Matador Resources closes Paloma acquisition for $1.255 billion in cash
The oil and gas producer added 16,500 net acres in New Mexico and expects to pay down debt by up to $400 million.
Key takeaways
- Matador Resources Company (MTDR) closed the acquisition of Paloma Permian LLC for an as-adjusted cash price of $1.255 billion on Oct. 1, 2026. The deal adds 16,500 net acres in New Mexico, 59 approved drilling permits, and over 156 net locations.
Matador Resources Company (MTDR) said Wednesday it has completed its acquisition of Paloma Permian LLC from EnCap Investments L.P. portfolio companies for an as-adjusted cash purchase price of $1.255 billion.
The deal was originally announced on July 22, 2026, with an initial cash price of $1.275 billion, subject to customary adjustments. Matador said in a filing that the transaction closed on Oct. 1, 2026.
The acquisition adds approximately 16,500 net primarily undeveloped acres in Eddy and Lea Counties, New Mexico, most of which is held by production. The target properties include over 156 net locations normalized to two-mile laterals across nine or more potential targeted benches and 59 approved drilling permits.
Founder, Chairman and CEO Joseph Wm. Foran said, On behalf of the board and executive committee, I would like to acknowledge the extra effort and assistance of everyone at Paloma, EnCap and Matador to close this important transaction as agreed.
Matador expects to start drilling operations on up to 25 wells associated with the Paloma acreage by the end of 2027. Production from the acquired properties has outperformed the company underwriting estimates by approximately 10% since June 1, 2026, driven largely by Paloma newest wells in Eddy County.
Following the fourth-quarter closings, Matador expects to pay down its reserves-based lending credit facility led by PNC Bank by approximately $350 million to $400 million, depending on commodity prices. The company also anticipates closing another transaction with Ridge Runner Resources II, LLC later in October 2026.
Baker Botts L.L.P. served as legal counsel to Matador. Vinson & Elkins LLP acted as legal advisor and RBC Richardson Barr served as financial advisor to Paloma and EnCap.