Matador Resources Company, an independent energy company focused on the exploration, development, production and acquisition of oil and natural gas resources in the U.S., has acquired EnCap Investments-backed Advance Energy Partners Holdings LLC.
The deal includes certain oil and natural gas-producing properties and undeveloped acreage located in Lea County, N.M., and Ward County, Texas. The consideration for the transaction will consist of an initial cash payment of $1.6 billion, 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 per barrel.
“The specific location and quality of these select assets, the strong existing cash flow, the multi-pay potential, the cost savings associated with developing these assets via longer laterals on multi-well pads with centralized facilities, the midstream synergies with Pronto and the held-by-production status of the acreage were key features that attracted us to this unique opportunity and should significantly enhance our already strong Delaware Basin portfolio,” states Joseph Foran, Matador’s founder, chairman and CEO. “This acquisition also provides us with increased operational scale in the Delaware Basin, which we expect will improve our overall rates of return and unit-of-production costs.
Baker Botts LLP served as legal advisor to Matador for the transaction. Vinson & Elkins LLP served as legal advisor and JP Morgan served as financial advisor to Advance.