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Debt | 3 Months Ended
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Mar. 31, 2017
Debt Disclosure [Abstract] |
DEBT | DEBT At March 31, 2017 and May 3, 2017, the Company had $575.0 million of outstanding 6.875% senior notes due 2023, no borrowings outstanding under the Company’s revolving credit agreement (the “Credit Agreement”) and approximately $0.8 million in outstanding letters of credit issued pursuant to the Credit Agreement. Credit Agreement The borrowing base under the Credit Agreement is determined semi-annually as of May 1 and November 1 by the lenders based primarily on the estimated value of the Company’s proved oil and natural gas reserves at December 31 and June 30 of each year, respectively. Both the Company and the lenders may request an unscheduled redetermination of the borrowing base once each between scheduled redetermination dates. During the first quarter of 2017, the lenders completed their review of the Company’s proved oil and natural gas reserves at December 31, 2016, and on April 28, 2017, the borrowing base was increased to $450.0 million and the maximum facility amount remained at $500.0 million. The Company elected to keep the borrowing commitment at $400.0 million. Borrowings under the Credit Agreement are limited to the least of the borrowing base, the maximum facility amount and the elected commitment. The Credit Agreement matures on October 16, 2020. In the event of an increase in the elected commitment, the Company is required to pay a fee to the lenders equal to a percentage of the amount of the increase, which is determined based on market conditions at the time of the increase. Total deferred loan costs were $1.2 million at March 31, 2017, and these costs are being amortized over the term of the Credit Agreement, which approximates amortization of these costs using the effective interest method. If, upon a redetermination of the borrowing base, the borrowing base were to be less than the outstanding borrowings under the Credit Agreement at any time, the Company would be required to provide additional collateral satisfactory in nature and value to the lenders to increase the borrowing base to an amount sufficient to cover such excess or to repay the deficit in equal installments over a period of six months. The Company believes that it was in compliance with the terms of the Credit Agreement at March 31, 2017. Senior Unsecured Notes On April 14, 2015 and December 9, 2016, the Company issued $400.0 million and $175.0 million, respectively, of 6.875% senior notes due 2023 (collectively, the “Notes”). The Notes mature on April 15, 2023, and interest is payable semi-annually in arrears on April and October 15 of each year. On February 17, 2017, in connection with the formation of San Mateo (see Note 3), Matador entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”), which supplements the indenture governing the Notes. Pursuant to the Fourth Supplemental Indenture, (i) Longwood Midstream Holdings, LLC, the holder of Matador’s 51% equity interest in San Mateo, was designated as a guarantor of the Notes and (ii) DLK Black River Midstream, LLC and Black River Water Management Company, LLC, each subsidiaries of San Mateo, were released as parties to, and as guarantors of, the Notes. The guarantors of the Notes, following the effectiveness of the Fourth Supplemental Indenture, are referred to herein as the “Guarantor Subsidiaries.” San Mateo and its subsidiaries (the “Non-Guarantor Subsidiaries”) are not guarantors of the Notes, although they remain restricted subsidiaries under the indenture governing the Notes. The following presents condensed consolidating financial information on an issuer (Matador), Non-Guarantor Subsidiaries, Guarantor Subsidiaries and consolidated basis (in thousands). Elimination entries are necessary to combine the entities. This financial information is presented in accordance with the requirements of Rule 3-10 of Regulation S-X. The following financial information may not necessarily be indicative of results of operations, cash flows or financial position had the Guarantor Subsidiaries operated as independent entities.
Condensed Consolidating Balance Sheet March 31, 2017
|  | Matador |  | Non-Guarantor Subsidiaries |  | Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated
ASSETS |  |  |  |  |  |  |  |  |  |
Intercompany receivable |  | $ | 389,913 |  |  | $ | 2,762 |  |  | $ | — |  |  | $ | (392,675 | ) |  | $ | — |
Other current assets |  | 1,850 |  |  | 15,153 |  |  | 292,973 |  |  | — |  |  | 309,976 |
Net property and equipment |  | 4 |  |  | 124,974 |  |  | 1,248,237 |  |  | — |  |  | 1,373,215 |
Investment in subsidiaries |  | 1,052,474 |  |  | — |  |  | 65,812 |  |  | (1,118,286 | ) |  | — |
Other long-term assets |  | — |  |  | — |  |  | 3,202 |  |  | — |  |  | 3,202 |
Total assets |  | $ | 1,444,241 |  |  | $ | 142,889 |  |  | $ | 1,610,224 |  |  | $ | (1,510,961 | ) |  | $ | 1,686,393 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |
Intercompany payable |  | $ | — |  |  | $ | — |  |  | $ | 392,675 |  |  | $ | (392,675 | ) |  | $ | — |
Other current liabilities |  | 18,008 |  |  | 13,272 |  |  | 136,025 |  |  | — |  |  | 167,305 |
Senior unsecured notes payable |  | 573,968 |  |  | — |  |  | — |  |  | — |  |  | 573,968 |
Other long-term liabilities |  | — |  |  | 574 |  |  | 29,050 |  |  | — |  |  | 29,624 |
Total equity attributable to Matador Resources Company |  | 852,265 |  |  | 65,812 |  |  | 1,052,474 |  |  | (1,118,286 | ) |  | 852,265 |
Non-controlling interest in subsidiaries |  | — |  |  | 63,231 |  |  | — |  |  | — |  |  | 63,231 |
Total liabilities and equity |  | $ | 1,444,241 |  |  | $ | 142,889 |  |  | $ | 1,610,224 |  |  | $ | (1,510,961 | ) |  | $ | 1,686,393 |
Condensed Consolidating Balance Sheet December 31, 2016
|  | Matador |  | Non-Guarantor Subsidiaries |  | Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated
ASSETS |  |  |  |  |  |  |  |  |  |
Intercompany receivable |  | $ | 316,791 |  |  | $ | 3,571 |  |  | $ | 12,091 |  |  | $ | (332,453 | ) |  | $ | — |
Other current assets |  | 101,102 |  |  | 4,242 |  |  | 173,838 |  |  | — |  |  | 279,182 |
Net property and equipment |  | 33 |  |  | 113,107 |  |  | 1,071,385 |  |  | — |  |  | 1,184,525 |
Investment in subsidiaries |  | 856,762 |  |  | — |  |  | 90,275 |  |  | (947,037 | ) |  | — |
Other long-term assets |  | — |  |  | — |  |  | 958 |  |  | — |  |  | 958 |
Total assets |  | $ | 1,274,688 |  |  | $ | 120,920 |  |  | $ | 1,348,547 |  |  | $ | (1,279,490 | ) |  | $ | 1,464,665 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |
Intercompany payable |  | $ | — |  |  | $ | 12,091 |  |  | $ | 320,362 |  |  | $ | (332,453 | ) |  | $ | — |
Other current liabilities |  | 9,265 |  |  | 16,632 |  |  | 143,608 |  |  | — |  |  | 169,505 |
Senior unsecured notes payable |  | 573,924 |  |  | — |  |  | — |  |  | — |  |  | 573,924 |
Other long-term liabilities |  | 1,374 |  |  | 602 |  |  | 27,815 |  |  | — |  |  | 29,791 |
Total equity attributable to Matador Resources Company |  | 690,125 |  |  | 90,275 |  |  | 856,762 |  |  | (947,037 | ) |  | 690,125 |
Non-controlling interest in subsidiaries |  | — |  |  | 1,320 |  |  | — |  |  | — |  |  | 1,320 |
Total liabilities and equity |  | $ | 1,274,688 |  |  | $ | 120,920 |  |  | $ | 1,348,547 |  |  | $ | (1,279,490 | ) |  | $ | 1,464,665 |
Condensed Consolidating Statement of Operations For the Three Months Ended March 31, 2017
|  | Matador |  | Non-Guarantor Subsidiaries |  | Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated
Total revenues |  | $ | — |  |  | $ | 9,663 |  |  | $ | 132,648 |  |  | $ | (7,497 | ) |  | $ | 134,814 |
Total expenses |  | 1,260 |  |  | 3,868 |  |  | 82,905 |  |  | (7,497 | ) |  | 80,536 |
Operating (loss) income |  | (1,260 | ) |  | 5,795 |  |  | 49,743 |  |  | — |  |  | 54,278 |
Net gain on asset sales and inventory impairment |  | — |  |  | — |  |  | 7 |  |  | — |  |  | 7 |
Interest expense |  | (8,455 | ) |  | — |  |  | — |  |  | — |  |  | (8,455 | )
Other income |  | 27 |  |  | — |  |  | 43 |  |  | — |  |  | 70 |
Earnings in subsidiaries |  | 53,672 |  |  | — |  |  | 3,825 |  |  | (57,497 | ) |  | — |
Income before income taxes |  | 43,984 |  |  | 5,795 |  |  | 53,618 |  |  | (57,497 | ) |  | 45,900 |
Total income tax provision (benefit) |  | — |  |  | 54 |  |  | (54 | ) |  | — |  |  | — |
Net income attributable to non-controlling interest in subsidiaries |  | — |  |  | (1,916 | ) |  | — |  |  | — |  |  | (1,916 | )
Net income attributable to Matador Resources Company shareholders |  | $ | 43,984 |  |  | $ | 3,825 |  |  | $ | 53,672 |  |  | $ | (57,497 | ) |  | $ | 43,984 |
Condensed Consolidating Statement of Operations For the Three Months Ended March 31, 2016
|  | Matador |  | Non-Guarantor Subsidiaries |  | Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated
Total revenues |  | $ | — |  |  | $ | 1,317 |  |  | $ | 44,047 |  |  | $ | (741 | ) |  | $ | 44,623 |
Total expenses |  | 1,935 |  |  | 1,133 |  |  | 143,925 |  |  | (741 | ) |  | 146,252 |
Operating (loss) income |  | (1,935 | ) |  | 184 |  |  | (99,878 | ) |  | — |  |  | (101,629 | )
Net gain on asset sales and inventory impairment |  | — |  |  | — |  |  | 1,065 |  |  | — |  |  | 1,065 |
Interest expense |  | (6,875 | ) |  | — |  |  | (322 | ) |  | — |  |  | (7,197 | )
Other income |  | — |  |  | — |  |  | 94 |  |  | — |  |  | 94 |
(Loss) earnings in subsidiaries |  | (98,851 | ) |  | — |  |  | 190 |  |  | 98,661 |  |  | — |
(Loss) income before income taxes |  | (107,661 | ) |  | 184 |  |  | (98,851 | ) |  | 98,661 |  |  | (107,667 | )
Total income tax (benefit) provision |  | (7 | ) |  | 7 |  |  | — |  |  | — |  |  | — |
Net loss attributable to non-controlling interest in subsidiaries |  | — |  |  | 13 |  |  | — |  |  | — |  |  | 13 |
Net (loss) income attributable to Matador Resources Company shareholders |  | $ | (107,654 | ) |  | $ | 190 |  |  | $ | (98,851 | ) |  | $ | 98,661 |  |  | $ | (107,654 | )
Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2017
|  | Matador |  | Non-Guarantor Subsidiaries |  | Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated
Net cash (used in) provided by operating activities |  | $ | (99,235 | ) |  | $ | (1,064 | ) |  | $ | 161,608 |  |  | $ | — |  |  | $ | 61,309 |
Net cash provided by (used in) investing activities |  | 29 |  |  | (32,950 | ) |  | (63,359 | ) |  | (142,040 | ) |  | (238,320 | )
Net cash provided by financing activities |  | — |  |  | 31,707 |  |  | 85 |  |  | 142,040 |  |  | 173,832 |
(Decrease) increase in cash |  | (99,206 | ) |  | (2,307 | ) |  | 98,334 |  |  | — |  |  | (3,179 | )
Cash at beginning of period |  | 99,795 |  |  | 2,307 |  |  | 110,782 |  |  | — |  |  | 212,884 |
Cash at end of period |  | $ | 589 |  |  | $ | — |  |  | $ | 209,116 |  |  | $ | — |  |  | $ | 209,705 |
Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2016
|  | Matador |  | Non-Guarantor Subsidiaries |  | Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated
Net cash (used in) provided by operating activities |  | $ | (5,663 | ) |  | $ | 4,294 |  |  | $ | 19,727 |  |  | $ | — |  |  | $ | 18,358 |
Net cash used in investing activities |  | (109,810 | ) |  | (26,482 | ) |  | (53,675 | ) |  | 132,035 |  |  | (57,932 | )
Net cash provided by financing activities |  | 141,736 |  |  | 22,225 |  |  | 109,245 |  |  | (132,035 | ) |  | 141,171 |
Increase in cash |  | 26,263 |  |  | 37 |  |  | 75,297 |  |  | — |  |  | 101,597 |
Cash at beginning of period |  | 80 |  |  | 186 |  |  | 16,466 |  |  | — |  |  | 16,732 |
Cash at end of period |  | $ | 26,343 |  |  | $ | 223 |  |  | $ | 91,763 |  |  | $ | — |  |  | $ | 118,329 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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