Matador Resources Shares Rise 5% in 8 Days Since M&A Deal

Key numbers

Deal value	$1.3B
Share of market cap	19.3%
Share of annual revenue	34.9%

Key highlights

• Adds 16,500 net primarily undeveloped acres in the Delaware Basin core
• Includes 156 net drilling locations and 59 approved drilling permits
• Final as-adjusted closing purchase price totaled $1.255 billion in cash
• Recent performance of acquired wells exceeded underwriting estimates by 10%
• Matador plans to repay $350 million to $400 million on its credit facility in Q4

What Is the Deal?

Matador Resources Company, through its subsidiary MRC Ranger, LLC, has finalized the purchase of Paloma Permian, LLC from EnCap Investments L.P. portfolio entities. The transaction involves the transfer of all outstanding membership interests for a total cash sum of $1.275 billion, subject to standard closing adjustments. The primary assets acquired consist of proved undeveloped acreage and producing oil and natural gas properties situated within the Delaware Basin. This deal significantly expands Matador's regional presence, bringing its total core acreage to approximately 240,000 net acres by the end of the current year.

Deal Structure & Terms

• Funded entirely via cash consideration totaling $1.255 billion after adjustments
• Closing price reflects deductions for title defects, environmental issues, and working capital
• MRC Energy Company provided a full guarantee for the purchaser's obligations
• Matador plans to reduce its reserves-based lending facility by up to $400 million in Q4
• Purchase includes 59 already approved drilling permits to accelerate immediate development

Strategic Rationale

“We believe the Paloma assets hold some of the highest hydrocarbon resources per acre in the Lower 48. This acreage also provides Matador with great value creation opportunities for upstream capital efficiencies, for its wholly-owned midstream system and for its 51%-owned San Mateo Midstream system.”

Financial Context

The acquisition represents a substantial capital commitment relative to Matador's $6.62 billion market capitalization. The company currently reports annual revenues of $3.66 billion and carries a price-to-earnings ratio of 9.18x. Since October 2025, Matador has grown its net acreage position by nearly 20 percent, driven by strategic transactions including the Paloma deal and the Ridge Runner Resources II acquisition. Management highlights that current production from the acquired Paloma wells has outperformed initial underwriting estimates by 10 percent, suggesting a strong immediate contribution to free cash flow as the firm prioritizes debt repayment.

Up 4.4% since our story on 5 Oct: $53.50 when we broke it → $55.88 at the close on 13 Oct. Daily closing prices. Source: Yahoo Finance.

Show the prices

14 Sep	$61.18
15 Sep	$63.17
16 Sep	$57.73
17 Sep	$57.67
18 Sep	$56.81
21 Sep	$54.09
22 Sep	$51.86
23 Sep	$52.12
24 Sep	$52.97
25 Sep	$51.55
28 Sep	$51.45
29 Sep	$50.69
30 Sep	$51.58
1 Oct	$52.96
2 Oct	$53.50
5 Oct	$53.01
6 Oct	$52.91
7 Oct	$52.85
8 Oct	$54.48
9 Oct	$54.28
12 Oct	$55.11
13 Oct	$55.88

Industry Landscape

The Permian Basin remains the most active region for energy consolidation in the United States, as producers seek to secure long-term inventory in Tier-1 acreage. High-profile mergers and acquisitions in the Delaware sub-basin have become frequent as companies prioritize scale and midstream integration to lower per-barrel operating costs. Matador's expansion reflects a broader industry trend of mid-cap exploration and production firms consolidating private-equity-backed assets to compete with larger integrated majors. This transaction strengthens Matador's position among independent producers by increasing its core footprint amid tightening supply for undeveloped drilling locations.

Management commentary

“We believe the Paloma assets hold some of the highest hydrocarbon resources per acre in the Lower 48. This acreage also provides Matador with great value creation opportunities for upstream capital efficiencies, for its wholly-owned midstream system and for its 51%-owned San Mateo Midstream system.”

Matador Resources Co · financial snapshot

Share price	$53.50
Market cap	$6.6B
Revenue (annual)	$3.7B
P/E (TTM)	9.2×
1-month price change	-9.64%
Sector	EnergyOil & Gas E&P

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.