Matador Resources finalized the $1.255 billion acquisition of Paloma Permian LLC from EnCap Investments, thus expanding its position in the Delaware Basin by 16,500 acres and over 156 drilling locations in southeastern New Mexico.
Acquisition Details
The acquired lands are located in Eddy and Lea counties and are primarily under production. Matador has identified over 156 drilling locations that have been normalized using two-mile laterals and are located in at least nine target layers with potential. These assets also include 59 approved drilling permits.
Future Plans
Matador expects to begin drilling operations on up to 25 wells related to the acquired lands by the end of 2027. According to the company's statements, production from the acquired assets is expected to be approximately 10 percent higher than initial estimates starting June 1, 2026, primarily due to the performance of newer Paloma wells in Eddy County.
Joseph V. Foran, founder and CEO of Matador, stated that Paloma's assets have some of the highest hydrocarbon resources per acre in the lower states. Foran also noted that this acquisition provides opportunities to improve capital efficiency in the upstream sector and increase the utilization of wholly-owned midstream infrastructure and the San Mateo midstream system, of which 51% is owned by the company.
This deal is part of Matador's broader effort to expand its position in the Delaware Basin. With the acquisition of Paloma and the expected closing of the previous acquisition of Ridge Runner Resources II in late October, Matador anticipates holding approximately 240,000 acres in the core of the Delaware Basin by the fourth quarter of 2026.
Considering the lands acquired through federal auction in May 2026, these transactions are expected to increase Matador's net position by nearly 20 percent compared to approximately 203,000 acres in October 2025.
Matador also expects to integrate the Paloma assets into its existing development plan and will provide more details on drilling plans in the fourth quarter when announcing third-quarter financial results in early November.
The company also anticipates reducing its borrowings under its reserve-based lending facility by $350 to $400 million following the expected closing of the acquisitions in the fourth quarter, depending on commodity prices.
