Dallas-based Matador Resources said Thursday that it has acquired Paloma Permian from Houston private equity firm EnCap Investments for $1.275 billion in cash. The Dallas oil and gas company said it also acquired acreage in the Woodford shale play in West Texas and Southeast New Mexico from Ridge Runner Resources, which is another EnCap portfolio company. Terms of this transaction weren’t disclosed.
Cale Curtain is Matador’s general counsel. Baker Botts advised the company led by Preston Bernhisel. Vinson & Elkins provided counsel to Paloma Permian, Ridge Runner and EnCap. The V&E team was led by Bryan Loocke and Michael Zarcaro.
Matador said the deals are part of its brick-by-brick strategy. Earlier in July, the CDT Roundup reported on the company’s acquisition of Cardinal Midstream Partners, which was another EnCap holding, for $752 million in cash.
“Similar to Matador’s previous transactions with EnCap, and its portfolio companies, we anticipate this [Paloma]acquisition will be integrated efficiently into Matador’s operating plan, contribute to Matador’s cash flow generation and deliver significant efficiency gains, increases in oil and natural gas production, and reserve growth,” Matador Founder and CEO Joseph Wm. Foran said. “We anticipate our drilling and completions teams will work quickly to integrate efficiencies across this [Woodford] development area to reduce well costs between 30% to 40% in the next 12 to 18 months, similar to the incremental improvements we made at both our Stateline and Rodney Robinson assets acquired in 2018.”
Matador has acquired about 50,000 contiguous, undeveloped acres in the Woodford formation, and the company also owns about 240,000 acres in the Delaware Basin.
Paloma Permian operates 16,235 undeveloped acres in Eddy and Lea Counties in Southeast New Mexico, and Matador expects third-quarter production of about 11,100 barrels of oil equivalent per day.
RBC Richardson Barr acted as financial advisor to Paloma Permian, Ridge Runner and EnCap.
The Baker Botts team that advised Matador includes Dallas lawyers Rusty Shellhorn, Brendan Waller and Stephen Marcus; Houston partners Alia Heintz and Anna Irion; and Houston associates Megan Young, Paige Meredith, Lucy Shoemaker, Abby Kite, Jared Meier, Meaghan Christner and Andrew Crayden.
Aileen Hooks advised from Austin and Michael Bodosky from Washington, D.C.
The Vinson & Elkins team includes Rivers Stephens, Michael Gassman, Shiyuan Wang, Oscar Miller, Peter Goetschel, Dan Henderson, Anthony DeLauro, Matt Dobbins, Becky Baker, David D’Alessandro and David Lassetter in Houston. Also advising were Sarah Mitchell, Victoria Bahrami-Negad, Megan James, Todd Way, Jeff Carr and Patrick Darby in Dallas. Eric Hechler advised from New York with Evan Miller, Kelly Rondinelli and Rami Rashmawi in Washington, D.C.