Edgar Filing: Matador Resources Co

Definitive Proxy Statement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.)

Filed by the Registrant þ Filed by a Party other than the Registrant ¨

Check the appropriate box:


¨		Preliminary Proxy Statement

¨		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ		Definitive Proxy Statement

¨		Definitive Additional Materials

¨		Soliciting Material Pursuant to §240.14a-12



Matador Resources Company
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

þ	No fee required.

¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	1)	Title of each class of securities to which transaction applies:

	2)	Aggregate number of securities to which transaction applies:

	3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	4)	Proposed maximum aggregate value of transaction:

	5)	Total fee paid:




¨	Fee paid previously with preliminary materials.

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	1)	Amount Previously Paid:

	2)	Form, Schedule or Registration Statement No.:

	3)	Filing Party:

	4)	Date Filed:

LOGO

One Lincoln Centre

5400 LBJ Freeway, Suite 1500

Dallas, Texas 75240

www.matadorresources.com

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on June 6, 2013

To the Matador Resources Company Shareholders:

Please join us for the 2013 Annual Meeting of Shareholders of Matador Resources Company. The meeting will be held at the Hilton Anatole, 2201 North Stemmons Freeway, Dallas, Texas 75207, on Thursday, June 6, 2013, at 9:30 a.m., Central Daylight Time.

At the meeting, you will hear a report on our business and act on the following matters:

(1)

Election of the three nominees for director named in the attached Proxy Statement;

(2)

Advisory vote to approve named executive officer compensation;

(3)

Ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2013; and

(4)

Any other matters that may properly come before the meeting.

All shareholders of record at the close of business on April 10, 2013 are entitled to vote at the meeting or any postponement or adjournment of the meeting. A list of the shareholders is available at the Company’s offices in Dallas, Texas.

By Order of the Board of Directors,

Joseph Wm. Foran

Chairman, President and Chief Executive Officer

April 24, 2013

YOUR VOTE IS IMPORTANT!

Please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning your proxy card to the address listed on the card.

Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Shareholders to Be Held on June 6, 2013:

Our Proxy Statement and the Annual Report to Shareholders for the fiscal year ended December 31, 2012 are available for viewing, printing and downloading at https://materials.proxyvote.com/576485.

TABLE OF CONTENTS


	Page
Proxy Statement		1
Information About the Annual Meeting		3
Proposal 1 — Election of Directors		7
Nominees		7
Vote Required		9
Directors Continuing in Office		9
Special Board Advisors		11
Corporate Governance		14
Independence of Directors		14
Board Leadership Structure		14
Board Committees		15
Board’s Role in Risk Oversight		19
Compensation Committee Interlocks and Insider Participation		19
Communications with Directors		20
Executive Officers		20
Proposal 2 — Advisory Vote to Approve Named Executive Officer Compensation		24
Vote Required		24
Proposal 3 — Ratification of the Appointment of Grant Thornton LLP		25
Fees of Independent Registered Public Accounting Firm for Fiscal Years 2012 and 2011		25
Report of the Audit Committee		26
Vote Required		26
Executive Compensation		28
Compensation Discussion and Analysis		28
Nominating, Compensation and Planning Committee Report		44
Summary Compensation Table		45
Grants of Plan-Based Awards Table		46
Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table		46
Outstanding Equity Awards at December 31, 2012		48
Option Exercises During 2012		49
Potential Payments Upon Termination or Change in Control		49
Director Compensation		54
Special Board Advisor Compensation		54
Securities Authorized for Issuance Under Equity Compensation Plans		55
Transactions with Related Persons		56
Participation in Our Initial Public Offering		56
Loan Program		56
Procedures for Approval of Related Party Transactions		57
Security Ownership		58
Security Ownership of Certain Beneficial Owners and Management		58
Additional Information		60
Section 16(a) Beneficial Ownership Reporting Compliance		60
Shareholder Proposals for the 2014 Proxy Statement		60
Director Nominations or Other Business for Presentation at the 2014 Annual Meeting		60
Annual Report on Form 10-K		61
Other Business		62

Matador Resources Company

One Lincoln Centre

5400 LBJ Freeway, Suite 1500

Dallas, Texas 75240

www.matadorresources.com

PROXY STATEMENT

For

ANNUAL MEETING OF SHAREHOLDERS

To Be Held on June 6, 2013

This Proxy Statement is being mailed on or about April 24, 2013 to the shareholders of Matador Resources Company (“Matador” or the “Company”) in connection with the solicitation of proxies by the Board of Directors (the “Board”) of the Company to be voted at the Annual Meeting of Shareholders of the Company to be held at the Hilton Anatole, 2201 North Stemmons Freeway, Dallas, Texas 75207, on June 6, 2013, at 9:30 a.m., Central Daylight Time (the “Annual Meeting”), or at any postponement or adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. The address of the Company’s principal executive office is One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240.

If you are a shareholder of record, you may vote in person by attending the meeting, by completing and returning a proxy by mail or by using the Internet or telephone. You may vote your proxy by mail by marking your vote on the enclosed proxy card and following the instructions on the card. To vote your proxy using the Internet or telephone, see the instructions on the proxy form and have the proxy form available when you access the Internet website or place your telephone call.

The named proxies will vote your shares according to your directions. If you sign and return your proxy but do not make any of the selections, the named proxies will vote your shares: (i) FOR the election of the three nominees for director as set forth in this Proxy Statement, (ii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in these materials and (iii) FOR the ratification of Grant Thornton LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2013. The proxy may be revoked at any time before it is exercised by filing with the Company a written revocation addressed to the Corporate Secretary, by executing a proxy bearing a later date or by attending the Annual Meeting and voting in person.

The cost of soliciting proxies will be borne by the Company. In addition to the use of postal services or the Internet, proxies may be solicited by directors, officers and employees of the Company (none of whom will receive any additional compensation for any assistance they may provide in the solicitation of proxies) in person or by telephone.

The outstanding voting securities of the Company consist of shares of Common Stock, $0.01 par value per share (“Common Stock”). The record date for the determination of the shareholders entitled to notice of and to vote at the Annual Meeting, or any postponement or adjournment thereof, has been established by the Board as the close of business on April 10, 2013 (the “Record Date”). At that date, there were outstanding and entitled to vote 55,842,938 shares of Common Stock.

The presence, in person or by proxy, of the holders of record of a majority of the outstanding shares entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting, but if a quorum should not be present, the meeting may be adjourned from time to time until a quorum is obtained. A holder of Common Stock will be entitled to one vote per share on each matter properly brought before the meeting. Cumulative voting is not permitted in the election of directors.

The proxy card provides space for a shareholder to withhold voting for any or all nominees for the Board. The election of directors requires a plurality of the votes cast at the meeting. All other proposals require the

affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the meeting. Shares of a shareholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum. Votes withheld with respect to the election of the Company’s directors will have no effect on the election of the nominees. In the case of the other proposals being submitted for shareholder approval, an abstention will effectively count as a vote cast against such proposal. Broker non-votes on any matter, as to which the broker has indicated on the proxy that it does not have discretionary authority to vote, will be treated as shares not entitled to vote with respect to that matter and therefore will have no effect upon the approval of such matter. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one other matter.

INFORMATION ABOUT THE ANNUAL MEETING

We are furnishing you this Proxy Statement in connection with the solicitation of proxies by the Board to be used at the Annual Meeting and any adjournment thereof. The Annual Meeting will be held on Thursday, June 6, 2013 at 9:30 a.m., Central Daylight Time. We are sending this Proxy Statement to our shareholders on or about April 24, 2013.

All references in this Proxy Statement to “we,” “our,” “us” or the “Company” refer to Matador Resources Company, including our subsidiaries and affiliates.

What is the purpose of the Annual Meeting?

At the Annual Meeting, shareholders will act upon the matters outlined in the Annual Meeting notice, including the following:

•

the election of the two nominees for director named in this Proxy Statement for a term expiring at the 2016 Annual Meeting of Shareholders and the one nominee for director named in this Proxy Statement for a term expiring at the 2015 Annual Meeting of Shareholders;

•

an advisory vote to approve named executive officer compensation;

•

the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2013; and

•

any other matters that may properly come before the meeting.

What are the Board’s voting recommendations?

•

For the election of the two nominees for director named in this Proxy Statement for a term expiring at the 2016 Annual Meeting of Shareholders and the one nominee for director named in the Proxy Statement for a term expiring at the 2015 Annual Meeting of Shareholders;

•

For the approval, on an advisory basis, of the compensation of the Company’s named executive officers; and

•

For the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2013.

Who is entitled to vote?

Shareholders as of the close of business on April 10, 2013 are eligible to vote their shares at the Annual Meeting. As of the Record Date, there were 55,842,938 shares of our Common Stock outstanding. Each share of Common Stock is entitled to one vote at the Annual Meeting.

Why did I receive a Notice Regarding the Internet Availability of Proxy Materials in the mail instead of a full set of proxy materials?

Securities and Exchange Commission (“SEC”) rules allow companies to furnish proxy materials over the Internet. We have elected to send a separate Notice of Internet Availability of Proxy Materials (the “Notice”) to most of our shareholders instead of a paper copy of the proxy materials. This approach conserves natural resources and reduces the costs of printing and distributing our proxy materials while providing shareholders with a convenient way to access our proxy materials. Instructions on how to access the proxy materials over the Internet or to request a paper copy of proxy materials, including a proxy card or voting instruction form, may be found in the Notice. In addition, shareholders may request to receive future proxy materials in printed form by mail or electronically by email. A shareholder’s election to receive proxy materials by mail or email will remain in effect until the shareholder terminates it.

How do I vote?

You may:

•

attend the Annual Meeting and vote in person; or

•

dial the toll-free number listed on the Notice, proxy card or voting instruction form provided by your broker. Easy-to-follow voice prompts allow you to vote your shares and confirm that your voting instructions have been properly recorded. Telephone voting will be available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time on June 5, 2013; or

•

go to the website www.proxyvote.com and follow the instructions, then confirm that your voting instructions have been properly recorded. If you vote using the website, you can request electronic delivery of future proxy materials. Internet voting will be available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time on June 5, 2013; or

•

if you received a paper copy of your proxy materials and elect to vote by written submission, mark your selections on the proxy card, date and sign it, and return the card in the pre-addressed, postage-paid envelope provided.

Why did I receive paper copies of proxy materials?

We are providing certain shareholders with paper copies of the proxy materials instead of a separate Notice. If you received a paper copy and would no longer like to receive printed proxy materials, you may consent to receive all future proxy materials electronically via email or the Internet. To sign up for electronic delivery, please follow the instructions provided in your proxy materials. When prompted, indicate that you agree to receive or access shareholder communications electronically in the future.

Will each shareholder in our household receive proxy materials?

Generally, no. To the extent you are receiving printed proxy materials, we try to provide only one set of proxy materials to be delivered to multiple shareholders sharing an address, unless you have given us other instructions. Any shareholder at a shared address may request delivery of single or multiple copies of printed proxy materials for future meetings by contacting us at:

Matador Resources Company

Attention: Corporate Secretary

5400 LBJ Freeway, Suite 1500

Dallas, Texas 75240

Email: investors@matadorresources.com

Telephone: (972) 371-5200

We hereby undertake to deliver promptly, upon written or oral request, a copy of proxy materials to a shareholder at a shared address to which a single copy of the proxy materials was delivered. Requests should be directed to the Corporate Secretary at the address or phone number set forth above.

Who will be admitted to the Annual Meeting?

Admission to the Annual Meeting will be limited to our shareholders of record, persons holding proxies from our shareholders, beneficial owners of our Common Stock and our employees. If your shares are registered in your name, we will verify your ownership at the meeting in our list of shareholders as of the Record Date. If your shares are held through a broker, bank or other nominee, you must bring proof of your ownership of the shares. This proof could consist of, for example, a bank or brokerage firm account statement or a letter from your bank or broker confirming your ownership as of the Record Date. You may also send proof of ownership to us at Matador Resources Company, Attention: Corporate Secretary, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240, or email: investors@matadorresources.com before the Annual Meeting, and we will send you an admission card.

If I vote via telephone or the Internet or by mailing my Proxy Card, may I still attend the Annual Meeting?

Yes.

What if I want to change my vote?

You may revoke your proxy before it is voted by submitting a new proxy with a later date (by mail, telephone or Internet), by voting at the Annual Meeting or by filing a written revocation with our Corporate Secretary. Your attendance at the Annual Meeting will not automatically revoke your proxy.

What constitutes a quorum?

A majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum. If you vote by telephone or Internet or by returning your Proxy Card, you will be considered part of the quorum. The Inspector of Election will treat shares represented by a properly executed proxy as present at the meeting. Abstentions and broker non-votes will be counted for purposes of determining a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner submits a proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power for that item and has not received instructions from the beneficial owner.

How many votes will be required to approve a proposal?

Election of directors at the Annual Meeting will be by a plurality of votes cast at the Annual Meeting. Votes may be cast in favor of the election of each director nominee or withheld. With respect to other matters, the affirmative vote of the holders of a majority of the shares, present in person or by proxy, and entitled to vote at the Annual Meeting, is required to take any other action.

Shares cannot be voted at the Annual Meeting unless the holder of record is present in person or by proxy.

Can brokers who hold shares in street name vote those shares if they have received no instructions?

Under the rules of the New York Stock Exchange (“NYSE”), brokers may not vote the shares held by them in street name for their customers and for which they have not received instructions, except with respect to a routine matter. The only matter to be voted on at the Annual Meeting that is considered routine for these purposes is the ratification of the appointment of our independent registered public accounting firm. Accordingly, brokers may not vote your shares on any other matter if you have not given specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote will be counted.

How will you treat abstentions and broker non-votes?

A plurality of the votes cast at the Annual Meeting is required to elect each nominee for director. Accordingly, abstentions and broker non-votes will have no effect on the election of directors. Shares of a shareholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum. Votes withheld with respect to the election of the Company’s directors will have no effect on the election of the nominees. In the case of the other proposals being submitted for shareholder approval, an abstention will effectively count as a vote cast against such proposal. Broker non-votes on any matter, as to which the broker has indicated on the proxy that it does not have discretionary authority to vote, will be treated as shares not entitled to vote with respect to that matter and therefore will have no effect upon the approval of such matter. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one other matter.

Who pays the solicitation expenses?

We will bear the cost of solicitation of proxies. Proxies may be solicited by mail or personally by our directors, officers or employees, none of whom will receive additional compensation for such solicitation. Those holding shares of Common Stock of record for the benefit of others, or nominee holders, are being asked to

distribute proxy soliciting materials to, and request voting instructions from, the beneficial owners of such shares. We will reimburse nominee holders for their reasonable out-of-pocket expenses.

Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting, and we will publish final results in a Current Report on Form 8-K that will be filed with the SEC within four business days of the Annual Meeting. You may obtain a copy of this and other reports free of charge at www.matadorresources.com, or by contacting our Investor Relations Department at (972) 371-5200 or investors@matadorresources.com or by accessing the SEC’s website at www.sec.gov.

Will the Company’s independent registered public accounting firm be available at the Annual Meeting to respond to questions?

Yes. The Audit Committee of the Board has approved Grant Thornton LLP to serve as our independent registered public accounting firm for the year ending December 31, 2013. Representatives of Grant Thornton LLP will be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to shareholder questions.

Where can I contact the Company?

Our mailing address is:

Matador Resources Company

5400 LBJ Freeway, Suite 1500

Dallas, Texas 75240

Our telephone number is (972) 371-5200.

PROPOSAL 1 — ELECTION OF DIRECTORS

The Board currently consists of eight members. Our Board is divided into three classes of directors, designated Class I, Class II and Class III, with the term of office of each director ending on the date of the third Annual Meeting following the Annual Meeting at which such director’s class was elected. The numbers of directors in each class will be as nearly equal as possible at all times. The current Class II directors are Mr. Gregory E. Mitchell and Dr. Steven W. Ohnimus. Mr. Mitchell and Dr. Ohnimus are the Class II director nominees at this Annual Meeting. Messrs. Joseph Wm. Foran and David M. Laney and Dr. Stephen A. Holditch are the Class III directors, who will hold office until the 2014 Annual Meeting of Shareholders and until the election and qualification of their respective successors or until their earlier death, retirement, resignation or removal. The current Class I directors are Ms. Margaret B. Shannon and Messrs. Michael C. Ryan and Carlos M. Sepulveda, Jr. Ms. Shannon and Mr. Ryan will hold office until the 2015 Annual Meeting of Shareholders and until the election and qualification of their respective successors or until their earlier death, retirement, resignation or removal. Mr. Sepulveda, who was appointed to the Board in April 2013, is the Class I director nominee at this Annual Meeting.

Mr. Mitchell and Dr. Ohnimus have been nominated by the Board for election as Class II directors at the Annual Meeting to hold office until the 2016 Annual Meeting and until the election and qualification of their respective successors or until their earlier death, retirement, resignation or removal. Mr. Sepulveda, who was appointed to the Board in April 2013 to fill a vacancy as a Class I director, has been nominated by the Board for election at the Annual Meeting to hold office until the 2015 Annual Meeting and until the election and qualification of his successor or until his earlier death, retirement, resignation or removal. The nomination of Mr. Sepulveda, a long-time shareholder of the Company who is nominated for his first election to the Board, was recommended to the Director Nominating Advisory Committee and the Nominating, Compensation and Planning Committee by the Company’s Chief Executive Officer. The Board has determined that each of the director nominees is an “independent director.”

The Board believes that each of the director nominees possesses the qualifications described below in “Corporate Governance — Board Committees — Nominating, Compensation and Planning Committee.” That is, the Board believes that each nominee possesses: (i) deep experience at the policy making level in business, government or education; (ii) the availability and willingness to devote adequate time to Board duties; (iii) the character and judgment and ability to make independent analytical, probing and other inquiries; (iv) a willingness to exercise independent judgment along with a willingness to listen and learn from others; (v) business knowledge and experience that provides a balance with the other directors; (vi) financial independence; and (vii) with respect to incumbent directors, excellent past performance on the Board.

The information provided below is biographical information about each of the nominees, as well as a description of the experience, qualifications, attributes or skills that led the Board to conclude that the individual should be nominated for election as a director of the Company.

Nominees

Mr. Gregory E. Mitchell. Mr. Mitchell, age 61, joined our Board in June 2011. With 45 years of grocery and petroleum retailing experience, he is currently President and CEO of Toot’n Totum Food Stores, LLC, his family company located in Amarillo, Texas. The company, founded in 1950, consists of over 70 convenience store/fueling locations, as well as car wash and car care centers, with an employee base of over 800 team members. His experience within the petroleum industry includes extensive negotiations with various major refiners in the United States. A 1973 graduate of the University of Oklahoma, with a Bachelor of Business Administration degree, Mr. Mitchell was appointed by former Governor William Clements to the Texas Higher Education Coordinating Board, where he served for six years. Additionally, he has served as Chairman of the Amarillo Chamber of Commerce, Chairman of the United Way of Amarillo and Canyon, Chairman of the Don and Sybil Harrington Foundation and President of the Amarillo Area Foundation. Currently, Mr. Mitchell is a director of

Cal Farley’s Boys Ranch. Mr. Mitchell’s experience as President and CEO of his large family business and as a past director of several companies provides our Board with extensive business, strategic and executive leadership experience.

Dr. Steven W. Ohnimus. Dr. Ohnimus, age 66, was first elected to our Board in January 2004. He spent his entire professional career from 1971 to 2000 with Unocal Corporation, an integrated energy company. From 1995 to 2000, he was General Manager—Partner Operated Ventures, where he represented Unocal’s non-operated international interests at board meetings, management committees and other high level meetings involving projects in the $200 million range in countries such as Azerbaijan, Bangladesh, China, Congo, Myanmar and Yemen. From 1994 to 1995, Dr. Ohnimus was General Manager of Asset Analysis, where he managed and directed planning, business plan budgeting and scenario plans for the domestic and international business unit with an asset portfolio totaling $5.5 billion. From 1990 to 1994, Dr. Ohnimus was Vice President and General Manager, Unocal Indonesia, located in Balikpapan, operating five offshore fields and one onshore liquid extraction plant and employing 1,200 nationals and 50 expatriates. From 1989 to 1990, he served as Regional Operations Manager in Anchorage, Alaska, and from 1988 to 1989, he was District Operations Manager in Houma, Louisiana. From 1981 to 1988, Dr. Ohnimus was in various management assignments in Houston and Houma, Louisiana, and from 1971 to 1981 he handled various technical assignments in reservoir, production and drilling in the Gulf Coast area (Houston, Van, Lafayette and Houma). From 1975 to 1979, Dr. Ohnimus was Assistant Professor of Petroleum Engineering at the University of Southwest Louisiana (now University of Southern Louisiana) where he taught a total of eleven undergraduate and graduate night classes. In 1980, he taught drilling seminars at the University of Texas Petroleum Extension Service of the International Association of Drilling Contractors (IADC). Dr. Ohnimus has authored several published papers concerning reservoir recompletion and increased recovery. He received his Bachelor of Science degree in Chemical Engineering from the University of Missouri at Rolla in 1968, a Master of Science degree in Petroleum Engineering from the University of Missouri at Rolla in 1969 and a PhD degree in Petroleum Engineering from the University of Missouri at Rolla in 1971. Dr. Ohnimus served as a director of the American Petroleum Institute in 1978 and 1979, served as Session Chairman for the Society of Petroleum Engineers’ Annual Convention in 1982, was the Evangeline Section Chairman of the Society of Petroleum Engineers in 1978 and 1979 and served as President of the Unocal Credit Union from 1986 to 1988. In 2007, he was elected President of the Unocal Gulf Coast Alumni Club, which reports through the Chevron Retirees Association. From 2008 to 2009, Dr. Ohnimus served as the vice chairman of the advisory board of Western Standard Energy Corp. (OTCBB:WSEG), an oil and natural gas exploration company. Due to his long oil and natural gas industry career and significant operational and international experience, Dr. Ohnimus provides valuable insight to our Board on our drilling and completion operations and management, as well as providing a global technology and operations perspective.

Mr. Carlos M. Sepulveda, Jr. Mr. Sepulveda, age 55, joined our Board in April 2013. Mr. Sepulveda has served since March 2004 as President and Chief Executive Officer of Interstate Battery System International, Inc. and has been a member of its board of directors since 1995. Mr. Sepulveda joined Interstate Batteries in 1990. Mr. Sepulveda has announced his plans to retire from his position as President and Chief Executive Officer in May 2013 but will remain on Interstate Batteries’ board of directors. He is also currently Chairman of the Board of Triumph Bancorp, Inc., a bank holding company with interests in wholesale banking, commercial finance and real estate investments. He has served on Triumph’s board of directors since 2010 and will serve as Executive Chairman of the board of directors following his retirement from Interstate Batteries. He has also served since 2007 on the board of directors of Cinemark Holdings, Inc. (NYSE: CNK), a company that owns and manages movie theaters, and is chair of its audit committee. From 1979 to 1990, Mr. Sepulveda was with KPMG Peat Marwick and was a partner in its audit department from July 1989 to October 1990. Mr. Sepulveda received his Bachelor of Business Administration degree in accounting from the University of Texas in 1979 and is a licensed Certified Public Accountant. Mr. Sepulveda’s experience as President and Chief Executive Officer of Interstate Batteries along with his extensive public accounting background provide the Board invaluable executive leadership and financial and accounting expertise. As a certified public accountant with proven management skills, Mr. Sepulveda brings to the Board strong accounting and financial oversight coupled with experience in enterprise and operational risk management.

Vote Required

To be elected as a director, each director nominee must receive a plurality of the votes cast by the shareholders entitled to vote for the election of directors. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.

The Board of Directors recommends that you vote FOR each of the Nominees.

Directors Continuing in Office

Biographical information for our directors who are continuing in office is provided below.

Mr. Joseph Wm. Foran. Mr. Foran, age 60, founded Matador Resources Company in July 2003 and has served as Chairman of the Board, Chief Executive Officer, President and Secretary since our founding. He is also chair of the Board’s Executive Committee. Mr. Foran began his career as an oil and natural gas independent in 1983 when he and his wife, Nancy, founded Foran Oil Company with $270,000 in contributed capital from 17 of his closest friends and neighbors. Foran Oil Company was later contributed into Matador Petroleum Corporation upon its formation by Mr. Foran in 1988, and Mr. Foran served as Chairman and Chief Executive Officer of that company from inception until the time of its sale to Tom Brown, Inc. in June 2003 for an enterprise value of $388 million in an all-cash transaction. Under Mr. Foran’s guidance, Matador Petroleum realized a 21% average annual rate of return for its shareholders for 15 years. Mr. Foran is originally from Amarillo, Texas, where his family owned a pipeline construction business. From 1980 to 1983, he was Vice President and General Counsel of J. Cleo Thompson and James Cleo Thompson, Jr., Oil Producers. Prior to that time, he was a briefing attorney to Chief Justice Joe R. Greenhill of the Supreme Court of Texas. Mr. Foran graduated with a Bachelor of Science degree in Accounting from the University of Kentucky with highest honors and a law degree from the Southern Methodist University Dedman School of Law, where he was a Hatton W. Sumners scholar and the Leading Articles Editor of the Southwestern Law Review. He is currently active as a member of various industry and civic organizations, including his church and various youth activities. In 2002, Mr. Foran was honored as the Ernst & Young “Entrepreneur of the Year” for the Southwest Region. As the founder and Chairman of the Board, Chief Executive Officer and President of Matador Resources Company, Mr. Foran has provided leadership, experience and long relationships with many of our shareholders.

Dr. Stephen A. Holditch. Dr. Holditch, age 66, was a shareholder in and advisor to Matador Petroleum Corporation and is an original shareholder in Matador Resources Company. He was first elected to our Board in January 2004 and currently serves as chair of the Board’s Operations and Engineering Committee. He is now a Professor Emeritus in the Harold Vance Department of Petroleum Engineering at Texas A&M University, having retired from the University on January 31, 2013. He was the Director of the Texas A&M University Energy Institute in 2011 and 2012. From January 2004 to January 2012, he was Head of the Harold Vance Department of Petroleum Engineering at Texas A&M University. Prior to rejoining Texas A&M University full-time in 2004, he was with Schlumberger Limited, a leading oilfield services provider, as a Fellow, one of only a handful of technical experts so recognized with this title in that company. In that position, Dr. Holditch advised top management within Schlumberger Limited on production and reservoir engineering matters. Dr. Holditch joined Schlumberger in 1997, following Schlumberger Limited’s acquisition of S.A. Holditch & Associates, Inc., the consulting company he founded and grew over 20 years into a preeminent engineering firm worldwide in the analysis of low permeability natural gas reservoirs and the design of hydraulic fracture treatments. During the latter half of the 1980s and into the 1990s, Dr. Holditch expanded the services offered by S.A. Holditch & Associates, building the company from three employees in 1977 to more than 80 employees. At the time of its sale to Schlumberger in 1997, S.A. Holditch & Associates had become a full-service petroleum engineering consulting company. From 1974 to 1976, Dr. Holditch worked as an independent consulting engineer on reservoir studies, well completions and fracture treatment design for numerous clients in East and South Texas.

During that period, he also attended Texas A&M University to earn a PhD degree in Petroleum Engineering and conducted research in reservoir flow behavior in fractured, low permeability natural gas reservoirs. From 1970 to 1974, he was a Production Engineer with Shell Oil Company, an integrated energy company, where his responsibilities included production engineering for numerous oil and natural gas fields, well completions and massive hydraulic fracture treatment designs in several deep, geopressured fields in South Texas. From 1968 to 1969, he worked for Pan American Petroleum Corporation as a field engineer on various projects in East Texas. Dr. Holditch received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1969 and 1970, respectively, and a PhD degree in Petroleum Engineering from Texas A&M University in 1976. Dr. Holditch was President of the Society of Petroleum Engineers, International (SPE) in 2002 and served on the Society’s board of directors from 1998 to 2003. In addition, he served as a Trustee for the American Institute of Mining, Metallurgical, and Petroleum Engineers from 1997 to 1998. He was also on the board of directors of Triangle Petroleum Corporation, an oil and natural gas exploration corporation, from February 2006 to December 2011. He has received numerous awards in recognition of his technical achievements and leadership. In 1995, Dr. Holditch was elected to the National Academy of Engineering, the highest professional honor awarded to an engineer. In 1997, he was elected to the Russian Academy of Natural Sciences, and in 1998, Dr. Holditch was elected to the Petroleum Engineering Academy of Distinguished Graduates at Texas A&M University. In 2010, he was named a Distinguished Alumnus of the Dwight Look College of Engineering at Texas A&M University. Dr. Holditch received the SPE Distinguished Service Award for Petroleum Engineering Faculty in 1981 and held the Shell Distinguished Chair in Petroleum Engineering at Texas A&M University from 1983 to 1987. He was awarded the R. L. Adams Professorship in 1995. He taught graduate level courses in formation evaluation, well stimulation and production engineering, and actively performed and supervised research at Texas A&M University from 1974 until his retirement in 2013 in a wide range of engineering areas. Dr. Holditch is a member of numerous professional societies and serves as a board member and/or trustee for several business affiliations. He has been an SPE Distinguished Lecturer and has co-authored or edited three books and more than 100 technical papers; he has made more than 80 invited technical presentations to petroleum industry audiences. His prior positions as Professor and Head of the Harold Vance Department of Petroleum Engineering at Texas A&M University, his prior positions with Schlumberger and S. A. Holditch & Associates, Inc. and his prior service on the board of directors of Triangle Petroleum Corporation provide our Board with additional perspective on our completion and stimulation operations and other business and engineering matters.

Mr. David M. Laney. Mr. Laney, age 64, is an original shareholder in Matador Resources Company and was an original shareholder in Matador Petroleum Corporation. He was one of the original directors on our Board in July 2003 and currently serves as lead independent director and chair of the Board’s Nominating, Compensation and Planning Committee. He is an attorney who since March 2007 has practiced law as a solo practitioner. Between 2003 and 2007, he was a partner with the law firm of Jackson Walker LLP in Dallas where he practiced in the area of corporate and financial law. Prior to joining Jackson Walker, Mr. Laney practiced at the law firm of Jenkens & Gilchrist, a Professional Corporation, from 1977 to 2003 and was Managing Partner of the Jenkens & Gilchrist law firm from 1990 to 2002. During his tenure as Managing Partner, Jenkens & Gilchrist was recognized as one of the fastest growing firms in the country and was named by industry press as among the top 50 firms in the country (from the standpoint of size and financial performance). From a regional law firm of roughly 160 lawyers in two Texas cities in 1990, the firm expanded under Mr. Laney’s leadership to over 625 attorneys in nine cities by the end of his tenure in 2002. Mr. Laney has also served in several capacities as an appointee of Texas Governors William Clements and George W. Bush on various state boards continuously from 1989 through 2001. He was Governor Clements’ appointee to the Texas Finance Commission, responsible for regulatory oversight of the state banking and thrift industries as the Texas banking system emerged from the recession and collapse of the 1980s. He then served as Governor Bush’s Texas Commissioner of Transportation (Chairman of the Texas Department of Transportation) from 1995 to 2000. Mr. Laney completed his term with the Texas Department of Transportation (TxDOT) in 2001. As Commissioner of Transportation, his responsibilities were largely those of the chief executive of TxDOT, a 14,000 employee state agency with a $5 billion annual budget. In that position, he initiated and oversaw the planning and successful execution of an extensive number of organizational and operational innovations throughout the organization, and developed and

managed TxDOT’s legislative agenda during three regular sessions of the Texas Legislature. In 2002, Mr. Laney was nominated by President George W. Bush to the board of directors of Amtrak and confirmed by the U. S. Senate for a five-year term. In November 2007, he completed his term as Chairman of Amtrak’s board of directors. From 1998 to 2003, Mr. Laney served as a member of the Stanford University Board of Trustees, and for two years as Chairman of its Audit Committee. Mr. Laney has also served in various capacities in connection with numerous civic and educational organizations and projects in the Dallas area. Mr. Laney graduated with a Bachelor of Arts degree with honors from Stanford University and a law degree from the Southern Methodist University Dedman School of Law. Mr. Laney’s legal experience and leadership positions in governmental departments provide our Board with additional perspective on our corporate governance, legal and governmental relations matters and general business matters.

Mr. Michael C. Ryan. Mr. Ryan, age 52, joined our Board in February 2009 and currently serves as chair of the Board’s Audit Committee. Prior to joining the Board, he served as a Board Advisor to the Financial Committee and frequently participated in Board planning and strategy sessions. Since October 2004, Mr. Ryan has been a Partner and member of the Investment Committee at Berens Capital Management LLC, an investment firm based in New York. From February 1998 to June 2004, he worked with Goldman, Sachs & Co., a global investment banking and securities services firm, leading its West Coast international institutional equities business. In this role, he developed and built a team of professionals to advise large institutional clients on their global investment decisions. From 1995 to 1998, Mr. Ryan lived in Oslo, Norway, where he was a Partner at Pareto Securities, a Scandinavian-based securities firm where he led and built the institutional equities business into the United States and United Kingdom. From 1991 to 1994, Mr. Ryan represented multiple eastern European governments in the preparation, negotiation and sale of many of their largest state-owned companies. He began his career with Honeywell, Inc., which invents and manufactures technologies, including in the safety, security and energy areas, in 1983, working in the Systems and Research Center, which focused on advanced weapons development programs. Mr. Ryan received a Master of Business Administration degree from The Wharton School at the University of Pennsylvania and a Bachelor of Science degree from the University of Minnesota. Mr. Ryan’s background and experience in the domestic and international financial markets provide our Board with additional perspective on accounting and auditing functions, economic trends and our capital sourcing and financing opportunities.

Ms. Margaret B. Shannon. Ms. Shannon, age 63, joined our Board in June 2011 and currently serves as chair of the Board’s Corporate Governance Committee. She served as Vice President and General Counsel of BJ Services Company, an international oilfield services company, from 1994 to 2010, when Baker Hughes Incorporated acquired BJ Services. Prior to 1994, she was a partner with the law firm of Andrews Kurth LLP. Ms. Shannon has served on the board of directors of Quanta Services Inc. (NYSE:PWR), a Houston-based public company that provides specialized infrastructure contracting services for the electric power, natural gas and pipeline and telecommunication industries, since December 2012. Ms. Shannon is also active in community activities serving as the chair of the finance committee and the governance committee of the board of directors of the Harris County Health Alliance and a member of the board of directors of the Houston Department of Health and Human Services Foundation. She previously served as the Chair of the Executive Women’s Partnership sponsored by the Greater Houston Partnership, chair of the audit committee of the board of directors of the South Texas College of Law and the chair of the Endowment Board of Palmer Memorial Episcopal Church and was a participant in the American Leadership Forum. Ms. Shannon received her J.D. cum laude from the Southern Methodist University Dedman School of Law in 1976 and her Bachelor of Arts degree from Baylor University in 1971. Ms. Shannon’s experience as an attorney, as a partner with Andrews Kurth LLP, as general counsel for a public company for more than 15 years and as a director for numerous other organizations provides our Board with important insights into public company obligations, corporate governance and board functions.

Special Board Advisors

In addition to our Board, we have four individuals who have significant oil and natural gas experience or legal, accounting and other business experience who advise our Board on various matters. Other than

indemnification agreements in form similar to those entered into with our directors and officers, or as otherwise noted below, we have not entered into written agreements with these individuals with respect to their service as special advisors to our Board. Their business histories are described below:

Mr. Marlan W. Downey. Mr. Downey worked for Shell Oil Company, an integrated energy company, from 1957 to 1987. In 1977, he moved to Shell Oil’s International Exploration & Production business and became Vice President of Shell, and then President of Shell Oil’s newly-formed international subsidiary, Pecten International. Mr. Downey joined ARCO International in 1990 as Senior Vice President of Exploration, becoming President of ARCO International and then Senior Vice President and Executive Exploration Advisor to ARCO. Mr. Downey retired from ARCO in 1996. He is a fellow of the American Association for the Advancement of Science. Mr. Downey is past President of the American Association of Petroleum Geologists (“AAPG”) and has served as Bartell Professor and Chief Scientist—Sarkeys Energy Center at the University of Oklahoma. Mr. Downey is the 2009 recipient of the AAPG’s Sidney Powers Medal, which is the highest honor awarded by the AAPG. He is active in several scientific organizations and serves on the board of Berkeley Earth. Mr. Downey received a Bachelor of Arts degree in Chemistry in 1952 at Peru State College in Nebraska. He served in the Army in Korea and the Philippines, then entered graduate school at the University of Nebraska, and received a Bachelor of Science degree in 1956 and a Master of Science degree in Geology in 1957. Mr. Downey previously served on Matador Petroleum Corporation’s board of directors with Mr. Foran. He has served as a special advisor since our inception in July 2003 and currently serves as chair of the Board’s Prospect Committee and on the Operations and Engineering Committee.

Mr. Wade I. Massad. Mr. Massad served as Executive Vice President—Capital Markets of the Company from December 2011 to July 2012. Following his resignation as an officer of the Company, Mr. Massad resumed his role as a consultant to the Company and as a special advisor to the Board as he did during portions of 2010 and 2011, pursuant to a consulting agreement entered into in August 2012. Mr. Massad is the Co-Founder and Co-Managing Member of Cleveland Capital Management L.L.C., a registered investment advisor and General Partner of Cleveland Capital L.P., a private investment fund focused on micro-cap public and private equity securities, established in October 1996. Previously, Mr. Massad was an investment banker with Keybanc Capital Markets and RBC Capital Markets, where he was the head of U.S. equity institutional sales from 1997 to 1998 and the head of U.S. Capital Markets business from 1999 to 2003. He also served on the firm’s executive committee. Mr. Massad has served on multiple public and private company boards and currently is a board member of 4Licensing Corporation. Mr. Massad received a Bachelor of Arts in business management from Baldwin-Wallace College in 1989 and currently serves on its Board of Trustees.

Mr. Edward R. Scott, Jr. Mr. Scott is a successful Amarillo, Texas lawyer, civic leader and businessman, managing a varied portfolio of real estate and development-related concerns. Currently, he is the primary developer for two residential developments in Amarillo: Pheasant Run and The Greenways. He serves as primary owner of Document Shredding & Storage, which services the entire Panhandle area, Sparky’s Storage Solutions in Amarillo, Texas and is part owner in two car washes in the Dallas/Fort Worth area. From 1968 to 1996, Mr. Scott was an attorney with the Amarillo law firm of Gibson, Ochsner & Adkins. From 1965 to 1968, he served as an accountant with Price Waterhouse & Co. Mr. Scott received his Bachelor of Business Administration degree in Accounting from West Texas State University in 1962 and an LLB from The University of Texas School of Law in 1965. Mr. Scott has previously served as a director and chairman of the Amarillo Economic Development Corporation and is currently serving as a board member of the Salvation Army, Amarillo Area Foundation and the Amarillo Club. He is a past President of the Rotary Club of Amarillo, the Amarillo Businessmen’s Club, the Amarillo Club, Big Brothers and Big Sisters and the Amarillo Business Foundation. He is a former chairman of the Amarillo Board of City Development and a former member of the Board of Regents for West Texas State University. Mr. Scott has previously served as an officer and/or board member to many other local civic and/or charitable organizations. He is a member of the Texas Bar Association, the Amarillo Bar Association, the Texas Society of Certified Public Accountants and the Panhandle Chapter of the Texas Society of Certified Public Accountants. Mr. Scott is an original shareholder in both Matador Resources Company and Matador Petroleum Corporation. He was an original director on the Matador Resources

Company Board and served as chair of the Audit Committee for eight years until his retirement from the Board in June 2011.

Mr. W.J. “Jack” Sleeper, Jr. Mr. Sleeper has over 55 years of experience evaluating oil and natural gas properties. Mr. Sleeper joined DeGolyer and MacNaughton, a petroleum consulting firm, as a Petroleum Engineer in 1965. He performed numerous field studies in North and South America, the North Sea and the Middle East. Mr. Sleeper retired as President and Chief Operating Officer of DeGolyer and MacNaughton on January 1, 1995. He served on DeGolyer and MacNaughton’s board of directors from 1978 until his retirement. Upon his graduation from the University of Oklahoma with a Bachelor of Science degree in Petroleum Engineering (with Distinction) in 1955, he was employed by Shell Oil Company, an integrated energy company, as an Exploitation Engineer. During his 10 years with Shell, he spent three years performing research at Shell Development Company in the fields of Reservoir Engineering, Geology and Petrophysics. He held the titles of Project Engineer, Senior Exploitation Engineer and Senior Production Geologist during his tenure with Shell. Mr. Sleeper has served on the Mewborne Petroleum and Geological Board of Advisors at the University of Oklahoma since 1995. He is a Licensed Professional Engineer (retired) in the states of Oklahoma and Texas. Mr. Sleeper previously served on Matador Petroleum Corporation’s board of directors with Mr. Foran. He has served as a special advisor since our inception in July 2003. He currently serves on our Operations and Engineering Committee and Prospect Committee.

CORPORATE GOVERNANCE

The business affairs of Matador are managed under the direction of the Board in accordance with the Texas Business Organizations Code, the Company’s Amended and Restated Certificate of Formation and its Amended and Restated Bylaws. The Board has adopted Corporate Governance Guidelines, which are reviewed annually by the Corporate Governance Committee. The Company has a Code of Ethics and Business Conduct, which is applicable to all officers, directors and employees of the Company. The Company intends to post any amendments to, and waivers from, its Code of Ethics and Business Conduct on the Company’s website to the extent applicable to an executive officer or a director of the Company. The Corporate Governance Guidelines and the Code of Ethics and Business Conduct are available on the Company’s website at www.matadorresources.com under the heading “Investors—Corporate Governance.”

At December 31, 2012, our Board had seven members. An additional director, Mr. Sepulveda, was appointed to the Board effective April 11, 2013 to fill a vacancy. The Board holds regular and special meetings and spends such time on the affairs of the Company as their duties require. During 2012, the Board held eight meetings. The Board also meets regularly in non-management executive sessions in accordance with NYSE regulations. The Corporate Governance Guidelines provide that one of the Company’s independent directors should serve as a lead independent director at any time when the chief executive officer serves as the chairman of the board. The lead independent director presides over the non-management executive sessions, serves as a liaison between the chairman and the independent directors and performs such additional duties as the Board may otherwise determine and delegate. Because Mr. Foran serves as Chairman of the Board and Chief Executive Officer, our independent directors have appointed Mr. Laney to serve as lead independent director. In 2012, all directors of the Company attended at least 75% of the meetings of the Board and the committees on which they served. It is Company policy that each of our directors is expected to attend Annual Meetings of Shareholders. All of our directors who were then serving were in attendance at the 2012 Annual Meeting.

Independence of Directors

The Board makes all determinations with respect to director independence in accordance with the NYSE listing standards and the rules and regulations promulgated by the SEC. The actual determination of whether a director is independent is made by the Board on a case-by-case basis.

In connection with its preparation for the Annual Meeting, the Board undertook its annual review of director independence and considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates. In making its determination, the Board applied the NYSE listing standards and SEC rules and regulations.

The Board reviewed the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. After this review, our Board determined that seven of our eight directors are “independent directors” as defined under the rules of the SEC and the NYSE: Ms. Shannon, Messrs. Laney, Mitchell, Ryan and Sepulveda and Drs. Holditch and Ohnimus.

Board Leadership Structure

Mr. Foran serves as the Chairman, President and Chief Executive Officer of the Company. As stated in the Corporate Governance Guidelines, the Board does not believe that the offices of Chairman of the Board and Chief Executive Officer must be separate. The members of the Board possess experience and unique knowledge of the challenges and opportunities the Company faces. They are, therefore, in the best position to evaluate the current and future needs of the Company and to judge how the capabilities of the directors and senior managers can be most effectively organized to meet those needs. Given his deep knowledge of the Company and experience in leading it, the Board believes that the most effective leadership structure for the Company is to have Mr. Foran serve as the Chairman, President and Chief Executive Officer.

While Mr. Foran serves as Chairman, President and Chief Executive Officer, all other directors are independent. After considering the recommendations of our Nominating, Compensation and Planning Committee, the independent directors determine Mr. Foran’s compensation. Further, the Company has four standing committees and an independent lead director. The Board believes that each of these measures counterbalances any risk that may exist in having Mr. Foran serve as the Chairman, President and Chief Executive Officer. For these reasons, the Board believes that this leadership structure is effective for the Company.

As the Lead Director, Mr. Laney has the following roles and responsibilities:

•

He chairs the executive sessions of the non-management and independent directors;

•

He leads the independent directors in the evaluation of the Chief Executive Officer;

•

He facilitates communication among the non-management and independent directors; and

•

He acts as a liaison between the non-management and independent directors and the Chief Executive Officer.

Mr. Laney, as Lead Director, may also perform such other duties as the Board or the Corporate Governance Committee from time to time may assign, which may include, but are not limited to, the following:

•

Help develop Board agendas and ensure critical issues are included;

•

Determine quality, quantity and timeliness of information from management;

•

Make recommendations about retaining consultants or special advisors for the Board;

•

Interview Board candidates;

•

Oversee Board and director evaluations; and

•

Help improve communications and processes by and between management and the Board and the Chief Executive Officer.

Board Committees

The standing committees of the Board are the Audit Committee; Nominating, Compensation and Planning Committee; Corporate Governance Committee; and Executive Committee. The Board has also established the following advisory committees: Operations and Engineering Committee; Financial Committee; and Prospect Committee. Each of the standing committees is governed by a charter, and a copy of the charters of each of these committees is available on the Company’s website at www.matadorresources.com under the heading “Investors—Corporate Governance.” Director membership of all of our committees at December 31, 2012 is identified below.

Director

Audit
Committee

Nominating,
Compensation
and Planning
Committee

Corporate
Governance
Committee

Executive
Committee

Operations
and
Engineering
Committee

Financial
Committee

Prospect
Committee

Joseph Wm. Foran

Stephen A. Holditch

David M. Laney

Gregory E. Mitchell

Steven W. Ohnimus

Michael C. Ryan

Carlos M. Sepulveda, Jr.⁽¹⁾

Margaret B. Shannon

Member

Chair

(1)	We anticipate that Mr. Sepulveda will be appointed to the Audit Committee at the next regularly scheduled meeting of the Board.

Audit Committee

The Audit Committee assists the Board in monitoring:

•

the integrity of our financial statements and disclosures;

•

our compliance with legal and regulatory requirements;

•

the qualifications and independence of our independent auditor;

•

the performance of our internal audit function and our independent auditor; and

•

our internal control systems.

In addition, the Audit Committee is charged with review of compliance with our Code of Ethics and Business Conduct for Officers, Directors and Employees.

During 2012, our Audit Committee met eight times and currently consists of Ms. Shannon, Messrs. Laney and Ryan and Dr. Ohnimus, each of whom is independent under the rules of the NYSE and the SEC. Mr. Ryan is the chair of the Audit Committee. SEC rules require a public company to disclose whether or not its audit committee has an “audit committee financial expert” as a member. An “audit committee financial expert” is defined as a person who, based on his or her experience, possesses the attributes outlined in such rules. Our Board has determined that Mr. Ryan is an “audit committee financial expert.” Mr. Sepulveda was appointed to the Board in April 2013 to fill a vacancy. We anticipate that he will be designated as an “audit committee financial expert” and appointed to the Audit Committee at the next regularly scheduled meeting of the Board.

Nominating, Compensation and Planning Committee

The Nominating, Compensation and Planning Committee has the following responsibilities:

•

It identifies and recommends to the Board individuals qualified to be nominated for election to the Board;

•

It recommends to the Board the members and chair of each committee of the Board;

•

It assists the Board and the independent members of the Board in the discharge of their fiduciary responsibilities relating to the fair and competitive compensation of our executive officers;

•

It provides overall guidance with respect to the establishment, maintenance and administration of our compensation programs, including stock and benefit plans;

•

It oversees and advises the Board and the independent members of the Board on the adoption of policies that govern our compensation programs; and

•

It recommends to the Board the strategy, tactical and performance goals of the Company, including those performance and tactical goals that relate to performance-based compensation, including but not limited to goals for production, reserves, cash flows and shareholder value.

Our Nominating, Compensation and Planning Committee has the authority to delegate authority and responsibilities to subcommittees of its members, so long as the subcommittee consists of at least two members.

Our Nominating, Compensation and Planning Committee currently consists of Ms. Shannon, Messrs. Laney and Ryan and Dr. Holditch, each of whom is independent under the rules of the NYSE, a “non-employee director” pursuant to Rule 16b-3 of the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” and an “outside director” pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). Mr. Laney is the chair of the Nominating, Compensation and Planning Committee. During 2012, the Nominating, Compensation and Planning Committee met eight times.

The Board has also established a Director Nominating Advisory Committee that is charged with receiving and considering possible nominees for election by shareholders to the Board. Pursuant to the Director Nominating Advisory Committee charter, this committee is comprised of 8 to 12 persons selected by the Nominating, Compensation and Planning Committee, and consists of at least:

•

two members of the Nominating, Compensation and Planning Committee;

•

two former members of or special advisors to the Board;

•

two shareholders who beneficially own Common Stock having a market value of at least $1.0 million (such value to be based on the market value of the Common Stock immediately prior to designation of such shareholders to the Director Nominating Advisory Committee); and

•

two shareholders who have beneficially owned Common Stock continuously for at least the five years prior to such shareholders’ designation to the Director Nominating Advisory Committee.

The current members of the Director Nominating Advisory Committee are Messrs. Laney and Ryan, Edward R. Scott, Jr., Kevin M. Grevey, Joe E. Coleman, James M. Funk, Scott E. King, James S. Kone, Jr. and James H. “Jake” Trewin.

The Director Nominating Advisory Committee makes recommendations based on its conclusions to the Nominating, Compensation and Planning Committee for its consideration and review.

The Nominating, Compensation and Planning Committee and the Director Nominating Advisory Committee consider individuals recommended by the Company’s shareholders to serve on the Board. In considering candidates submitted by shareholders, the Director Nominating Advisory Committee and the Nominating, Compensation and Planning Committee take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the Director Nominating Advisory Committee and the Nominating, Compensation and Planning Committee, a shareholder must submit the recommendation in writing and must include the following information:

•

The name and address of the shareholder, evidence of the person’s ownership of Company stock or derivatives, including the number of shares owned, a description of all arrangements or understandings regarding the right to vote shares of the Company, any short interest in any security of the Company, any rights to dividends that are separated or separable from the underlying shares, any proportionate interest in shares or derivatives held by a general or limited partnership whereby the shareholder is a general partner or beneficially owns an interest in the general partner, any performance-related fees (other than an asset-based fee) that the shareholder is entitled to based on any change in the value of the shares or derivatives, any other information relating to the shareholder that would be required to be disclosed in connection with solicitations of proxies for the election of directors in a contested election and a statement whether or not the shareholder will deliver a proxy to shareholders; and

•

The name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s consent to be a director if selected by the Nominating, Compensation and Planning Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors.

The shareholder recommendation and information described above and in more detail in our Amended and Restated Bylaws must be sent to the Corporate Secretary at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240 and must be received by the Corporate Secretary not less than 45 or more than 75 days prior to the one-year anniversary date of the date the Company’s proxy statement was mailed in connection with the previous year’s Annual Meeting of Shareholders.

The Nominating, Compensation and Planning Committee believes that a potential director of the Company must demonstrate that such candidate has:

•

a depth of experience at the policy-making level in business, government or education;

•

a balance with the business knowledge and experience of the incumbent or nominated directors;

•

availability and willingness to devote adequate time to Board duties;

•

any unfilled expertise needed on the Board or one of its committees;

•

character, judgment and ability to make independent analytical, probing and other inquiries;

•

willingness to exercise independent judgment yet willingness to listen and learn from the other directors and the Company’s staff; and

•

financial independence to ensure such candidate will not be financially dependent on director compensation.

In the case of an incumbent director, the Nominating, Compensation and Planning Committee will also consider such director’s past performance on the Board.

The Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee may identify potential nominees by asking, from time to time, current directors and executive officers for their recommendation of persons meeting the criteria described above who might be available to serve on the Board. The Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee may also engage firms that specialize in identifying director candidates. As described above, the Nominating, Compensation and Planning Committee and Director Nominating Advisory Committee will also consider candidates recommended by shareholders.

Once a person has been identified by the Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee as a potential candidate, the Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee will make an initial determination regarding the need for additional Board members to fill vacancies or expand the size of the Board. If the Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee determines that additional consideration is warranted, the Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee will review such information and conduct interviews as it deems necessary to fully evaluate each director candidate. In addition to the qualifications of a candidate, the Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee will consider such relevant factors as it deems appropriate, including the current composition of the Board, the evaluations of other prospective nominees and the need for any required expertise on the Board or one of its committees. The Nominating, Compensation and Planning Committee or the Director Nominating Advisory Committee also contemplate multiple dynamics that promote and advance diversity amongst the members of the Board. Although the Nominating, Compensation and Planning Committee does not have a formal diversity policy, the Nominating, Compensation and Planning Committee considers a number of factors regarding diversity of personal and professional backgrounds, specialized skills and acumen and breadth of experience in energy production, consumption, distribution or transportation, government policy, finance or law. The Nominating, Compensation and Planning Committee’s evaluation process will not vary based on whether or not a candidate is recommended by a shareholder.

Corporate Governance Committee

The Corporate Governance Committee is responsible for periodically reviewing and assessing our Corporate Governance Guidelines and making recommendations for changes thereto to the Board, reviewing any other matters related to our corporate governance, unless the authority to conduct such review has been retained by the Board or delegated to another committee, and overseeing the evaluation of the Board and management.

Our Corporate Governance Committee currently consists of Ms. Shannon and Messrs. Laney and Mitchell, each of whom is independent under the rules of the NYSE. Ms. Shannon is the chair of the Corporate Governance Committee. During 2012, the Corporate Governance Committee met three times.

Executive Committee

The Executive Committee has authority to discharge all the responsibilities of the Board in the management of the business and affairs of the Company, except where action of the full Board is required by statute or by our Amended and Restated Certificate of Formation.

Our Executive Committee consists of Messrs. Foran and Laney and Dr. Ohnimus. Mr. Foran is the chair of the Executive Committee.

Operations and Engineering Committee

The Operations and Engineering Committee provides oversight of the development of our prospects, our drilling and completion operations and our production operations and associated costs. In addition, the Operations and Engineering Committee provides oversight of the amount and classifications of our reserves and the design of our completion techniques and hydraulic fracturing operations and various other reservoir engineering matters. The current members of the Operations and Engineering Committee are Mr. Foran, Drs. Holditch and Ohnimus and Messrs. Downey (ex officio) and Sleeper (ex officio), who are special advisors to our Board. Dr. Holditch is the chair of the Operations and Engineering Committee.

Financial Committee

The Financial Committee provides oversight of our financial position, liquidity and capital needs and the various methods for financing our business. The current members of the Financial Committee are Ms. Shannon and Messrs. Foran, Laney, Mitchell and Ryan. Mr. Foran is the chair of the Financial Committee.

Prospect Committee

The Prospect Committee provides oversight of the technical analysis, evaluation and selection of our oil and natural gas prospects. The current members of the Prospect Committee are Messrs. Foran, Downey (ex officio) and Sleeper (ex officio) and Drs. Holditch and Ohnimus. Mr. Downey is the chair of the Prospect Committee.

Board’s Role in Risk Oversight

The Audit Committee has the responsibility to oversee the Company’s guidelines and policies to govern the process by which risk assessment and risk management are undertaken by management. The Nominating, Compensation and Planning Committee has the responsibility to oversee that our incentive pay does not encourage unnecessary risk taking and to review and discuss the relationship between risk management policies and practices, corporate strategy and senior executive compensation.

Compensation Committee Interlocks and Insider Participation

Ms. Shannon, Messrs. Laney, Mitchell and Ryan and Drs. Holditch and Ohnimus served on our Nominating, Compensation and Planning Committee during the last completed fiscal year. None of our executive officers serve on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Nominating, Compensation and Planning Committee. No member of our Board serves as an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. There were no compensation committee interlocks during 2012.

Communications with Directors

The Board has established a process to receive communications from shareholders and other interested parties by mail. Shareholders and other interested parties may contact any member of the Board, any Board committee or the entire Board. To communicate with the Board, any individual director or any committee of directors, correspondence should be addressed to the Board. All such correspondence should be sent “c/o Corporate Secretary” at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240. The Corporate Secretary will review and forward correspondence to the appropriate person or persons.

Any communications to the Company from one of the Company’s officers or directors will not be considered “shareholder communications.” Communications to the Company from one of the Company’s employees or agents will only be considered “shareholder communications” if they are made solely in such employee’s or agent’s capacity as a shareholder. Any shareholder proposal submitted pursuant to Rule 14a-8 promulgated under the Exchange Act will not be viewed as “shareholder communications.”

Executive Officers

The following table sets forth the names, ages and positions of our executive officers at April 24, 2013:


Name	Age		Positions Held With Us
Joseph Wm. Foran		60	Chairman of the Board, Chief Executive Officer and President
David E. Lancaster		56	Executive Vice President, Chief Operating Officer and Chief Financial Officer
Matthew V. Hairford		52	Executive Vice President—Operations
David F. Nicklin		64	Executive Director—Exploration
Bradley M. Robinson		58	Vice President—Reservoir Engineering
Craig N. Adams		46	Vice President and General Counsel
Ryan C. London		34	Vice President and General Manager
Kathryn L. Wayne		52	Controller and Treasurer

The following biographies describe the business experience of our executive officers. Each officer serves at the discretion of our Board. There are no family relationships among any of our officers.

Mr. Joseph Wm. Foran. Please see the biography of Mr. Foran on page 9 of this Proxy Statement.

Mr. David E. Lancaster. Mr. Lancaster joined Matador Resources Company in December 2003 and serves as Executive Vice President, Chief Operating Officer and Chief Financial Officer. Mr. Lancaster has served in several capacities since joining Matador, including Vice President—Business Development, Acquisitions and Finance from December 2003 to May 2005; Vice President and Chief Financial Officer from May 2005 to May 2007; and Executive Vice President and Chief Financial Officer from May 2007 to May 2009. He assumed his current role in May 2009. From August 2000 to December 2003, he was Marketing Manager for Schlumberger Limited’s Data & Consulting Services which provided full-field reservoir characterization, production enhancement, multidisciplinary reservoir and production solutions and field development planning. In this position, he was responsible for global marketing strategies, business models, input to research and development, commercialization of new products and services and marketing communications. From 1999 to 2000, Mr. Lancaster was Business Manager, North and South America, for Schlumberger Holditch-Reservoir Technologies, the petroleum engineering consulting organization formed following Schlumberger’s acquisitions of S.A. Holditch & Associates, Inc. and Intera Petroleum Services. In this role, he was responsible for the business operations of 12 consulting offices throughout North and South America. Mr. Lancaster worked with Schlumberger for six years following its acquisition of S.A. Holditch & Associates, Inc. in October 1997. He joined S.A. Holditch & Associates in 1980, and was one of the principals in that well-known petroleum engineering consulting firm. Between 1980 and 1997, Mr. Lancaster held positions ranging from Senior Petroleum Engineer to Senior Vice President—Business Development. In this latter role, he was responsible for marketing and sales, as well as the company’s commercial training business. During most of his tenure at

S.A. Holditch & Associates, Inc., Mr. Lancaster was a consulting reservoir engineer with particular emphasis on characterizing and improving production from unconventional natural gas reservoirs. For more than seven years during this time, he was the Project Manager for the Gas Research Institute’s Devonian Shales applied research projects investigating ways to improve reservoir characterization, completion practices and natural gas recovery in low permeability, natural gas shale reservoirs. He was also the lead reservoir engineer for the Secondary Gas Recovery project sponsored by the Gas Research Institute and the U.S. Department of Energy, looking at ways to improve recovery from compartmentalized natural gas reservoirs in North and South Texas. Mr. Lancaster began his career as a reservoir engineer for Diamond Shamrock Corporation in 1979. Mr. Lancaster received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1979 and 1988, respectively, graduating summa cum laude. He has authored or co-authored more than 50 technical papers and articles, as well as numerous other published reports and industry presentations. He is a member of the Society of Petroleum Engineers, and he served as a charter member and former Vice Chairman of the Texas A&M University Petroleum Engineering Advisory Board. Mr. Lancaster is a Licensed Professional Engineer in the State of Texas.

Mr. Matthew V. Hairford. Mr. Hairford joined Matador Resources Company in July 2004 as its Drilling Manager. He was named Vice President—Drilling in May 2005; Vice President—Operations in May 2006; and in May 2009 assumed the title of Executive Vice President—Operations. He is in charge of our drilling and production operations. He was previously with Samson Resources, an exploration and production company, as Senior Drilling Engineer, having joined Samson in 1999. His responsibilities there included difficult Texas and Louisiana Gulf Coast projects, horizontal drilling projects and a start-up drilling program in Wyoming. The scope of this work ranged from multi-lateral James Lime wells in East Texas to deep wells in South Texas and South Louisiana. Mr. Hairford has drilled many geo-pressured wells in Texas and Louisiana, along with normally pressured wells in Southwest Wyoming and East Texas. Additional responsibilities included a horizontal well program in Roger Mills County, Oklahoma at 15,000 feet vertical depth. Mr. Hairford has experience in air drilling, underbalanced drilling, drilling under mud caps and high temperature and pressure environments. From 1998 until 1999, Mr. Hairford served as Senior Drilling Engineer with Sonat, Inc. in Tyler, Texas, a global company involved with natural gas transmission and marketing, oil and natural gas exploration and production and oil services. There his responsibilities included Pinnacle Reef wells in East Texas and deep horizontal drilling in the Austin Chalk field in Central Louisiana. From 1984 to 1998, Mr. Hairford served in various drilling engineering capacities with Conoco, Inc., an integrated energy company. His operational areas included the Appalachian Basin, Illinois Basin, Permian Basin, Texas Panhandle and Val Verde Basin. Mr. Hairford was selected as a member of a three-person team to explore the use of unconventional technologies to identify a potential step change in the drilling sector. Multiple techniques were evaluated and tested, including declassified defense department technologies. Additional Conoco assignments included both field and office drilling positions in Midland and Oklahoma City. Earlier in his career with Conoco, Mr. Hairford was selected to participate in the Conoco Drilling Rig Supervisor Training Program in Houston. This program consisted of two years working a regular rotation as a drilling representative on rigs and as a drilling engineer in various domestic offices. Mr. Hairford began his career in 1984 with Conoco in a field production assignment in Hobbs, New Mexico. Mr. Hairford received his Bachelor of Science degree in Petroleum Engineering Technology from Oklahoma State University in 1984. He is an active member of the American Association of Drilling Engineers, the American Petroleum Institute and the Society of Petroleum Engineers. Mr. Hairford has also undertaken additional training through Stanford University’s Executive Education programs including, most recently in the summer of 2011, the Stanford Graduate School of Business flagship six week Stanford Executive Program.

Mr. David F. Nicklin. Mr. Nicklin joined Matador Resources Company in February 2009 as Executive Director—Exploration after working with us as an independent contractor since November 2007. Prior to joining Matador, Mr. Nicklin provided executive level consulting services to a variety of clients since January 2000 through his wholly-owned corporation, David F. Nicklin International Consulting Inc. In 2006, Mr. Nicklin co-founded and currently leads a small, private oil and natural gas company, Salt Creek Petroleum LLC. Salt Creek Petroleum owns small, non-operated interests in a variety of onshore oil and natural gas fields in the United States. Since 2009, Mr. Nicklin has consulted almost exclusively for us, with the primary exception of the

minimal time he has devoted to Salt Creek Petroleum. Mr. Nicklin worked approximately 210 days for us in each of 2010 and 2011 and 230 days in 2012. We have determined that Mr. Nicklin’s involvement with Salt Creek Petroleum does not detract from his performance for Matador and does not result in any conflict of interest between Mr. Nicklin and Matador due to the fact that Salt Creek Petroleum is not involved in plays and prospects that compete with our interests. In 2000, Mr. Nicklin founded and led for three years a private oil and natural gas exploration company, Serica Energy, which is now a public company with assets in Indonesia, the United Kingdom, Spain, Ireland and Morocco. Between 1981 and 2000, Mr. Nicklin was an employee of ARCO, an integrated energy company, where he participated in and led several international exploration teams, particularly in the Middle East, southeast Asia and Australasia. In 1991, he became the Chief Geologist for ARCO, a position he held until his retirement in 2000. In this position, Mr. Nicklin was responsible for the quality of the geological effort at ARCO, in particular, ensuring the application of state-of-the-art geological technology, the company’s risk management process, the selection of new ventures and the high-grading of a large geoscience staff. Throughout his career at ARCO, Mr. Nicklin was closely involved with the successful exploration for and development of a number of large oil and natural gas discoveries. Prior to joining ARCO, Mr. Nicklin was a senior development and operations geologist in a variety of positions in the United Kingdom, Angola, Norway and the Middle East. He was a specialist in well-site operations and provided training in operations to entry-level personnel. Mr. Nicklin was born in the United Kingdom and received a Bachelor of Science degree in Geology from the University of Wales in 1971. He is an active member of the American Association of Petroleum Geologists and various other professional groups.

Mr. Bradley M. Robinson. Mr. Robinson joined Matador Resources Company in August 2003 as one of its founders and has served as our Vice President—Reservoir Engineering since that time. Prior to joining Matador, from 1997 to August 2003, Mr. Robinson held the position of Advisor with Schlumberger Limited’s Data & Consulting Services business unit, which provided full-field reservoir characterization, production enhancement, multidisciplinary reservoir and production solutions and field development planning, where he was responsible for the development and application of new technologies for well completions and stimulation, provided technical expertise for reservoir management and field development projects, taught basic and advanced industry courses in well completions and stimulation and provided internal training in production engineering and stimulation methods. Mr. Robinson worked with Schlumberger for six years following its acquisition of S.A. Holditch & Associates, Inc. in 1997. Mr. Robinson joined Holditch in 1979, and was one of the principals in that well-known petroleum engineering consulting firm. From 1979 to 1982, Mr. Robinson served as Senior Petroleum Engineer and was involved in all aspects of reservoir and production engineering for both conventional and low permeability oil and natural gas fields. From 1982 to 1997, he was Holditch’s Vice President—Production Engineering, where he was responsible for coordination and management of production and completion engineering projects, including development drilling and openhole data acquisition programs, design and supervision of initial well completions and workovers, transient well test design and analysis and hydraulic fracture stimulation design and supervision. His duties also included reserves evaluation and economic analysis of new and existing wells, and his areas of specialization included low permeability natural gas sands, coalbed methane reservoirs and horizontal wells. For approximately 10 years during this time, he served as assistant project manager for the Gas Research Institute’s Tight Gas Sands and Horizontal Gas Wells applied research projects investigating ways to improve reservoir characterization, completion practices and natural gas recovery in low permeability natural gas reservoirs and horizontal natural gas wells. During his career, he has worked all over the world including the United States, Canada, Venezuela, Colombia, Mexico, Egypt, the North Sea, Russia and Indonesia, among others. Mr. Robinson began his career in 1977 with Marathon Oil Company, serving as an Associate Production Engineer and later as a Reservoir Engineer in Midland. Mr. Robinson received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1977 and 1986, respectively. He has authored or co-authored more than 30 technical articles appearing in industry and/or technical publications and has made numerous engineering technical presentations. Mr. Robinson is a member of the Society of Petroleum Engineers and is a Licensed Professional Engineer in the State of Texas. He served as Chairman of the Dallas Section of the Society of Petroleum Engineers in 2011 and 2012. He also received the 2013 Engineer of the Year Award presented by the Dallas Section of the Society of Petroleum Engineers.

Mr. Craig N. Adams. Mr. Adams joined Matador Resources Company in September 2012 as its Vice President and General Counsel. Before joining the Company, Mr. Adams was a partner with Baker Botts L.L.P. from March 2001 to September 2012 where he focused his practice on securities, mergers and acquisitions and corporate governance matters. He was a partner with Thompson & Knight L.L.P. from January 1999 to February 2001 and an associate from September 1992 to December 1998. Mr. Adams received a Bachelor of Business Administration degree in finance from Southern Methodist University in 1988 and his law degree in 1992 from Texas Tech University School of Law, where he was a Comment Editor of the Texas Tech Law Review.

Mr. Ryan C. London. Mr. London first worked at Matador Resources Company in the summer of 2004 as a student intern. He joined Matador Resources Company full-time as a Petroleum Engineer in May 2005 and advanced to the positions of Senior Operations Engineer in January 2008 and Asset Manager in March 2012. He was promoted to Vice President and General Manager in March 2013. In this position, Mr. London manages the day-to-day activities of our various asset teams. Mr. London received his Bachelor of Science degree in Mechanical Engineering from Texas A&M University in 2002 and his Master of Engineering degree in Petroleum Engineering from Colorado School of Mines in 2005. Mr. London is a member of the Society of Petroleum Engineers and is a Licensed Professional Engineer in the State of Texas.

Ms. Kathryn L. Wayne. Ms. Wayne was one of the original employees of Matador Resources Company and serves as the Company’s Controller and Treasurer. She was previously with Matador Petroleum Corporation, joining the company in 1991. Immediately prior to its sale, Ms. Wayne was Senior Revenue Accountant, and her duties included supervision of the revenue accounting staff, management of the revenue distribution process and preparation of monthly accruals and various required regulatory reports. Ms. Wayne began her career with Mobil Oil Corporation, where she held various positions in the gas accounting department. Ms. Wayne received a Bachelor of Arts degree in Accounting from Texas A&M University in 1983. She is recognized by the Council of Petroleum Accountants Societies (COPAS) as an Accredited Petroleum Accountant (APA), having passed all eight parts of the accreditation examination. She is an active member of COPAS and served a three-year term on the COPAS APA Board of Examiners.

PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

The Company seeks a non-binding advisory vote from its shareholders to approve the compensation of its Named Executive Officers as described in this Proxy Statement.

As discussed in the Compensation Discussion and Analysis section of this Proxy Statement, we believe the Company’s future success and the ability to create long-term value for our shareholders depends on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. Additionally, we believe that our success also depends on the continued contributions of our Named Executive Officers. The Company’s compensation system plays a significant role in its ability to attract, motivate and retain a high quality workforce. As described in the Compensation Discussion and Analysis, the Company’s Named Executive Officer compensation program is designed to reward, in both the short-term and the long-term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and the achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies such as teamwork; individual performance in light of general economic and industry-specific conditions; relationships with shareholders and vendors; the ability to manage and enhance production from our existing assets; the ability to explore new opportunities to increase oil and natural gas production; the ability to identify and acquire additional acreage; the ability to increase year-over-year proved reserves; the ability to control unit production costs; level of job responsibility; industry experience; and general professional growth.

This proposal provides shareholders the opportunity to endorse or not endorse the Company’s executive compensation program through the following resolution:

“Resolved, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.”

The above referenced Compensation Discussion and Analysis disclosure appears on pages 28 to 43 of this Proxy Statement.

Because this is an advisory vote, it will not be binding upon the Board. However, the Nominating, Compensation and Planning Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

Vote Required

The affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting is required to approve this resolution on a non-binding basis. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions will have the effect as a vote cast against the proposal. Broker non-votes will be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.

The Board of Directors recommends that you vote FOR approval of this resolution.

PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP

The Audit Committee has appointed Grant Thornton LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2013, and the Board has directed that such appointment be submitted to our shareholders for ratification at the Annual Meeting. If the shareholders do not ratify the appointment of Grant Thornton, the Audit Committee will reconsider the appointment.

The Company has been advised by Grant Thornton that the firm has no relationship with the Company or its subsidiaries other than that arising from the firm’s engagement as auditors.

The Company has been advised that representatives of Grant Thornton will be present at the Annual Meeting and will be available to respond to appropriate questions and make a statement if they desire to do so.

Fees of Independent Registered Public Accounting Firm for Fiscal Years 2012 and 2011

The following table presents fees for professional audit services rendered by Grant Thornton for the audits of the Company’s annual financial statements for the years ended December 31, 2012 and 2011, and fees for other services rendered by Grant Thornton during those periods:


	2012		2011
Audit fees	$	598,730	$	811,549
Audit-related fees		—		—
Tax fees		—		—
All other fees		2,858		4,650

Total	$	601,588	$	816,199

Services rendered by Grant Thornton in connection with the fees presented above were as follows:

Audit Fees

For fiscal year 2012, audit fees consist of fees associated with the audit of the Company’s consolidated financial statements, including the audit of the effectiveness of the Company’s internal control over financial reporting, required reviews of our quarterly condensed consolidated financial statements and review of our Form S-3. For fiscal year 2011, audit fees consist of fees associated with the audit of the Company’s consolidated financial statements and reviews of our quarterly condensed consolidated financial statements for inclusion in our registration statements, final prospectus and Annual Report on Form 10-K, and providing the underwriters with comfort letters on certain information contained in our registration statements and final prospectus.

Audit-Related Fees

We did not incur any audit-related fees in 2012 or 2011.

Tax Fees

We did not incur any fees for tax advice, planning and other services in 2012 or 2011.

All Other Fees

For fiscal years 2012 and 2011, all other fees included the use of online research tools provided by Grant Thornton.

The Audit Committee pre-approves all audit and permissible non-audit services provided by Grant Thornton. These services may include audit services, audit-related services, tax services and other services. The

Audit Committee has authorized the chair of the Audit Committee to pre-approve audit and permissible non-audit services provided by Grant Thornton up to $750,000. Pursuant to this delegation, the decisions of the chair must be presented to the Audit Committee at its next meeting.

Report of the Audit Committee

We are a standing committee comprised of independent directors as currently defined by SEC regulations and the applicable listing standards of the NYSE. The Board has determined that one of the members of the Audit Committee is an “audit committee financial expert” as defined by applicable SEC rules and regulations. We operate under a written charter adopted by the Board. A copy of the charter is available free of charge on the Company’s website at www.matadorresources.com under “Investors—Corporate Governance.”

We annually select the Company’s independent auditors. If the shareholders do not ratify the appointment of Grant Thornton at the Annual Meeting, the Audit Committee will reconsider the appointment of the independent auditors.

Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and issuing a report thereon. As provided in our charter, our responsibilities include the monitoring and oversight of these processes.

Consistent with our charter responsibilities, we have met and held discussions with management and the independent auditors. In this context, management and the independent auditors represented to us that the Company’s consolidated financial statements for the fiscal year ended December 31, 2012 were prepared in accordance with U.S. generally accepted accounting principles. We reviewed and discussed the consolidated financial statements with management and the independent auditors and discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

The Company’s independent auditors have also provided to us the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit Committee, and we discussed with the independent auditors that firm’s independence.

Based upon our reviews and discussions with management and the independent auditors and our review of the representation of management and the report of the independent auditors to the Audit Committee, we recommended that the Board include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.

Audit Committee,

Michael C. Ryan, Chair

David M. Laney

Steven W. Ohnimus

Margaret B. Shannon

Vote Required

The affirmative vote of the holders of a majority of the shares of the Company’s voting securities represented in person or by proxy at the Annual Meeting entitled to vote on such proposal is required for the ratification of the appointment of Grant Thornton as the Company’s independent registered public accounting

firm for the year ending December 31, 2013. If the shareholders do not ratify the appointment of Grant Thornton, the Audit Committee will reconsider the appointment. Abstentions will have the effect as a vote cast against the proposal.

The Board of Directors recommends that you vote FOR the ratification of the appointment of Grant Thornton as the Company’s independent registered public accounting firm for the year ending December 31, 2013.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

In this compensation discussion and analysis, we discuss our compensation objectives, our decisions and the rationale behind those decisions relating to compensation for 2012 for our principal executive officer, our principal financial officer and our other three most highly compensated executive officers. Furthermore, this compensation discussion and analysis discusses our decisions regarding compensation for 2013 to date and the rationale behind those decisions. This compensation discussion and analysis provides a general description of our compensation program and specific information about its various components.

Named Executive Officers

Throughout this discussion, the following individuals are referred to as the “Named Executive Officers” and are included in the Summary Compensation Table:

•

Joseph Wm. Foran, Chairman of the Board, Chief Executive Officer and President;

•

David E. Lancaster, Executive Vice President, Chief Operating Officer and Chief Financial Officer;

•

Matthew V. Hairford, Executive Vice President—Operations;

•

David F. Nicklin, Executive Director—Exploration; and

•

Bradley M. Robinson, Vice President—Reservoir Engineering.

Objectives of Our Compensation Program

Our future success and the ability to create long-term value for our shareholders depends on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. Additionally, we believe that our success also depends on the continued contributions of our Named Executive Officers. Our executive compensation program is designed to provide a comprehensive compensation program to meet the following objectives:

•

to be fair to both the executive and the Company;

•

to attract and retain talented and experienced executives with the skills necessary for us to execute our business plan;

•

to provide opportunities to achieve a total compensation level that is competitive with comparable positions at companies with which we may compete for executives;

•

to align the interests of our executive officers with the interests of our shareholders and with the performance of our Company for long-term value creation;

•

to provide financial incentives to our executives to achieve our key corporate and individual objectives;

•

to provide an appropriate mix of fixed and variable pay components to maintain a “pay-for-performance” oriented compensation program;

•

to foster a shared commitment among executives by coordinating their corporate and individual goals;

•

to provide compensation that takes into consideration the education, professional experience and knowledge that is specific to each job and the unique qualities the executive possesses; and

•

to recognize an executive’s commitment and dedication in his job performance and in support of our culture.

What Our Compensation Program Is Designed to Reward

Our compensation program is designed to reward, in both the short-term and the long-term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and the

achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies such as teamwork; individual performance in light of general economic and industry-specific conditions; relationships with shareholders and vendors; the ability to manage and enhance production from our existing assets; the ability to explore new opportunities to increase oil and natural gas production; the ability to identify and acquire additional acreage; the ability to increase year-over-year proved reserves; the ability to control unit production costs; level of job responsibility; industry experience; and general professional growth.

2012

How We Determined Each Element of 2012 Compensation

In early 2011, in consideration of becoming a public company and in connection with our initial public offering, a predecessor committee to the Nominating, Compensation and Planning Committee engaged Pay Governance LLC as its independent executive compensation advisory firm. The Nominating, Compensation and Planning Committee has continued to engage Pay Governance LLC as its independent executive compensation advisory firm.

For purposes of benchmarking executive compensation, Pay Governance LLC developed a list of recommended peer companies in the oil and natural gas exploration and production sector with comparable revenue size (approximately $50 million to approximately $700 million), market capitalization (less than $1 billion to approximately $3.3 billion) and competitors, especially competitors in the Eagle Ford shale due to our current emphasis on the Eagle Ford shale. These companies and the rationale for their inclusion in our peer group were considered and approved by the Nominating, Compensation and Planning Committee and the Independent Directors. The compensation peer companies are as follows (the “Peer Group”):

Approach Resources Inc.

Carrizo Oil & Gas, Inc.

Clayton Williams Energy, Inc.

Comstock Resources, Inc.

Crimson Exploration Inc.

Forest Oil Corporation

Goodrich Petroleum Corporation

Gulfport Energy Corporation

Laredo Petroleum Holdings, Inc.

Penn Virginia Corporation

PDC Energy, Inc.

Resolute Energy Corporation

Rex Energy Corporation

Rosetta Resources Inc.

Mr. Foran was compared against the chief executive officer position of all 14 companies in the Peer Group. Mr. Lancaster was compared against the average of the chief financial officer position and the second highest paid position based on annual cash compensation of the 14 companies in the Peer Group. Messrs. Hairford, Nicklin and Robinson were compared against the third, fourth and fifth highest paid positions based on annual cash compensation of the Peer Group, respectively. However, Gulfport Energy Corporation did not report a fourth and fifth highest paid position. The data regarding the peer comparison was based on information presented in their 2011 filings regarding compensation for the year ended December 31, 2010.

As an overall compensation philosophy for 2012, we increased Named Executive Officer base salaries to meet the objective of having total compensation for the Named Executive Officers in approximately the 25^th – 50^th percentile of the Peer Group, anticipating that the Independent Directors would approve future salary increases based on the Company’s growth and performance.

Elements of Our 2012 Compensation Program and Why We Paid Each Element

For 2012, our management compensation program was comprised of the following four elements:

•

Base Salary. We paid base salary to compensate each executive for his assigned responsibilities, experience, leadership and expected future contribution.

•

Performance-Based Cash Bonus. We adopted the Matador Resources Company Annual Incentive Plan for Management and Key Employees (the “Annual Incentive Plan”) as part of our management compensation program because we believed this element of compensation (i) helped focus and motivate management to achieve key corporate and individual objectives by rewarding the achievement of these objectives; (ii) helped retain management; (iii) rewarded our successes over the prior year; and (iv) was necessary to be competitive from a total remuneration standpoint.

•

Equity Awards. We used stock options, restricted stock and restricted stock unit grants as the primary vehicles for (i) linking our long-term performance and increases in shareholder value to the total compensation for our executive officers and (ii) providing competitive compensation to attract and retain our executive officers.

•

Benefits. We offered a variety of health and welfare programs to all eligible employees, including the executive officers other than Mr. Nicklin. The health and welfare programs were intended to protect employees against catastrophic loss and encourage a healthy lifestyle.

Nominating, Compensation and Planning Committee

In October 2011, we formed the Nominating, Compensation and Planning Committee of our Board and adopted a charter for such committee which provided a new process for approving compensation of the Named Executive Officers. The Nominating, Compensation and Planning Committee has the authority, at our expense, to retain and terminate independent third-party compensation consultants and other expert advisors.

In addition, the Nominating, Compensation and Planning Committee will confirm at least annually that our incentive pay does not encourage unnecessary risk taking and review and discuss the relationship between risk management policies and practices, corporate strategy and senior executive compensation. The Nominating, Compensation and Planning Committee considered, in establishing and reviewing our executive compensation program, whether the program encourages unnecessary or excessive risk taking and has concluded that it does not. Several features of our program reflect sound risk management practices. Base salaries are fixed in amount and thus do not encourage risk taking. While our bonuses are tied to management’s achievements during the previous fiscal year and may encourage the taking of short-term risks at the expense of long-term results, executives’ annual bonuses take into account multiple performance criteria based on the executive’s individual performance and are within the discretion of the Independent Directors. The Nominating, Compensation and Planning Committee believes that our bonus awards appropriately balance risk and the desire to focus executives on specific short-term goals important to the Company’s success, and that they do not encourage unnecessary or excessive risk taking. In addition, the Nominating, Compensation and Planning Committee believes that our current equity compensation program provides an appropriate balance between the goals of increasing the price of our Common Stock and avoiding potential risks that could threaten our growth and stability due to the fact that stock options and service-based restricted stock typically vest on the second and/or fourth anniversaries of the grant and the performance-based restricted stock and restricted stock units vest based on the stock performance as compared to our peers over a three year period.

With regard to all of the Named Executive Officers, the Nominating, Compensation and Planning Committee recommends to the independent members of our Board (the “Independent Directors”):

•

option guidelines and size of overall grants;

•

option grants and other equity and non-equity related awards; and

•

limitations, restrictions and conditions upon any award as the Nominating, Compensation and Planning Committee deems appropriate and as permitted under the applicable plan.

The Independent Directors are required to be independent pursuant to the listing standards of the NYSE and the rules and regulations promulgated under the Exchange Act and Section 162(m) of the Code.

The Nominating, Compensation and Planning Committee annually reviews and makes recommendations to the Independent Directors regarding the matters related to Mr. Foran’s compensation, including corporate goals

and objectives applicable to Mr. Foran’s compensation. The Nominating, Compensation and Planning Committee also evaluates Mr. Foran’s performance in light of these established goals and objectives at least annually. Based upon these evaluations, the Nominating, Compensation and Planning Committee makes recommendations to the Independent Directors regarding Mr. Foran’s annual compensation, including salary, bonus and equity and non-equity incentive compensation. The Nominating, Compensation and Planning Committee reviews and recommends to the Independent Directors with regard to Mr. Foran:

•

any employment agreement, severance agreement, change in control agreement or provision or separation agreement or amendment thereof;

•

any deferred compensation arrangement or retirement plan or benefits; and

•

any benefits and perquisites.

On an annual basis, after consultation with Mr. Foran, the Nominating, Compensation and Planning Committee reviews and makes recommendations to the Independent Directors on the evaluation process and compensation structure for the other Named Executive Officers. After considering the evaluation and recommendations of Mr. Foran, the Nominating, Compensation and Planning Committee evaluates the performance of the other Named Executive Officers and makes recommendations to the Independent Directors regarding the annual compensation of such Named Executive Officers, including salary, bonus and equity and non-equity incentive compensation.

After considering the recommendations of Mr. Foran with regard to the other Named Executive Officers, the Nominating, Compensation and Planning Committee reviews and recommends to the Independent Directors regarding the other executive officers:

•

any employment agreement, severance agreement, change in control agreement or provision or separation agreement or amendment thereof;

•

any deferred compensation arrangement or retirement plan or benefits; and

•

any benefits and perquisites.

In addition, pursuant to its charter, the Nominating, Compensation and Planning Committee reviews and recommends to the Independent Directors any proposals for the adoption, amendment, modification or termination of our incentive compensation, equity-based plans and non-equity based plans.

2012 Base Salary

In December 2011 and January 2012, based on the recommendations of Mr. Foran (other than with regard to his base salary), the Nominating, Compensation and Planning Committee (which until June 2012 consisted of all the members of the Board other than Mr. Foran) and the Independent Directors decided that for 2012 the base salaries for our Named Executive Officers would be as follows:


Executive Officer	2012 Base Salary
Joseph Wm. Foran	$	550,000
Chairman of the Board, Chief Executive Officer and President

David E. Lancaster	$	340,000
Executive Vice President, Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford	$	300,000
Executive Vice President—Operations

Bradley M. Robinson	$	240,000
Vice President—Reservoir Engineering

Although Mr. Nicklin is retained officially as an independent contractor, he serves as our Executive Director—Exploration and is included and treated as a Named Executive Officer. Mr. Nicklin retired in 2000 as the Chief Geologist for ARCO and desires to maintain a measure of independence and flexibility in his schedule. Under this independent contractor arrangement, we are able to obtain the benefit of his experience and expertise. Based on the recommendation of Mr. Foran, the Nominating, Compensation and Planning Committee and Independent Directors decided that, for 2012, Mr. Nicklin’s base rate would be $2,000 per day of which $250 will be deferred until the end of his three-year independent contractor agreement, provided that Mr. Nicklin’s engagement continues until that point.

Mr. Foran’s base salary was set between the 25^th-50^th percentiles of base compensation levels of the Peer Group based on compensation set forth in the Peer Group’s 2011 proxy statements. The base salaries of the other Named Executive Officers were set in the range of the 25^th percentile of the base compensation levels of the Peer Group based on compensation set forth in the Peer Group’s 2011 proxy statements.

2012 Annual Incentive Compensation

Effective January 1, 2012, we adopted the Annual Incentive Plan, pursuant to which we may award Named Executive Officers annual incentive compensation awards based on certain terms and conditions established by the Board. In early 2012, the Nominating, Compensation and Planning Committee recommended to the Independent Directors and the Independent Directors set annual performance criteria for 2012 for the Named Executive Officers based on the performance criteria that are set forth in the Annual Incentive Plan (the “2012 Incentive Program”). Such criteria included financial, operational and strategic performance goals for the Company, Company performance measures and Company performance relative to peers. These performance criteria had corresponding performance payment amounts that were guidelines for actual amounts to be paid based on the achievement of such performance criteria by each Named Executive Officer.

In addition to the annual performance criteria, in order to give the Nominating, Compensation and Planning Committee and the Independent Directors flexibility, the Nominating, Compensation and Planning Committee had the discretion to make recommendations to the Independent Directors and the Independent Directors had the discretion to decide after the completion of the year ended December 31, 2012 to decrease the amount of the payments relating to the corresponding performance criteria or to increase the amount of the payments to the Named Executive Officers. Any increase could have been in response to unforeseen circumstances when the performance criteria were set. Any such increase could have been or not have been based on the list of performance criteria set forth in the 2012 Incentive Program and could have been made irrespective of whether any payments were made regarding the performance criteria.

For 2012, representatives of the Nominating, Compensation and Planning Committee met with Pay Governance LLC and management to determine potential criteria for the 2012 Incentive Program. As a result of these meetings, the Nominating, Compensation and Planning Committee recommended and the Independent Directors determined to use the following performance criteria as guidelines:

•

Adjusted EBITDA⁽¹⁾ growth for 2012 as compared to 2011

•

Reserves growth⁽²⁾ for 2012 as compared to 2011

•

Increase in stock price for 2012 as compared to our $12.00 per share initial public offering price

•

Increase in oil production for 2012 as compared to 2011

⁽¹⁾

We define Adjusted EBITDA as earnings before interest expense, income taxes, depletion, depreciation and amortization, accretion of asset retirement obligations, property impairments, unrealized derivative gains and losses, certain other non-cash items and non-cash stock-based compensation expense, including stock option and grant expense and restricted stock and restricted stock units expense, and net gain or loss on asset sales and inventory impairment. Adjusted EBITDA is a non-GAAP financial measure.

⁽²⁾

Reserves growth based on PV-10 at December 31, 2012, calculated using a prescribed natural gas price of $4.12 per MMBtu and a prescribed oil price of $100 per Bbl. PV-10 was calculated by adding estimated future income taxes to the standardized measure of discounted future net cash flows of our reserves. PV-10 is a non-GAAP financial measure.

•

Increase in “Tier One” quality net oil acreage

•

Increase in oil produced and sold on a natural gas equivalent basis (using 1 Bbl of oil = 6 Mcf of natural gas)

The Nominating, Compensation and Planning Committee and the Independent Directors determined that these six criteria were general measures of our performance and were the key criteria on which management should focus during 2012. The Independent Directors established the threshold levels of the performance criteria as representing an achievable increase over 2011, the target levels as representing a considerable but reasonable increase over 2011 and the maximum levels as representing an exceptional increase over 2011. Since the actual payments to be made under the 2012 Incentive Program were discretionary with the Independent Board, there was no weighting among the performance criteria. Below are the threshold, target and maximum performance criteria set for 2012.

2012 Incentive Program Metrics


Performance Metric	2011 Baseline	Threshold	Target	Maximum
Adjusted EBITDA	$49.9 million	$75.0 million	$100.0 million	$125.0 million
Reserves Growth	$248.7 million	$350.0 million	$375.0 million	$400.0 million
Stock Price/Share	$12.00	$14.00	$16.00	$18.00
Oil Production⁽¹⁾	154,000 Bbl	1.2 million Bbl	1.3 million Bbl	1.4 million Bbl
Oil Acreage (Total)	27,000 net acres	29,500 net acres	32,000 net acres	37,000 net acres
Oil as Percentage of Total Production	6%	30%	35%	40%

⁽¹⁾	In August 2012, the Company revised its previously-released 2012 oil production guidance, and the Independent Directors adjusted this performance metric accordingly.

In making recommendations regarding the potential payment guidelines under the 2012 Incentive Program, Pay Governance LLC made recommendations regarding the target payment guidelines. The Nominating, Compensation and Planning Committee reviewed the Pay Governance LLC recommendations regarding target payment guidelines as well as the recommendations of management regarding the threshold, target and maximum payment guidelines. Based on the review of the Pay Governance recommendations and the management recommendations, which took into account the differing responsibilities of each Named Executive Officer by the Nominating, Compensation and Planning Committee and the Independent Directors, the following threshold, target and maximum payment guidelines were adopted.

The table which follows sets forth the threshold, target and maximum annual incentive guidelines for the Named Executive Officers for 2012 based on the performance criteria guidelines set forth above.


Participant	Threshold Annual Incentive Opportunity as % of 2012 Base Salary	Target Annual Incentive Opportunity as % of 2012 Base Salary	Maximum Annual Incentive Opportunity as % of 2012 Base Salary
Joseph Wm. Foran	38%	75%	150%
Chairman of the Board, Chief Executive Officer and President

David E. Lancaster	44%	74%	147%
Executive Vice President, Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford	33%	67%	133%
Executive Vice President—Operations

David F. Nicklin⁽¹⁾	29%	43%	86%
Executive Director—Exploration

Bradley M. Robinson	25%	40%	50%
Vice President—Reservoir Engineering

(1)	The target annual incentive opportunity, expressed in dollars, assumes that Mr. Nicklin works 200 days per year at the daily rate of $1,750 per day.

In early 2013, after reviewing the Company’s 2012 results compared to the financial and operational metrics set forth above, the Nominating, Compensation and Planning Committee concluded that the Company had met or exceeded the target performance metrics for Adjusted EBITDA, oil acreage and oil as a percentage of total production and exceeded the maximum performance metric for reserves growth. The Company’s stock price and oil production, however, were below the target performance metrics. After completing this comparison, the Nominating, Compensation and Planning Committee noted that during 2012 the Company:

•

more than doubled its Adjusted EBITDA;

•

increased proved oil reserves by 176%;

•

increased oil production from 154,000 Bbl in 2011 to over 1.2 million Bbl in 2013;

•

acquired over 5,000 net acres prospective for oil; and

•

continued its shift from natural gas to oil production, with oil production in 2012 constituting 37% of the Company’s total production by volume as compared to only 6% in 2011 and 2% in 2010.

With regard to each Named Executive Officer, after taking into account the performance criteria guidelines, the Company’s 2012 results and all other information with regard to such Named Executive Officer, the Nominating, Compensation and Planning Committee recommended to the Independent Directors that the Named Executive Officers be paid annual awards as set forth below, and the Independent Directors determined the annual award to be paid to each Named Executive Officer. The amounts of such annual awards were approximately equal to the Target Annual Incentive Opportunity for Messrs. Hairford, Nicklin and Robinson. With respect to Messrs. Foran and Lancaster, the amounts of such annual awards were between the Threshold and Target Annual Incentive Opportunity as a result of the Company’s stock price performance and 2012 oil production being below the target performance metrics. The Nominating, Compensation and Planning Committee considers shareholder return to be of particular importance in the evaluation of annual performance. As a result, it exercised its discretion in reducing the incentive awards to Messrs. Foran and Lancaster. All

awards made pursuant to the 2012 Incentive Program were cash awards. Such awards were paid to the Named Executive Officers in the first quarter of 2013.


Executive Officer	2012 Incentive Program Compensation		% of 2012 Base Salary
Joseph Wm. Foran	$	330,000		60.0	%
Chairman of the Board, Chief Executive Officer and President

David E. Lancaster	$	200,000		58.8	%
Executive Vice President, Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford	$	200,000		66.7	%
Executive Vice President—Operations

David F. Nicklin	$	150,000		42.9	%
Executive Director—Operations

Bradley M. Robinson	$	100,000		41.7	%
Vice President—Reservoir Engineering

2012 Long-Term Incentive Compensation

Effective January 1, 2012, the Board adopted the 2012 Long-Term Incentive Plan (the “2012 Plan”). This plan permits the granting of long-term equity and cash incentive awards, including the following:

•

stock options;

•

stock appreciation rights;

•

restricted stock (service-based and performance-based);

•

restricted stock units (both service-based and performance-based);

•

performance shares;

•

performance units;

•

stock grants; and

•

performance cash awards.

After receiving recommendations from the Nominating, Compensation and Planning Committee, the 2012 Plan is administered by the Independent Directors. For 2012, the Nominating, Compensation and Planning Committee met with Pay Governance LLC and management regarding the appropriate types and amounts of equity grants based on differing levels of responsibility of the Named Executive Officers and made recommendations to the Independent Directors. Non-qualified stock options, service-based restricted shares and performance-based restricted stock and restricted stock units were granted approximately equal in value to a specified percentage of the Named Executive Officer’s salary.

The stock options were equal to approximately 49% of the total value of the awards, vest 50% on the second and 50% on the fourth anniversaries of the grant date if the Named Executive Officer is still employed by us on the vesting dates, have an exercise price of $10.49 per share and have a five-year term. The service-based restricted stock comprised approximately 23% of the total value of the awards and vests 50% on the second and 50% on the fourth anniversaries of the grant date if the Named Executive Officer is still employed by us on the vesting dates. The performance-based restricted stock and restricted stock units were each equal to approximately 28% of the total value of the awards and vest on April 16, 2015 according to the Company’s percentile rank within the Peer Group as described below, provided the Named Executive Officer is still employed by us on the vesting date. During the restricted period prior to vesting of the service-based restricted stock and the performance-base restricted stock, the Named Executive Officer will be eligible to receive dividends on and vote the restricted shares. The stock options and service-based restricted stock were granted in order to facilitate

retention of our Named Executive Officers, encourage improved future results and provide a reward for future results. The performance-based restricted stock and restricted stock units align with creating value for the shareholders while further encouraging the performance and retention of the Named Executive Officers.

The approximate value of the 2012 equity grants as a percentage of 2012 base salary and the number of shares underlying each grant are set forth in the table below:


Participant	% of 2012 Base Salary			Stock Options		Service-Based Restricted Stock		Performance-Based Restricted Stock		Performance-Based Restricted Stock Units
Joseph Wm. Foran		169	%		80,208		20,052		20,052		20,052
Chairman of the Board, Chief Executive Officer and President

David E. Lancaster		145	%		42,500		10,625		10,625		10,625
Executive Vice President, Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford		126	%		32,500		8,125		8,125		8,125
Executive Vice President—Operations

David F. Nicklin		102	%⁽¹⁾		30,625		7,657		7,656		7,656
Executive Director—Exploration

Bradley M. Robinson		97	%		20,000		5,000		5,000		5,000
Vice President—Reservoir Engineering

(1)	The value assumes that Mr. Nicklin works 200 days per year at the daily rate of $1,750 per day.

The performance-based restricted stock and performance-based restricted stock units vest depending upon the percentile rank of our Common Stock within the Peer Group based upon the annualized total equivalent shareholder return from March 19, 2012 to April 15, 2015 as set forth below:


Company’s Percentile Rank within the Peer Group		Percentage of Vested Shares
91^st and Above		200%
81^st – 90^th		175%
71^st – 80^th		150%
61^st – 70^th		125%
51^st – 60^th		100%
41^st – 50^th		50%
40^th and Below		0%

The performance-based restricted stock vests up to 100% of the shares granted. Any amounts above 100% of the shares granted up to 200% of the shares granted consist of the performance-based restricted stock units which will vest and be converted into a corresponding number of shares of Common Stock, subject to the Company meeting the performance criteria outlined above.

Benefits

We offer a variety of health and welfare programs to all eligible employees, including the executive officers other than Mr. Nicklin. The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. Our health and welfare programs include medical, pharmacy, dental, disability and life insurance. We also have a 401(k) plan for all full time employees, including the executive officers, other than Mr. Nicklin, in which we contribute 3% of the employee’s base salary and have the discretion to match dollar-for-dollar up to an additional 4% of the employee’s elective deferral contributions. We generally do not offer perquisites to our executives, including our Named Executive Officers.

2013

Role of Shareholder Say-on-Pay Votes

On June 7, 2012, we held a shareholder advisory vote on the compensation of the Named Executive Officers as described in the 2012 Proxy Statement, commonly referred to as a say-on-pay vote. The shareholders approved the Named Executive Officers’ compensation, with approximately 95% of the shares present in person or represented by proxy and entitled to vote on the say-on-pay vote at the 2012 Annual Meeting voting in favor of the 2012 say-on-pay resolution. As we evaluated our compensation practices, the Nominating, Compensation and Planning Committee and the Independent Directors were mindful of the overwhelming support shareholders expressed for our compensation philosophy. As a result, in considering 2013 compensation, the Nominating, Compensation and Planning Committee and the Independent Directors decided to maintain moderate levels of executive compensation with respect to our Peer Group. Also, in determining to have a say-on-pay vote at this Annual Meeting, the Board took into account the preference by approximately 96% of the shares present in person or represented by proxy and entitled to vote on the frequency of say-on-pay votes at the 2012 Annual Meeting voting for an annual vote.

2013 Base Salary

For 2013, after receiving input from Mr. Foran (other than with regard to his base salary), the Nominating, Compensation and Planning Committee and the Independent Directors decided that for 2013 the base salaries for our Named Executive Officers would be as follows:


Executive Officer	2013 Base Salary
Joseph Wm. Foran	$	600,000
Chairman of the Board,
Chief Executive Officer and President

David E. Lancaster	$	375,000
Executive Vice President,
Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford	$	330,000
Executive Vice President—Operations

Bradley M. Robinson	$	255,000
Vice President—Reservoir Engineering

Mr. Nicklin’s base rate stayed the same as for 2012. The 2013 base salaries reflect the general philosophy for 2013 of having total target compensation for the Named Executive Officers in approximately the 25^th-50^th percentile of the Peer Group based on compensation set forth in the Peer Group’s 2012 proxy statements.

2013 Annual Incentive Compensation

As with 2012, effective January 1, 2013, we set annual performance criteria for 2013 for the Named Executive Officers based on the possible performance criteria that are set forth in the Annual Incentive Plan (the “2013 Incentive Program”). Such criteria included financial, operational and strategic performance goals for the Company, Company performance measures and Company performance relative to peers. These performance criteria had corresponding performance payment amounts that will be guidelines for actual amounts to be paid based on the achievement of such performance criteria by each Named Executive Officer.

All awards made pursuant to the 2013 Incentive Program will be cash awards. Such awards are to be paid to the Named Executive Officers as soon as practicable following completion of 2013 and, in any case, within the first 135 days following the end of 2013. The 2013 Incentive Program operates in a similar fashion to the 2012 Incentive Program described above.

For 2013, the Chair of the Nominating, Compensation and Planning Committee met with Pay Governance LLC and management to determine potential criteria for the 2013 Incentive Program. Based on these meetings, the Chair proposed certain preliminary performance criteria metrics for consideration by the Nominating, Compensation and Planning Committee. The Nominating, Compensation and Planning Committee then met with Pay Governance and management to review the proposed criteria. As a result of these meetings, the Nominating, Compensation and Planning Committee recommended and the Independent Directors determined to use the following performance criteria as guidelines:

•

Adjusted EBITDA⁽³⁾ growth for 2013 as compared to 2012

•

Reserves growth⁽⁴⁾ for 2013 as compared to 2012

•

Increase in stock price for 2013 as compared to 2012

•

Increase in oil production for 2013 as compared to 2012

It is important to note that performance goals are part of our incentive program and do not correspond to any financial guidance that the Company has provided to the investment community or that the Company will provide and should, therefore, not be considered as statements of our expectations or estimates.

The Nominating, Compensation and Planning Committee and the Independent Directors determined that these four criteria are general measures of our performance and are the key criteria on which management should focus during 2013. The Independent Directors established the threshold levels of the performance criteria as representing an achievable increase over 2012, the target levels as representing a considerable but reasonable increase over 2012 and the maximum levels as representing an exceptional increase over 2012. In addition, the Nominating, Compensation and Planning Committee and the Independent Directors have asked Mr. Foran to establish initial individual performance criteria for each Named Executive Officer (other than himself), which criteria are intended to measure individual performance of the Named Executive Officers during 2013. Since the actual payments to be made under the 2013 Incentive Program are discretionary with the Independent Board, there is no weighting among the performance criteria. Below are the threshold, target and maximum performance criteria.

2013 Incentive Program Metrics


Performance Metric	2012 Baseline	Threshold	Target	Maximum
Adjusted EBITDA	$116 million	$135 million	$150 million	$170 million
Reserves Growth	$423 million	$500 million	$550 million	$600 million
Stock Price/Share	$8.20	$10.00	$12.00	$14.00
Oil Production	1.2 million Bbl	1.5 million Bbl	1.75 million Bbl	2.0 million Bbl

In making recommendations regarding the 2013 Incentive Program, Pay Governance LLC made recommendations regarding the target payment guidelines. The Nominating, Compensation and Planning Committee reviewed the Pay Governance LLC recommendations regarding target payment guidelines as well as the recommendations of management regarding the threshold, target and maximum payment guidelines. Based on the review of the Pay Governance recommendations and the management recommendations which took into

⁽³⁾

We define Adjusted EBITDA as earnings before interest expense, income taxes, depletion, depreciation and amortization, accretion of asset retirement obligations, property impairments, unrealized derivative gains and losses, and non-cash stock-based compensation expense, including stock option and grant expense and restricted stock and restricted stock units expense and net gain or loss on assets sales and inventory impairment. Adjusted EBITDA is a non-GAAP financial measure.

⁽⁴⁾

Reserves growth will be based on PV-10 at December 31, 2013, calculated using a prescribed natural gas price of $2.757 per MMBtu and a prescribed oil price of $91.21 per Bbl, such commodity prices being the commodity prices used to determine the Company’s proved reserves and PV-10 at December 31, 2012. PV-10 is calculated by adding estimated future income taxes to the standardized measure of discounted future net cash flows of our reserves. PV-10 is a non-GAAP financial measure.

account the differing responsibilities of each Named Executive Officer by the Nominating, Compensation and Planning Committee and the Independent Directors, the following threshold, target and maximum payment guidelines were adopted.

The table which follows sets forth the threshold, target and maximum annual incentive guidelines for the Named Executive Officers for 2013 based on the performance criteria guidelines set forth above.


Participant	Threshold Annual Incentive Opportunity as % of 2013 Base Salary			Target Annual Incentive Opportunity as % of 2013 Base Salary			Maximum Annual Incentive Opportunity as % of 2013 Base Salary
Joseph Wm. Foran		38	%		75	%		100	%
Chairman of the Board, Chief Executive Officer and President

David E. Lancaster		44	%		74	%		100	%
Executive Vice President, Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford		33	%		67	%		100	%
Executive Vice President—Operations

David F. Nicklin ⁽¹⁾		29	%		43	%		85	%
Executive Director—Exploration

Bradley M. Robinson		25	%		40	%		50	%
Vice President—Reservoir Engineering

(1)	The target annual incentive opportunity, expressed in dollars, assumes that Mr. Nicklin works 200 days per year at the daily rate of $1,750 per day.

In early 2014, with regard to each Named Executive Officer, after taking into account the performance criteria guidelines and all other information with regard to such Named Executive Officer, the Nominating, Compensation and Planning Committee may recommend to the Independent Directors that any Named Executive Officer be paid an annual award for 2013 and the Independent Directors will determine the annual award for 2013 to be paid to such Named Executive Officer, if any. The amount of such annual award may be greater than or less than the payment opportunity based on the performance criteria guidelines so long as the annual award does not exceed 200% of the applicable Named Executive Officer’s annual base salary.

2013 Long-Term Incentive Compensation

For 2013, the Nominating, Compensation and Planning Committee met with Pay Governance LLC and management regarding the appropriate types and amounts of equity grants based upon differing levels of responsibility of the Named Executive Officers and made recommendations to the Independent Directors. Based on this discussion, non-qualified stock options and restricted shares were granted to each Named Executive Officer.

The stock options vest 50% on the second and 50% on the fourth anniversaries of the grant date if the Named Executive Officer is still employed by us on the vesting dates, have an exercise price of $8.21 per share and have a five-year term. The restricted stock vests 100% on the fourth anniversary of the grant date if the Named Executive Officer is still employed by us on the vesting date. During the restricted period prior to vesting of the restricted stock, the Named Executive Officer will be eligible to receive dividends on and vote the restricted shares. The stock options and restricted stock are granted in order to facilitate retention of our Named Executive Officers, encourage improved future results and provide a reward for future results.

The approximate value of the 2013 equity grants as a percentage of 2013 base salary and the number of shares underlying each grant are set forth in the table below:


Participant	% of 2013 Base Salary			Stock Options		Restricted Stock
Joseph Wm. Foran		164	%		175,000		40,000
Chairman of the Board, Chief Executive Officer and President

David E. Lancaster		190	%		125,000		30,000
Executive Vice President, Chief Operating Officer and Chief Financial Officer

Matthew V. Hairford		195	%		117,500		25,000
Executive Vice President—Operations

David F. Nicklin		78	%⁽¹⁾		40,000		15,000
Executive Director— Exploration

Bradley M. Robinson		63	%		10,000		15,000
Vice President—Reservoir Engineering

(1)	The value assumes that Mr. Nicklin works 200 days per year at the daily rate of $1,750 per day.

How Elements of Our Compensation Program Are Related to Each Other

We view the various components of compensation as related but distinct with generally a significant portion of total compensation reflecting “pay for performance.” We do not have any formal or informal policies or guidelines for allocating compensation between long-term and currently paid out compensation or between cash or non-cash compensation.

Accounting and Tax Considerations

Under Section 162(m) of the Code, a limitation is placed on tax deductions of any publicly-held corporation for individual compensation to certain executives of such corporation exceeding $1.0 million in any taxable year, unless the compensation is performance-based. Since we were not a publicly-held company until February 2012, Section 162(m) has not applied to us, and there is an exception to this deductibility limitation for a specified period of time in the case of companies such as us that become publicly-held.

Termination of Employment Arrangements and Independent Contractor Agreement

Employment Agreements and Independent Contractor Agreement

Under the employment agreements, if one of the following occurs:

•

the Named Executive Officer dies;

•

the Named Executive Officer is totally disabled;

•

we mutually agree to end the employment agreement;

•

we dissolve and liquidate; or

•

the term of the employment agreement ends,

we will pay the Named Executive Officer the average of his annual bonus, which includes non-equity incentive compensation, for the prior two years pro-rated based on the number of complete or partial months completed during the year of termination.

Also, under the employment agreements, if one of the following occurs:

•

the Named Executive Officer is terminated other than (i) as set forth above, (ii) by us for just cause, or (iii) in connection with a “change in control” as described below; or

•

the Named Executive Officer terminates his employment for “good reason,”

if the Named Executive Officer is Mr. Foran, we will pay him twice his base salary and twice the average of his annual bonus for the prior two years; if the Named Executive Officer is Messrs. Lancaster or Hairford we will pay him 1.5 times his base salary and 1.5 times the average of his annual bonus for the prior two years; and if the Named Executive Officer is Mr. Robinson, we will pay him one year of base salary and the average of his annual bonus for the prior two years.

Finally, under the employment agreements, upon a “change in control” and within 30 days prior to the “change in control” or within 12 months after the “change in control,” if we terminate a Named Executive Officer without just cause or the Named Executive Officer terminates his employment with or without “good reason,” if the Named Executive Officer is Messrs. Foran, Lancaster or Hairford, we will pay him three times his base salary and three times the average of his annual bonus for the prior two years; and if the Named Executive Officer is Mr. Robinson, we will pay him twice his base salary and twice the average of his annual bonus for the prior two years. In addition, if Messrs. Foran, Lancaster, Hairford or Robinson are terminated or terminate their employment as set forth above in connection with a “change in control,” all equity awards of such Named Executive Officer vest immediately prior to such termination.

“Change in control” is defined under Section 409A of the Code as follows:

•

A change in ownership of the Company occurs on the date that, except in certain situations, results in someone acquiring more than 50% of the total fair market value or voting power of the Company’s stock;

•

A change in effective control of the Company occurs on one of the following dates:

•

The date that a person acquires (or has acquired in a 12 month period) ownership of 30% or more of the Company’s total voting power; however, if a person already owns at least 30% of the Company’s total voting power, the acquisition of additional control does not constitute a change in control; or

•

The date during a 12 month period where a majority of the Company’s Board is replaced by directors whose appointment or election was not endorsed by a majority of the Board; or

•

A change in the ownership of a substantial portion of the Company’s assets occurs on the date a person acquires (or has acquired in a 12 month period) assets of the Company having a total gross market value of at least 40% of the total gross fair market value of all of the Company’s assets immediately before such acquisition.

For purposes of the employment agreements, “good reason” means:

•

The assignment of duties inconsistent with the title of the Named Executive Officer or his current office or a material diminution of the Named Executive Officer’s current authority, duties or responsibilities;

•

A diminution of the Named Executive Officer’s base salary or a material breach of the employment agreement; or

•

The relocation of the Company’s principal executive offices more than 30 miles from the Company’s present principal executive offices or the transfer of the Named Executive Officer to a place other than the Company’s principal executive offices; and

•

The action causing the “good reason” is not cured within the applicable cure period.

For purposes of the employment agreements, “just cause” means:

•

The Named Executive Officer’s continued and material failure to perform the duties of his employment consistent with his position other than due to disability;

•

The Named Executive Officer’s failure to perform his material obligations under the employment agreement other than due to disability;

•

The Named Executive Officer’s material breach of the Company’s written policies concerning discrimination, harassment or securities trading;

•

The Named Executive Officer’s refusal or failure to follow lawful directives of the Board and any supervisors other than due to disability;

•

The Named Executive Officer’s commission of fraud, theft or embezzlement;

•

The Named Executive Officer’s conviction or indictment of a felony or other crime involving moral turpitude; or

•

The Named Executive Officer’s intentional breach of fiduciary duty; and

•

The action causing the “just cause” is not cured within the applicable cure period.

Under Mr. Nicklin’s independent contractor agreement, if one of the following occurs:

•

he dies;

•

he is totally disabled;

•

we mutually agree to end the independent contractor agreement;

•

we dissolve and liquidate; or

•

the term of the independent contractor agreement ends,

we must pay his consulting company (i) the average of the annual bonus paid to the consulting company for the prior two years pro-rated based on the number of complete or partial months completed during the year of termination and (ii) all accrued and vested compensation under our incentive plans. In addition, if Mr. Nicklin dies or is totally disabled during the three-year term of the independent contractor agreement, his consulting company will be paid $250 per day that Mr. Nicklin consulted for us during the term of the independent contractor agreement.

Also, under the independent contractor agreement, if one of the following occurs:

•

the independent contractor agreement is terminated by us for a reason other than as set forth above or in connection with a “change in control” as described below; or

•

he terminates the independent contractor agreement for “good reason” (as described in connection with the employment agreements set forth above),

we must pay an amount equal to $1,000 per full business day that Mr. Nicklin consulted for us during the prior twelve months of the term of the independent contractor agreement plus accrued and vested compensation under our equity plans.

Finally, under the independent contractor agreement, upon a “change in control” (as described in connection with the employment agreements set forth above) and within 30 days prior to the “change in control” or within 12 months after the “change in control,” if we terminate Mr. Nicklin without “just cause” (as described in

connection with the employment agreements set forth above) or Mr. Nicklin terminates his independent contractor agreement with or without “good reason” (as described in connection with the employment agreements set forth above), we will pay an amount equal to two times the aggregate amount paid based on the daily rate during the prior twelve months plus accrued and vested compensation under our equity plans.

Equity Plans

The 2003 Stock and Incentive Plan (the “2003 Plan”) provides that all awards automatically vest upon a “change in control.” For equity grants under the 2012 Plan, vesting upon a “change in control” for Messrs. Foran, Lancaster, Hairford and Robinson mirrors the terms of their employment agreements. For Mr. Nicklin, for equity grants under the 2012 Plan, vesting occurs if within 12 months after a “change in control” Mr. Nicklin is terminated without “just cause” (as defined above) or terminates his employment with “good reason” (as defined above other than with respect to relocation).

For the 2003 Plan, see the definition of “change in control” below in the section “—Potential Payments upon Termination or Change in Control.”

The “change in control” provisions in the employment agreements, independent contractor agreement and the equity grants under the 2012 Plan and the 2003 Plan help prevent management from being distracted by rumored or actual changes in control. The “change in control” provisions provide:

•

incentives for those Named Executive Officers to remain with us despite the uncertainties of a potential or actual change in control;

•

assurance of severance payments for terminated Named Executive Officers; and

•

access to equity compensation after a change in control.

We believe a single trigger or modified single trigger is appropriate given the Company’s size, early stage of development and strong growth aspirations. Further, the Company believes that such provisions would help to retain its Named Executive Officers in the event of speculation regarding an unfriendly takeover.

Stock Ownership Guidelines

We have adopted stock ownership guidelines for our executive officers that cover the following executive officers and designated amounts:

•

Chairman, President and Chief Executive Officer—shares equal to five times base salary;

•

Executive Vice Presidents—shares equal to two and ¹/₂ times base salary; and

•

Vice Presidents and Executive Directors—shares equal to one and ¹/₂ times base salary.

Each of the foregoing executive officers has five years from the later of the date of the closing of our initial public offering and the fifth anniversary of his or her appointment as an officer of the Company in which to achieve the stock ownership position. Shares which will count toward the stock ownership guidelines include time-lapse restricted shares that are still restricted and any shares held in trust by the executive officer or his immediate family over which he has direct beneficial ownership interest. Shares which will not count toward the stock ownership guidelines include shares underlying unexercised stock options, unexercised stock appreciation rights and performance-based awards for which the performance requirements have not been satisfied. Messrs. Foran, Lancaster, Hairford and Robinson each owns shares in excess of the minimum requirement set forth in the stock ownership guidelines.

Nominating, Compensation and Planning Committee Report

We have reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and based on such review and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Nominating, Compensation and Planning Committee

David M. Laney, Chair

Stephen A. Holditch

Michael C. Ryan

Margaret B. Shannon

Summary Compensation Table

The following table summarizes the total compensation awarded to, earned by or paid to Messrs. Foran, Lancaster, Hairford, Nicklin and Robinson for 2012, 2011 and 2010. This table and the accompanying narrative should be read in conjunction with the Compensation Discussion and Analysis, which sets forth the objectives and other information regarding our executive compensation program.


Name and Principal Position	Year		Salary			Bonus		Stock Awards ⁽¹⁾		Option Awards⁽²⁾		Non-Equity Incentive Plan Compensation⁽³⁾		All Other Compensation			Total
Joseph Wm. Foran		2012	$	550,000		$	—	$	475,834	$	455,581	$	330,000	$	18,471	⁽⁴⁾	$	1,829,886
Chairman of the Board, Chief		2011	$	240,000		$	650,000	$	—	$	—	$	—	$	18,019	⁽⁵⁾	$	908,019
Executive Officer and President		2010	$	240,000		$	400,000	$	—	$	—	$	—	$	17,994	⁽⁶⁾	$	657,994

David E. Lancaster		2012	$	340,000		$	—	$	252,131	$	241,400	$	200,000	$	17,500	⁽⁷⁾	$	1,051,031
Executive Vice President, Chief		2011	$	248,333		$	390,000	$	—	$	—	$	—	$	17,150	⁽⁷⁾	$	655,483
Operating Officer and Chief Financial Officer		2010	$	240,000		$	100,000	$	—	$	46,781	$	—	$	17,150	⁽⁷⁾	$	403,931

Matthew V. Hairford		2012	$	300,000		$	—	$	192,806	$	184,600	$	200,000	$	17,500	⁽⁷⁾	$	894,906
Executive Vice President		2011	$	242,917		$	270,000	$	—	$	—	$	—	$	17,150	⁽⁷⁾	$	530,067
—Operations		2010	$	240,000		$	150,000	$	—	$	31,187	$	—	$	17,150	⁽⁷⁾	$	438,337

David F. Nicklin		2012	$	402,500	⁽⁸⁾	$	—	$	181,687	$	173,950	$	150,000	$	—		$	908,137
Executive Director		2011	$	320,750	⁽⁹⁾	$	125,000	$	—	$	—	$	—	$	—		$	445,750
—Exploration		2010	$	315,000	⁽¹⁰⁾	$	35,000	$	—	$	32,556	$	—	$	—		$	382,556

Bradley M. Robinson		2012	$	240,000		$	100,000	$	118,650	$	113,600	$	100,000	$	17,500	⁽⁷⁾	$	689,750
Vice President—Reservoir		2011	$	225,000		$	75,000	$	—	$	—	$	—	$	15,831	⁽⁷⁾	$	315,831
Engineering		2010	$	200,000		$	50,000	$	—	$	15,594	$	—	$	17,150	⁽⁷⁾	$	282,744

(1)

Reflects the grant date fair value of service-based restricted stock and performance-based restricted stock and restricted stock units computed in accordance with FASB ASC Topic 718. The grant date fair value of the performance-based awards was estimated based on the most likely outcome of the performance-based awards as determined using the Monte Carlo method. This is the amount that will be expensed for these awards, regardless of the actual number of shares of Common Stock, if any, that will ultimately be issued to the recipients of the awards, provided that the requisite service is furnished.

(2)	Reflects the grant date fair value of option awards computed in accordance with FASB ASC Topic 718. Our policy and assumptions made in the valuation of the stock options are contained in Note 2 and Note 8 of the audited financial statements for the year ended December 31, 2012.

(3)	Represents awards pursuant to the 2012 Incentive Program.

(4)	Consists of $17,500 in 401(k) matching contributions as described in “—Benefits” and $971 in premiums reimbursed to Mr. Foran for a disability policy covering Mr. Foran.

(5)	Consists of $17,150 in 401(k) matching contributions as described in “—Benefits” and $869 in premiums reimbursed to Mr. Foran for a disability policy covering Mr. Foran.

(6)	Consists of $17,150 in 401(k) matching contributions as described in “—Benefits” and $844 in premiums reimbursed to Mr. Foran for a disability policy covering Mr. Foran.

(7)	Consists of 401(k) matching contributions as described in “—Benefits.”

(8)	Based on the aggregate amount of payments made to Mr. Nicklin under his independent contractor agreement as determined by his base rate of $1,750 per day.

(9)	Based on the aggregate amount of payments made to Mr. Nicklin under his independent contractor agreement as determined by his base rate of $1,500 per day from January 1, 2011 through November 30, 2011 and $1,750 per day for December 2011.

(10)	Based on the aggregate amount of payments made to Mr. Nicklin under his independent contractor agreement as determined by his base rate of $1,500 per day.

Grants of Plan-Based Awards Table

The following table sets forth certain information regarding non-equity awards granted by the Company pursuant to the 2012 Incentive Program and stock and option awards granted by the Company pursuant to the 2012 Plan during the year ended December 31, 2012 to the Named Executive Officers below:


			Estimated Possible Payouts Under Non-Equity Incentive Plan Awards⁽¹⁾						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares or Stock Units		All Other Option Awards: Number of Securities Underlying Options		Exercise or Base Price of Option Awards		Grant Date Fair Value of Stock and Option Awards⁽⁵⁾
			Threshold		Target		Maximum		Threshold⁽²⁾		Target⁽³⁾		Maximum⁽⁴⁾		All Other Stock Awards: Number of Shares or Stock Units				Exercise or Base Price of Option Awards		Grant Date Fair Value of Stock and Option Awards⁽⁵⁾
Name	Grant Date		($)		($)		($)		(# shares)		(# shares)		(# shares)		(# shares)		(# shares)		($/share)		($)
Joseph Wm. Foran		4/16/2012		209,000		412,500		825,000		10,026		20,052		40,104		20,052		80,208		10.49		931,415
David E. Lancaster		4/16/2012		149,600		251,600		499,800		5,312		10,625		21,250		10,625		42,500		10.49		493,531
Matthew V. Hairford		4/16/2012		99,000		201,000		399,000		4,062		8,125		16,250		8,125		32,500		10.49		377,406
David F. Nicklin		4/16/2012		101,500		150,500		301,000		3,828		7,656		15,312		7,657		30,625		10.49		355,637
Bradley M. Robinson		4/16/2012		60,000		96,000		120,000		2,500		5,000		10,000		5,000		20,000		10.49		232,250

(1)	See “Compensation Discussion and Analysis—2012—2012 Annual Incentive Compensation” and “Summary Compensation Table—Non-Equity Incentive Plan Compensation” regarding the actual payments made to the Named Executive Officers.

(2)	The threshold level represents the Company’s shareholder return ranking in the 41^st to 50^th percentile within the Peer Group.

(3)	The target level represents the Company’s shareholder return ranking in the 51^st to 60^th percentile within the Peer Group.

(4)	The maximum level represents the Company’s shareholder return ranking in the 91^st or above percentile within the Peer Group.

(5)	Grant date fair value for the performance-based equity incentive awards was estimated based on the most likely outcome of the award as determined using the Monte Carlo method.

Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table

On August 9, 2011, we entered into employment agreements with Messrs. Foran, Lancaster, Hairford and Robinson and an independent contractor agreement with Mr. Nicklin.

Mr. Foran. His employment agreement extends for a twenty-four month term which automatically renews each month for an additional month unless either the Company or Mr. Foran gives written notice that the term will no longer be extended. For 2012, his base salary was $550,000. Effective January 1, 2013, his base salary is $600,000, and he is eligible to participate in the 2013 Incentive Program and the 2012 Plan. See “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement” regarding the payments to be made to Mr. Foran upon termination of his employment and/or a “change in control.”

Mr. Lancaster. His employment agreement extends for an eighteen month term which automatically renews each month for an additional month unless either the Company or Mr. Lancaster gives written notice that the term will no longer be extended. For 2012, his base salary was $340,000. Effective January 1, 2013, his base salary is $375,000, and he is eligible to participate in the 2013 Incentive Program and the 2012 Plan. See “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement” regarding the payments to be made to Mr. Lancaster upon termination of his employment and/or a “change in control.”

Mr. Hairford. His employment agreement extends for an eighteen month term which automatically renews each month for an additional month unless either the Company or Mr. Hairford gives written notice that the term will no longer be extended. For 2012, his base salary was $300,000. Effective January 1, 2013, his base salary is $330,000, and he is eligible to participate in the 2013 Incentive Program and the 2012 Plan. See “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement” regarding the payments to be made to Mr. Hairford upon termination of his employment and/or a “change in control.”

Mr. Robinson. His employment agreement extends for a twelve month term which automatically renews each month for an additional month unless either the Company or Mr. Robinson gives written notice that the term will no longer be extended. For 2012, his base salary was $240,000. Effective January 1, 2013, his base salary is $255,000, and he is eligible to participate in the 2013 Incentive Program and the 2012 Plan. See “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement” regarding the payments to be made to Mr. Robinson upon termination of his employment and/or a “change in control.”

Mr. Nicklin. His independent contractor agreement extends for a thirty-six month term. For 2012, the daily rate was $1,750 per day that Mr. Nicklin consulted for us. If the independent contractor agreement remains in effect until the end of the thirty-six month term, we will pay Mr. Nicklin an additional $250 per day that he consulted for us during the thirty-six month term of the agreement. For 2013, our arrangement with Mr. Nicklin remains the same. In addition, Mr. Nicklin, through his consulting company, is eligible to participate in the 2013 Incentive Program and the 2012 Plan. See “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement” regarding the payments to be made to Mr. Nicklin’s consulting company upon termination of the independent contractor agreement and/or a “change in control.”

Non-Equity Incentive Plan Compensation. See “Compensation Discussion and Analysis—2012—2012 Annual Incentive Compensation” regarding the 2012 Incentive Program compensation goals, threshold, target and maximum potential payments and actual payments.

Long-Term Incentive Compensation. See “Compensation Discussion and Analysis—2012—2012 Long-Term Incentive Compensation” regarding 2012 long-term incentive compensation.

General. Base salary and the amount of cash bonuses, including non-equity awards granted by the Company pursuant to the 2012 Incentive Program, paid for 2012 represented from approximately 48% to approximately 64% of the Named Executive Officers’ total compensation as represented in the Summary Compensation Table with the percentages being as follows: Mr. Foran—48.1%; Mr. Lancaster—51.4%; Mr. Hairford—55.9%; Mr. Nicklin—60.8%; and Mr. Robinson—63.8%.

Outstanding Equity Awards at December 31, 2012

The following table summarizes the total outstanding option awards at December 31, 2012 for each Named Executive Officer:


	Option Awards
Name	Number of Securities Underlying Unexercised Stock Options (#) Exercisable		Number of Securities Underlying Unexercised Stock Options (#) Unexercisable		Option Exercise Price		Option Expiration Date
Joseph Wm. Foran		—		80,208	$	10.49		4/15/17

David E. Lancaster		75,000		—	$	10.00		2/12/13	⁽¹⁾
		7,500		7,500	$	9.00		2/21/20
		—		42,500	$	10.49		4/15/17

Matthew V. Hairford		90,000		—	$	10.00		2/12/13	⁽¹⁾
		5,000		5,000	$	9.00		2/21/20
		—		32,500	$	10.49		4/15/17

David F. Nicklin		15,000		—	$	10.00		2/12/13	⁽¹⁾
		5,000		5,000	$	9.00		2/21/20
		—		30,625	$	10.49		4/15/17

Bradley M. Robinson		30,000		—	$	10.00		2/12/13	⁽¹⁾
		2,500		2,500	$	9.00		2/21/20
		—		20,000	$	10.49		4/15/17

(1)	The options expiring on February 12, 2013 expired unexercised.

The following table provides the vesting dates at December 31, 2012 for unvested stock options:


Vesting Date	Joseph Wm. Foran		David E. Lancaster		Matthew V. Hairford		David F. Nicklin		Bradley M. Robinson
2/22/13		—		3,750		2,500		2,500		1,250
2/22/14		—		3,750		2,500		2,500		1,250
4/16/14		40,104		21,250		16,250		15,312		10,000
4/16/16		40,104		21,250		16,250		15,313		10,000

Total Unvested Stock Options		80,208		50,000		37,500		35,625		22,500

The following table summarizes the total outstanding stock awards at December 31, 2012 for each Named Executive Officer:


	Stock Awards
Name	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested		Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)⁽¹⁾		Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested⁽²⁾
Joseph Wm. Foran		20,052	$	164,426		10,026	$	82,213
David E. Lancaster		10,625	$	87,125		5,312	$	43,558
Matthew V. Hairford		8,125	$	66,625		4,062	$	33,308
David F. Nicklin		7,657	$	62,787		3,828	$	31,390
Bradley M. Robinson		5,000	$	41,000		2,500	$	20,500

(1)	The number of performance-based shares or units listed represents the threshold number of shares that could be issued under this award.

(2)	The market value presented is based on achievement of the threshold performance level under this award. The number of shares that would have been issued based on the performance criteria as measured on December 31, 2012 was zero.

The following table provides the vesting dates at December 31, 2012 for restricted stock and restricted stock units:


Vesting Date	Joseph Wm. Foran		David E. Lancaster		Matthew V. Hairford		David F. Nicklin		Bradley M. Robinson
4/16/14		10,026		5,312		4,062		3,828		2,500
4/16/15⁽¹⁾		10,026		5,312		4,062		3,828		2,500
4/16/16		10,026		5,313		4,063		3,829		2,500

Total Unvested Shares and Units		30,078		15,937		12,187		11,485		7,500

(1)

The restricted stock and restricted stock units vesting on this date are performance-based shares or units. The number of shares and units that vest on this date is estimated based on achievement of the threshold performance level under this award. The number of shares that would have been issued based on the performance criteria as measured on December 31, 2012 was zero.

Option Exercises During 2012

The following table summarizes, for the Named Executive Officers in 2012, the number of shares acquired upon exercise of stock options and the value realized, each before payout of any applicable withholding tax:


	Option Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)⁽¹⁾		Date of Exercise
Joseph Wm. Foran		—		—		—
David E. Lancaster		60,000		180,000		2/7/12
Matthew V. Hairford		30,000		90,000		2/7/12
David F. Nicklin		—		—		—
Bradley M. Robinson		15,000		45,000		2/7/12

(1)	Determined based on the difference between the $9.00 per share exercise price of the stock options and the initial public offering price of our Common Stock, which was $12.00 per share.

Potential Payments Upon Termination or Change in Control

2003 Plan

All equity awards granted to Named Executive Officers under the 2003 Plan vest upon a change in control. Assuming there was a change in control on December 31, 2012, the Named Executive Officers would not have received any amounts in automatic vesting of stock based compensation because the exercise price of all stock options held by such Named Executive Officers was above the closing price of our Common Stock of $8.20 per share on December 31, 2012. A “change in control” occurs upon any of the following events:

•

any person (or group of persons acting in concert), other than the Company or an affiliate, becomes the beneficial owner, directly or indirectly, of voting securities representing 30% or more of the voting power of our then outstanding voting securities (with the threshold percentage being increased, not to exceed 50% for the beneficial owners of our voting securities for whom Wellington Management Company, LLP serves as an investment advisor if those owners are deemed to be a “group” for this purpose);

•

our Board ceases to consist of a majority of continuing directors; where “continuing director” means a member of the Board who was either (i) a member of the Board at October 31, 2008 or (ii) nominated, appointed or approved (following nomination by our shareholders), to serve as a director by a majority of the then continuing directors;

•

our shareholders approve (i) any consolidation or merger with us or any subsidiary that results in the shareholders immediately prior to the consolidation or merger holding less than a majority ownership interest in the outstanding voting securities of the surviving entity, (ii) any sale, lease, exchange or other transfer of all or substantially all of our assets or (iii) any plan or proposal for our liquidation or dissolution; or

•

our shareholders accept a share exchange in which our shareholders immediately before such share exchange do not hold, immediately following such share exchange, the total voting securities of the surviving entity in substantially the same proportion as held before the share exchange.

Employment Agreements and Independent Contractor Agreement

As described under “Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table,” in contemplation of our initial public offering, on August 9, 2011, we entered into employment agreements with Messrs. Foran, Lancaster, Hairford and Robinson and an independent contractor agreement with Mr. Nicklin and his consulting company. Pursuant to the terms of the employment agreements and independent contractor agreement, we may be required to make certain payments to one or more of our Named Executive Officers upon the occurrence of certain events resulting in such Named Executive Officer’s termination. For a detailed description of the events that may trigger such payments, see “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement.”

The employment agreements and the independent contractor agreement each contain a non-disclosure of confidential information provision that requires each Named Executive Officer to maintain, both during and after employment, the confidentiality of information used by such Named Executive Officer in the performance of his job duties.

Additionally, each of the employment agreements contains a non-competition provision, pursuant to which Messrs. Foran, Lancaster, Hairford and Robinson have agreed that: (i) for six months following termination by us for total disability, or by such Named Executive Officer for good reason, or (ii) for 12 months following termination (a) by us for just cause, (b) by such Named Executive Officer other than for good reason, or (c) in connection with a change in control, such Named Executive Officer shall not, without our prior written consent (not to be unreasonably withheld if the Named Executive Officer’s employment is terminated by the Named Executive Officer other than for good reason), directly or indirectly: (x) invest in (other than investments in publicly-owned companies which constitute not more than 1% of the voting securities of any such company) a competing business with significant assets in the restricted area (each as defined below), or (y) participate in a competing business as a manager, employee, director, officer, consultant, independent contractor, or other capacity or otherwise provide, directly or indirectly, services or assistance to a competing business in a position that involves input into or direction of such competing business’s decisions within the restricted area.

Similarly, Mr. Nicklin’s independent contractor agreement contains a non-competition provision pursuant to which Mr. Nicklin has agreed that following termination: (i) by us for total disability or just cause, (ii) by Mr. Nicklin for good reason or other than for good reason, or (iii) in connection with a change in control, then for a period of 12 months thereafter, Mr. Nicklin may not, without our prior written consent, directly or indirectly (x) invest in (other than investments in publicly-owned companies which constitute not more than 5% of the voting securities of any such company) a competing business with significant assets in the restricted area, or (y) participate in a competing business as a manager, employee, director, officer, consultant, independent contractor, or other capacity or otherwise provide, directly or indirectly, services or assistance to a competing business in a position that involves input into or direction of the competing business’s decisions within the restricted area.

For purposes of the employment agreements and independent contractor agreement:

“competing business” means any person or entity engaged in oil and natural gas exploration, development, production and acquisition activities;

“significant assets” means oil and natural gas reserves with an aggregate fair market value of $25 million or more; and

“restricted area” means a one-mile radius of any oil and natural gas reserves held by us as of the end of the Named Executive Officer’s employment, plus any county or parish where we have significant assets as of the end of the Named Executive Officer’s employment. However, for purposes of Mr. Nicklin’s independent contractor agreement, “restricted area” means a one-mile radius of any oil and natural gas reserves held by us as of the end of the performance of his independent contractor services, plus any county or parish where we have significant assets as of the end of the performance of his independent contractor services other than a one-mile radius of any oil and natural gas reserves held by Salt Creek Petroleum as of August 9, 2011 to the extent previously disclosed to us and any new oil and natural gas reserves that may be approved by us after August 9, 2011. See the definitions of “change in control,” “good reason” and “just cause” set forth in “Compensation Discussion and Analysis—Termination of Employment Arrangements and Independent Contractor Agreement—Employment Agreements and Independent Contractor Agreement.”

Furthermore, other than Mr. Foran’s employment agreement, each employment agreement and the independent contractor agreement contains an anti-solicitation provision, pursuant to which, during the restricted periods described above, subject to certain exceptions, Messrs. Lancaster, Hairford, Nicklin and Robinson shall not, without our prior written consent, solicit for employment or a contracting relationship, or employ or retain any person who is or has been, within six months prior to such time, employed by or engaged as an individual independent contractor by us or our affiliates or induce or attempt to induce any such person to leave his or her employment or independent contractor relationship with us or our affiliates.

For the Named Executive Officer to receive any severance payments described below for termination by us without just cause, by the Named Executive Officer for good reason or, following a change in control, by us without cause or by the Named Executive Officer with or without good reason, the Named Executive Officer must comply with the non-disclosure, non-competition and non-solicitation provisions described above.

Finally, as a condition to receiving any severance payments and other payments under their respective employment agreements or independent contractor agreement, as applicable, each Named Executive Officer is required to execute a separation agreement and release in favor of us.

To describe the payments and benefits that are triggered for each event of termination, we have created the following table estimating the payments and benefits that would be paid to each Named Executive Officer under each element of our compensation program assuming that such Named Executive Officer’s employment agreement or independent contractor agreement, as applicable, terminated on December 31, 2012, the last day of our 2012 fiscal year. In all cases, the amounts were valued as of December 31, 2012, based upon, where applicable, the closing price of our Common Stock of $8.20 per share. The amounts in the following table are calculated as of December 31, 2012 pursuant to SEC rules and are not intended to reflect actual payments that may be made. Actual payments that may be made will be based on the dates and circumstances of the applicable event.


	Payment Upon Termination
Named Executive Officer	Category of Payment	Upon Death or Total Disability ⁽¹⁾			Upon Mutual Agreement or Dissolution/ Liquidation ⁽¹⁾			Termination by Us Without Just Cause or by Named Executive Officer for Good Reason ⁽¹⁾			Termination Following a Change in Control Without Cause or by Named Executive Officer With or Without Good Reason ⁽¹⁰⁾
Joseph Wm. Foran	Salary	$	—		$	—		$	1,100,000	⁽⁴⁾	$	1,650,000	⁽¹¹⁾
	Bonus		490,000	⁽²⁾		490,000	⁽²⁾		980,000	⁽⁵⁾		1,470,000	⁽¹²⁾
	Vesting equity		—			—			—			493,279	⁽¹³⁾

	Total:	$	490,000		$	490,000		$	2,080,000		$	3,613,279

David E. Lancaster	Salary	$	—		$	—		$	510,000	⁽⁶⁾	$	1,020,000	⁽¹¹⁾
	Bonus		295,000	⁽²⁾		295,000	⁽²⁾		442,500	⁽⁷⁾		885,000	⁽¹²⁾
	Vesting equity		—			—			—			261,375	⁽¹³⁾

	Total:	$	295,000		$	295,000		$	952,500		$	2,166,375

Matthew V. Hairford	Salary	$	—		$	—		$	450,000	⁽⁶⁾	$	900,000	⁽¹¹⁾
	Bonus		235,000	⁽²⁾		235,000	⁽²⁾		352,500	⁽⁷⁾		705,000	⁽¹²⁾
	Vesting equity		—			—			—			199,875	⁽¹³⁾

	Total:	$	235,000		$	235,000		$	802,500		$	1,804,875

David F. Nicklin	Salary	$	79,125	⁽³⁾	$	—		$	230,000	⁽⁸⁾	$	805,000	⁽¹⁴⁾
	Bonus		137,500	⁽²⁾		137,500	⁽²⁾		—			—
	Vesting equity		—			—			—			125,567	⁽¹⁵⁾

	Total:	$	216,625		$	137,500		$	230,000		$	930,567

Bradley M. Robinson	Salary	$	—		$	—		$	240,000	⁽⁹⁾	$	480,000	⁽⁴⁾
	Bonus		137,500	⁽²⁾		137,500	⁽²⁾		137,500	⁽²⁾		275,000	⁽⁵⁾
	Vesting equity		—			—			—			123,000	⁽¹³⁾

	Total:	$	137,500		$	137,500		$	377,500		$	878,000

(1)

Amounts due upon death, total disability, mutual agreement, dissolution or liquidation, termination by us without cause or termination by Named Executive Officer for good reason are payable in a lump sum on the sixtieth day following the date of termination unless otherwise required by Section 409A of the Code.

(2)	Represents the average annual amount of bonuses, including pursuant to the 2012 Incentive Program, paid to such Named Executive Officer with respect to prior two calendar years (2011-2012).

(3)	Consists of cash payment of $250 for each full business day worked by Mr. Nicklin during the term of the independent contractor agreement.

(4)	Represents two times such Named Executive Officer’s base salary as of the termination date.

(5)	Represents two times an amount equal to the average annual amount of bonuses, including pursuant to the 2012 Incentive Program, paid to such Named Executive Officer with respect to prior two calendar years (2011-2012).

(6)	Represents 1.5 times such Named Executive Officer’s base salary as of the termination date.

(7)	Represents 1.5 times an amount equal to the average annual amount of bonuses, including pursuant to the 2012 Incentive Program, paid to such Named Executive Officer with respect to prior two calendar years (2011-2012).

(8)	Consists of a cash payment of $1,000 for each full business day worked by Mr. Nicklin during the prior 12 months.

(9)	Represents such Named Executive Officer’s base salary as of the termination date.

(10)	Amounts due following a change in control are payable in lump sum on the date which immediately follows six months from the date of termination or, if earlier, within 30 days of such Named Executive Officer’s death.

(11)	Represents three times such Named Executive Officer’s base salary as of the termination date.

(12)	Represents three times an amount equal to the average annual amount of bonuses, including pursuant to the 2012 Incentive Program, paid to such Named Executive Officer with respect to prior two calendar years (2011-2012).

(13)

The employment agreements provide for accelerated and full vesting of unvested incentive awards held by these Named Executive Officers in the event that such Named Executive Officer is terminated without “Just Cause” or terminates his employment with or without “Good Reason” within 30 days prior to, or 12 months following, a “change in control.” The 2003 Plan provides that all awards automatically vest upon a “change in control.” The amount disclosed reflects the closing price of our Common Stock on December 31, 2012 of $8.20 per share multiplied by the number of unvested (i) service-based shares of restricted stock, (ii) performance-based shares of restricted stock and (iii) performance-based restricted stock units held by such Named Executive Officer on December 31, 2012. Additionally, the exercise price of all stock options held by such Named Executive Officers was above the closing price of our Common Stock on December 31, 2012; therefore, these options had no intrinsic value at December 31, 2012.

(14)	Consists of a cash payment consisting of two times his daily contract rate of $1,750 for each full business day worked during the year ended December 31, 2012.

(15)

Mr. Nicklin’s equity grants under the 2012 Plan provide for accelerated and full vesting of certain unvested incentive awards in the event that Mr. Nicklin is terminated without “Just Cause” or terminates his employment for “Good Reason” within 12 months following a “change in control.” The 2003 Plan provides that all awards automatically vest upon a “change in control.” The amount disclosed reflects the closing price of our Common Stock on December 31, 2012 of $8.20 per share multiplied by the number of unvested (i) service-based shares of restricted stock and (ii) performance-based shares of restricted stock held by Mr. Nicklin on December 31, 2012. None of the unvested performance-based restricted stock units held by Mr. Nicklin on December 31, 2012 would vest under a change in control. Additionally, the exercise price of all stock options held by Mr. Nicklin was above the closing price of our Common Stock on December 31, 2012; therefore, these options had no intrinsic value at December 31, 2012.

DIRECTOR COMPENSATION


Name	Fees Earned or Paid in Cash ($)		Stock Awards ⁽¹⁾⁽²⁾ ($)			Restricted Stock Units ⁽¹⁾⁽³⁾ ($)		All Other Compensation ($)		Total ($)
Charles L. Gummer⁽⁴⁾		25,667		38,840	⁽⁵⁾		18,745		—		83,252
Stephen A. Holditch		54,000		—			74,977		—		128,977
David M. Laney		48,000		—			74,977		—		122,977
Gregory E. Mitchell		48,000		—			74,977		—		122,977
Steven W. Ohnimus		49,000		—			74,977		—		123,977
Michael C. Ryan		51,333		—			74,977		—		126,310
Margaret B. Shannon		48,000		—			74,977		—		122,977

(1)	Based on the fair market value of the stock awards on the date of grant.

(2)	The following directors owned the following number of fully vested options to purchase Common Stock at December 31, 2012: Stephen A. Holditch (3,750), David M. Laney (3,000), Steven W. Ohnimus (5,250) and Michael C. Ryan (1,500). The options are not reflected in the 2012 stock awards.

(3)	Subject to a three year vesting period. One-third of these restricted stock units vest on each of the first, second and third anniversaries of the grant dates.

(4)	Mr. Gummer’s term ended on June 7, 2012, at which date his restricted stock units were forfeited.

(5)	Represents the fair value of an award of 4,000 shares of Common Stock in connection with the termination of Mr. Gummer’s Board service.

We target our non-employee directors’ compensation at the 25th percentile of the Peer Group used for benchmarking the non-employee directors’ compensation. Upon consummation of our initial public offering, our director compensation program became the following:

•

Annual cash retainer of $40,000;

•

Cash meeting fee of $1,000 per day for each day of Board and committee service;

•

The chairs of the Audit Committee and Engineering Committee each receive an additional cash retainer of $5,000 annually; and

•

Each non-employee director receives restricted stock units (“RSUs”) equal to up to $75,000 in value annually with the restrictions lapsing in one-third increments on each of the first, second and third anniversaries of the date of grant. Each grant may be adjusted downward (but not upward) in value based upon the non-employee director’s attendance and contributions at Board or committee meetings called during the period for which RSUs are due.

In addition, we reimburse our directors for travel, lodging and related expenses incurred in attending Board and committee meetings.

The non-employee directors follow our voluntary stock ownership guidelines for non-employee directors. Within three years of becoming a director, each non-employee director will be expected to own $250,000 of the Company’s Common Stock and continue to hold such shares while serving as a director. All directors presently meet this standard. Shares which will count toward the stock ownership guidelines include time-lapse restricted shares or RSUs that are still restricted and any shares held in trust by the director or his immediate family over which he has direct beneficial ownership interest. Shares which will not count toward the stock ownership guidelines include shares underlying unexercised stock options and unexercised stock appreciation rights.

Special Board Advisor Compensation

Other than Messrs. Downey and Massad, each special Board advisor is paid $1,250 each month in cash for a total annual stipend of $15,000. In addition, other than Messrs. Downey and Massad, each special Board advisor is granted 250 shares of Common Stock for each day of attendance at each Board meeting or committee meeting,

other than telephonic meetings. In addition, we reimburse our special Board advisors for travel, lodging and related expenses incurred in attending Board and committee meetings. Other than Messrs. Downey and Massad, special Board advisors do not receive any other remuneration for their service as special Board advisors. Mr. Downey’s special Board advisor compensation is the same as for the non-employee directors as described above.

Mr. Massad resigned effective July 31, 2012 as our Executive Vice President—Capital Markets. In connection with his resignation, he entered into a Consulting Agreement with us pursuant to which he is paid $7,500 per month.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table presents the securities authorized for issuance under our equity compensation plans as of December 31, 2012.


Plan Category	Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans
Equity compensation plans approved by security holders ⁽¹⁾⁽²⁾		1,229,437	$	10.19		3,056,957
Equity compensation plans not approved by security holders		—		—		—

Total		1,229,437	$	10.19		3,056,957

(1)	Our Board has determined not to make any additional awards under the 2003 Plan.

(2)	Our 2012 Plan was approved by our Board in December 2011 and took effect on January 1, 2012. The 2012 Plan was also approved by our shareholders at the Annual Meeting of Shareholders on June 7, 2012.

TRANSACTIONS WITH RELATED PERSONS

Since January 1, 2012, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers, which are described in “Compensation of Named Executive Officers” and the transactions described or referred to below.

Participation in Our Initial Public Offering

On February 7, 2012, upon the closing of our initial public offering, the following directors purchased at least $120,000 of Common Stock in the directed share program from the underwriters in the offering at the initial price to the public:


Director or Executive Officer	Amount
Joseph Wm. Foran ⁽¹⁾	$	1,660,800
David M. Laney ⁽²⁾		684,000
Gregory E. Mitchell ⁽³⁾		200,004
Carlos M. Sepulveda, Jr.		600,000
Margaret B. Shannon		200,004

(1)	$1,200,000 of shares were purchased by Mr. Foran, and $460,800 of shares were purchased by Sage Resources, Ltd., a limited partnership owned by the Foran family, including Mr. Foran.

(2)

$180,000 of shares were purchased by Mr. Laney, $144,000 of shares were purchased by Mr. Laney’s adult children, who gave Mr. Laney voting power of such shares through a revocable power of attorney, which power of attorney is no longer in effect, and $360,000 of shares were purchased by Laney Investments Ltd., for which Mr. Laney has sole voting and investment power.

(3)	All of the shares were purchased by JAMAL Enterprises, LP, for which Mr. Mitchell has sole voting and investment authority.

Loan Program

During 2011, we guaranteed the repayment of loans to certain of our executive officers by Comerica Bank. The purpose of these loans was to assist our executive officers in buying shares of our Common Stock pursuant to the exercise of stock options. We guaranteed the repayment of the following loans, and made deposits of funds in certificates of deposit to secure our guarantees, for the following executive officers until January 2012, when such guarantees were terminated.


Executive Officer and Date of Loan or Renewal	Loan Amount		Interest Rate			Interest Paid or Payable in 2012 through Termination of the Loan Guarantee in January 2012
Matthew V. Hairford; December 29, 2009; renewed October 8, 2011	$	310,000		5.25	%	$	1,067

David E. Lancaster; April 30, 2009; renewed May 30, 2011	$	470,000		5.25	%	$	1,618

Bradley M. Robinson; December 29, 2008; renewed January 29, 2011	$	280,000		5.25	%	$	964

Our Board approved the termination of the loan program on April 7, 2011, and we terminated our guarantees and the associated pledge of our certificates of deposit with Comerica Bank relating to these loans in January 2012. We made no payments to Comerica Bank pursuant to these loan guarantees.

Procedures for Approval of Related Party Transactions

Our Board has adopted a written related party transaction policy. Pursuant to this policy, a “Related Party Transaction” is defined as a transaction (including any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness)), or series of related transactions, or any material amendment to any such transaction, involving a Related Party (as defined below) and in which we are a participant, other than:

•

a transaction involving compensation of directors;

•

a transaction involving compensation of an executive officer or involving an employment agreement, severance agreement, change in control provision or agreement or a special supplemental benefit for an executive officer;

•

a transaction available to all employees generally or to all salaried employees generally;

•

a transaction with a Related Party involving less than $120,000;

•

a transaction in which the interest of the Related Party arises solely from the ownership of a class of our equity securities and all holders of that class receive the same benefit on a pro rata basis; or

•

a transaction in which the rates or charges involved therein are determined by competitive bids, or a transaction that involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.

“Related Party” means:

•

any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors or nominees for directors;

•

any person who is known by us to be the beneficial owner of more than 5% of our Common Stock;

•

any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, nominee for director, executive officer or a beneficial owner of more than 5% of our Common Stock; and

•

any firm, corporation or other entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons is a general partner or executive officer or in which such person, together with all other of the foregoing persons, owns 10% or more of the equity interests thereof.

Pursuant to our related party transaction policy, the Audit Committee must review all material facts of each Related Party Transaction and recommend either approval or disapproval of the Related Party Transaction to the full Board, subject to certain limited exceptions. In determining whether to recommend approval or disapproval of the Related Party Transaction, the Audit Committee must, after reviewing all material facts of the Related Party Transaction and the Related Party’s relationship and interest, determine whether the Related Party Transaction is fair to the Company. Further, the policy requires that all Related Party Transactions be disclosed in our filings with the SEC and/or our website in accordance with applicable laws, rules and regulations. All of the Related Party Transactions discussed above occurred prior to the adoption of the policy, except for participation in our initial public offering. Those executive officers and directors who participated in our initial public offering negotiated with RBC Capital Markets, LLC; therefore, the related party transaction policy was not triggered.

SECURITY OWNERSHIP

Security Ownership of Certain Beneficial Owners and Management

The following table presents the beneficial ownership of our Common Stock as of April 19, 2013 for (i) each person beneficially owning more than 5% of the outstanding shares of our Common Stock, (ii) each director and nominee for director of the Company, (iii) each executive officer of the Company listed in the Summary Compensation Table and (iv) all of our directors and executive officers as a group. Except pursuant to applicable community property laws and except as otherwise indicated, each shareholder possesses sole voting and investment power with respect to its, his or her shares. The business address of each of our directors and executive officers is c/o Matador Resources Company, One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240. The applicable percentage ownership is based on 55,846,340 shares of our Common Stock issued as of April 19, 2013, plus, on an individual basis, the right of that individual to obtain Common Stock upon exercise of stock options within 60 days of April 19, 2013. The information is based on Form 3s, Form 4s, Schedule 13Ds and Schedule 13Gs filed through April 19, 2013.


Name	Amount and Nature of Ownership of Common Stock		Percent of Class
*Directors and Named Executive Officers:*
Joseph Wm. Foran ⁽¹⁾		3,931,617		7.0	%
Matthew V. Hairford ⁽²⁾		188,050		*
Stephen A. Holditch ⁽³⁾		123,570		*
David E. Lancaster ⁽⁴⁾		299,250		*
David M. Laney ⁽⁵⁾		456,294		*
Gregory E. Mitchell ⁽⁶⁾		192,859		*
David F. Nicklin ⁽⁷⁾		73,813		*
Steven W. Ohnimus ⁽⁸⁾		94,094		*
Bradley M. Robinson ⁽⁹⁾		237,750		*
Michael C. Ryan ⁽¹⁰⁾		254,887		*
Carlos M. Sepulveda, Jr.		282,000		*
Margaret B. Shannon		43,009		*
All Directors and Executive Officers as a Group (15 persons) ⁽¹¹⁾:		6,331,578		11.3	%

*Other 5% Owners:*
T. Rowe Price Associates, Inc. ⁽¹²⁾		4,410,200		7.9	%
GRT Capital Partners L.L.C. ⁽¹³⁾		3,683,685		6.6	%
General Mills Group Trust ⁽¹⁴⁾		3,405,109		6.1	%

*	Less than one percent (1%)

(1)

Includes (i) 1,074,933 shares of Common Stock held of record by Sage Resources, Ltd., a limited partnership owned by the Foran family, including Mr. Foran; (ii) 4,000 shares of Common Stock held of record by the reporting person’s spouse through her Individual Retirement Account; (iii) 10,000 shares of Common Stock held of record by Mr. Foran’s college age child; (iv) 135,500 shares and 50,000 shares of Common Stock held of record by The Don Foran Family Trust 2008 and The Foran Family Special Needs Trust, respectively, for which Mr. Foran is the co-trustee and over which Mr. Foran has shared voting and investment power with other members of his family; (v) 1,208,640 shares and 1,208,640 shares of Common Stock held of record by the JWF 2011-1 GRAT and the NNF 2011-1 GRAT, respectively, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; and (vi) 80,104 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Foran has the right to vote such shares but may only dispose of such shares to the extent they have vested.

(2)

Includes 7,500 shares of Common Stock issuable to Mr. Hairford upon the exercise of stock options and 3,000 shares held of record by his Individual Retirement Account. Also includes 41,250 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Hairford has the right to vote such shares but may only dispose of such shares to the extent they have vested.

(3)	Includes 3,000 shares of Common Stock issuable to Dr. Holditch upon the exercise of stock options.

(4)	Includes 11,250 shares of Common Stock issuable to Mr. Lancaster upon the exercise of stock options and 75,500 shares of Common Stock held of record by his Individual Retirement Account. Also includes 51,250 shares of restricted stock. Pursuant to the terms of the

restricted stock grants, Mr. Lancaster has the right to vote such shares but may only dispose of such shares to the extent they have vested.

(5)	Includes 1,500 shares of Common Stock issuable to Mr. Laney upon the exercise of stock options. Also includes 56,000 shares of Common Stock held of record by Laney Investments Ltd., for which Mr. Laney has sole voting and investment power.

(6)	Includes 191,292 shares of Common Stock held of record by JAMAL Enterprises, LP, for which Mr. Mitchell has sole voting and investment power.

(7)

Includes 7,500 shares of Common Stock issuable to Mr. Nicklin upon the exercise of stock options and 36,000 shares of Common Stock held of record by his Individual Retirement Account. Also includes 30,313 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Nicklin has the right to vote such shares but may only dispose of such shares to the extent they have vested.

(8)	Includes 3,000 shares of Common Stock issuable to Dr. Ohnimus upon the exercise of stock options.

(9)

Includes 3,750 shares of Common Stock issuable to Mr. Robinson upon the exercise of stock options and 50,000 shares of Common Stock held of record by his Individual Retirement Account. Also includes 25,000 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Robinson has the right to vote such shares but may only dispose of such shares to the extent they have vested.

(10)	Includes 1,500 shares of Common Stock issuable to Mr. Ryan upon the exercise of stock options.

(11)

Includes an aggregate of 67,125 shares of Common Stock which our executive officers and directors as a group have the right to acquire within 60 days of April 19, 2013 upon the exercise of stock options. Also includes 294,919 shares of restricted stock held by our executive officers. Pursuant to the terms of the restricted stock grants, the executive officers have the right to vote such shares but may only dispose of such shares to the extent they have vested.

(12)

Information based on a Schedule 13G filed with the SEC on February 13, 2013. These securities are owned by various individual and institutional investors, for which T. Rowe Price Associates, Inc. (“Price Associates”) serves as an investment adviser registered under the Investment Advisers Act of 1940, as amended, with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, as amended, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities. Price Associates’ address is 100 E. Pratt Street, Baltimore, MD 21202.

(13)

Information based on a Schedule 13G filed with the SEC on February 14, 2013. GRT Capital Partners, L.L.C. (“GRT Capital”) is an investment adviser registered under the Investment Advisers Act of 1940, as amended. GRT Capital, in such capacity, may be deemed to share beneficial ownership over the shares held by its client accounts. GRT Capital’s address is One Liberty Square, Floor 11, Boston, MA 02109.

(14)	Information based on a Schedule 13G filed with the SEC on February 14, 2013. General Mills Group Trust’s address is c/o Benefit Finance Committee of General Mills, Inc., Number One General Mills Boulevard, Minneapolis, MN 55426.

ADDITIONAL INFORMATION

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and persons who own more than ten percent of the Company’s Common Stock to file initial reports of ownership and changes in ownership with the SEC.

Additionally, SEC regulations require that the Company identify any individuals for whom one of the referenced reports was not filed on a timely basis during the most recent fiscal year. Based solely on the Company’s review of copies of the reports received and written inquiries to the Company’s directors and officers, the Company believes that all persons subject to Section 16(a) of the Exchange Act timely filed all reports required pursuant to such section relating to the Company’s Common Stock with the exception of: Mr. Foran filed a Form 4 on February 9, 2012, relating to two purchases on February 2, 2012, and each of Scott E. King, Bradley M. Robinson and Kathryn L. Wayne filed a Form 4 on April 24, 2012, relating to an equity award granted on April 16, 2012.

Shareholder Proposals for the 2014 Proxy Statement

For shareholder proposals to be included in the Company’s Proxy Statement and form of proxy relating to the 2014 Annual Meeting of Shareholders, such proposals must be received by the Company at its offices in Dallas, Texas, addressed to the Corporate Secretary of the Company, no later than December 25, 2013. Upon timely receipt of any such proposal, the Company will determine whether or not to include such proposal in the proxy statement and proxy in accordance with applicable regulations and provisions governing the solicitation of proxies.

Director Nominations or Other Business for Presentation at the 2014 Annual Meeting

Under the Amended and Restated Bylaws of the Company, certain procedures are provided that a shareholder must follow in order to place in nomination persons for election as directors at an Annual Meeting of Shareholders or to introduce an item of business at an Annual Meeting of Shareholders. These procedures provide, generally, among other things, that shareholders desiring to place in nomination persons for election as directors, and/or bring a proper subject of business before an Annual Meeting, must do so by a written notice timely received (on or before March 10, 2014, but no earlier than February 8, 2014, for the 2014 Annual Meeting) to the Corporate Secretary of the Company containing the name and address of the shareholder and the number of shares of the Company’s Common Stock beneficially owned by the shareholder. If the notice relates to a nomination for director, it must also set forth the name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s written consent to be a director if selected by the Nominating, Compensation and Planning Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as director. Notice of an item of business shall include a brief description of the proposed business and any material interest of the shareholder in such business.

The Chairman of the meeting may refuse to allow the transaction of any business not presented, or to acknowledge the nomination of any person not made, in compliance with the foregoing procedures. Copies of the Company’s Amended and Restated Bylaws are available from the Corporate Secretary of the Company.

See “Corporate Governance—Board Committees—Nominating, Compensation and Planning Committee” for the process for shareholders to follow to suggest a director candidate to the Nominating, Compensation and Planning Committee for nomination by the Board.

Annual Report on Form 10-K

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC, including financial statements, accompanies this proxy statement. Shareholders may obtain without charge another copy of the Annual Report on Form 10-K, excluding certain exhibits, by writing to Investor Relations, Matador Resources Company, One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240.

OTHER BUSINESS

Management of the Company is not aware of other business to be presented for action at the Annual Meeting; however, if other matters are presented for action, it is the intention of the persons named in the accompanying form of proxy to vote in accordance with their judgment on such matters.

By Order of the Board of Directors,

LOGO

Joseph Wm. Foran

Chairman, President and Chief Executive Officer

April 24, 2013

LOGO

MATADOR RESOURCES COMPANY

5400 LBJ FREEWAY, SUITE 1500

DALLAS, TX 75240

VOTE BY INTERNET - www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

KEEP THIS PORTION FOR YOUR RECORDS

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

For

All

Withhold

All

For All

Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends you vote FOR the following:

Election of Directors

Nominees

Gregory E. Mitchell 02 Steven W. Ohnimus 03 Carlos M. Sepulveda, Jr

The Board of Directors recommends you vote FOR the following proposals:

For

Against

Abstain

Advisory vote to approve named executive officer compensation.

Ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2013.

NOTE: The proxies are authorized to vote in their discretion on such other business as may properly come before the meeting or any adjournment thereof.

Yes

Please indicate if you plan to attend this meeting

Please sign exactly as your name(s) appear(s) hereon. When signing as

attorney, executor, administrator, or other fiduciary, please give full

title as such. Joint owners should each sign personally. All holders must

sign. If a corporation or partnership, please sign in full corporate or

partnership name, by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report for the year ended December 31, 2012, Notice of Annual Meeting and Proxy Statement is/are available at www.proxyvote.com.

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

MATADOR RESOURCES COMPANY

Annual Meeting of Shareholders

June 6, 2013 9:30 A.M.

This proxy is solicited by the Board of Directors.

As an alternative to completing this form, you may enter your vote instruction by telephone at 1-800-690-6903, or via the internet at www.proxyvote.com. Have your proxy card in hand and follow the instructions.

The shareholder hereby appoints Joseph Wm. Foran and Michael C. Ryan, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of MATADOR RESOURCES COMPANY that the shareholder is entitled to vote at the Annual Meeting of Shareholders to be held at 9:30 A.M., CDT on June 6, 2013, at the Hilton Anatole, 2201 North Stemmons Freeway, Dallas, Texas 75207, and any adjournment or postponement thereof. The shareholder hereby revokes any proxy or proxies heretofore given to vote upon or act with respect to such shares of stock.

This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.

Continued and to be signed on reverse side