Tom Brown Inc., Denver, (NYSE: TBI) has purchased privately held Matador Petroleum Corp., Dallas, for about $373 million in cash and assumed debt. The deal will increase the independent's proved reserves 37%-adding an estimated 269 billion cu. ft. equivalent (Bcfe) for a total of more than 1 trillion cu. ft. equivalent (Tcfe). It also diversifies Tom Brown's asset base away from the Rockies and Canada. Tom Brown's proved reserves will be 63% in the Rockies and Canada (compared with 85% now), 19% in East Texas and 18% in the Permian Basin and other areas, according to Petrie Parkman & Co. Matador, which is active primarily in the East Texas and Permian basins, produced about 61 million cu. ft. equivalent per day in the first quarter of 2003. Some 36% of Matador's reserves are proved undeveloped. They are 86% gas and have a reserve-life index of 12 years. The assets include approximately 56,000 net developed acres and 111,000 net undeveloped acres. Matador operates a majority of its assets. Matador shareholders will receive $17.53 per share, and Tom Brown will assume approximately $105 million of net debt. Unocal Corp. (NYSE: UCL), which owns a 30% stake in Matador, has tendered its shares. Tom Brown intends to fund the deal initially with bank debt. Matador is the 15th-largest producer in southeastern New Mexico and the fourth-largest in the Freestone County area of the East Texas Basin. For the past four years, Matador has grown almost exclusively through the drillbit. The company had planned in 2001 to go public but withdrew the offering when equity markets tumbled. -Petroleum Finance Week