Matador Resources (MTDR) Closes Ameredev Acquisition

Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced the closing of its previously announced strategic bolt-on acquisition of a subsidiary of Ameredev II Parent, LLC (“Ameredev”) from affiliates of EnCap Investments L.P. (“EnCap”) for cash consideration of $1.832 billion, which amount is subject to customary post-closing adjustments (the “Ameredev Acquisition”). The Ameredev Acquisition includes:

• Approximately 33,500 contiguous net acres (82% held by production; over 99% operated) in the core of the Delaware Basin;
• Production that is expected to average between 25,500 and 26,500 barrels of oil and natural gas equivalent (“BOE”) per day during the remainder of the third quarter of 2024, which is anticipated to decline in the fourth quarter of 2024 (due to natural declines and the temporary shutting-in of wells for offset completion operations) before increasing again in the first half of 2025;
• 431 gross (371 net) operated locations, including prospective targets throughout the Wolfcamp and Bone Spring formations;
• Total proved oil and natural gas reserves of approximately 118 million BOE (60% oil); and
• An approximate 19% equity interest in the parent company of Piñon Midstream, LLC (“Piñon”).

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “On behalf of the Board and executive committee, I would like to acknowledge the extra effort and professionalism of everyone at Matador, Ameredev and EnCap to close this important transaction on time and as scheduled. The Ameredev assets include one of the largest, contiguous blocks of available acreage in the core of the Delaware basin—directly between two of our better asset areas—and we are excited to have the opportunity to integrate the Ameredev properties into our existing assets. The Ameredev gathering assets include 135 miles of water, natural gas and oil pipelines.

“Following the addition of the Ameredev Acquisition, Matador will have collectively over 190,000 net acres in the core of the Delaware Basin, production exceeding 180,000 BOE per day and proved oil and natural gas reserves of over 600 million BOE. In addition, we will have approximately 2,000 net locations, which provides inventory of 10 to 15 years with wells exceeding a 50% average rate of return.

“The Ameredev Acquisition also includes an approximate 19% equity interest in the parent company of Piñon. On August 21, 2024, Enterprise Products Partners L.P. announced that it was acquiring Piñon for $950 million in enterprise value. Matador expects to receive its proportionate share of such proceeds, in accordance with the applicable payout mechanism, following the closing of the Piñon acquisition, which Enterprise has indicated is expected to occur in the fourth quarter of 2024, subject to customary regulatory approvals.

“Matador successfully integrated the Advance assets that we acquired during 2023, and we are confident that we will successfully integrate the Ameredev assets as we go forward in much the same manner. To start, our operations team expects to implement on new wells operational efficiencies such as ‘simul-frac’ and ‘trimul-frac’ completion operations, dual fuel technologies and other operational efficiencies on the Ameredev assets that have worked well on other properties. Matador estimates that these operational efficiencies will result in synergies of approximately $160 million over the next five years.

“The Ameredev Acquisition was funded through borrowings under our credit facility after we took significant strides early in 2024 to strengthen our balance sheet and, more recently, increased the commitments under our credit facility from $1.5 billion to $2.5 billion, including a $250 million term loan. We express our appreciation to PNC Bank for their leadership and to each of the 19 banks in our bank group for their confidence and support in connection with this acquisition.

“We are excited about our positive outlook for the remainder of 2024 and 2025. We look forward to further discussing the Ameredev assets, including our plans for the fourth quarter of 2024, during our third quarter 2024 earnings release and conference call next month. We especially want to express our respect and appreciation for Ameredev’s professionalism and cooperation in the transition process, both with its management team and its field and office staff.”

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