
|
700
|
|
4.8
|
|
1,501
|
|
47%
|
|
2,231
|
|
32/64"
|
|
4,376
|
|
|
Charlie Sweeney 31-23S-28E RB #201H
|
Wolfcamp A-XY
|
927
|
|
1.9
|
|
1,242
|
|
75%
|
|
1,900
|
|
34/64"
|
|
4,623
|
|
|
Janie Conner 13-24S-28E RB #201H
|
Wolfcamp A-XY
|
|
950
|
|
2.0
|
|
1,283
|
|
74%
|
|
2,145
|
|
36/64"
|
|
4,522
|
|
Janie Conner 13-24S-28E RB #221H
|
Wolfcamp B (Blair)
|
884
|
|
9.0
|
|
2,384
|
|
37%
|
|
3,447
|
|
36/64"
|
|
4,522
|
|
|
Jimmy Kone 05-24S-28E RB #203H
|
Wolfcamp A-XY
|
|
1,032
|
|
2.4
|
|
1,424
|
|
72%
|
|
1,980
|
|
36/64"
|
|
4,522
|
|
B. Banker 33-23S-28E #226H
|
Wolfcamp A-XY
|
1,006
|
|
2.0
|
|
1,346
|
|
75%
|
|
1,852
|
|
36/64"
|
|
4,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Flowing casing pressure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matador’s Permian Basin Acreage at October 31, 2016 (approximate):
|
|
|
||||||
|
|
|
|
|
||||
Asset Area
|
|
Gross Acres
|
|
Net Acres
|
||||
Ranger (Lea County, NM)
|
|
|
33,400
|
|
|
|
20,500
|
|
Arrowhead (Eddy County, NM)
|
|
48,900
|
|
|
17,300
|
|
||
Rustler Breaks (Eddy County, NM)
|
|
25,000
|
|
|
16,700
|
|
||
Wolf and Jackson Trust (Loving County, TX)
|
|
13,000
|
|
|
7,900
|
|
||
Twin Lakes (Lea County, NM)
|
|
43,500
|
|
|
31,300
|
|
||
Other
|
|
1,700
|
|
|
1,000
|
|
||
Total
|
|
165,500
|
|
|
94,700
|
|
Capital expenditures (in millions)
|
Nine Months Ended
September 30, 2016
|
|
Year Ended
December 31, 2016 (Estimated)
|
|
|||||||||||||||
Original Guidance
|
|
Actual
(Unaudited)
|
|
Original Guidance
|
|
Revised Expectations
|
|
||||||||||||
Exploration and development drilling and completion costs, including production facilities and infrastructure
|
$
|
199
|
|
|
$
|
182
|
|
|
$
|
260
|
|
|
$
|
245
|
-
|
255
|
|
|
|
Midstream activities
|
40
|
|
|
50
|
|
|
40
|
|
|
|
65
|
|
|
||||||
Leasehold and minerals acquisition and 2-D and 3-D seismic data
|
18
|
|
|
96
|
|
|
25
|
|
|
|
110
|
-
|
125
|
|
|
|
|||
Other
|
0
|
|
|
5
|
|
|
0
|
|
|
|
5
|
|
|
||||||
Total
|
$
|
257
|
|
|
$
|
333
|
|
|
$
|
325
|
|
|
$
|
425
|
-
|
450
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Approximately 0.5 million barrels of oil at a weighted average floor price of $42 per barrel and a weighted average ceiling price of $61 per barrel.
|
•
|
Approximately 3.4 billion cubic feet of natural gas at a weighted average floor price of $2.66 per MMBtu and a weighted average ceiling price of $3.70 per MMBtu.
|
•
|
Approximately 2.8 million barrels of oil at a weighted average floor price of $41 per barrel and a weighted average ceiling price of $52 per barrel.
|
•
|
Approximately 16.9 billion cubic feet of natural gas at a weighted average floor price of $2.40 per MMBtu and a weighted average ceiling price of $3.59 per MMBtu.
|
•
|
Total natural gas production guidance increased from 28.0 to 29.0 billion cubic feet to 29.5 to 30.5 billion cubic feet. Matador’s 2016 natural gas guidance has increased from initial guidance of 26.0 to 28.0 billion cubic feet in February 2016;
|
•
|
Total oil equivalent production guidance increased from 9.6 to 9.9 million BOE to 9.8 to 10.2 million BOE. Matador’s 2016 total equivalent oil production guidance has increased from initial guidance of 9.2 to 9.8 million BOE in February 2016;
|
•
|
Expected capital expenditures were adjusted from $325 million to between $425 and $450 million, with the additional capital primarily being used for strategic acreage and minerals acquisitions and to accelerate a number of new midstream initiatives in the Delaware Basin; and
|
•
|
Adjusted EBITDA guidance increased from $130 to $140 million to $140 to $150 million based on actual results for the first nine months of 2016 and estimated oil and natural gas prices for the remainder of 2016 using oil and natural gas futures prices as of late October 2016. Matador’s 2016 Adjusted EBITDA guidance has increased from initial guidance of $120 to $130 million in February 2016.
|
(In thousands, except par value and share data)
|
September 30,
2016 |
|
December 31,
2015 |
|
|||||
|
ASSETS
|
|
|
|
|
||||
|
Current assets
|
|
|
|
|
||||
|
Cash
|
$
|
20,566
|
|
|
$
|
16,732
|
|
|
|
Restricted cash
|
1,803
|
|
|
44,357
|
|
|
||
|
Accounts receivable
|
|
|
|
|
||||
|
Oil and natural gas revenues
|
27,739
|
|
|
16,616
|
|
|
||
|
Joint interest billings
|
18,796
|
|
|
16,999
|
|
|
||
|
Other
|
5,657
|
|
|
10,794
|
|
|
||
|
Derivative instruments
|
—
|
|
|
16,284
|
|
|
||
|
Lease and well equipment inventory
|
3,182
|
|
|
2,022
|
|
|
||
|
Prepaid expenses
|
3,277
|
|
|
3,203
|
|
|
||
|
Total current assets
|
81,020
|
|
|
127,007
|
|
|
||
|
Property and equipment, at cost
|
|
|
|
|
||||
|
Oil and natural gas properties, full-cost method
|
|
|
|
|
||||
|
Evaluated
|
2,341,342
|
|
|
2,122,174
|
|
|
||
|
Unproved and unevaluated
|
445,421
|
|
|
387,504
|
|
|
||
|
Other property and equipment
|
141,420
|
|
|
86,387
|
|
|
||
|
Less accumulated depletion, depreciation and amortization
|
(1,832,478
|
)
|
|
(1,583,659
|
)
|
|
||
|
Net property and equipment
|
1,095,705
|
|
|
1,012,406
|
|
|
||
|
Other assets
|
968
|
|
|
1,448
|
|
|
||
|
Total assets
|
$
|
1,177,693
|
|
|
$
|
1,140,861
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
|
Current liabilities
|
|
|
|
|
||||
|
Accounts payable
|
$
|
4,534
|
|
|
$
|
10,966
|
|
|
|
Accrued liabilities
|
93,339
|
|
|
92,369
|
|
|
||
|
Royalties payable
|
21,717
|
|
|
16,493
|
|
|
||
|
Amounts due to affiliates
|
7,033
|
|
|
5,670
|
|
|
||
|
Derivative instruments
|
10,139
|
|
|
—
|
|
|
||
|
Advances from joint interest owners
|
3,847
|
|
|
700
|
|
|
||
|
Deferred gain on plant sale
|
6,440
|
|
|
4,830
|
|
|
||
|
Amounts due to joint ventures
|
4,050
|
|
|
2,793
|
|
|
||
|
Income taxes payable
|
—
|
|
|
2,848
|
|
|
||
|
Other current liabilities
|
530
|
|
|
161
|
|
|
||
|
Total current liabilities
|
151,629
|
|
|
136,830
|
|
|
||
|
Long-term liabilities
|
|
|
|
|
||||
|
Borrowings under Credit Agreement
|
65,000
|
|
|
—
|
|
|
||
|
Senior unsecured notes payable
|
392,153
|
|
|
391,254
|
|
|
||
|
Asset retirement obligations
|
19,452
|
|
|
15,166
|
|
|
||
|
Amounts due to joint ventures
|
2,700
|
|
|
3,956
|
|
|
||
|
Derivative instruments
|
3,838
|
|
|
—
|
|
|
||
|
Deferred gain on plant sale
|
97,676
|
|
|
102,506
|
|
|
||
|
Other long-term liabilities
|
7,451
|
|
|
2,190
|
|
|
||
|
Total long-term liabilities
|
588,270
|
|
|
515,072
|
|
|
||
|
Shareholders’ equity
|
|
|
|
|
||||
|
Common stock - $0.01 par value, 120,000,000 shares authorized; 93,580,969 and 85,567,021 shares issued; and 93,464,898 and 85,564,435 shares outstanding, respectively
|
936
|
|
|
856
|
|
|
||
|
Additional paid-in capital
|
1,176,198
|
|
|
1,026,077
|
|
|
||
|
Retained deficit
|
(740,505
|
)
|
|
(538,930
|
)
|
|
||
|
Total Matador Resources Company shareholders’ equity
|
436,629
|
|
|
488,003
|
|
|
||
|
Non-controlling interest in subsidiaries
|
1,165
|
|
|
956
|
|
|
||
|
Total shareholders’ equity
|
437,794
|
|
|
488,959
|
|
|
||
|
Total liabilities and shareholders’ equity
|
$
|
1,177,693
|
|
|
$
|
1,140,861
|
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
|
Revenues
|
|
|
|
|
|
|
|
|
||||||||
|
Oil and natural gas revenues
|
$
|
83,079
|
|
|
$
|
71,815
|
|
|
$
|
196,341
|
|
|
$
|
222,128
|
|
|
|
Third-party midstream services revenues
|
1,566
|
|
|
569
|
|
|
2,956
|
|
|
1,384
|
|
|
||||
|
Realized gain on derivatives
|
885
|
|
|
19,862
|
|
|
10,413
|
|
|
52,146
|
|
|
||||
|
Unrealized gain (loss) on derivatives
|
3,203
|
|
|
6,733
|
|
|
(30,261
|
)
|
|
(25,356
|
)
|
|
||||
|
Total revenues
|
88,733
|
|
|
98,979
|
|
|
179,449
|
|
|
250,302
|
|
|
||||
|
Expenses
|
|
|
|
|
|
|
|
|
||||||||
|
Production taxes, transportation and processing
|
12,388
|
|
|
9,426
|
|
|
30,846
|
|
|
26,734
|
|
|
||||
|
Lease operating
|
14,605
|
|
|
13,466
|
|
|
41,300
|
|
|
40,140
|
|
|
||||
|
Plant and other midstream services operating
|
1,449
|
|
|
1,450
|
|
|
3,537
|
|
|
2,772
|
|
|
||||
|
Depletion, depreciation and amortization
|
30,015
|
|
|
45,237
|
|
|
90,185
|
|
|
143,477
|
|
|
||||
|
Accretion of asset retirement obligations
|
276
|
|
|
182
|
|
|
828
|
|
|
427
|
|
|
||||
|
Full-cost ceiling impairment
|
—
|
|
|
285,721
|
|
|
158,633
|
|
|
581,874
|
|
|
||||
|
General and administrative
|
13,146
|
|
|
12,151
|
|
|
39,506
|
|
|
38,523
|
|
|
||||
|
Total expenses
|
71,879
|
|
|
367,633
|
|
|
364,835
|
|
|
833,947
|
|
|
||||
|
Operating income (loss)
|
16,854
|
|
|
(268,654
|
)
|
|
(185,386
|
)
|
|
(583,645
|
)
|
|
||||
|
Other income (expense)
|
|
|
|
|
|
|
|
|
||||||||
|
Net gain (loss) on asset sales and inventory impairment
|
1,073
|
|
|
—
|
|
|
3,140
|
|
|
(97
|
)
|
|
||||
|
Interest expense
|
(6,880
|
)
|
|
(7,229
|
)
|
|
(20,244
|
)
|
|
(15,168
|
)
|
|
||||
|
Other (expense) income
|
(141
|
)
|
|
564
|
|
|
(17
|
)
|
|
637
|
|
|
||||
|
Total other expense
|
(5,948
|
)
|
|
(6,665
|
)
|
|
(17,121
|
)
|
|
(14,628
|
)
|
|
||||
|
Income (loss) before income taxes
|
10,906
|
|
|
(275,319
|
)
|
|
(202,507
|
)
|
|
(598,273
|
)
|
|
||||
|
Income tax (benefit) provision
|
|
|
|
|
|
|
|
|
||||||||
|
Current
|
(1,141
|
)
|
|
(295
|
)
|
|
(1,141
|
)
|
|
(295
|
)
|
|
||||
|
Deferred
|
—
|
|
|
(33,010
|
)
|
|
—
|
|
|
(148,750
|
)
|
|
||||
|
Total income tax benefit
|
(1,141
|
)
|
|
(33,305
|
)
|
|
(1,141
|
)
|
|
(149,045
|
)
|
|
||||
|
Net income (loss)
|
12,047
|
|
|
(242,014
|
)
|
|
(201,366
|
)
|
|
(449,228
|
)
|
|
||||
|
Net income attributable to non-controlling interest in subsidiaries
|
(116
|
)
|
|
(45
|
)
|
|
(209
|
)
|
|
(156
|
)
|
|
||||
|
Net income (loss) attributable to Matador Resources Company shareholders
|
$
|
11,931
|
|
|
$
|
(242,059
|
)
|
|
$
|
(201,575
|
)
|
|
$
|
(449,384
|
)
|
|
|
Earnings (loss) per common share
|
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
$
|
0.13
|
|
|
$
|
(2.86
|
)
|
|
$
|
(2.24
|
)
|
|
$
|
(5.58
|
)
|
|
|
Diluted
|
$
|
0.13
|
|
|
$
|
(2.86
|
)
|
|
$
|
(2.24
|
)
|
|
$
|
(5.58
|
)
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
93,384
|
|
|
84,685
|
|
|
90,016
|
|
|
80,481
|
|
|
||||
|
Diluted
|
93,724
|
|
|
84,685
|
|
|
90,016
|
|
|
80,481
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
Nine Months Ended
September 30, |
|
|||||||
|
|
2016
|
|
2015
|
|
||||
|
Operating activities
|
|
|
|
|
||||
|
Net loss
|
$
|
(201,366
|
)
|
|
$
|
(449,228
|
)
|
|
|
Adjustments to reconcile net loss to net cash provided by operating activities
|
|
|
|
|
||||
|
Unrealized loss on derivatives
|
30,261
|
|
|
25,356
|
|
|
||
|
Depletion, depreciation and amortization
|
90,185
|
|
|
143,477
|
|
|
||
|
Accretion of asset retirement obligations
|
828
|
|
|
427
|
|
|
||
|
Full-cost ceiling impairment
|
158,633
|
|
|
581,874
|
|
|
||
|
Stock-based compensation expense
|
9,138
|
|
|
6,886
|
|
|
||
|
Deferred income tax benefit
|
—
|
|
|
(148,750
|
)
|
|
||
|
Amortization of debt issuance cost
|
899
|
|
|
551
|
|
|
||
|
Net (gain) loss on asset sales and inventory impairment
|
(3,140
|
)
|
|
97
|
|
|
||
|
Changes in operating assets and liabilities
|
|
|
|
|
||||
|
Accounts receivable
|
(7,782
|
)
|
|
1,997
|
|
|
||
|
Lease and well equipment inventory
|
(669
|
)
|
|
(225
|
)
|
|
||
|
Prepaid expenses
|
(74
|
)
|
|
(329
|
)
|
|
||
|
Other assets
|
480
|
|
|
665
|
|
|
||
|
Accounts payable, accrued liabilities and other current liabilities
|
9,710
|
|
|
16,863
|
|
|
||
|
Royalties payable
|
5,225
|
|
|
6,898
|
|
|
||
|
Advances from joint interest owners
|
3,147
|
|
|
306
|
|
|
||
|
Income taxes payable
|
(2,848
|
)
|
|
(444
|
)
|
|
||
|
Other long-term liabilities
|
3,835
|
|
|
(497
|
)
|
|
||
|
Net cash provided by operating activities
|
96,462
|
|
|
185,924
|
|
|
||
|
Investing activities
|
|
|
|
|
||||
|
Oil and natural gas properties capital expenditures
|
(288,175
|
)
|
|
(334,951
|
)
|
|
||
|
Expenditures for other property and equipment
|
(57,148
|
)
|
|
(46,738
|
)
|
|
||
|
Proceeds from sale of assets
|
5,173
|
|
|
—
|
|
|
||
|
Business combination, net of cash acquired
|
—
|
|
|
(24,028
|
)
|
|
||
|
Restricted cash
|
43,098
|
|
|
—
|
|
|
||
|
Restricted cash in less-than-wholly-owned subsidiaries
|
(544
|
)
|
|
158
|
|
|
||
|
Net cash used in investing activities
|
(297,596
|
)
|
|
(405,559
|
)
|
|
||
|
Financing activities
|
|
|
|
|
||||
|
Repayments of borrowings
|
—
|
|
|
(476,982
|
)
|
|
||
|
Borrowings under Credit Agreement
|
65,000
|
|
|
125,000
|
|
|
||
|
Proceeds from issuance of senior unsecured notes
|
—
|
|
|
400,000
|
|
|
||
|
Cost to issue senior unsecured notes
|
—
|
|
|
(9,479
|
)
|
|
||
|
Proceeds from issuance of common stock
|
142,350
|
|
|
188,720
|
|
|
||
|
Cost to issue equity
|
(830
|
)
|
|
(1,151
|
)
|
|
||
|
Proceeds from stock options exercised
|
—
|
|
|
10
|
|
|
||
|
Capital commitments from non-controlling interest owners in less-than-wholly-owned subsidiaries
|
—
|
|
|
562
|
|
|
||
|
Taxes paid related to net share settlement of stock-based compensation
|
(1,552
|
)
|
|
(1,565
|
)
|
|
||
|
Net cash provided by financing activities
|
204,968
|
|
|
225,115
|
|
|
||
|
Increase in cash
|
3,834
|
|
|
5,480
|
|
|
||
|
Cash at beginning of period
|
16,732
|
|
|
8,407
|
|
|
||
|
Cash at end of period
|
$
|
20,566
|
|
|
$
|
13,887
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||
(In thousands)
|
September 30, 2016
|
|
June 30, 2016
|
|
September 30, 2015
|
||||||
Unaudited Adjusted EBITDA Reconciliation to Net Income (Loss):
|
|
|
|
|
|
||||||
Net income (loss) attributable to Matador Resources Company shareholders
|
$
|
11,931
|
|
|
$
|
(105,853
|
)
|
|
$
|
(242,059
|
)
|
Interest expense
|
6,880
|
|
|
6,167
|
|
|
7,229
|
|
|||
Total income tax benefit
|
(1,141
|
)
|
|
—
|
|
|
(33,305
|
)
|
|||
Depletion, depreciation and amortization
|
30,015
|
|
|
31,248
|
|
|
45,237
|
|
|||
Accretion of asset retirement obligations
|
276
|
|
|
289
|
|
|
182
|
|
|||
Full-cost ceiling impairment
|
—
|
|
|
78,171
|
|
|
285,721
|
|
|||
Unrealized (gain) loss on derivatives
|
(3,203
|
)
|
|
26,625
|
|
|
(6,733
|
)
|
|||
Stock-based compensation expense
|
3,584
|
|
|
3,310
|
|
|
1,755
|
|
|||
Net gain on asset sales and inventory impairment
|
(1,073
|
)
|
|
(1,002
|
)
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
47,269
|
|
|
$
|
38,955
|
|
|
$
|
58,027
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||
(In thousands)
|
September 30, 2016
|
|
June 30, 2016
|
|
September 30, 2015
|
||||||
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
46,862
|
|
|
$
|
31,242
|
|
|
$
|
72,535
|
|
Net change in operating assets and liabilities
|
(4,909
|
)
|
|
1,944
|
|
|
(20,846
|
)
|
|||
Interest expense, net of non-cash portion
|
6,573
|
|
|
5,875
|
|
|
6,678
|
|
|||
Current income tax benefit
|
(1,141
|
)
|
|
—
|
|
|
(295
|
)
|
|||
Net income attributable to non-controlling interest in subsidiaries
|
(116
|
)
|
|
(106
|
)
|
|
(45
|
)
|
|||
Adjusted EBITDA
|
$
|
47,269
|
|
|
$
|
38,955
|
|
|
$
|
58,027
|
|
|
|
|
|
|
|
(in millions)
|
At September 30,
2016
|
|
At December 31,
2015 |
|
At September 30,
2015 |
|
||||||
PV-10
|
$
|
524.7
|
|
|
$
|
541.6
|
|
|
$
|
692.7
|
|
|
Discounted future income taxes
|
(7.9
|
)
|
|
(12.4
|
)
|
|
(18.9
|
)
|
|
|||
Standardized Measure
|
$
|
516.8
|
|
|
$
|
529.2
|
|
|
$
|
673.8
|
|
|
|
|
|
|
|
|
|