Matador Resources said on Thursday it would buy privately held Paloma Permian from EnCap Investments for about $1.28 billion, adding high-quality drilling assets in the oil-rich Delaware Basin.
U.S. shale producers are prioritizing acquisitions that add premium drilling inventory over rapid production growth to maintain capital discipline, allowing them to sustain output and shareholder returns for longer.
The deal gives Matador access to 16,235 net undeveloped acres in Eddy and Lea counties in New Mexico, along with properties producing about 11,100 barrels of oil equivalent (BOE) per day, around 57% of which is oil.
The company said the acquisition would add 55 million BOE of proved reserves and more than 156 net drilling locations, primarily in the Bone Spring and Wolfcamp formations. The transaction is expected to close in the fourth quarter.
Shares of Matador were up 1% in premarket trading.
Separately, the company also agreed to acquire primarily undeveloped acreage in the emerging Woodford play from another EnCap-backed company, Ridge Runner Resources II, though it did not disclose the purchase price.
The company said the acquisition, combined with prior land purchases, would increase its Woodford position to about 50,000 contiguous net acres and lift its total Delaware Basin acreage to roughly 240,000 net acres.
Matador also reported successful results from its Rae’s Creek exploratory well in the Woodford formation, with a 24-hour test rate exceeding 2,200 BOE per day, with 72% oil.
Source: Reuters.com