Matador Resources Co. agreed to acquire a gathering and processing system in New Mexico’s Eddy and Lea counties from Summit Midstream Partners LP for $75 million, adding to Matador’s midstream portfolio in the Permian Basin.
“This acquisition is a further extension of our strategy to control our midstream operations and to use our midstream assets to further enhance and assist our operations,” commented Joseph Wm. Foran, Matador’s founder, chairman and CEO, in a company release.
On June 9, Matador said it had entered into an agreement with a subsidiary of Summit to acquire Summit’s Lane Gathering and Processing System. In connection with the transaction, the company will also assume certain takeaway capacity on the Double E Pipeline, a FERC-regulated natural gas pipeline operated by Summit.
The Lane G&P System includes a 60 MMcf/d cryogenic natural gas processing plant, three compressor stations and approximately 45 miles of natural gas gathering pipelines. Foran said the company expects to expand the Lane G&P System to support Matador’s environmental, safety, exploration and production efforts in northern Eddy and Lea counties located within the Delaware Basin.
Matador began its initial midstream build-out in the Delaware Basin in 2015-2016, according to an investor presentation. The company has since expanded its midstream footprint in the Delaware through the San Mateo I and San Mateo II joint venture partnerships with Five Point Energy LLC.
San Mateo serves as the primary midstream solution for its anchor customer, Matador, and provides midstream services to other E&P operators in the Delaware Basin.
A subsidiary of Matador and Five Point, San Mateo owns and operates oil, natural gas and produced water gathering and transportation systems in Eddy County, N.M., and Loving County, Texas, the Black River Processing Plant in Eddy County with a designed inlet capacity of 460 MMcf/d of natural gas and 13 commercial salt water disposal wells in Eddy County and Loving County with a combined designed disposal capacity of 335,000 bbl/d.
“We are also pleased to acquire additional takeaway capacity from the Delaware Basin to ensure our and our third-party customers’ natural gas is transported to market,” Foran continued in the June 9 release. “We thank both the Summit and Matador teams for their diligence in negotiating this transaction and look forward to closing later this month.”
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