Yahoo Finance Matador Agrees to Buy Permian Oil Assets Worth $1.9 Billion
(Bloomberg) -- Oil producer Matador Resources Co. agreed to buy assets in the Permian Basin from a portfolio company of EnCap Investments LP for $1.9 billion cash, the latest in a series of shale industry tie-ups.
Most Read from Bloomberg
US Inflation Broadly Cools in Encouraging Sign for Fed Officials
Hunter Biden Was Convicted. His Dad’s Reaction Was Remarkable.
Blinken Casts Doubt on Cease-Fire Hopes After Hamas Responds
Stock Bull Run Breaks Record on Fed Decision Day: Markets Wrap
The deal includes oil and gas producing properties and undeveloped acreage in New Mexico and West Texas owned by Ameredev II Parent LLC, Matador said in a Wednesday statement. Matador, which primarily operates in the region, said the assets will provide more contiguous acreage for the firm to drill longer lateral wells and more efficiently tap the oil-rich rocks in the western Permian. The deal includes a 19% stake in Piñon Midstream LLC, which has pipeline and compression assets in New Mexico.
Matador shares initially rose as much as 3.6% after the transaction was announced. The stock has since retreated, falling 0.6% as of 11:45 a.m. in New York, tracking declines of industry peers as oil prices eased.
The acquisition, which is expected to close late in the third quarter, is among a wave of deals across the shale patch in the past year. With US shale output likely to peak sometime in the 2030s, producers are keen to capture core acreage in the Permian and other basins to extend their runway of drilling locations.
“As much as people are talking about inventory these days, their inventory fits very well with us,” Matador Chief Executive Officer Joseph Foran said during a conference call with analysts. Foran and his wife founded the predecessor company of Matador in 1983 with $270,000 from friends.
(Adds shares and updates details from second paragraph.)
Most Read from Bloomberg Businessweek
China’s Economic Powerhouse Is Feeling the Brunt of Its Slowdown
The World’s Most Online Male Gymnast Prepares for the Paris Olympics
As Banking Moves Online, Branch Design Takes Cues From Starbucks
Food Companies Hope You Won’t Notice Shortages Are Raising Prices
©2024 Bloomberg L.P.
