Matador Closes $1.255 Billion Cash Purchase of Paloma
The Delaware Basin producer completed the EnCap portfolio buy, citing high hydrocarbon resources per acre and midstream synergies.
Matador Resources Company (MTDR) closed an all-cash purchase of Paloma Permian LLC for $1.255 billion, completing a Delaware Basin acquisition it had agreed to in July.
The oil and natural gas producer said the Paloma assets hold some of the highest hydrocarbon resources per acre in the Lower 48 and provide value-creation opportunities through upstream capital efficiencies, its wholly owned midstream system, and its 51%-owned San Mateo Midstream system.
A wholly owned subsidiary of Matador had entered into a definitive agreement in July to buy Paloma, a portfolio company of EnCap Investments L.P., including proved undeveloped acreage and oil and natural gas producing properties in southeast New Mexico. Subject to customary closing adjustments, the originally disclosed cash consideration was $1.275 billion. The July release said the deal was expected to close in the fourth quarter of 2026.
The Paloma Acquisition included 16,235 net undeveloped acres in Eddy and Lea Counties, New Mexico, and third-quarter estimated production of approximately 11,100 barrels of oil equivalent per day, 57% oil. Those acres sit in the same Delaware Basin where Matador’s operations are focused primarily on the oil- and liquids-rich Wolfcamp and Bone Spring plays in southeast New Mexico and West Texas.
Joseph Wm. Foran, Matador’s founder, chairman and CEO, said the company believes the Paloma assets hold some of the highest hydrocarbon resources per acre in the Lower 48. He said the acreage also provides Matador with value-creation opportunities through upstream capital efficiencies, its wholly owned midstream system, and its 51%-owned San Mateo Midstream system.
Foran said that, on behalf of the board and executive committee, he would like to acknowledge the extra effort and assistance of everyone at Paloma, EnCap and Matador to close this important transaction as agreed.
In July, Matador also agreed to acquire primarily undeveloped acreage in what it believed to be the heart of the Woodford play in West Texas and southeast New Mexico from Ridge Runner Resources II, LLC, another EnCap portfolio company. As a result of that Ridge Runner acquisition, prior acreage additions and Matador’s ongoing “brick-by-brick” land strategy, the company said it would have acquired approximately 50,000 contiguous, undeveloped net acres in the Woodford formation, primarily in its Antelope Ridge asset area in Lea County, New Mexico, and in West Texas. Those additional contiguous net acres, together with the Paloma Acquisition, were expected to bring Matador’s corporate acreage total to approximately 240,000 net acres in the Delaware Basin.
Matador also operates in the Haynesville shale and Cotton Valley plays in northwest Louisiana and conducts midstream operations in support of its exploration, development and production operations, including natural gas processing, oil transportation, gathering and produced-water disposal services to third parties.