Matador Resources to buy Paloma Permian in $1.275B deal

Matador Resources (MTDR) said Thursday it agreed to acquire Paloma Permian, a portfolio company of EnCap Investments, for $1.275B in cash, adding 16,235 net undeveloped acres in southeast New Mexico and Q3 estimated production of 11.1K boe/day.

The deal also adds ~156 net drilling locations, primarily in the Bone Spring and Wolfcamp formations, and is expected to add significant value to Matador’s (MTDR) inventory.

Separately, Matador (MTDR) said it agreed to acquire undeveloped acreage in the Woodford formation from Ridge Runner Resources II, another EnCap portfolio company; financial terms were not disclosed.

The additional contiguous net acres, together with the Paloma acquisition, will increase Matador's (MTDR) corporate acreage total to ~240K net acres in the Delaware Basin.

The company also disclosed results from its first Woodford exploratory well, the Rae's Creek well, which recorded initial production of more than 2.2K boe/day during its official 24-hour test.