MATADOR RESOURCES COMPANY 17th Annual Midwest IDEAS Conference

Sit down. Tyler Ventura, please sit down. He's not even here. We'll go ahead and get started. Our next presentation, Matador Resources. I'm Dave Mossberg with Three Part Advisors. I'm very happy to have them back today. They came, I think, for the first time last year to the Chicago conference. Came all the way from Dallas, which is where we're headquartered. We've known the company for a lot of years. Really, a good example of the type of company that we like. Fantastic asset allocators over the years. It's a really unique story, and I think there's aspects of it that maybe not everybody would understand or appreciate, and I don't think it's reflected in the stock price. I'll let them tell the story, and I'll turn it over to Matt.

Great. Thanks, Dave. Wanted to first thank Three Part Advisors for having us back again this year. This is our second year at this conference. I think it's a different conference that we attend and see a lot of new faces, so certainly appreciate everybody coming out for our presentation today. As Dave said, I'm Mac Schmitz, senior vice president of investor relations. I'm joined with a few other members of the team, which I'll call up, and we'll speak to a few slides before we jump into Q&A. One is Chris Calvert, EVP and CFO. To his right is Michael Frenzel, EVP and treasurer, and then Hannah Rhodes is to my right, vice president of land. I thought I'd dive into a few slides, and then again, we'll try and quickly get to Q&A and hopefully keep this a little back and forth.

A couple slides on just sort of the history of Matador, just to give those that are new to the story a high level look, and then we'll drill down to the operations and try and get into a little more of the specifics. We like to show this slide. It shows that we are still a founder-run oil and gas company, which you don't see that much today. Joe Foran, our founder, is still at the helm today. He started Matador One with $270,000 with initial capital. He ended up selling that 20 years after he started it in 2003 for $388 million. The story goes that he sold that on a Friday and started this current Matador on a Monday. This Matador was started with $6 million in initial capital, $5 million from Joe and $1 million from his partner.

Today, as you can see, we're obviously a public company, but the asset value is approaching in over $10 billion today. When thinking about Matador and where we're positioned, this gives a high level snapshot, just generally speaking of where we operate. I think most would consider us a pure play Delaware Basin operator, which is out in northeast New Mexico and West Texas. We do still have some legacy assets, as you can see on the right hand of the slide over in the Haynesville and Cotton Valley. That is what we call our gas bank. It's 100% held by production. We don't currently have any ongoing operations there. It's also a fairly large non-op position for us, but it is an option value for us depending on what natural gas prices do. Again, it doesn't cost much money for us to hold onto it.

Where we do spend our time and where essentially, as you can see in the lower left-hand corner, where virtually all of our production and all of our reserve value is in northeast New Mexico and West Texas. I wanted to turn it over to Hannah Rhodes to further explain why we are in the Delaware Basin and why we think it is the best basin in the United States.

All right. I get to talk about the fun stuff. The Delaware, why the Delaware? Obviously, I think we will talk a little bit today about why not every net acre is the same. A lot of peers will talk about their position and where they are located. But I think this is a really great visual to show the stack pay that the Delaware has. We are continuing to add to it. We recently announced our Woodford position, the Woodford, as you can see, the very bottom portion of that layer. The Woodford is a really exciting part for us, and I think we have even added a few before. Second Bone Spring Carb as well was not on this. We have continued to be a pioneer in proving up geological formations in targeted zones within our operated position and then elsewhere.

This is kind of a good overview, a history of where our acreage evolution has started and where it is today. In blue on the today far right, you will see a couple of different acquisitions that we have also announced this year, this quarter that we are very excited about. But really it all starts with our ground game, and I know a lot of folks out there have talked a little bit about a ground game, but I think our ground game here is a little bit more organic. We are constantly in the backgrounds. Our landmen are constantly doing deals, leasing efforts, making relationships in the basin, and traveling a lot. They are on the road getting good deals done, and a lot of these deals are accretive and can be really meaningful and impactful at the end of the year.

Just last year, we announced just from the ground game effort, 17,000 net acres in the basin that they had acquired, and that is also through trades and swaps, a lot of different creative structures, and just really proud of that effort that they have put there. We are also very particular about these acquisitions. We put the balance sheet first, but if they are highly accretive in quality in the rock and position and where it is at, if it is contiguous for us, we obviously love to be able to extend laterals and be able to turn that story into more of a capital efficiency story. That is exactly what we did, first starting with the BLM lease sale back in May.

This was one of the larger lease sales that we had seen coming up. We had been aware of this and had been evaluating the tracts that were going to come up for sale. The ones that we had ended up choosing and winning were highly accretive to our current position, being able to extend laterals while also being able to get a higher net revenue interest with those. I think typically average is around 75% in the basin. Those were at 87.5% or 12.5% interest. We are really excited about those. Those all come without PDP, a full opportunity set with formations. We had targeted nine different zones with some of those leases, or all of those leases, so we are very excited about adding them to our portfolio. Next, too, we had Paloma, announced Paloma acquisition, and those are the same quality.

They have high targeted formations within those leases, a higher net revenue interest on average across all of those properties, and then also were contiguous to our footprint. Ridge Runner, we had announced with the position of our Woodford. Just really proud of this evolution here. I think this is just a story to tell that Joe Foran started in the basin taking leases. It is really kind of trickled in with our land group. It is continuing in the background while also being able to be in the mix of other acquisitions in the basin that come up. This is a little bit on the inventory side. Inventory is a really big topic for the energy sector. I think that you get a lot of that coming from peers that are having or struggling with maintaining inventory or creating a good inventory base.

Luckily for us, I am happy to be able to talk about it today, but we are very happy and very proud of our inventory base that we have put together. Again, a lot of it through ground game acquisitions. We continue to replenish net locations drilled the year prior with those. Also, too, with the high-quality acquisitions that we have targeted and transacted on. This kind of just shows the ability for our team to add this longevity and in a world where we talk a lot about scarcity and opportunity within the basin, which I always tend to laugh at because 17,000 net acres is not small. We are continuing on a really good path of that this year. Our inventory base is really put together through the land group, but also through geological efforts.

We are putting a lot of efforts in finding new zones, like I had talked about earlier. I would be regretted to mention the geological team going back through our current operated position and also adding in benches there, too. Then I will pass it over to Chris Calvert to talk about our production.

Okay. Thank you, Hannah. The one thing that we do like to talk about, we've got this slide going back to 2021, really kind of post-COVID. The industry kind of did a reset at that point. We had been spending and not generating a lot of free cash flow. Coming out of COVID, we really focused on prioritizing cash flow. This slide doesn't speak to free cash flow generation, but coming out of COVID, we became a free cash flow generator. In 2026, in our last quarter release, we projected that we would generate around $900 million in free cash flow for the year. We are able to do that while still growing production, and I think that's a key factor.

We look at ourselves as one of the superior operators in the Permian Basin, and we do feel that we have the opportunity to not only grow, from Hannah's perspective, at the land position, but also we can grow our reserves, we can grow our production, and still deliver free cash flow generation. This slide here shows the historical production growth, 21% CAGR from oil production, and then also a similar compound annual growth rate for BOE production. It's something that we're proud of. We can deliver this production growth in a capitally efficient way that still allows us to generate free cash. Not on this slide, but I'll speak to it real quick. Uses of free cash have historically been, we have a fixed dividend that we have grown seven times in five years. That is kind of priority number one.