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Matador Resources Company Announces Expansion of San Mateo’s Delaware Basin Footprint Through the Acquisition of Cardinal Midstream

MTDR
  • San Mateo Midstream, LLC, a 51%-owned joint venture of Matador Resources Company & Five Point Infrastructure, entered a definitive agreement to acquire Cardinal Midstream Partners, LLC for $752 million in cash.
  • The Cardinal Acquisition is expected to close on or before July 31, 2026, subject to customary closing conditions.
  • Matador anticipates the transaction to be cash neutral by funding any required contributions via San Mateo distributions, potential asset drop-downs, or sales of Matador's wholly-owned midstream assets.
  • Cardinal's assets include a cryogenic natural gas processing plant in Loving County, Texas with 320 million cubic feet per day capacity, plus 145 miles of gathering pipelines in West Texas & southern Eddy County, New Mexico.
  • The acquisition will introduce nine new third-party customers to San Mateo, increasing its customer base, volume throughput, & revenue generation.
  • Post-acquisition, San Mateo's designed processing capacity is expected to exceed one billion cubic feet per day, with gathering systems expanding to over 800 miles of pipeline.
  • Synergies include enhanced flow assurance allowing gas volumes to move between Cardinal's Texas plant & San Mateo's Marlan & Black River plants in New Mexico.
  • Cardinal assets are expected to be immediately accretive to Adjusted EBITDA & cash flows, reaching up to $110 million annually by 2028 when the plant is fully utilized.
  • Financing involves a new term loan of up to $650 million led by PNC Bank & Truist Bank, due 364 days after closing, with the balance funded by cash on hand, existing credit facilities, & partner capital contributions.
  • The deal supports Matador's development of federal lease acreage in Lea County, New Mexico, & provides flow assurance for volumes from the Wolf asset area in Loving County, Texas.
  • Baker Botts L.L.P. & O'Melveny & Myers LLP served as counsel to San Mateo, while Willkie Farr & Gallagher LLP represented Cardinal.