Matador Resources Inks $1.6B Deal to Acquire Encap-Backed Advance Energy
Dallas-based oil and gas producer Matador Resources will acquire EnCap Investments-backed Advance Energy Partners Holdings for an initial cash payment of $1.6 billion. The deal also includes additional cash of $7.5 million each month during 2023 if the average price of oil exceeds $85 per barrel.
The transaction includes certain oil and natural gas-producing properties and undeveloped acreage in New Mexico and Texas.
“Importantly, this acquisition should not significantly impact Matador’s leverage profile, as we expect to maintain a pro forma leverage ratio below 1.0x throughout 2023,” highlighted Matador founder, chairman and CEO Joseph Wm. Foran.
According to Matador, Advance Energy, which has about 18,500 net acres in the northern Delaware Basin, had an estimated production in the first quarter last year of 24,500 to 25,500 barrels of oil and natural gas equivalent per day.
Matador expects the acquired assets to generate forward one-year Adjusted EBITDA of approximately $475 million to $525 million at strip prices as of the middle of January.
The acquisition, the largest in Matador’s 20-year history, is expected to close early in the second quarter of this year.