Matador announces bolt-on acquisition of Advance Energy Partners for $1.6B

Matador announced that a wholly-owned subsidiary of Matador has entered into a definitive agreement to acquire Advance Energy Partners Holdings, including certain oil and natural gas producing properties and undeveloped acreage located in Lea County, New Mexico and Ward County, Texas. The consideration for the Advance Transaction will consist of an initial cash payment of $1.6B, subject to customary closing adjustments, plus additional cash consideration of $7.5M for each month during 2023 in which the average oil price as defined in the securities purchase agreement exceeds $85 per barrel. Advance is a portfolio company of EnCap Investments L.P. The Advance Transaction is subject to customary closing conditions and is expected to close early in the second quarter of 2023 with an effective date of January 1. Matador estimates total proved oil and natural gas reserves associated with these properties of approximately 106.4 million BOE at December 31, 2022. PV-102 of the proved oil and natural gas reserves of these properties at December 31, 2022 was approximately $2.86B using the same unweighted arithmetic average first-day-of-the-month prices for the previous 12-month period being used to value the company’s reserves at December 31, 2022, which are $90.15 per barrel of oil and $6.36 per MMBtu of natural gas. Matador expects to add future proved reserves and reserves value as a result of the development of these properties going forward. These reserves estimates were prepared by Matador’s engineering staff and audited by Netherland, Sewell & Associates, Inc., independent reservoir engineers. Estimated production in the first quarter of 2023 of 24,500 to 25,500 barrels of oil and natural gas equivalent per day. Approximately $225M to $275M is expected to be incurred between the anticipated closing date and year end 2023.