Exhibit 10.37

FORM OF

INCENTIVE STOCK OPTION AGREEMENT

GRANTED PURSUANT TO THE 2003 STOCK AND INCENTIVE PLAN

THIS AGREEMENT, entered into as of the Date of Grant (as defined herein), by and
between                      (the “Participant”) and Matador Resources Company
(the “Company”).

RECITALS

WHEREAS, the Company has instituted the Matador Resources Company 2003 Stock and
Incentive Plan (the “Plan”), which is incorporated by reference into and forms a
part of this Agreement, and the Participant, who is an employee of the Company
or one of its Subsidiaries, has been selected by the board of directors or
committee (collectively, the “Committee”) administering the Plan to receive an
Incentive Stock Option Award under the Plan.

NOW THEREFORE, IT IS AGREED, by and between the Company and the Participant as
follows:

1.      Definitions. Terms otherwise not defined herein shall have the meaning
ascribed to them in the Plan.

2.      Terms of Award. In consideration for the Participant’s service to the
Company and to provide incentive to the Participant to continue service to the
Company, an Incentive Stock Option (the “Option”) is hereby granted to the
Participant on the following terms:

(a) Number of Shares. The number of shares subject to the Option is
                     shares of common stock, par value $0.01 per share
(“Shares”).

(b) Exercise Price. The “Exercise Price” is $             for each Share.

(c) Date of Grant. This Option is granted as of                      (the “Date
of Grant”).

(d) Incentive Stock Options. The Option is intended to constitute an “incentive
stock option” as that term is used in Code section 422. The limitations imposed
on Incentive Stock Options by the Plan shall be applicable to this Option.

(e) Exercisability. The Option shall be exercisable as follows:

             Shares after the first anniversary of the Date of Grant;

             Shares after the second anniversary of the Date of Grant;

             Shares after the third anniversary of the Date of Grant; and

             Shares after the fourth anniversary of the Date of Grant.

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(f) Other Terms. The Option shall, in all respects, be subject to the terms,
definitions and provisions of the Plan.

3.      Expiration. The Option shall not be exercisable after the Company’s
close of business on the last business day that occurs prior to the Expiration
Date. The “Expiration Date” shall be earliest to occur of:

(a) the         -year anniversary of the Date of Grant;

(b) if the Participant’s Date of Termination occurs by reason of Disability, the
one-year anniversary of such Date of Termination;

(c) if the Participant’s Date of Termination occurs by reason of death,
subsection (a) above applies; or

(d) if the Participant’s Date of Termination occurs for reasons other than death
or Disability, including for Cause, 30 days after such Date of Termination.

4.      Method of Exercise. This Option shall be exercisable by a written notice
delivered to the Company that shall:

(a) state the election to exercise the Option and the number of Shares in
respect of which it is being exercised; and

(b) be signed by the person or persons entitled to exercise the Option and, if
the Option is being exercised by any person or persons other than the
Participant, be accompanied by proof, satisfactory to the Company, of the right
of such person or persons to exercise the Option.

5.      Payment. The Exercise Price of any Shares purchased shall be paid in any
manner permitted by the Plan.

6.      Withholding. The Participant shall make satisfactory arrangements for
the withholding of any amounts necessary for withholding in accordance with
applicable federal or state income tax laws.

7.      Issuance of Shares. No person shall be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the Shares
subject to an Option unless and until certificates representing such Shares
shall have been issued and delivered to such person. As a condition of any
issuance of a certificate for Shares, the Committee may obtain such agreements
or undertakings, if any, as it may deem necessary or advisable to assure
compliance with any provision of the Plan, the Option Agreement or any law or
regulation including, but not limited to, the following:

(a) A representation, warranty or agreement by the Participant to the Company at
the time any Option is exercised that he or she is acquiring the Shares to be
issued to him or her for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and

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(b) A representation, warranty or agreement to be bound by any legends that are,
in the opinion of the Committee, necessary or appropriate to comply with the
provisions of any securities laws deemed by the Committee to be applicable to
the issuance of the Shares and are endorsed upon the Share certificates.

8.      Surrender of Option. Upon exercise of this Option in part, if requested
by the Company, the Participant shall deliver this Option and any other written
agreements executed by the Company and the Participant with respect to this
Option to the Company, which shall endorse or cause to be endorsed thereon a
notation of such exercise and return all such agreements to the Participant.

9.      Transferability of Option. The Option is not transferable, other than as
designated by the Participant by will or by the laws of descent and
distribution, and during the Participant’s life, may be exercised only by the
Participant.

10.      Company Reservation. After the Date of Termination of the Participant
for whatever reason, including for Cause, the Company shall have the right, but
not the obligation, to repurchase from the Participant (or his or her heirs,
devisees or personal representatives) all or any part of the Shares that have
been previously purchased, or are thereafter purchased, by the Participant (or
his or her heirs, devisees or personal representatives) upon any exercise of
this Option. Such right may be exercised by the Company (i) as to any Shares
purchased prior to the Date of Termination, at any time within 60 days after the
Date of Termination or (ii) as to any Shares purchased after the Date of
Termination, at any time within 30 days after such purchase. The repurchase
price per Share payable by the Company will equal the Share’s Fair Market Value
on the Date of Termination. Subject to effecting satisfactory tax withholding
arrangements, if agreed between the Participant (or the person or persons
exercising this Option) and the Company, the Exercise Price for any Shares being
purchased from the Company after the Date of Termination may be netted against
the purchase price payable by the Company.

11.      Administration. The Plan and this Option shall be administered by the
Committee as provided for and described in the Plan.

MATADOR RESOURCES COMPANY

 

_______________________________

Joseph Wm. Foran

Chairman and CEO

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The Participant acknowledges receipt of a copy of the Plan, and represents that
the Participant is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all the terms and provisions of the Plan. The
Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee (as defined in the Plan) upon any
questions arising under the Plan.

 

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Participant: