US Shale Consolidation: Matador Adds to Permian Position for $1.9 Billion

The Dallas-based tight oil producer will gain 33,500 acres and approximately 25,500 BOE/D from the latest deal to reshape the US shale sector.

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Matador Resources has announced the acquisition of private-equity-backed Ameredev II for $1.9 billion in cash.

Described as a “bolt-on” deal by Dallas-based Matador, the move will increase the tight oil producer’s output in the Permian Basin by approximately 25,500 BOE/D, bringing its total to 182,750 BOE/D, with crude accounting for about 60% of the output. This positions Matador as the seventh-largest oil company in New Mexico by production.

The transaction, expected to close in the third quarter of the year, reflects a persistent wave of consolidation that is reshaping the US shale landscape in recent weeks. In May, ConocoPhillips announced a $17.1 billion acquisition of rival Marathon Oil Corp., and Crescent Energy purchased SilverBow Resources for $2.1 billion.

The deal to buy Ameredev II includes 33,500 contiguous net acres in the Permian's Delaware Basin which straddles portions of New Mexico and Texas, expanding Matador’s total holdings in the region to nearly 192,000 acres. The newly acquired acreage also overlies the prolific Bone Spring and Wolfcamp formations, with 82% held by production through 371 net operated well locations.

Matador also announced that the deal will boost its proven reserves to approximately 578 million BOE, an increase of about 118 million BOE.

Ameredev II is a portfolio company of EnCap Investments which tallied up more than $8.4 billion in exit deals last year— surpassing its earnings from the previous 5 years combined. One of those deals from 2023 involved Matador which purchased Advance Energy Partners from EnCap for $1.6 billion.

With Matador's latest move, the "second land grab" appears to be well underway in the Permian Basin following the period between 2016 and 2019 as pubic companies compete for increasingly scarce untapped drilling inventory, said Andrew Dittmar, principal analyst at Enverus Intelligence Research.

"That has proven a gold mine for private-equity firms that had built sizable positions in the Delaware and Midland basins including EnCap. These private firms have seen the value of their assets soar as a dwindling set of opportunities to acquire deals drives prices higher," said Dittmar.