Matador Announces Deal to Acquire Advance Energy Partners
1/24 3:39 PM
Matador Announces Deal to Acquire Advance Energy Partners OAKHURST, N.J. (DTN) -- Matador Resources Company today announced that a wholly owned subsidiary has entered into a definitive agreement to acquire Advance Energy Partners Holdings, LLC, including certain oil and gas producing properties and undeveloped acreage located in Lea County, New Mexico, and Ward County, Texas. The consideration for the Advance Transaction for an initial cash payment of $1.6 billion, subject to customary closing adjustments, plus additional cash consideration of $7.5 million for each month during 2023 in which the average oil price as defined in the securities purchase agreement exceeds $85 bbl. Advance is a portfolio company of EnCap investments L.P. The deal is expected to close early in the second quarter, with an effective date of Jan. 1, 2023. Estimated production from the assets in the first quarter is 24,500 to 25,500 barrels of oil and natural gas equivalent per day, 74% oil. Approximately 18,500 net acres, 99% held by production, are in the core of the northern Delaware Basin, most of which is strategically located in Matador's Ranger asset area in Lea County, near Matador's existing properties. There are 203 net gross horizontal locations identified for future drilling, including prospective targets throughout the Wolfcamp, Bone Spring and Avalon formations. Estimated drilling, completing and equipping capital expenditures of $300 to $350 million in 2023 is based upon one drilling rig operating on the Advance properties. "Matador is very excited by this strategic bolt-on opportunity as well as the opportunity to work with Avance and EnCap. We view this transaction as a unique value-creating opportunity for Matador and its shareholders," said Joseph Foran, Matador's founder, chairman and CEO. "We evaluated this transaction based on rock quality, the strong existing production and cash flow profile, the potential reserve additions, the high-quality inventory, the available midstream opportunities and the strategic fit within our existing portfolio of properties." Foran said Matador intends to "fund the Advance Transaction with a combination of cash on hand, free cash flow prior to closing and borrowings under our credit agreement, under which we expect to increase our elected commitment in connection with this transaction." (c) Copyright 2023 DTN, LLC. All rights reserved.
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