Matador Acquires 16,000 Delaware Basin Acres in $1.28 Billion Deal
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Matador Resources has reached an agreement to acquire Permian basin operator Paloma Permian LLC, a portfolio company of EnCap Investments, for $1.275 billion in cash. The acquisition includes 16,235 net undeveloped acres in Lea and Eddy counties, New Mexico, along with producing properties projected to average 11,100 barrels of oil equivalent per day (57% oil) in the third quarter of 2026. The deal, which is expected to close in the fourth quarter, adds an estimated 55 million barrels of oil equivalent in proved reserves and over 156 net drilling locations in the Wolfcamp and Bone Spring formations.
In a separate transaction, Matador is acquiring mostly undeveloped acreage from Ridge Runner Resources II, another EnCap portfolio company. This acquisition expands Matador’s footprint in the Woodford formation across southeast New Mexico and West Texas, bringing its total Woodford position to approximately 50,000 contiguous net acres and expanding its overall Delaware basin holdings to about 240,000 net acres.
The expansion follows Matador’s successful validation of the Woodford play in New Mexico. The company’s Rae’s Creek exploratory well achieved an initial 24-hour production rate exceeding 2,200 boed (72% oil). On a 60-day cumulative oil production basis, the well has outperformed the average Texas Woodford well by roughly 20%, confirming the commercial potential of the formation in this area of the Delaware basin.
Matador expects the Ridge Runner acquisition to add more than 150 operated Woodford drilling locations. The deal is anticipated to enable longer lateral wells, larger development programs, and improved operational efficiencies, which could lower well costs by 30% to 40% over the next 12 to 18 months.
Joseph Wm. Foran, founder, chairman, and CEO of Matador, expressed excitement over the Delaware basin expansion and noted that the Rae’s Creek results demonstrate the commercial viability of the Woodford formation in southeast New Mexico, paving the way for future development. These transactions align with Matador’s ongoing strategy to grow its operated presence in the core Delaware basin and increase its exposure to emerging unconventional plays.
