Matador Resources Company has signed an agreement to acquire a subsidiary of Ameredev II Parent, including oil and gas properties and undeveloped acreage in New Mexico and Texas, for $1.91bn in cash.
Under the deal terms, Matador will also acquire approximately a 19% stake in Piñon Midstream, which owns midstream assets in southern Lea County, New Mexico.
Matador estimates that the Ameredev properties have total proved reserves of 118 million barrels of oil equivalent (mboe), with 60% being oil as of 31 May 2024.
Post-acquisition, Matador's pro forma metrics include more than 190,000 net acres in the Delaware Basin, around 2,000 net locations and daily production exceeding 180,000boe.
The company's proved reserves are expected to surpass 580mboe, with an enterprise value exceeding $10bn.
The deal also increases Matador's resource base and expands its midstream footprint with a significant stake in Piñon. This move is expected to enhance the coordination of gathering, transporting and treating natural gas from the acquired properties.
Matador founder, chairman and CEO Joseph Wm Foran said: “As with the successful Advance Energy deal we completed in April of 2023, we view the Ameredev transaction as another unique opportunity to work with EnCap and another value-creating opportunity for Matador and its shareholders.
“We evaluated this opportunity based on the high rock quality, the strong existing production and cash flow profile, the significant reserves additions, the high-quality inventory, the strategic fit within our existing portfolio of properties and the expansion of our midstream footprint with an ownership interest in Piñon.
“The equity and debt securities offerings and the revolving credit facility amendment we completed earlier this year, together with our historical balance sheet conservatism, have provided Matador with the opportunity to acquire these high-quality assets and continue Matador’s consistent history of profitable growth at a measured pace.”
Subject to customary conditions, the transaction is planned for completion late in the third quarter of 2024, with an effective date of 1 June 2024.
Last year, Matador completed the acquisition of Advance Energy Partners from EnCap Investments for $1.6bn.
