Matador Resources Company (NYSE: MTDR) has agreed to acquire Paloma Permian LLC, a portfolio company of EnCap Investments L.P., for $1.275 billion in cash, adding 16,235 net undeveloped acres in Eddy and Lea Counties, New Mexico, along with oil and natural gas producing properties in the Delaware Basin.

The acquired properties produced an estimated 11,100 barrels of oil equivalent (BOE) per day in the third quarter, with 57% oil. The deal also adds over 156 net drilling locations, primarily in the Bone Spring and Wolfcamp formations, and 55 million BOE of total proved reserves. The transaction is expected to close in the fourth quarter of 2026.

Separately, Matador agreed to acquire undeveloped acreage in the Woodford formation from Ridge Runner Resources II, LLC, another EnCap portfolio company. Combined with prior acreage additions, the deals bring Matador's Woodford position to approximately 50,000 contiguous net acres, acquired at an average cost of $4,000 per acre. The Ridge Runner deal adds over 150 net operated Woodford locations at roughly $1.3 million per location.

Matador also disclosed results from its first Woodford exploratory well, the Rae's Creek well in Southeast Lea County, New Mexico. The well recorded initial production of over 2,200 BOE per day (72% oil) during its official 24-hour test on June 29, 2026, and is producing approximately 20% above the average of comparable Woodford wells in Texas on a 60-day cumulative oil basis.

Both acquisitions are expected to be funded through cash on hand and borrowings under Matador's existing reserve-based lending credit facility, which was fully repaid in May 2026. The company anticipates generating approximately $1 billion in adjusted free cash flow for full-year 2026. Matador said debt repayment will be a top priority following closing.

Management is scheduled to discuss the acquisitions and second-quarter 2026 results on August 6, 2026. Baker Botts L.L.P. advised Matador on both deals. Vinson & Elkins LLP and RBC Richardson Barr advised Paloma, Ridge Runner, and EnCap.