In the western part of the Permian Basin, also known as the Delaware Basin, the Lower Permian age Bone Spring (also called the Leonardian) and Wolfcamp formations are several thousand feet thick and contain stacked layers of shales, sandstones, limestones and dolomites.
Matador Resources has announced a significant acquisition to expand its presence in the Delaware Basin. The company is set to acquire Advance Energy for approximately $1.91 billion, a strategic move that enhances its footprint in one of the most prolific oil-producing regions in the United States.
The acquisition includes 18,500 net acres in the Northern Delaware Basin, primarily held by production, and is expected to be highly accretive to Matador’s key financial and operational metrics. The deal will add high-quality inventory in key development zones, including the Avalon, Bone Spring, and Wolfcamp formations. Notably, this expansion includes 203 net locations, with a significant number of these being operated by Matador (MarketScreener) (OilPrice.com).
This acquisition is part of a broader consolidation trend in the Permian Basin, where the quality of the remaining acreage is increasingly scrutinized. Analysts have noted that much of the prime drilling locations in the basin have already been exploited, leading companies to acquire existing production and proven reserves to maintain their output levels (OilPrice.com).
Matador’s acquisition strategy involves expanding its acreage and enhancing its midstream capabilities. Integrating Advance Energy’s assets is expected to provide synergies with Matador’s existing midstream operations, potentially boosting efficiency and profitability. The deal, expected to be completed in the third quarter, includes a 19% stake in Pinon Midstream, which owns assets in southern Lea County in New Mexico.
This move by Matador comes amid a backdrop of intense merger and acquisition activity in the Permian Basin, which saw deals surpassing $100 billion in 2023. This trend reflects a strategic shift by oil and gas companies to consolidate resources and streamline operations in a highly competitive and resource-intensive environment (OilPrice.com) (OilPrice.com).
Overall, Matador’s acquisition of Advance Energy positions it well to capitalize on the remaining opportunities in the Delaware Basin, ensuring continued growth and resilience in a challenging market.
Company Profile
Matador is an independent energy company engaged in exploring, developing, producing, and acquiring oil and natural gas resources in the United States, emphasizing oil and natural gas shale and other unconventional plays. Its current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Eagle Ford shale play in South Texas, and the Haynesville shale and Cotton Valley plays in Northwest Louisiana.
Additionally, Matador conducts midstream operations in support of its exploration, development, and production operations and provides third parties with natural gas processing, oil transportation services, natural gas, oil, and produced water gathering services, and produced water disposal services.
