Matador Resources JV increases Delaware Basin footprint by $752 Million Cardinal Deal

Matador Resources, an oil and gas company, announced?on Monday that its joint venture San Mateo Midstream had agreed to purchase the operating subsidiaries of Cardinal Midstream Partners for a total of $752 million?in cash.

The deal reflects the continued consolidation of the U.S. Energy Sector as producers and midstream operators expand their infrastructure and scale to support increasing shale production and growing liquefied gas export demand.

Cardinal's assets consist of a cryogenic gas processing facility in Loving County in Texas, with a capacity to receive 320 million cubic?feet per day, and approximately 145 miles in natural gas gathering pipelines in West Texas and Southern Eddy County in New Mexico.

The assets are located in the Delaware Basin - a major shale oil producing region of the United States.

Matador purchased 5,154 acres of undeveloped land in the Delaware Basin, in southeast New Mexico, for $1.1 billion. This acquisition strengthened Matador's position in this region and the prolific shale-play.

The latest deal, which should close by July 31, will increase San Mateo’s processing capacity to more than 1 billion cubic foot per day, and expand the gathering system up to over 800 miles of pipe, as well as adding new customers.

San Mateo Midstream is Matador's joint venture, which owns 51% of the midstream business, with private equity firm Five Point Infrastructure. The company expects to finance this acquisition in part through a new loan up to $650m under its credit facility. (Reporting by Varun Sahay in Bengaluru; Editing by Shailesh Kuber)

(source: Reuters)