Matador Resources closed a deal adding subsidiary Pronto Midstream to its 51%-owned joint venture with Five Point Energy. (Source: Shutterstock)
Matador Resources (MTDR) said Dec. 19 it has closed a deal to add its Pronto Midstream subsidiary to its joint venture (JV) with Five Point Energy.
Matador, which owns a 51% stake of the midstream JV, said that San Mateo now has a total estimated asset value of more than $1.5 billion net to Matador. Pronto Midstream was valued at approximately $600 million, the company said.
Matador received $220 million in upfront cash plus for Pronto and can receive up to $75 million in performance incentive payments. Pronto Midstream is a 45-mile, natural-gas gathering network in New Mexico’s Eddy and Lea counties. San Mateo Midstream has 140 miles in natural gas gathering and processing assets in Eddy and Loving counties, Texas.
“This transaction is expected to have substantial benefits for Matador and its shareholders,” Joseph Wm. Foran, Matador’s founder, chairman and CEO, said in a press release.
Foran said the addition of Pronto increases flow assurance to San Mateo’s third party customers and provides a long-term sour gas solution in northern Lea County, New Mexico.
The deal also expedites the expansion of the Marlan Processing Plant, which is approaching its designed capacity of 260 MMcf as early as 2026, he said. After the expansion, San Mateo will have a gas processing capacity of 700 MMcf. The expansion remains on time and on budget and is expected to come online in the first half of 2025.
As part of the transaction, Matador entered into agreements for sour gas treatment by Northwind Midstream, a Five Point affiliate.
“This sour gas solution is expected to allow Matador to continue with its development plans in the Advance acreage it acquired in 2023 as well as on other acreage Matador and its third-party customers have acquired in northern Lea County, New Mexico,” Foran said.
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