Matador’s San Mateo Midstream to Acquire Cardinal Midstream for $752M
San Mateo Midstream, the 51%-owned joint venture between Matador Resources Company and Five Point Infrastructure, has agreed to acquire the operating subsidiaries of Cardinal Midstream Partners for $752 million in cash, strengthening its position as a leading midstream operator in the Delaware Basin.
The acquisition expands San Mateo’s natural gas gathering, processing and transportation network with Cardinal’s portfolio of nearly 150 miles of high- and low-pressure natural gas gathering pipelines and 320 MMcf/d of natural gas processing capacity located in the core of the Delaware Basin.
Matador said the transaction is expected to be cash neutral to the company. It plans to fund any required capital contributions to San Mateo through distributions from the joint venture and/or proceeds from a potential drop-down or sale of a portion of Matador’s wholly owned midstream assets.
San Mateo expects the acquisition to be immediately accretive to adjusted EBITDA and cash flow. The Cardinal assets are projected to generate up to $110 million in annualized adjusted EBITDA by 2028 once the processing complex reaches full utilization.
The transaction will be financed primarily through a new term loan of up to $650 million under San Mateo’s existing credit facility, led by PNC Bank and Truist Bank. The balance of the purchase price will be funded through a combination of cash on hand, borrowings under the existing credit facility and partner capital contributions.
“We believe the acquisition—which is being funded by midstream—is the next step in the growth of San Mateo and a continuation of the strategic vision Matador and Five Point share for our joint midstream business to be a leading midstream company in the Delaware Basin, providing flow assurance to Matador and third-party customers,” said Joseph Wm. Foran, founder, chairman and CEO of Matador and founder of San Mateo.
The acquisition is expected to close on or before July 31, 2026. Baker Botts LLP and O’Melveny & Myers LLP advised San Mateo, while Willkie Farr & Gallagher LLP represented Cardinal Midstream.