Matador Resources Company (NYSE: MTDR) (“Matador” or the
“Company”) today announced the closing of its wholly-owned
subsidiary’s previously-announced acquisition of Advance Energy
Partners Holdings, LLC (“Advance”) from EnCap Investments L.P.
(“EnCap”), including Advance’s oil and natural gas producing
properties, undeveloped acreage and midstream assets located in Lea
County, New Mexico and Ward County, Texas (the “Advance
Transaction”).
The consideration paid upon the closing of the Advance
Transaction consisted of an initial as-adjusted cash purchase price
of approximately $1.6 billion, which amount is subject to customary
post-closing adjustments. As previously announced, the Advance
Transaction may also include potential additional cash
consideration of $7.5 million for each month of 2023 in which the
average oil price, as defined in the securities purchase agreement,
exceeds $85 per barrel.
The Advance Transaction includes approximately 18,500 net acres
(99% held by production) in the core of the northern Delaware
Basin, most of which is adjacent to or very close to some of
Matador’s best acreage where wells with an estimated ultimate
recovery of over one million barrels of oil equivalent have been
drilled. It also provides a significant increase to Matador’s
inventory in primary development zones, with 206 gross (174 net)
operated locations in core target formations and an additional 38
gross (35 net) upside operated locations in the Wolfcamp D
formation. This new acreage also provides further expansion
opportunities for Pronto Midstream, LLC, Matador’s wholly-owned
midstream subsidiary.
Management Comments
Joseph Wm. Foran, Matador’s Founder, Chairman and CEO,
commented, “On behalf of the Board and management, I would like to
congratulate and thank everyone at Matador and EnCap for their
professionalism and for everyone’s efforts to close this
transaction. These properties are a unique, value-creating
opportunity for Matador and all of its stakeholders. Closing this
transaction sets Matador up nicely for a great 2023 and an even
better 2024.
“The Advance Transaction was funded with a combination of cash
on hand and borrowings under our credit agreement. On March 31,
2023, we successfully increased the elected commitment under our
credit agreement from $775 million to $1.25 billion. We express our
appreciation to each of our banks for their continued support.
Importantly, this acquisition does not significantly impact
Matador’s leverage profile, and we remain committed to maintaining
a strong balance sheet, growing our assets at a measured pace and
paying down our debt with free cash flow going forward from here as
well as increasing the value of the company and increasing the
amount of our shareholder returns over time.
“We look forward to further discussing the Advance acquisition
and our plans for 2023 during our first quarter 2023 earnings
release update call.”
About Matador Resources Company
Matador is an independent energy company engaged in the
exploration, development, production and acquisition of oil and
natural gas resources in the United States, with an emphasis on oil
and natural gas shale and other unconventional plays. Its current
operations are focused primarily on the oil and liquids-rich
portion of the Wolfcamp and Bone Spring plays in the Delaware Basin
in Southeast New Mexico and West Texas. Matador also operates in
the Eagle Ford shale play in South Texas and the Haynesville shale
and Cotton Valley plays in Northwest Louisiana. Additionally,
Matador conducts midstream operations in support of its
exploration, development and production operations and provides
natural gas processing, oil transportation services, natural gas,
oil and produced water gathering services and produced water
disposal services to third parties.
The Company’s predecessor, Foran Oil Company, was founded in
1983 by Joseph Wm. Foran, the Company’s Chairman and Chief
Executive Officer, with $270,000 in contributed capital from 17
friends and family members. Foran Oil Company was later contributed
to Matador Petroleum Corporation upon its formation by Mr. Foran in
1988. Mr. Foran served as Chairman and Chief Executive Officer of
that company from its inception until it was sold in June 2003 to
Tom Brown, Inc., in an all-cash transaction for an enterprise value
of approximately $388.5 million. On the following Monday, Mr. Foran
founded Matador Resources Company with $6 million. Today, Matador
has a market cap of approximately $6 billion (based upon the
Company’s closing share price on April 5, 2023) and is one of the
top 20 public exploration and production companies in the country
by market capitalization and one of the top 10 oil and natural gas
producers in New Mexico.
For more information, visit Matador Resources Company at
www.matadorresources.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. “Forward-looking statements” are statements related to
future, not past, events. Forward-looking statements are based on
current expectations and include any statement that does not
directly relate to a current or historical fact. In this context,
forward-looking statements often address expected future business
and financial performance, and often contain words such as “could,”
“believe,” “would,” “anticipate,” “intend,” “estimate,” “expect,”
“may,” “should,” “continue,” “plan,” “predict,” “potential,”
“project,” “hypothetical,” “forecasted” and similar expressions
that are intended to identify forward-looking statements, although
not all forward-looking statements contain such identifying words.
Such forward-looking statements include, but are not limited to,
statements about the anticipated benefits, opportunities and
results with respect to the Advance Transaction, including any
expected value creation, reserves additions, midstream
opportunities and other anticipated impacts from the Advance
Transaction, as well as other aspects of the transaction, guidance,
projected or forecasted financial and operating results, future
liquidity, leverage, the payment of dividends, results in certain
basins, objectives, project timing, expectations and intentions,
regulatory and governmental actions and other statements that are
not historical facts. Actual results and future events could differ
materially from those anticipated in such statements, and such
forward-looking statements may not prove to be accurate. These
forward-looking statements involve certain risks and uncertainties,
including, but not limited to, disruption from the Advance
Transaction making it more difficult to maintain business and
operational relationships; significant transaction costs associated
with the Advance Transaction; the risk of litigation and/or
regulatory actions related to the Advance Transaction, as well as
the following risks related to financial and operational
performance: general economic conditions; the Company’s ability to
execute its business plan, including whether its drilling program
is successful; changes in oil, natural gas and natural gas liquids
prices and the demand for oil, natural gas and natural gas liquids;
its ability to replace reserves and efficiently develop current
reserves; the operating results of the Company’s midstream oil,
natural gas and water gathering and transportation systems,
pipelines and facilities, the acquiring of third-party business and
the drilling of any additional salt water disposal wells; costs of
operations; delays and other difficulties related to producing oil,
natural gas and natural gas liquids; delays and other difficulties
related to regulatory and governmental approvals and restrictions;
impact on the Company’s operations due to seismic events; its
ability to make acquisitions on economically acceptable terms; its
ability to integrate acquisitions; availability of sufficient
capital to execute its business plan, including from future cash
flows, available borrowing capacity under its revolving credit
facilities and otherwise; the operating results of and the
availability of any potential distributions from our joint
ventures; weather and environmental conditions; the ongoing impact
of the novel coronavirus, or COVID-19, or variants thereof, on oil
and natural gas demand, oil and natural gas prices and its
business; and the other factors that could cause actual results to
differ materially from those anticipated or implied in the
forward-looking statements. For further discussions of risks and
uncertainties, you should refer to Matador’s filings with the
Securities and Exchange Commission (“SEC”), including the “Risk
Factors” section of Matador’s most recent Annual Report on Form
10-K and any subsequent Quarterly Reports on Form 10-Q. Matador
undertakes no obligation to update these forward-looking statements
to reflect events or circumstances occurring after the date of this
press release, except as required by law, including the securities
laws of the United States and the rules and regulations of the SEC.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in
their entirety by this cautionary statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20230412005774/en/
Mac Schmitz Vice President – Investor Relations
investors@matadorresources.com (972) 371-5225
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