By Connor Hart
Matador Resources said its majority-owned midstream joint venture has entered a deal to acquire the operating subsidiaries of Cardinal Midstream Partners for $752 million.
The company said Monday that it expects the transaction to be cash neutral for San Mateo Midstream, its joint venture with Five Point Infrastructure.
Cardinal's assets will complement San Mateo's existing natural gas gathering and processing systems, as well as allow San Mateo to move natural gas more easily throughout the northern Delaware Basin in southeastern New Mexico and western Texas, Matador said.
The assets consist of a cryogenic natural gas processing plant complex, as well as roughly 145 miles of low- and high-pressure natural-gas-gathering pipelines throughout the region.
The deal will expand San Mateo's operations, adding new natural gas customers for San Mateo. It would also increase its designed natural-gas-processing capacity to more than one billion cubic feet per day, and expand the company's gathering systems to over 800 miles of pipeline, according to Matador.
San Mateo will finance the deal, in part, through a new term loan of up to $650 million under its existing credit facility, it said.
"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," Matador Chief Executive Joseph Wm. Foran said.
Write to Connor Hart at [email protected]