Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced that a wholly-owned subsidiary of Matador has entered into a definitive agreement to acquire a subsidiary of Ameredev II Parent, LLC (“Ameredev”), including certain oil and natural gas producing properties and undeveloped acreage located in Lea County, New Mexico and Loving and Winkler Counties, Texas (the “Ameredev Acquisition”).
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The Ameredev Acquisition also includes an approximate 19% stake in Piñon Midstream, LLC (“Piñon”), which has midstream assets in southern Lea County, New Mexico. The consideration for the Ameredev Acquisition will consist of a cash payment of $1.905 billion, subject to customary closing adjustments. Ameredev is a portfolio company of EnCap Investments L.P. (“EnCap”).
Key Details of the Acquisition:
- Acreage and Production:
- Over 190,000 net acres in the Delaware Basin.
- Expected production of over 180,000 BOE per day.
- Proved reserves of over 580 million BOE.
- Estimated enterprise value post-acquisition exceeding $10 billion.
- Pro forma proved oil and gas reserves of 578 million BOE.
- Financial Highlights:
- Expected forward one-year Adjusted EBITDA of $425-$475 million.
- Attractive purchase price multiple of 4.2x for upstream assets.
- PV-10 value of $1.46 billion on total proved reserves.
- Operational Impact:
- Adds 431 gross (371 net) operated locations.
- The Ameredev assets include 33,500 highly contiguous net acres in the northern Delaware Basin.
- Matador plans to operate one drilling rig on Ameredev properties before closing, maintaining nine rigs post-closing.
- Strategic Fit:
- Enhances Matador’s Delaware Basin portfolio.
- Expands midstream footprint through a 19% stake in Piñon Midstream.
- Significant reserves additions and high-quality inventory.
- Financing:
- Matador secured firm commitments from PNC Bank for increased credit facility and additional liquidity.
- Pro forma leverage expected to be approximately 1.3x at closing and below 1.0x by mid-2025.
Comments from Management: Joseph Wm. Foran, Matador’s Founder, Chairman, and CEO, emphasized the strategic value of the acquisition, highlighting the high-quality assets, strong cash flow profile, and the expansion of Matador’s midstream operations. He also noted the importance of their relationship with EnCap Investments L.P. and expressed appreciation for the support from PNC Bank and other stakeholders.
Matador will host a live conference call to discuss the acquisition details at 10:00 am Central Time on June 12, 2024. More information is available on Matador’s website under the Investor Relations tab.
