Matador Resources to acquire Advance Energy Partners to boost position in Delaware Basin
Matador Resources has agreed to acquire Advance Energy Partners, including certain oil and natural gas producing properties and undeveloped acreage situated in Lea County, New Mexico and Ward County, Texas, for an initial cash payment of $1.6 billion.
Advance Energy Partners will also receive an additional cash consideration of $7.5 million for each month this year in which the average oil price exceeds $85 per barrel.
The transaction is anticipated to increase the Dallas-based Matador Resources’ pro forma drilling sites in primary development zones.
With proposed acquisition, Matador Resources adds nearly 18,500 net acres in the northern Delaware Basin, most of which is situated in the company’s Ranger asset area in Lea County, New Mexico near its current assets.
The deal is likely to provide potential midstream opportunities for Matador Resources’ wholly-owned midstream subsidiary Pronto Midstream that operates in the Lea County area, New Mexico.
Joseph Wm. Foran — Matador Resources Founder, Chairman, and CEO said: “The specific location and quality of these select assets, the strong existing cash flow, the multi-pay potential, the cost savings associated with developing these assets via longer laterals on multi-well pads with centralized facilities, the midstream synergies with Pronto and the held-by-production status of the acreage were key features that attracted us to this unique opportunity and should significantly enhance our already strong Delaware Basin portfolio.
“This acquisition also provides us with increased operational scale in the Delaware Basin, which we expect will improve our overall rates of return and unit-of-production costs.
As of mid-January 2023, the proposed acquisition is projected to generate forward one-year Adjusted EBITDA of around $475 to $525 million at strip prices.
The acquisition with an effective date of 1 January 2023, and is expected to close early in the second quarter of 2023, subject to customary closing conditions.
Advance Energy Partners is a portfolio company of EnCap Investments.