Matador Resources Acquires Paloma Permian LLC for $1.275 Billion
Matador Resources Company announced two significant deals that will expand its presence in the Delaware Basin. The first is a definitive agreement to acquire Paloma Permian LLC, a portfolio company of EnCap Investments, for $1.275 billion in cash. This acquisition includes approximately 16,235 net undeveloped acres in Eddy and Lea Counties, New Mexico, with third quarter estimated production of around 11,100 barrels of oil equivalent per day, 57% of which is oil.
The Paloma acquisition also brings an additional $816 million in PV-10 value as of May 31, 2026, and approximately 55 million barrels of oil equivalent in total proved reserves. Matador's confidence in the Woodford play was reinforced by results from its Rae's Creek exploratory well, which recorded initial production rates exceeding 2,200 barrels of oil equivalent per day, 72% oil.
The company also agreed to acquire primarily undeveloped acreage in the Woodford formation from Ridge Runner Resources II, another EnCap portfolio company. This deal brings Matador's total Delaware Basin acreage to approximately 240,000 net acres and its Woodford position to around 50,000 contiguous net acres.
Matador expects to fund both acquisitions through cash on hand and borrowings under its reserve-based lending credit facility, which was fully repaid in May 2026. The company anticipates generating approximately $1 billion in adjusted free cash flow for full-year 2026 and expects additional production from the acquired properties to help return its corporate leverage ratio closer to 1.0 times within 12 to 18 months of closing.