Matador Acquires EnCap-backed Ameredev Unit for $1.91 Billion, Expanding Permian Oil Assets

(Reuters) — U.S. oil and gas producer Matador Resources said on Wednesday it would add oil and natural gas producing assets and undeveloped acreage in the Delaware basin in a $1.91 billion cash deal for a unit of Ameredev II Parent.

Deal-making in the U.S. shale patch hit record levels in 2023 and has extended into this year, as exploration and production companies chase premium drilling locations and scale.

ExxonMobil's $60 billion takeover of Pioneer, Chevron's $53 billion pending acquisition of Hess and ConocoPhillips' $22.5 billion deal for Marathon Oil announced late last month are among the big acquisitions during the period.

Dallas, Texas-based Matador expects to have over 190,000 net acres in the Delaware Basin, and production of more than 180,000 barrels of oil equivalent per day (boepd) on a pro forma basis once the transaction closes.

The deal, expected to be completed in the third quarter, includes a 19% stake in Pinon Midstream that owns assets in southern Lea County in New Mexico.

"Scale is important in the E&P sector, and this deal expands both (Matador's) E&P and midstream assets while keeping leverage in check," said Gabriele Sorbara, managing director of equity research at Siebert Williams Shank & Co.

Matador on a conference call said it would continue to explore opportunities for its existing midstream assets.

The company's shares were down 1% in afternoon trading.

Ameredev is part of EnCap Investments, and the deal marks a second significant transaction by the private-equity firm in the last 18 months with Matador.

"The list of built-for-sale private equity positions is getting thin in the Permian Basin," said Andrew Dittmar, principal analyst at energy consultancy Enverus Intelligence.

"A few notable names left outstanding include Franklin Mountain in the Delaware Basin as well as Double Eagle and FireBird in the Midland Basin."

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