Matador Resources (MTDR) Provides Update on 2020 Operational Plan

Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today provided a brief update on its 2020 operational plan in response to the recent sharp decline in oil prices.

Updated 2020 Operational Plan

Matador expects to take the following actions over the next several months to reduce its capital spending and protect its balance sheet.

• Reduce its operated drilling program from six rigs to three rigs before June 30, 2020. Matador expects to release one of its six operated rigs by the end of March 2020 and expects to release two of its remaining five rigs before the end of the second quarter of 2020, after which Matador expects to operate three rigs for the remainder of the year.

• Reduce its unit operating costs, particularly targeting lease operating (LOE) and general and administrative (G&A) expenses.

• Continue to pursue divestitures of portions of its non-core assets, including possible sales of leasehold and mineral interests in South Texas and in the Haynesville shale as well as a possible joint venture or divestiture involving its mineral interests in the Delaware Basin.

Matador intends to provide more specific details regarding the changes to its 2020 operational plan and rig activity and to revise and update its 2020 market guidance in the coming weeks. Matador anticipates suspending its development activities in the Wolf asset area in Loving County, Texas by the end of the first quarter of 2020. The Company is currently evaluating multiple options to optimize its drilling and completions activities beyond the first quarter of 2020, but as it reduces its operated rig count from six to three rigs, Matador expects to keep at least two of these rigs operating full time in the Stateline asset area in Eddy County, New Mexico. Matador is also evaluating other options for increasing its cash flow and for further reducing its operating expenses and capital spending, if necessary, in the second half of 2020. Matador currently anticipates minimal changes to the planned 2020 capital expenditures for its San Mateo midstream affiliate.

Joseph Wm. Foran, Matador's Chairman and CEO, commented, "As we navigate this abrupt change in oil prices, our first priority is to protect our balance sheet and to position ourselves for the long run. Due to the quality and flexibility of our lease positions, we believe these selective actions to reduce spending should permit us to strengthen our balance sheet and create further value for our shareholders throughout 2020. While we believe these are the appropriate steps to take at this time, we stand prepared to take additional actions, if necessary, to conserve cash and reduce spending.

The Board, the senior officers and I are large shareholders and recent buyers of Matador stock. Our aim is to generate profitable growth at a measured pace. Towards that end, I have voluntarily agreed to reduce my base salary by 25%, the Board members have agreed to reduce their compensation by 25% and the executive officers and Vice Presidents have agreed to reduce their base salaries by 20% and 10%, respectively. I am also pleased to report that over 140 individuals – nearly 50% of Matador’s workforce – have purchased stock in the most recent trading period."

Spring 2020 Borrowing Base Affirmed and Elected Commitment Increased

Matador and its lenders completed and closed the Company's Spring 2020 borrowing base redetermination on February 27, 2020.

As a result of this process,

• Matador's borrowing base was affirmed at $900 million unanimously by all eleven lenders in the Company's commercial banking group.

• Matador chose to increase its elected borrowing commitment from $500 million to $700 million, with most banks increasing their commitments to the Company's reserves-based credit facility.

• Two additional lenders joined the nine existing members of Matador's commercial bank group.

The $900 million borrowing base and $700 million elected commitment should provide Matador with more-than-sufficient liquidity for conducting its current and anticipated future operations in 2020. Under its credit facility, the only financial covenant Matador is required to maintain is a Net Debt (as defined in the credit facility) to Adjusted EBITDA ratio of 4.0x or less. At December 31, 2019, this ratio was 2.2x. San Mateo’s credit facility is non-recourse to Matador, and San Mateo’s borrowings are not considered in determining compliance with this Net Debt to Adjusted EBITDA covenant under the Company's reserves-based credit facility. Matador's next regularly scheduled borrowing base redetermination is expected to occur in the Fall of 2020 and should be completed on or before November 1, 2020.

Matador faces no near-term debt maturities, as the Company's revolving credit facility matures in October 2023, and its senior unsecured notes mature in September 2026. Matador has approximately 45% of its anticipated oil production hedged at approximately $48 per barrel in 2020, as detailed in its fourth quarter and full year 2019 earnings release issued on February 25, 2020.

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