Matador Resources' strategic acquisition fuels expansion and growth, propelling the company toward new heights in the energy sector.
Matador Resources recently acquired Ameredev II in a $1.9 billion deal effective June 2024. The acquisition includes oil and gas properties and undeveloped acreage in West Texas and New Mexico in Loving, Winkler, and Lea counties. This significantly expands Matador’s operations in the Delaware Basin, adding 33,500 contiguous net acres with 82% held by production. The deal comprises a 19% stake in Piñon Midstream and undeveloped acreage, aligning well with Matador Resources’ vertical integration strategy. Matador Resources is expected to increase its total acreage to over 191,800 net acres, which includes acreage acquired from Advance Energy Partners Holdings, LLC in April 2023. Matador Resources’ acreage is competing for development capital, and they plan to continue operating nine drilling rigs across their 1,998 net locations, as stated in their press release acquisition presentation. The company aims to enhance operational efficiency, divest non-core assets, focus on midstream operations extending up to 700 miles, and strengthen its financial position, as shown in Figure 1 (pipelines provided by MAPSearch).
Figure 1. Geographic well coverage in Delaware Basin within Matador’s operation areas (pipeline data available via MAPSearch).
Matador Resources achieved a record average of 154,300 barrels of oil equivalent per day in Q4 2023, up from over 130,000 barrels per day in Q2 2023, according to TGS Well Data Analytics. Matador forecasts an 18% increase in total average production and a 23% rise in oil production by the end of 2024, highlighting their strategic investments and operational efficiencies, and positioning them for substantial future growth.
Figure 2. TGS Well Data Analytics application showing the Matador assets within the Delaware Basin, colored by their corresponding Landing Zones.
According to TGS Well Data Analytics, the Wolfcamp Shale is one of the top-producing zones in the Northern Delaware Basin, as shown in Figure 2. This geological area offers multiple horizontal drilling targets. Leveraging TGS Well Economics data, Matador Resources' top five areas, along with their newly acquired assets labeled A – E in Figure 1, demonstrate an Average IRR of 35.1%, an NPV of $12,179, a Breakeven Price of $35.7, and a Payback Period of just 2.9 years. These insights enable swift comparative analysis and evaluation, empowering informed decision-making and successful navigation of today’s dynamic economic landscape.
Table 1. Matador Resources' top five areas and newly acquired assets: Average IRR, NPV, Breakeven Price, and Payback Period, calculated using TGS Well Economics data.
Matador Resources' recent acquisitions align with its growth strategy and integrated approach, optimizing gas flow and market conditions in the Midstream market. These efforts have strengthened the company's financial position and highlighted the long-term benefits of vertical integration.
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