Matador Resources Company (NYSE:MTDR) ("Matador" or the "Company") announces the successful bolt-on acquisition of 5,154 net undeveloped acres in the core of the Delaware Basin as part of the Bureau of Land Management (BLM) Oil and Gas Lease Sale this week.
Joseph Wm. Foran, Matador's Founder, Chairman and CEO, commented, "Matador is pleased to announce a $1.1 billion expansion of its premier Delaware Basin asset base in Southeast New Mexico through the recent BLM Lease Sale. The company acquired 5,154 net undeveloped acres, all of which are in the ‘core-of-the-core' of the Delaware Basin and are strategic and highly complementary to Matador's current acreage position. This acquisition not only extends the amount and the duration of Matador's high-quality inventory and reserve base but also enhances the Company's current assets with increased operating efficiencies. These lease acquisitions lend themselves to extended reach laterals of three miles or more, leveraging of existing facilities and infrastructure with Matador's existing field teams, and increased midstream value from potential future volume additions in the Delaware Basin.
HIGHLIGHTS
- Prime Location: Acquired acreage located in most prolific areas of Delaware Basin, with nine or more discrete prospective formations
- Strategic Alignment to Current Asset Base: Acreage directly adjacent to existing operated units, enabling further operating efficiencies in already established cost-advantaged operating areas with current completed cost per lateral foot averages 10-20% below Matador's corporate average
- Improved Economics and Lease Terms: 87.5% net revenue interest with 10-year term across all depths
- San Mateo Connectivity: Key tracts and associated wells and volumes strategically located near existing infrastructure expected to be additive to San Mateo's volume throughput and growing revenue streams
- Locations and Efficiencies: Adds over 141 net operated locations (normalized to 2-mile laterals), including extended reach laterals, U-Turn well designs, multi-well developments and completions, emerging horizons and targets, with opportunities for enhanced water recycling processes and natural gas takeaway capacity
- Maintenance of Strong Balance Sheet: Purchase price of approximately $1.143 billion implies approximately $7.3 million per location after accounting for anticipated midstream value and is expected to be funded through cash on hand and existing credit facility
Mr. Foran further commented, "We believe our proven track record of value creation over the years de-risks this transaction as evidenced by our 2018 acquisition of the State line and Rodney Robinson Federal tracts. To date, Matador has already recovered all associated capital invested in lease acquisitions, drilling, and completions associated with those tracts, as well as generating an additional $1.9 billion in returns from these projects. We have full confidence that our reservoir, geology, midstream, and operating teams will maximize the value of these new tracts in a similar manner.