Matador Resources Company Announces Strategic Relationship with Plains All American Pipeline in Rustler Breaks

January 22, 2018

DALLAS–(BUSINESS WIRE)–Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”)
today announced a strategic relationship between a subsidiary of the
Company’s 51%-owned midstream joint venture, San Mateo Midstream, LLC
(“San Mateo” or the “Joint Venture”), and a subsidiary of Plains All
American Pipeline, L.P. (NYSE: PAA) (“Plains”) to gather and transport
crude oil for Matador and third-party customers in and around the
Rustler Breaks asset area in Eddy County, New Mexico. Subsidiaries of
San Mateo and Plains have agreed to work together through a Joint Tariff
arrangement and related transactions to offer third-party producers
located within a joint development area of approximately 400,000 acres
in Eddy County, New Mexico (the “Joint Development Area”) crude oil
transportation services from the wellhead to Midland, Texas with access
to other end markets, such as Cushing and the Gulf Coast. In addition,
another subsidiary of Plains has agreed to purchase Matador’s oil
production in the Rustler Breaks asset area and in the Wolf asset area
in Loving County, Texas.

In order to transport crude oil from the Joint Development Area to
Midland or other end markets, Plains intends to construct a mainline
extension from its current long-haul oil pipeline system located in
Culberson County, Texas to a central delivery point on San Mateo’s crude
oil pipeline system, which is currently under construction throughout
the Rustler Breaks asset area near Carlsbad, New Mexico. Matador expects
construction will be complete in the second quarter or early in the
third quarter of 2018. In addition, San Mateo will be able to accept
crude oil onto its system from trucks near the city of Loving, New
Mexico. This crude oil trucking station will provide producers in the
area whose oil is not yet connected to pipe at the wellhead a favorable
option to transport oil to Midland and other end markets. The crude oil
will be shipped under a Joint Tariff that will be filed with the Federal
Energy Regulatory Commission (FERC) prior to the oil transportation
pipeline being placed into service. San Mateo expects to benefit from
Matador’s activities in this area and from Plains’ extensive midstream
asset footprint, long-term customer relationships and outstanding
reputation for oil gathering and transportation services to open up
additional market opportunities while also capitalizing on San Mateo’s
own ability to offer services across all three production streams—oil
transportation and gathering, natural gas gathering and processing and
salt water gathering and disposal.

With transportation costs rising in the Delaware Basin, Matador expects
to save substantial expenses by transporting increasing volumes of its
oil by pipeline. Further, Matador has simultaneously improved its net
pricing realizations for the oil it already has on pipe in the Wolf
asset area and expects to have additional options for various end
markets as a result of this arrangement with Plains. These transactions
also provide operational advantages as transportation by pipeline rather
than by truck reduces operational and shut-in risks—for example,
interruptions from ice storms or insufficient trucking capacity around
holidays. In addition, Matador’s agreement with Plains allows for
optionality in getting its crude oil to other markets from Midland.

At January 22, 2018, Matador was operating five rigs that were drilling
oil and natural gas wells full-time in the Delaware Basin. In addition,
Matador was temporarily operating a sixth rig that was drilling an oil
and natural gas well in its Antelope Ridge asset area in southern Lea
County, New Mexico. Matador expects to continue operating this rig to
drill two additional salt water disposal wells in the Rustler Breaks
asset area on behalf of San Mateo, which would bring San Mateo’s salt
water disposal well count in the Rustler Breaks asset area to five by
mid-2018. San Mateo is currently disposing of approximately 100,000
barrels per day of Matador and third-party water in the Rustler Breaks
and Wolf asset areas. Matador anticipates providing its 2018 capital
expenditures program and production guidance in association with its
year-end 2017 earnings release in late February 2018.

Joseph Wm. Foran, Chairman and Chief Executive Officer of Matador, said,
“We are excited to announce this strategic relationship between San
Mateo, Matador and Plains. Similar to the formation of San Mateo in
early 2017, this transaction demonstrates the different ways companies
in the same industry can work together to create value for their
stakeholders. Not only does this relationship open up additional market
opportunities for San Mateo and Matador through Plains’ extensive
midstream asset footprint, long-term customer relationships and record
of performance, but it also demonstrates San Mateo’s ability to generate
value for itself and for third-party customers by providing services
across all three production streams—oil, natural gas and water.

“Greg Armstrong and I have known each other for a long time, and I have
the utmost respect for Greg and his team at Plains. Plains has a great,
well-deserved reputation earned over its 25-plus years in the Permian
Basin, and the capacity and interconnectivity of its systems create a
lot of opportunities for operating companies like us. We are very
pleased to have this opportunity to work with Plains, and we look
forward to building upon and strengthening our business relationship
with Greg, Harry Pefanis, Willie Chiang and the team at Plains. The
value to Matador of this transaction is significant. In addition to
Matador’s 51% ownership in San Mateo, the Joint Tariff in Rustler Breaks
and the tariff in Wolf provide Matador the ability to lock in attractive
and competitive long-term oil transportation rates, obtain additional
oil market optionality, reduce shut-in and transportation risk and
receive increased takeaway capacity out of the Delaware Basin.

“The Board and I congratulate our midstream team for the value it has
created thus far, and we appreciate the support from our San Mateo joint
venture partner, Five Point Capital Partners LLC. We look forward to
supporting this strategic relationship between San Mateo and Plains as
San Mateo continues to expand our midstream operations and continues to
create future value for all these equity groups.”

Greg Armstrong, Chairman and CEO of Plains, said, “I, Willie Chiang and
the rest of the Plains team are very pleased to enter into this win/win
opportunity with Matador and San Mateo Midstream. Building upon their
prior successes, Joe Foran and his team have established a leadership
role in this part of the Delaware Basin, and we are excited about
extending our relationship through this strategic arrangement.”

About Matador Resources Company

Matador is an independent energy company engaged in the exploration,
development, production and acquisition of oil and natural gas resources
in the United States, with an emphasis on oil and natural gas shale and
other unconventional plays. Its current operations are focused primarily
on the oil and liquids-rich portion of the Wolfcamp and Bone Spring
plays in the Delaware Basin in Southeast New Mexico and West Texas.
Matador also operates in the Eagle Ford shale play in South Texas and
the Haynesville shale and Cotton Valley plays in Northwest Louisiana and
East Texas. Additionally, Matador conducts midstream operations,
primarily through its midstream joint venture, San Mateo Midstream, LLC,
in support of its exploration, development and production operations and
provides natural gas processing, oil transportation services, natural
gas, oil and salt water gathering services and salt water disposal
services to third parties.

For more information, visit Matador Resources Company at www.matadorresources.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
“Forward-looking statements” are statements related to future, not past,
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identifying words. Such forward-looking statements include, but are not
limited to, statements about guidance, projected or forecasted financial
and operating results, results in certain basins, objectives, project
timing, expectations and intentions and other statements that are not
historical facts. Actual results and future events could differ
materially from those anticipated in such statements, and such
forward-looking statements may not prove to be accurate. These
forward-looking statements involve certain risks and uncertainties,
including, but not limited to, the following risks related to financial
and operational performance: general economic conditions; the Company’s
ability to execute its business plan, including whether its drilling
program is successful; the ability of the Company’s midstream joint
venture to expand the Black River cryogenic processing plant, the timing
of such expansion and the operating results thereof; the timing and
operating results of the buildout by the Company’s midstream joint
venture of oil, natural gas and water gathering and transportation
systems and the drilling of any additional salt water disposal wells;
changes in oil, natural gas and natural gas liquids prices and the
demand for oil, natural gas and natural gas liquids; its ability to
replace reserves and efficiently develop current reserves; costs of
operations; delays and other difficulties related to producing oil,
natural gas and natural gas liquids; its ability to make acquisitions on
economically acceptable terms; its ability to integrate acquisitions;
availability of sufficient capital to execute its business plan,
including from future cash flows, increases in its borrowing base and
otherwise; weather and environmental conditions; and other important
factors which could cause actual results to differ materially from those
anticipated or implied in the forward-looking statements. For further
discussions of risks and uncertainties, you should refer to Matador’s
filings with the Securities and Exchange Commission (“SEC”), including
the “Risk Factors” section of Matador’s most recent Annual Report on
Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Matador
undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances occurring
after the date of this press release, except as required by law,
including the securities laws of the United States and the rules and
regulations of the SEC. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of
this press release. All forward-looking statements are qualified in
their entirety by this cautionary statement.