☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
Texas
|
|
27-4662601
|
||
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
|
||
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5400 LBJ Freeway,
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Suite 1500
|
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75240
|
||
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Dallas,
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Texas
|
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||
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(Address of principal executive offices)
|
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(Zip Code)
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Title of each class
|
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Trading symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
|
MTDR
|
|
New York Stock Exchange
|
Large accelerated filer
|
|
☒
|
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Accelerated filer
|
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☐
|
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|
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Non-accelerated filer
|
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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March 31,
2020 |
|
December 31,
2019 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash
|
$
|
27,063
|
|
|
$
|
40,024
|
|
Restricted cash
|
29,732
|
|
|
25,104
|
|
||
Accounts receivable
|
|
|
|
||||
Oil and natural gas revenues
|
52,879
|
|
|
95,228
|
|
||
Joint interest billings
|
70,318
|
|
|
67,546
|
|
||
Other
|
30,592
|
|
|
26,639
|
|
||
Derivative instruments
|
121,179
|
|
|
—
|
|
||
Lease and well equipment inventory
|
11,638
|
|
|
10,744
|
|
||
Prepaid expenses and other current assets
|
13,234
|
|
|
13,207
|
|
||
Total current assets
|
356,635
|
|
|
278,492
|
|
||
Property and equipment, at cost
|
|
|
|
||||
Oil and natural gas properties, full-cost method
|
|
|
|
||||
Evaluated
|
4,724,293
|
|
|
4,557,265
|
|
||
Unproved and unevaluated
|
1,169,751
|
|
|
1,126,992
|
|
||
Midstream properties
|
711,863
|
|
|
643,903
|
|
||
Other property and equipment
|
27,640
|
|
|
27,021
|
|
||
Less accumulated depletion, depreciation and amortization
|
(2,746,314
|
)
|
|
(2,655,586
|
)
|
||
Net property and equipment
|
3,887,233
|
|
|
3,699,595
|
|
||
Other assets
|
|
|
|
||||
Derivative instruments
|
11,371
|
|
|
—
|
|
||
Other long-term assets
|
78,432
|
|
|
91,589
|
|
||
Total other assets
|
89,803
|
|
|
91,589
|
|
||
Total assets
|
$
|
4,333,671
|
|
|
$
|
4,069,676
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
17,659
|
|
|
$
|
25,230
|
|
Accrued liabilities
|
197,305
|
|
|
200,695
|
|
||
Royalties payable
|
85,577
|
|
|
85,193
|
|
||
Amounts due to affiliates
|
234
|
|
|
19,606
|
|
||
Derivative instruments
|
—
|
|
|
1,897
|
|
||
Advances from joint interest owners
|
11,240
|
|
|
14,837
|
|
||
Amounts due to joint ventures
|
—
|
|
|
486
|
|
||
Other current liabilities
|
47,883
|
|
|
51,828
|
|
||
Total current liabilities
|
359,898
|
|
|
399,772
|
|
||
Long-term liabilities
|
|
|
|
||||
Borrowings under Credit Agreement
|
315,000
|
|
|
255,000
|
|
||
Borrowings under San Mateo Credit Facility
|
307,500
|
|
|
288,000
|
|
||
Senior unsecured notes payable
|
1,039,811
|
|
|
1,039,416
|
|
||
Asset retirement obligations
|
37,118
|
|
|
35,592
|
|
||
Derivative instruments
|
—
|
|
|
1,984
|
|
||
Deferred income taxes
|
84,700
|
|
|
37,329
|
|
||
Other long-term liabilities
|
35,264
|
|
|
43,131
|
|
||
Total long-term liabilities
|
1,819,393
|
|
|
1,700,452
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
||||
Common stock - $0.01 par value, 160,000,000 shares authorized; 116,671,325 and 116,644,246 shares issued; and 116,564,598 and 116,642,899 shares outstanding, respectively
|
1,167
|
|
|
1,166
|
|
||
Additional paid-in capital
|
2,014,246
|
|
|
1,981,014
|
|
||
Accumulated deficit
|
(22,771
|
)
|
|
(148,500
|
)
|
||
Treasury stock, at cost, 106,727 and 1,347 shares, respectively
|
(1,293
|
)
|
|
(26
|
)
|
||
Total Matador Resources Company shareholders’ equity
|
1,991,349
|
|
|
1,833,654
|
|
||
Non-controlling interest in subsidiaries
|
163,031
|
|
|
135,798
|
|
||
Total shareholders’ equity
|
2,154,380
|
|
|
1,969,452
|
|
||
Total liabilities and shareholders’ equity
|
$
|
4,333,671
|
|
|
$
|
4,069,676
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
||||
Oil and natural gas revenues
|
$
|
197,914
|
|
|
$
|
193,269
|
|
Third-party midstream services revenues
|
15,830
|
|
|
11,838
|
|
||
Sales of purchased natural gas
|
10,544
|
|
|
11,231
|
|
||
Realized gain on derivatives
|
10,867
|
|
|
3,270
|
|
||
Unrealized gain (loss) on derivatives
|
136,430
|
|
|
(45,719
|
)
|
||
Total revenues
|
371,585
|
|
|
173,889
|
|
||
Expenses
|
|
|
|
||||
Production taxes, transportation and processing
|
21,716
|
|
|
19,665
|
|
||
Lease operating
|
30,910
|
|
|
31,163
|
|
||
Plant and other midstream services operating
|
9,964
|
|
|
9,316
|
|
||
Purchased natural gas
|
8,058
|
|
|
10,634
|
|
||
Depletion, depreciation and amortization
|
90,707
|
|
|
76,866
|
|
||
Accretion of asset retirement obligations
|
476
|
|
|
414
|
|
||
General and administrative
|
16,222
|
|
|
18,290
|
|
||
Total expenses
|
178,053
|
|
|
166,348
|
|
||
Operating income
|
193,532
|
|
|
7,541
|
|
||
Other income (expense)
|
|
|
|
||||
Interest expense
|
(19,812
|
)
|
|
(17,929
|
)
|
||
Other income (expense)
|
1,320
|
|
|
(110
|
)
|
||
Total other expense
|
(18,492
|
)
|
|
(18,039
|
)
|
||
Income (loss) before income taxes
|
175,040
|
|
|
(10,498
|
)
|
||
Income tax provision (benefit)
|
|
|
|
||||
Deferred
|
39,957
|
|
|
(1,013
|
)
|
||
Total income tax provision (benefit)
|
39,957
|
|
|
(1,013
|
)
|
||
Net income (loss)
|
135,083
|
|
|
(9,485
|
)
|
||
Net income attributable to non-controlling interest in subsidiaries
|
(9,354
|
)
|
|
(7,462
|
)
|
||
Net income (loss) attributable to Matador Resources Company shareholders
|
$
|
125,729
|
|
|
$
|
(16,947
|
)
|
Earnings (loss) per common share
|
|
|
|
||||
Basic
|
$
|
1.08
|
|
|
$
|
(0.15
|
)
|
Diluted
|
$
|
1.08
|
|
|
$
|
(0.15
|
)
|
Weighted average common shares outstanding
|
|
|
|
||||
Basic
|
116,607
|
|
|
115,315
|
|
||
Diluted
|
116,684
|
|
|
115,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity attributable to Matador Resources Company
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in subsidiaries
|
|
Total shareholders’ equity
|
|||||||||||||||||
|
Common Stock
|
|
Additional
paid-in capital |
|
Accumulated deficit
|
|
Treasury Stock
|
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|||||||||||||||||||
Balance at January 1, 2020
|
116,644
|
|
|
$
|
1,166
|
|
|
$
|
1,981,014
|
|
|
$
|
(148,500
|
)
|
|
1
|
|
|
$
|
(26
|
)
|
|
$
|
1,833,654
|
|
|
$
|
135,798
|
|
|
$
|
1,969,452
|
|
Issuance of common stock pursuant to employee stock compensation plan
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common stock pursuant to directors’ and advisors’ compensation plan
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized
|
—
|
|
|
—
|
|
|
5,066
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,066
|
|
|
—
|
|
|
5,066
|
|
|||||||
Stock options exercised, net of options forfeited in net share settlements
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
|||||||
Liability-based stock option awards settled in equity
|
22
|
|
|
1
|
|
|
297
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
298
|
|
|
—
|
|
|
298
|
|
|||||||
Restricted stock forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
(1,267
|
)
|
|
(1,267
|
)
|
|
—
|
|
|
(1,267
|
)
|
|||||||
Contribution related to formation of San Mateo I, net of tax of $3.1 million (see Note 6)
|
—
|
|
|
—
|
|
|
11,613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,613
|
|
|
—
|
|
|
11,613
|
|
|||||||
Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries, net of tax of $4.3 million (see Note 6)
|
—
|
|
|
—
|
|
|
16,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,280
|
|
|
29,394
|
|
|
45,674
|
|
|||||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,515
|
)
|
|
(11,515
|
)
|
|||||||
Current period net income
|
—
|
|
|
—
|
|
|
—
|
|
|
125,729
|
|
|
—
|
|
|
—
|
|
|
125,729
|
|
|
9,354
|
|
|
135,083
|
|
|||||||
Balance at March 31, 2020
|
116,671
|
|
|
$
|
1,167
|
|
|
$
|
2,014,246
|
|
|
$
|
(22,771
|
)
|
|
107
|
|
|
$
|
(1,293
|
)
|
|
$
|
1,991,349
|
|
|
$
|
163,031
|
|
|
$
|
2,154,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity attributable to Matador Resources Company
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in subsidiaries
|
|
Total shareholders’ equity
|
|||||||||||||||||
|
Common Stock
|
|
Additional
paid-in capital |
|
Accumulated deficit
|
|
Treasury Stock
|
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|||||||||||||||||||
Balance at January 1, 2019
|
116,375
|
|
|
$
|
1,164
|
|
|
$
|
1,924,408
|
|
|
$
|
(236,277
|
)
|
|
21
|
|
|
$
|
(415
|
)
|
|
$
|
1,688,880
|
|
|
$
|
90,777
|
|
|
$
|
1,779,657
|
|
Issuance of common stock pursuant to employee stock compensation plan
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common stock pursuant to directors’ and advisors’ compensation plan
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation expense related to equity-based awards including amounts capitalized
|
—
|
|
|
—
|
|
|
5,802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,802
|
|
|
—
|
|
|
5,802
|
|
|||||||
Stock options exercised, net of options forfeited in net share settlements
|
210
|
|
|
2
|
|
|
3,109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,111
|
|
|
—
|
|
|
3,111
|
|
|||||||
Restricted stock forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|
(3,170
|
)
|
|
(3,170
|
)
|
|
—
|
|
|
(3,170
|
)
|
|||||||
Contribution related to formation of San Mateo I, net of tax of $3.1 million (see Note 6)
|
—
|
|
|
—
|
|
|
11,613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,613
|
|
|
—
|
|
|
11,613
|
|
|||||||
Contribution of property related to formation of San Mateo II (see Note 6)
|
—
|
|
|
—
|
|
|
(506
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(506
|
)
|
|
506
|
|
|
—
|
|
|||||||
Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries
|
—
|
|
|
—
|
|
|
2,040
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,040
|
|
|
10,291
|
|
|
12,331
|
|
|||||||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,330
|
)
|
|
(8,330
|
)
|
|||||||
Current period net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,947
|
)
|
|
—
|
|
|
—
|
|
|
(16,947
|
)
|
|
7,462
|
|
|
(9,485
|
)
|
|||||||
Balance at March 31, 2019
|
116,594
|
|
|
$
|
1,166
|
|
|
$
|
1,946,466
|
|
|
$
|
(253,224
|
)
|
|
205
|
|
|
$
|
(3,585
|
)
|
|
$
|
1,690,823
|
|
|
$
|
100,706
|
|
|
$
|
1,791,529
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
135,083
|
|
|
$
|
(9,485
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
||||
Unrealized (gain) loss on derivatives
|
(136,430
|
)
|
|
45,719
|
|
||
Depletion, depreciation and amortization
|
90,707
|
|
|
76,866
|
|
||
Accretion of asset retirement obligations
|
476
|
|
|
414
|
|
||
Stock-based compensation expense
|
3,794
|
|
|
4,587
|
|
||
Deferred income tax provision (benefit)
|
39,957
|
|
|
(1,013
|
)
|
||
Amortization of debt issuance cost
|
684
|
|
|
643
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
36,342
|
|
|
(3,873
|
)
|
||
Lease and well equipment inventory
|
(1,296
|
)
|
|
(1,465
|
)
|
||
Prepaid expenses and other current assets
|
174
|
|
|
(936
|
)
|
||
Other long-term assets
|
1,749
|
|
|
9,809
|
|
||
Accounts payable, accrued liabilities and other current liabilities
|
(58,562
|
)
|
|
(41,621
|
)
|
||
Royalties payable
|
384
|
|
|
(7,500
|
)
|
||
Advances from joint interest owners
|
(3,598
|
)
|
|
(6,297
|
)
|
||
Other long-term liabilities
|
(92
|
)
|
|
(6,608
|
)
|
||
Net cash provided by operating activities
|
109,372
|
|
|
59,240
|
|
||
Investing activities
|
|
|
|
|
|
||
Oil and natural gas properties capital expenditures
|
(173,994
|
)
|
|
(182,288
|
)
|
||
Midstream capital expenditures
|
(73,439
|
)
|
|
(33,340
|
)
|
||
Expenditures for other property and equipment
|
(787
|
)
|
|
(807
|
)
|
||
Proceeds from sale of assets
|
—
|
|
|
1,555
|
|
||
Net cash used in investing activities
|
(248,220
|
)
|
|
(214,880
|
)
|
||
Financing activities
|
|
|
|
|
|
||
Borrowings under Credit Agreement
|
60,000
|
|
|
100,000
|
|
||
Borrowings under San Mateo Credit Facility
|
19,500
|
|
|
—
|
|
||
Cost to amend Credit Agreement
|
(660
|
)
|
|
—
|
|
||
Proceeds from stock options exercised
|
45
|
|
|
3,150
|
|
||
Contributions related to formation of San Mateo I
|
14,700
|
|
|
14,700
|
|
||
Contributions from non-controlling interest owners of less-than-wholly-owned subsidiaries
|
50,000
|
|
|
12,330
|
|
||
Distributions to non-controlling interest owners of less-than-wholly-owned subsidiaries
|
(11,515
|
)
|
|
(8,330
|
)
|
||
Taxes paid related to net share settlement of stock-based compensation
|
(1,336
|
)
|
|
(3,208
|
)
|
||
Cash paid under financing lease obligations
|
(219
|
)
|
|
(274
|
)
|
||
Net cash provided by financing activities
|
130,515
|
|
|
118,368
|
|
||
Decrease in cash and restricted cash
|
(8,333
|
)
|
|
(37,272
|
)
|
||
Cash and restricted cash at beginning of period
|
65,128
|
|
|
83,984
|
|
||
Cash and restricted cash at end of period
|
$
|
56,795
|
|
|
$
|
46,712
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information (Note 10)
|
|
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Revenues from contracts with customers
|
$
|
224,288
|
|
|
$
|
216,338
|
|
Realized gain on derivatives
|
10,867
|
|
|
3,270
|
|
||
Unrealized gain (loss) on derivatives
|
136,430
|
|
|
(45,719
|
)
|
||
Total revenues
|
$
|
371,585
|
|
|
$
|
173,889
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Oil revenues
|
$
|
169,585
|
|
|
$
|
154,204
|
|
Natural gas revenues
|
28,329
|
|
|
39,065
|
|
||
Third-party midstream services revenues
|
15,830
|
|
|
11,838
|
|
||
Sales of purchased natural gas
|
10,544
|
|
|
11,231
|
|
||
Total revenues from contracts with customers
|
$
|
224,288
|
|
|
$
|
216,338
|
|
|
Three Months Ended
March 31, |
||||
2020
|
|
2019
|
|||
Weighted average common shares outstanding
|
|
|
|
||
Basic
|
116,607
|
|
|
115,315
|
|
Dilutive effect of options and restricted stock units
|
77
|
|
|
—
|
|
Diluted weighted average common shares outstanding
|
116,684
|
|
|
115,315
|
|
Beginning asset retirement obligations
|
$
|
36,211
|
|
Liabilities incurred during period
|
990
|
|
|
Liabilities settled during period
|
(44
|
)
|
|
Accretion expense
|
476
|
|
|
Ending asset retirement obligations
|
37,633
|
|
|
Less: current asset retirement obligations(1)
|
(515
|
)
|
|
Long-term asset retirement obligations
|
$
|
37,118
|
|
(1)
|
Included in accrued liabilities in the Company’s interim unaudited condensed consolidated balance sheet at March 31, 2020.
|
Commodity
|
|
Calculation Period
|
|
Notional Quantity (Bbl)
|
|
Weighted Average Price Floor ($/Bbl)
|
|
Weighted Average Price Ceiling ($/Bbl)
|
|
Fair Value of Asset (Liability) (thousands)
|
|||||||
Oil
|
|
04/01/2020 - 12/31/2020
|
|
5,205,000
|
|
|
$
|
47.68
|
|
|
$
|
66.69
|
|
|
$
|
95,553
|
|
Total open costless collar contracts
|
|
|
|
|
|
|
|
$
|
95,553
|
|
Commodity
|
|
Calculation Period
|
|
Notional Quantity (Bbl)
|
|
Fixed Price
($/Bbl)
|
|
Fair Value of
Asset
(Liability)
(thousands)
|
|||||
Oil Basis
|
|
04/01/2020 - 12/31/2020
|
|
7,335,000
|
|
|
$
|
0.61
|
|
|
$
|
23,318
|
|
Oil Basis
|
|
01/01/2021 - 12/31/2021
|
|
8,400,000
|
|
|
$
|
0.87
|
|
|
8,552
|
|
|
Oil Basis
|
|
01/01/2022 - 12/31/2022
|
|
5,520,000
|
|
|
$
|
0.95
|
|
|
5,127
|
|
|
Total open basis swap contracts
|
|
|
|
|
|
|
|
$
|
36,997
|
|
Derivative Instruments
|
|
Gross
amounts recognized |
|
Gross amounts
netted in the condensed consolidated balance sheets |
|
Net amounts presented in the condensed
consolidated balance sheets |
||||||
March 31, 2020
|
|
|
|
|
|
|
||||||
Current assets
|
|
$
|
321,607
|
|
|
$
|
(200,428
|
)
|
|
$
|
121,179
|
|
Other assets
|
|
296,261
|
|
|
(284,890
|
)
|
|
11,371
|
|
|||
Current liabilities
|
|
(200,428
|
)
|
|
200,428
|
|
|
—
|
|
|||
Long-term liabilities
|
|
(284,890
|
)
|
|
284,890
|
|
|
—
|
|
|||
Total
|
|
$
|
132,550
|
|
|
$
|
—
|
|
|
$
|
132,550
|
|
December 31, 2019
|
|
|
|
|
|
|
||||||
Current assets
|
|
$
|
442,291
|
|
|
$
|
(442,291
|
)
|
|
$
|
—
|
|
Other assets
|
|
280,397
|
|
|
(280,397
|
)
|
|
—
|
|
|||
Current liabilities
|
|
(444,188
|
)
|
|
442,291
|
|
|
(1,897
|
)
|
|||
Long-term liabilities
|
|
(282,381
|
)
|
|
280,397
|
|
|
(1,984
|
)
|
|||
Total
|
|
$
|
(3,881
|
)
|
|
$
|
—
|
|
|
$
|
(3,881
|
)
|
|
|
|
|
Three Months Ended
March 31, |
||||||
Type of Instrument
|
|
Location in Condensed Consolidated Statement of Operations
|
|
2020
|
|
2019
|
||||
Derivative Instrument
|
|
|
|
|
|
|
||||
Oil
|
|
Revenues: Realized gain on derivatives
|
|
$
|
10,867
|
|
|
$
|
3,366
|
|
Natural Gas
|
|
Revenues: Realized loss on derivatives
|
|
—
|
|
|
(96
|
)
|
||
Realized gain on derivatives
|
|
10,867
|
|
|
3,270
|
|
||||
Oil
|
|
Revenues: Unrealized gain (loss) on derivatives
|
|
136,430
|
|
|
(45,444
|
)
|
||
Natural Gas
|
|
Revenues: Unrealized loss on derivatives
|
|
—
|
|
|
(275
|
)
|
||
Unrealized gain (loss) on derivatives
|
|
136,430
|
|
|
(45,719
|
)
|
||||
Total
|
|
|
|
$
|
147,297
|
|
|
$
|
(42,449
|
)
|
Commodity
|
|
Calculation Period
|
|
Notional Quantity (Bbl or MMBtu)
|
|
Weighted Average Price Floor ($/Bbl or
$/MMBtu) |
|
Weighted Average Price Ceiling ($/Bbl or
$/MMBtu) |
|||||
Oil
|
|
04/01/2020 - 12/31/2020
|
|
2,311,500
|
|
|
$
|
47.94
|
|
|
$
|
66.19
|
|
Natural Gas
|
|
11/01/2020 - 12/31/2020
|
|
3,200,000
|
|
|
$
|
2.52
|
|
|
$
|
3.71
|
|
Natural Gas
|
|
01/01/2021 - 03/31/2021
|
|
4,800,000
|
|
|
$
|
2.52
|
|
|
$
|
3.71
|
|
Commodity
|
|
Calculation Period
|
|
Notional Quantity (Bbl)
|
|
Fixed Price
($/Bbl)
|
|||
Oil
|
|
04/01/2020 - 12/31/2020
|
|
7,620,000
|
|
|
$
|
34.93
|
|
Oil
|
|
01/01/2021 - 12/31/2021
|
|
2,040,000
|
|
|
$
|
35.26
|
|
Commodity
|
|
Calculation Period
|
|
Notional Quantity (Bbl)
|
|
Fixed Price
($/Bbl)
|
|||
Oil
|
|
04/01/2020 - 06/30/2020
|
|
391,500
|
|
|
$
|
48.15
|
|
Level 1
|
Unadjusted quoted prices for identical, unrestricted assets or liabilities in active markets.
|
Level 2
|
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs, including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace.
|
Level 3
|
Unobservable inputs that are not corroborated by market data that reflect a company’s own market assumptions.
|
|
|
Fair Value Measurements at
March 31, 2020 using |
||||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets (Liabilities)
|
|
|
|
|
|
|
|
|
||||||||
Oil derivatives and basis swaps
|
|
$
|
—
|
|
|
$
|
132,550
|
|
|
$
|
—
|
|
|
$
|
132,550
|
|
Total
|
|
$
|
—
|
|
|
$
|
132,550
|
|
|
$
|
—
|
|
|
$
|
132,550
|
|
|
|
Fair Value Measurements at
December 31, 2019 using |
||||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets (Liabilities)
|
|
|
|
|
|
|
|
|
||||||||
Oil derivatives and basis swaps
|
|
$
|
—
|
|
|
$
|
(3,881
|
)
|
|
$
|
—
|
|
|
$
|
(3,881
|
)
|
Total
|
|
$
|
—
|
|
|
$
|
(3,881
|
)
|
|
$
|
—
|
|
|
$
|
(3,881
|
)
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Accrued evaluated and unproved and unevaluated property costs
|
$
|
107,173
|
|
|
$
|
72,376
|
|
Accrued midstream properties costs
|
40,781
|
|
|
46,402
|
|
||
Accrued lease operating expenses
|
20,849
|
|
|
18,223
|
|
||
Accrued interest on debt
|
2,861
|
|
|
18,569
|
|
||
Accrued asset retirement obligations
|
515
|
|
|
619
|
|
||
Accrued partners’ share of joint interest charges
|
18,202
|
|
|
14,322
|
|
||
Accrued payable related to purchased natural gas
|
1,770
|
|
|
17,806
|
|
||
Other
|
5,154
|
|
|
12,378
|
|
||
Total accrued liabilities
|
$
|
197,305
|
|
|
$
|
200,695
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash paid for interest expense, net of amounts capitalized
|
$
|
35,461
|
|
|
$
|
35,326
|
|
Increase in asset retirement obligations related to mineral properties
|
$
|
738
|
|
|
$
|
445
|
|
Increase in asset retirement obligations related to midstream properties
|
$
|
213
|
|
|
$
|
—
|
|
Increase in liabilities for oil and natural gas properties capital expenditures
|
$
|
34,602
|
|
|
$
|
16,184
|
|
Decrease in liabilities for midstream properties capital expenditures
|
$
|
(5,579
|
)
|
|
$
|
(3,908
|
)
|
Stock-based compensation (benefit) expense recognized as liability
|
$
|
(1,411
|
)
|
|
$
|
605
|
|
Transfer of inventory from oil and natural gas properties
|
$
|
401
|
|
|
$
|
250
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash
|
$
|
27,063
|
|
|
$
|
20,758
|
|
Restricted cash
|
29,732
|
|
|
25,954
|
|
||
Total cash and restricted cash
|
$
|
56,795
|
|
|
$
|
46,712
|
|
|
Exploration and Production
|
|
|
|
|
|
Consolidations and Eliminations
|
|
Consolidated Company
|
||||||||||
|
|
Midstream
|
|
Corporate
|
|
|
|||||||||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas revenues
|
$
|
196,795
|
|
|
$
|
1,119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197,914
|
|
Midstream services revenues
|
—
|
|
|
37,749
|
|
|
—
|
|
|
(21,919
|
)
|
|
15,830
|
|
|||||
Sales of purchased natural gas
|
3,595
|
|
|
6,949
|
|
|
—
|
|
|
—
|
|
|
10,544
|
|
|||||
Realized gain on derivatives
|
10,867
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,867
|
|
|||||
Unrealized gain on derivatives
|
136,430
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136,430
|
|
|||||
Expenses(1)
|
161,325
|
|
|
24,330
|
|
|
14,317
|
|
|
(21,919
|
)
|
|
178,053
|
|
|||||
Operating income (loss)(2)
|
$
|
186,362
|
|
|
$
|
21,487
|
|
|
$
|
(14,317
|
)
|
|
$
|
—
|
|
|
$
|
193,532
|
|
Total assets
|
$
|
3,571,257
|
|
|
$
|
715,413
|
|
|
$
|
47,001
|
|
|
$
|
—
|
|
|
$
|
4,333,671
|
|
Capital expenditures(3)
|
$
|
209,735
|
|
|
$
|
68,073
|
|
|
$
|
787
|
|
|
$
|
—
|
|
|
$
|
278,595
|
|
(1)
|
Includes depletion, depreciation and amortization expenses of $85.2 million and $4.8 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.7 million.
|
(2)
|
Includes $9.4 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.
|
(3)
|
Includes $39.7 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $47.6 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
|
|
Exploration and Production
|
|
|
|
|
|
Consolidations and Eliminations
|
|
Consolidated Company
|
||||||||||
|
|
Midstream
|
|
Corporate
|
|
|
|||||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas revenues
|
$
|
191,663
|
|
|
$
|
1,606
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193,269
|
|
Midstream services revenues
|
—
|
|
|
30,254
|
|
|
—
|
|
|
(18,416
|
)
|
|
11,838
|
|
|||||
Sales of purchased natural gas
|
—
|
|
|
11,231
|
|
|
—
|
|
|
—
|
|
|
11,231
|
|
|||||
Realized gain on derivatives
|
3,270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,270
|
|
|||||
Unrealized loss on derivatives
|
(45,719
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,719
|
)
|
|||||
Expenses(1)
|
141,980
|
|
|
25,834
|
|
|
16,950
|
|
|
(18,416
|
)
|
|
166,348
|
|
|||||
Operating income (loss)(2)
|
$
|
7,234
|
|
|
$
|
17,257
|
|
|
$
|
(16,950
|
)
|
|
$
|
—
|
|
|
$
|
7,541
|
|
Total assets
|
$
|
3,043,375
|
|
|
$
|
477,836
|
|
|
$
|
62,087
|
|
|
$
|
—
|
|
|
$
|
3,583,298
|
|
Capital expenditures(3)
|
$
|
197,611
|
|
|
$
|
29,432
|
|
|
$
|
807
|
|
|
$
|
—
|
|
|
$
|
227,850
|
|
(1)
|
Includes depletion, depreciation and amortization expenses of $72.6 million and $3.7 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million.
|
(2)
|
Includes $7.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.
|
(3)
|
Includes $23.1 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $13.7 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
|
Condensed Consolidating Balance Sheet
March 31, 2020 |
||||||||||||||||||||
|
|
Matador
|
|
Non-Guarantor Subsidiaries
|
|
Guarantor Subsidiaries
|
|
Eliminating Entries
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany receivable
|
|
$
|
1,595,484
|
|
|
$
|
13,440
|
|
|
$
|
—
|
|
|
$
|
(1,608,924
|
)
|
|
$
|
—
|
|
Current assets
|
|
7,024
|
|
|
41,840
|
|
|
307,771
|
|
|
—
|
|
|
356,635
|
|
|||||
Net property and equipment
|
|
—
|
|
|
648,361
|
|
|
3,238,872
|
|
|
—
|
|
|
3,887,233
|
|
|||||
Investment in subsidiaries
|
|
1,516,219
|
|
|
—
|
|
|
170,552
|
|
|
(1,686,771
|
)
|
|
—
|
|
|||||
Long-term assets
|
|
—
|
|
|
2,855
|
|
|
97,278
|
|
|
(10,330
|
)
|
|
89,803
|
|
|||||
Total assets
|
|
$
|
3,118,727
|
|
|
$
|
706,496
|
|
|
$
|
3,814,473
|
|
|
$
|
(3,306,025
|
)
|
|
$
|
4,333,671
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,608,924
|
|
|
$
|
(1,608,924
|
)
|
|
$
|
—
|
|
Current liabilities
|
|
2,867
|
|
|
52,782
|
|
|
305,123
|
|
|
(874
|
)
|
|
359,898
|
|
|||||
Senior unsecured notes payable
|
|
1,039,811
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,039,811
|
|
|||||
Other long-term liabilities
|
|
84,700
|
|
|
320,131
|
|
|
384,207
|
|
|
(9,456
|
)
|
|
779,582
|
|
|||||
Total equity attributable to Matador Resources Company
|
|
1,991,349
|
|
|
170,552
|
|
|
1,516,219
|
|
|
(1,686,771
|
)
|
|
1,991,349
|
|
|||||
Non-controlling interest in subsidiaries
|
|
—
|
|
|
163,031
|
|
|
—
|
|
|
—
|
|
|
163,031
|
|
|||||
Total liabilities and equity
|
|
$
|
3,118,727
|
|
|
$
|
706,496
|
|
|
$
|
3,814,473
|
|
|
$
|
(3,306,025
|
)
|
|
$
|
4,333,671
|
|
Condensed Consolidating Balance Sheet
December 31, 2019 |
||||||||||||||||||||
|
|
Matador
|
|
Non-Guarantor Subsidiaries
|
|
Guarantor Subsidiaries
|
|
Eliminating Entries
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany receivable
|
|
$
|
1,578,133
|
|
|
$
|
29,217
|
|
|
$
|
—
|
|
|
$
|
(1,607,350
|
)
|
|
$
|
—
|
|
Current assets
|
|
29
|
|
|
37,933
|
|
|
240,530
|
|
|
—
|
|
|
278,492
|
|
|||||
Net property and equipment
|
|
—
|
|
|
583,899
|
|
|
3,115,696
|
|
|
—
|
|
|
3,699,595
|
|
|||||
Investment in subsidiaries
|
|
1,332,237
|
|
|
—
|
|
|
144,697
|
|
|
(1,476,934
|
)
|
|
—
|
|
|||||
Long-term assets
|
|
—
|
|
|
3,072
|
|
|
99,049
|
|
|
(10,532
|
)
|
|
91,589
|
|
|||||
Total assets
|
|
$
|
2,910,399
|
|
|
$
|
654,121
|
|
|
$
|
3,599,972
|
|
|
$
|
(3,094,816
|
)
|
|
$
|
4,069,676
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,607,350
|
|
|
$
|
(1,607,350
|
)
|
|
$
|
—
|
|
Current liabilities
|
|
—
|
|
|
73,086
|
|
|
327,595
|
|
|
(909
|
)
|
|
399,772
|
|
|||||
Senior unsecured notes payable
|
|
1,039,416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,039,416
|
|
|||||
Other long-term liabilities
|
|
37,329
|
|
|
300,540
|
|
|
332,790
|
|
|
(9,623
|
)
|
|
661,036
|
|
|||||
Total equity attributable to Matador Resources Company
|
|
1,833,654
|
|
|
144,697
|
|
|
1,332,237
|
|
|
(1,476,934
|
)
|
|
1,833,654
|
|
|||||
Non-controlling interest in subsidiaries
|
|
—
|
|
|
135,798
|
|
|
—
|
|
|
—
|
|
|
135,798
|
|
|||||
Total liabilities and equity
|
|
$
|
2,910,399
|
|
|
$
|
654,121
|
|
|
$
|
3,599,972
|
|
|
$
|
(3,094,816
|
)
|
|
$
|
4,069,676
|
|
Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 2020 |
||||||||||||||||||||
|
|
Matador
|
|
Non-Guarantor Subsidiaries
|
|
Guarantor Subsidiaries
|
|
Eliminating Entries
|
|
Consolidated
|
||||||||||
Total revenues
|
|
$
|
—
|
|
|
$
|
45,319
|
|
|
$
|
347,687
|
|
|
$
|
(21,421
|
)
|
|
$
|
371,585
|
|
Total expenses
|
|
921
|
|
|
23,794
|
|
|
174,759
|
|
|
(21,421
|
)
|
|
178,053
|
|
|||||
Operating (loss) income
|
|
(921
|
)
|
|
21,525
|
|
|
172,928
|
|
|
—
|
|
|
193,532
|
|
|||||
Interest expense
|
|
(17,375
|
)
|
|
(2,437
|
)
|
|
—
|
|
|
—
|
|
|
(19,812
|
)
|
|||||
Other income
|
|
—
|
|
|
—
|
|
|
1,320
|
|
|
—
|
|
|
1,320
|
|
|||||
Earnings in subsidiaries
|
|
183,982
|
|
|
—
|
|
|
9,734
|
|
|
(193,716
|
)
|
|
—
|
|
|||||
Income before income taxes
|
|
165,686
|
|
|
19,088
|
|
|
183,982
|
|
|
(193,716
|
)
|
|
175,040
|
|
|||||
Total income tax provision
|
|
39,957
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,957
|
|
|||||
Net income attributable to non-controlling interest in subsidiaries
|
|
—
|
|
|
(9,354
|
)
|
|
—
|
|
|
—
|
|
|
(9,354
|
)
|
|||||
Net income attributable to Matador Resources Company shareholders
|
|
$
|
125,729
|
|
|
$
|
9,734
|
|
|
$
|
183,982
|
|
|
$
|
(193,716
|
)
|
|
$
|
125,729
|
|
Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 2019 |
||||||||||||||||||||
|
|
Matador
|
|
Non-Guarantor Subsidiaries
|
|
Guarantor Subsidiaries
|
|
Eliminating Entries
|
|
Consolidated
|
||||||||||
Total revenues
|
|
$
|
—
|
|
|
$
|
42,876
|
|
|
$
|
149,248
|
|
|
$
|
(18,235
|
)
|
|
$
|
173,889
|
|
Total expenses
|
|
1,035
|
|
|
25,505
|
|
|
158,043
|
|
|
(18,235
|
)
|
|
166,348
|
|
|||||
Operating (loss) income
|
|
(1,035
|
)
|
|
17,371
|
|
|
(8,795
|
)
|
|
—
|
|
|
7,541
|
|
|||||
Interest expense
|
|
(15,787
|
)
|
|
(2,142
|
)
|
|
—
|
|
|
—
|
|
|
(17,929
|
)
|
|||||
Other expense
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
(110
|
)
|
|||||
(Loss) earnings in subsidiaries
|
|
(1,138
|
)
|
|
—
|
|
|
7,767
|
|
|
(6,629
|
)
|
|
—
|
|
|||||
(Loss) income before income taxes
|
|
(17,960
|
)
|
|
15,229
|
|
|
(1,138
|
)
|
|
(6,629
|
)
|
|
(10,498
|
)
|
|||||
Total income tax benefit
|
|
(1,013
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,013
|
)
|
|||||
Net income attributable to non-controlling interest in subsidiaries
|
|
—
|
|
|
(7,462
|
)
|
|
—
|
|
|
—
|
|
|
(7,462
|
)
|
|||||
Net (loss) income attributable to Matador Resources Company shareholders
|
|
$
|
(16,947
|
)
|
|
$
|
7,767
|
|
|
$
|
(1,138
|
)
|
|
$
|
(6,629
|
)
|
|
$
|
(16,947
|
)
|
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2020 |
||||||||||||||||||||
|
|
Matador
|
|
Non-Guarantor Subsidiaries
|
|
Guarantor Subsidiaries
|
|
Eliminating Entries
|
|
Consolidated
|
||||||||||
Net cash provided by operating activities
|
|
$
|
4
|
|
|
$
|
25,244
|
|
|
$
|
84,124
|
|
|
$
|
—
|
|
|
$
|
109,372
|
|
Net cash used in investing activities
|
|
—
|
|
|
(73,670
|
)
|
|
(170,065
|
)
|
|
(4,485
|
)
|
|
(248,220
|
)
|
|||||
Net cash provided by financing activities
|
|
—
|
|
|
53,500
|
|
|
72,530
|
|
|
4,485
|
|
|
130,515
|
|
|||||
Increase (decrease) in cash and restricted cash
|
|
4
|
|
|
5,074
|
|
|
(13,411
|
)
|
|
—
|
|
|
(8,333
|
)
|
|||||
Cash and restricted cash at beginning of period
|
|
29
|
|
|
24,656
|
|
|
40,443
|
|
|
—
|
|
|
65,128
|
|
|||||
Cash and restricted cash at end of period
|
|
$
|
33
|
|
|
$
|
29,730
|
|
|
$
|
27,032
|
|
|
$
|
—
|
|
|
$
|
56,795
|
|
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2019 |
||||||||||||||||||||
|
|
Matador
|
|
Non-Guarantor Subsidiaries
|
|
Guarantor Subsidiaries
|
|
Eliminating Entries
|
|
Consolidated
|
||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(109
|
)
|
|
$
|
32,616
|
|
|
$
|
26,733
|
|
|
$
|
—
|
|
|
$
|
59,240
|
|
Net cash used in investing activities
|
|
—
|
|
|
(29,988
|
)
|
|
(184,892
|
)
|
|
—
|
|
|
(214,880
|
)
|
|||||
Net cash provided by financing activities
|
|
—
|
|
|
3,968
|
|
|
114,400
|
|
|
—
|
|
|
118,368
|
|
|||||
(Decrease) Increase in cash and restricted cash
|
|
(109
|
)
|
|
6,596
|
|
|
(43,759
|
)
|
|
—
|
|
|
(37,272
|
)
|
|||||
Cash and restricted cash at beginning of period
|
|
456
|
|
|
18,840
|
|
|
64,688
|
|
|
—
|
|
|
83,984
|
|
|||||
Cash and restricted cash at end of period
|
|
$
|
347
|
|
|
$
|
25,436
|
|
|
$
|
20,929
|
|
|
$
|
—
|
|
|
$
|
46,712
|
|
•
|
our business strategy;
|
•
|
our estimated future reserves and the present value thereof, including whether or to what extent a full-cost ceiling impairment could be realized;
|
•
|
our cash flows and liquidity;
|
•
|
our financial strategy, budget, projections and operating results;
|
•
|
the supply and demand of oil, natural gas and natural gas liquids;
|
•
|
oil, natural gas and natural gas liquids prices, including our realized prices thereof;
|
•
|
the timing and amount of future production of oil and natural gas;
|
•
|
the availability of drilling and production equipment;
|
•
|
the availability of oil storage capacity;
|
•
|
the availability of oil field labor;
|
•
|
the amount, nature and timing of capital expenditures, including future exploration and development costs;
|
•
|
the availability and terms of capital;
|
•
|
our drilling of wells;
|
•
|
our ability to negotiate and consummate acquisition and divestiture opportunities;
|
•
|
government regulation and taxation of the oil and natural gas industry;
|
•
|
our marketing of oil and natural gas;
|
•
|
our exploitation projects or property acquisitions;
|
•
|
the integration of acquisitions with our business;
|
•
|
our ability and the ability of San Mateo to construct and operate midstream facilities, including the operation and expansion of its Black River cryogenic natural gas processing plant and the drilling of additional salt water disposal wells;
|
•
|
the ability of San Mateo to attract third-party volumes;
|
•
|
our costs of exploiting and developing our properties and conducting other operations;
|
•
|
general economic conditions;
|
•
|
competition in the oil and natural gas industry, including in both the exploration and production and midstream segments;
|
•
|
the effectiveness of our risk management and hedging activities;
|
•
|
our technology;
|
•
|
environmental liabilities;
|
•
|
counterparty credit risk;
|
•
|
developments in oil-producing and natural gas-producing countries;
|
•
|
the impact of the novel coronavirus on the oil and natural gas industry and our business;
|
•
|
our future operating results; and
|
•
|
our plans, objectives, expectations and intentions contained in this Quarterly Report or in our other filings with the SEC that are not historical.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Operating Data:
|
|
|
|
||||
Revenues (in thousands):(1)
|
|
|
|
||||
Oil
|
$
|
169,585
|
|
|
$
|
154,204
|
|
Natural gas
|
28,329
|
|
|
39,065
|
|
||
Total oil and natural gas revenues
|
197,914
|
|
|
193,269
|
|
||
Third-party midstream services revenues
|
15,830
|
|
|
11,838
|
|
||
Sales of purchased natural gas
|
10,544
|
|
|
11,231
|
|
||
Realized gain on derivatives
|
10,867
|
|
|
3,270
|
|
||
Unrealized gain (loss) on derivatives
|
136,430
|
|
|
(45,719
|
)
|
||
Total revenues
|
$
|
371,585
|
|
|
$
|
173,889
|
|
Net Production Volumes:(1)
|
|
|
|
||||
Oil (MBbl)(2)
|
3,697
|
|
|
3,107
|
|
||
Natural gas (Bcf)(3)
|
16.7
|
|
|
13.7
|
|
||
Total oil equivalent (MBOE)(4)
|
6,476
|
|
|
5,395
|
|
||
Average daily production (BOE/d)(5)
|
71,161
|
|
|
59,941
|
|
||
Average Sales Prices:
|
|
|
|
||||
Oil, without realized derivatives (per Bbl)
|
$
|
45.87
|
|
|
$
|
49.64
|
|
Oil, with realized derivatives (per Bbl)
|
$
|
48.81
|
|
|
$
|
50.72
|
|
Natural gas, without realized derivatives (per Mcf)
|
$
|
1.70
|
|
|
$
|
2.85
|
|
Natural gas, with realized derivatives (per Mcf)
|
$
|
1.70
|
|
|
$
|
2.84
|
|
(1)
|
We report our production volumes in two streams: oil and natural gas, including both dry and liquids-rich natural gas. Revenues associated with natural gas liquids are included with our natural gas revenues.
|
(2)
|
One thousand Bbl of oil.
|
(3)
|
One billion cubic feet of natural gas.
|
(4)
|
One thousand Bbl of oil equivalent, estimated using a conversion ratio of one Bbl of oil per six Mcf of natural gas.
|
(5)
|
Barrels of oil equivalent per day, estimated using a conversion ratio of one Bbl of oil per six Mcf of natural gas.
|
|
Three Months Ended
March 31, |
||||||
(In thousands, except expenses per BOE)
|
2020
|
|
2019
|
||||
Expenses:
|
|
|
|
||||
Production taxes, transportation and processing
|
$
|
21,716
|
|
|
$
|
19,665
|
|
Lease operating
|
30,910
|
|
|
31,163
|
|
||
Plant and other midstream services operating
|
9,964
|
|
|
9,316
|
|
||
Purchased natural gas
|
8,058
|
|
|
10,634
|
|
||
Depletion, depreciation and amortization
|
90,707
|
|
|
76,866
|
|
||
Accretion of asset retirement obligations
|
476
|
|
|
414
|
|
||
General and administrative
|
16,222
|
|
|
18,290
|
|
||
Total expenses
|
178,053
|
|
|
166,348
|
|
||
Operating income
|
193,532
|
|
|
7,541
|
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(19,812
|
)
|
|
(17,929
|
)
|
||
Other income (expense)
|
1,320
|
|
|
(110
|
)
|
||
Total other expense
|
(18,492
|
)
|
|
(18,039
|
)
|
||
Income (loss) before income taxes
|
175,040
|
|
|
(10,498
|
)
|
||
Total income tax provision (benefit)
|
39,957
|
|
|
(1,013
|
)
|
||
Net income attributable to non-controlling interest in subsidiaries
|
(9,354
|
)
|
|
(7,462
|
)
|
||
Net income (loss) attributable to Matador Resources Company shareholders
|
$
|
125,729
|
|
|
$
|
(16,947
|
)
|
Expenses per BOE:
|
|
|
|
||||
Production taxes, transportation and processing
|
$
|
3.35
|
|
|
$
|
3.65
|
|
Lease operating
|
$
|
4.77
|
|
|
$
|
5.78
|
|
Plant and other midstream services operating
|
$
|
1.54
|
|
|
$
|
1.73
|
|
Depletion, depreciation and amortization
|
$
|
14.01
|
|
|
$
|
14.25
|
|
General and administrative
|
$
|
2.51
|
|
|
$
|
3.39
|
|
|
Three Months Ended
March 31, |
||||||
(In thousands)
|
2020
|
|
2019
|
||||
Net cash provided by operating activities
|
$
|
109,372
|
|
|
$
|
59,240
|
|
Net cash used in investing activities
|
(248,220
|
)
|
|
(214,880
|
)
|
||
Net cash provided by financing activities
|
130,515
|
|
|
118,368
|
|
||
Net change in cash and restricted cash
|
$
|
(8,333
|
)
|
|
$
|
(37,272
|
)
|
Adjusted EBITDA attributable to Matador Resources Company shareholders(1)
|
$
|
140,576
|
|
|
$
|
124,839
|
|
(1)
|
Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, see “— Non-GAAP Financial Measures” below.
|
|
Three Months Ended
March 31, |
||||||
(In thousands)
|
2020
|
|
2019
|
||||
Unaudited Adjusted EBITDA Reconciliation to Net Income (Loss):
|
|
|
|
||||
Net income (loss) attributable to Matador Resources Company shareholders
|
$
|
125,729
|
|
|
$
|
(16,947
|
)
|
Net income attributable to non-controlling interest in subsidiaries
|
9,354
|
|
|
7,462
|
|
||
Net income (loss)
|
135,083
|
|
|
(9,485
|
)
|
||
Interest expense
|
19,812
|
|
|
17,929
|
|
||
Total income tax provision (benefit)
|
39,957
|
|
|
(1,013
|
)
|
||
Depletion, depreciation and amortization
|
90,707
|
|
|
76,866
|
|
||
Accretion of asset retirement obligations
|
476
|
|
|
414
|
|
||
Unrealized (gain) loss on derivatives
|
(136,430
|
)
|
|
45,719
|
|
||
Stock-based compensation expense
|
3,794
|
|
|
4,587
|
|
||
Consolidated Adjusted EBITDA
|
153,399
|
|
|
135,017
|
|
||
Adjusted EBITDA attributable to non-controlling interest in subsidiaries
|
(12,823
|
)
|
|
(10,178
|
)
|
||
Adjusted EBITDA attributable to Matador Resources Company shareholders
|
$
|
140,576
|
|
|
$
|
124,839
|
|
|
Three Months Ended
March 31, |
||||||
(In thousands)
|
2020
|
|
2019
|
||||
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
109,372
|
|
|
$
|
59,240
|
|
Net change in operating assets and liabilities
|
24,899
|
|
|
58,491
|
|
||
Interest expense, net of non-cash portion
|
19,128
|
|
|
17,286
|
|
||
Adjusted EBITDA attributable to non-controlling interest in subsidiaries
|
(12,823
|
)
|
|
(10,178
|
)
|
||
Adjusted EBITDA attributable to Matador Resources Company shareholders
|
$
|
140,576
|
|
|
$
|
124,839
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In thousands)
|
Total
|
|
Less
Than
1 Year
|
|
1 - 3
Years
|
|
3 - 5
Years
|
|
More
Than
5 Years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under credit agreements and facilities, including letters of credit(1)
|
$
|
677,528
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
677,528
|
|
|
$
|
—
|
|
Senior unsecured notes(2)
|
1,050,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,050,000
|
|
|||||
Office leases
|
25,382
|
|
|
3,997
|
|
|
8,080
|
|
|
8,564
|
|
|
4,741
|
|
|||||
Non-operated drilling and other capital commitments(3)
|
64,449
|
|
|
30,746
|
|
|
20,000
|
|
|
13,703
|
|
|
—
|
|
|||||
Drilling rig contracts(4)
|
37,444
|
|
|
28,845
|
|
|
8,599
|
|
|
—
|
|
|
—
|
|
|||||
Asset retirement obligations(5)
|
37,633
|
|
|
515
|
|
|
3,379
|
|
|
1,995
|
|
|
31,744
|
|
|||||
Natural gas transportation, gathering and processing agreements with non-affiliates(6)
|
634,239
|
|
|
54,977
|
|
|
133,912
|
|
|
134,070
|
|
|
311,280
|
|
|||||
Gathering, processing and disposal agreements with San Mateo(7)
|
511,796
|
|
|
—
|
|
|
60,418
|
|
|
163,614
|
|
|
287,764
|
|
|||||
Natural gas engineering, construction and installation contract(8)
|
19,416
|
|
|
19,416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
3,057,887
|
|
|
$
|
138,496
|
|
|
$
|
234,388
|
|
|
$
|
999,474
|
|
|
$
|
1,685,529
|
|
(1)
|
The amounts included in the table above represent principal maturities only. At March 31, 2020, we had $315.0 million in borrowings outstanding under the Credit Agreement and approximately $46.0 million in outstanding letters of credit issued pursuant to the Credit Agreement. The Credit Agreement matures in October 2023. At March 31, 2020, San Mateo I had $307.5 million of borrowings outstanding under the San Mateo Credit Facility and approximately $9.0 million in outstanding letters of credit issued pursuant to the San Mateo Credit Facility. The San Mateo Credit Facility matures in December 2023. Assuming the amounts outstanding and interest rates of 2.49% and 2.74% (for the Credit Agreement and the San Mateo Credit Facility), respectively, at March 31, 2020, the interest expense is expected to be approximately $8.0 million and $8.5 million each year until maturity.
|
(2)
|
The amounts included in the table above represent principal maturities only. Interest expense on the $1.05 billion of Notes that were outstanding as of March 31, 2020 is expected to be approximately $61.7 million each year until maturity.
|
(3)
|
At March 31, 2020, we had outstanding commitments to drill and complete and to participate in the drilling and completion of various operated and non-operated wells.
|
(4)
|
We do not own or operate our own drilling rigs but instead enter into contracts with third parties for such drilling rigs.
|
(5)
|
The amounts included in the table above represent discounted cash flow estimates for future asset retirement obligations at March 31, 2020.
|
(6)
|
From time to time, we enter into agreements with third parties whereby we commit to deliver anticipated natural gas and oil production and salt water from certain portions of our acreage for gathering, transportation, processing, fractionation, sales and, in the case of salt water, disposal. Certain of these agreements contain minimum volume commitments. If we do not meet the minimum volume commitments under these agreements, we would be required to pay certain deficiency fees. See Note 9 to the interim unaudited condensed consolidated financial statements in this Quarterly Report for more information about these contractual commitments.
|
(7)
|
In February 2017, in connection with the formation of San Mateo I, we dedicated our current and certain future leasehold interests in the Rustler Breaks and Wolf asset areas pursuant to 15-year, fixed-fee natural gas, oil and salt water gathering agreements and salt water disposal agreements. In addition, effective February 1, 2017, we dedicated our current and certain future leasehold interests in the Rustler Breaks asset area pursuant to a 15-year, fixed-fee natural gas processing agreement. In February 2019, in connection with the formation of San Mateo II, we dedicated our current and certain future leasehold interests in the Greater Stebbins Area and the Stateline asset area pursuant to 15-year, fixed-fee agreements for oil, natural gas and salt water gathering, natural gas processing and salt water disposal. See Note 9 to the interim unaudited condensed consolidated financial statements in this Quarterly Report for more information about these contractual commitments.
|
(8)
|
Beginning in June 2019, a subsidiary of San Mateo II entered into an agreement with third parties for the engineering, procurement, construction and installation of an expansion of the Black River Processing Plant, including required compression. See Note 9 to the interim unaudited condensed consolidated financial statements in this Quarterly Report for more information about these contractual commitments.
|
•
|
significantly reduced prices for our oil, natural gas and NGL production, resulting from a world-wide decrease in demand for hydrocarbons and a resulting oversupply of existing production;
|
•
|
further decreases in the demand for our oil production, resulting from significantly decreased levels of global, regional and local travel as a result of federal, state and local government-imposed quarantines, including shelter-in-place mandates, enacted to slow the spread of COVID-19;
|
•
|
increased likelihood that we will, either voluntarily or as a result of third-party and regulatory mandates, curtail or shut in production, resulting from depressed oil prices, lack of storage and other market or political forces;
|
•
|
significant decreases in the volumes of oil, natural gas and water that are transported, gathered, processed or disposed of by San Mateo due to curtailed or shut-in production by Matador or other of San Mateo’s customers;
|
•
|
increased costs associated with, or actual unavailability of, facilities for the storage of oil, natural gas and NGL production in the markets in which we operate;
|
•
|
increased operational difficulties associated with the delivery of oil, natural gas and NGLs to end-markets, resulting from pipeline and storage constraints;
|
•
|
the potential for the operations of the Black River Processing Plant and other critical midstream infrastructure to be adversely impacted by outbreaks of COVID-19;
|
•
|
the potential for forced curtailment of oil and NGL production by state governmental agencies, resulting in a need to significantly curtail or shut in our production;
|
•
|
the potential for loss of leasehold interests for the failure to produce oil and natural gas in paying quantities as a result of significantly lower commodity prices, voluntary or forced curtailments or other factors related to the misalignment of supply and demand, and the potential to incur significant costs associated with litigation related to the foregoing;
|
•
|
increased third-party credit risk, including the risk that counterparties may not accept the delivery of our oil, natural gas and NGL production, resulting from adverse market conditions, a lack of access to capital and storage and the failure of certain of our counterparties to continue as going concerns;
|
•
|
increased likelihood that counterparties to our existing agreements may seek to invoke force majeure provisions to avoid the performance of contractual obligations, resulting from significantly adverse market conditions;
|
•
|
the potential impact for delays in construction or increased costs related to the expansion of the Black River Processing Plant and other midstream construction projects, including construction of the natural gas pipelines connecting our Stateline asset area and the Greater Stebbins Area to the Black River Processing Plant;
|
•
|
increased costs, staffing requirements and difficulties sourcing oilfield services related to social distancing measures implemented in connection with federal, state or local government and voluntarily imposed quarantines; and
|
•
|
increased legal and operational costs related to compliance with significant changes in federal, state and local laws and regulations.
|
Period
|
|
Total Number of Shares Purchased(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs
|
|||||
January 1, 2020 to January 31, 2020
|
|
199
|
|
|
$
|
16.70
|
|
|
—
|
|
|
—
|
|
February 1, 2020 to February 29, 2020
|
|
99,150
|
|
|
$
|
12.94
|
|
|
—
|
|
|
—
|
|
March 1, 2020 to March 31, 2020
|
|
542
|
|
|
$
|
2.29
|
|
|
—
|
|
|
—
|
|
Total
|
|
99,891
|
|
|
$
|
12.89
|
|
|
—
|
|
|
—
|
|
(1)
|
The shares were not re-acquired pursuant to any repurchase plan or program. The Company re-acquired shares of common stock from certain employees in order to satisfy the employees’ tax liability in connection with the vesting of restricted stock.
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
10.1†
|
|
|
|
|
|
10.2†
|
|
|
|
|
|
10.3
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
The following financial information from Matador Resources Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets - Unaudited, (ii) the Condensed Consolidated Statements of Operations - Unaudited, (iii) the Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited, (iv) the Condensed Consolidated Statements of Cash Flows - Unaudited and (v) the Notes to Condensed Consolidated Financial Statements - Unaudited (submitted electronically herewith).
|
|
|
|
104
|
|
Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101).
|
|
|
|
†
|
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
|
MATADOR RESOURCES COMPANY
|
|
|
|
|
Date: May 1, 2020
|
By:
|
|
/s/ Joseph Wm. Foran
|
|
|
|
Joseph Wm. Foran
|
|
|
|
Chairman and Chief Executive Officer
|
Date: May 1, 2020
|
By:
|
|
/s/ David E. Lancaster
|
|
|
|
David E. Lancaster
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Callon Petroleum Company
|
Oasis Petroleum, Inc.
|
Centennial Resource Development, Inc.
|
Parsley Energy, Inc.
|
Cimarex Energy Co.
|
SM Energy Company
|
Devon Energy Corp.
|
WPX Energy, Inc.
|
Diamondback Energy, Inc.
|
S&P Oil and Gas Exploration and Production Select Industry Index (XOP)
|
Marathon Oil Corporation
|
Company’s Percentile Ranking
|
Percentage of Target Units that will become Vested Units
|
0
|
0%
|
10th
|
20%
|
20th
|
40%
|
30th
|
60%
|
40th
|
80%
|
50th
|
100%
|
60th
|
120%
|
70th
|
140%
|
80th
|
160%
|
90th
|
180%
|
100th
|
200%
|
May 1, 2020
|
/s/ Joseph Wm. Foran
|
|
|
Joseph Wm. Foran
|
|
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
May 1, 2020
|
/s/ David E. Lancaster
|
|
|
David E. Lancaster
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
May 1, 2020
|
/s/ Joseph Wm. Foran
|
|
|
Joseph Wm. Foran
|
|
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
May 1, 2020
|
/s/ David E. Lancaster
|
|
|
David E. Lancaster
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|