Matador Reports 7% Annual Increase in Total Proved Reserves

Source: www.gulfoilandgas.com 2/17/2021, Location: North America

Matador Resources Company reported its estimated proved oil and natural gas reserves at December 31, 2020, which showed a 7% year-over-year increase in total proved reserves, including a 17% year-over-year increase in proved developed reserves and a 12% year-over-year increase in Delaware Basin total proved reserves, each as compared to the Companyís oil and natural gas reserves at December 31, 2019.

Joseph Wm. Foran, Matadorís Chairman and CEO, commented, ďMatador is pleased today to report a 7% year-over-year increase in our total proved reserves from 252.5 million BOE at December 31, 2019 to 270.3 million BOE at December 31, 2020, an all-time high for Matador. This reserves increase was achieved despite the 31% reduction in oil price and the 23% reduction in natural gas price required to be used in estimating proved reserves at December 31, 2020, as noted in the summary table following my remarks. Further, this increase in total proved reserves reflects organic reserves growth from Matadorís oil and natural gas properties and was achieved despite the reduction in the Companyís operated rig count from six to three during 2020.

ďMatadorís year-end 2020 proved reserves also reflect a 17% year-over-year increase in proved developed reserves, which is attributable to the quality of new wells we completed and turned to sales during 2020 and is very important to the continued reaffirmation, and potential future increases, of the borrowing base under our reserves-based credit facility. Further, our total proved reserves in the Delaware Basin increased 12% during 2020 and now comprise approximately 97% of our total proved oil and natural gas reserves.

ďAlthough the Standardized Measure and the PV-10 value of our proved reserves declined 22% and 26%, respectively, from $2.03 billion and $2.25 billion at December 31, 2019 to $1.58 billion and $1.66 billion at December 31, 2020, the decrease was entirely attributable to the reduction in commodity prices noted above. Given the continued strong well results we have achieved throughout our Delaware Basin acreage position, and particularly in the Stateline asset area and the Rodney Robinson leasehold, Matador believes that it is well positioned for more significant growth in its proved reserves volumes and PV-10 value at year-end 2021 as commodity prices recover.Ē

The proved reserves estimates presented for each period in the table above were prepared by the Companyís internal engineering staff and audited by an independent reservoir engineering firm, Netherland, Sewell & Associates, Inc. These proved reserves estimates were prepared in accordance with the Securities and Exchange Commissionís rules for oil and natural gas reserves reporting and do not include any unproved reserves classified as probable or possible that might exist on Matadorís properties.

Total Proved Reserves at December 31, 2020 Increased 7% Year-Over-Year and Proved Developed Reserves Increased 17% Year-Over-Year

Matadorís total proved oil and natural gas reserves increased 7% year-over-year from 252.5 million barrels of oil equivalent (ďBOEĒ) (59% oil, 42% proved developed, 92% Delaware Basin), consisting of 148.0 million barrels of oil and 627.2 billion cubic feet of natural gas, at December 31, 2019 to 270.3 million BOE (59% oil, 46% proved developed, 97% Delaware Basin), consisting of 159.9 million barrels of oil and 662.3 billion cubic feet of natural gas, at December 31, 2020. Oil, natural gas and total proved reserves at December 31, 2020 were each at all-time highs for Matador. Estimated total proved oil and natural gas reserves increased 26%, or 55.0 million BOE, over the last two years from 215.3 million BOE (57% oil, 44% proved developed, 89% Delaware Basin) at December 31, 2018.

At December 31, 2020, the Standardized Measure and the PV-10, a non-GAAP financial measure, of Matadorís total proved oil and natural gas reserves decreased 22% and 26% to $1.58 billion and $1.66 billion from $2.03 billion and $2.25 billion, respectively, at December 31, 2019. The decrease in both Standardized Measure and PV-10 of Matadorís proved oil and natural gas reserves at December 31, 2020 resulted primarily from the significant decrease in both oil and natural gas prices used to estimate proved reserves at December 31, 2020, as compared to December 31, 2019. At December 31, 2020, the oil and natural gas prices used to estimate total proved reserves were $36.04 per barrel (a 31% decrease) and $1.99 per MMBtu (a 23% decrease), respectively, as compared to $52.19 per barrel and $2.58 per MMBtu, respectively, at December 31, 2019.

Matadorís proved developed oil and natural gas reserves increased 17% year-over-year from 105.7 million BOE (56% oil), consisting of 59.7 million barrels of oil and 276.3 billion cubic feet of natural gas, at December 31, 2019 to 123.5 million BOE (56% oil), consisting of 69.6 million barrels of oil and 323.2 billion cubic feet of natural gas, at December 31, 2020. Proved developed oil, natural gas and total reserves at December 31, 2020 were each at all-time highs for Matador.

The increase in Matadorís proved reserves during 2020 also included net upward revisions to prior reserves estimates of 9.8 million BOE. These upward revisions to prior estimates resulted primarily from better-than-expected well performance associated with a number of wells throughout the Delaware Basin, which more than offset downward revisions associated with the lower commodity prices used to evaluate proved reserves at December 31, 2020.

Matadorís Delaware Basin total proved reserves increased 12% year-over-year from 232.8 million BOE (60% oil), consisting of 139.6 million barrels of oil and 559.2 billion cubic feet of natural gas, at December 31, 2019 to 261.9 million BOE (60% oil), consisting of 156.3 million barrels of oil and 633.5 billion cubic feet of natural gas, at December 31, 2020. At December 31, 2020, the Delaware Basin comprised 97% of the Companyís total proved oil and natural gas reserves, including 98% of its proved oil reserves and 96% of its proved natural gas reserves. Delaware Basin oil, natural gas and total proved reserves at December 31, 2020 were each at all-time highs for Matador.

Matadorís proved undeveloped reserves at December 31, 2020 were unchanged at 146.8 million BOE, as compared to December 31, 2019, as the net additions to the Companyís proved undeveloped reserves offset the conversion of reserves from proved undeveloped reserves to proved developed reserves during 2020. Matadorís proved undeveloped oil reserves increased 2% from 88.3 million barrels at December 31, 2019 to 90.3 million barrels at December 31, 2020. Proved undeveloped natural gas reserves decreased 3% from 351.0 billion cubic feet at December 31, 2019 to 339.1 billion cubic feet at December 31, 2020. These changes in proved undeveloped reserves were primarily the result of net increases in Matadorís proved undeveloped reserves in the Delaware Basin, which were offset by the removal of certain proved undeveloped reserves from total proved reserves at December 31, 2020, primarily in the Eagle Ford shale and the Haynesville shale, resulting primarily from the large declines in oil and natural gas prices used to estimate proved reserves at December 31, 2020, as compared to December 31, 2019.


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