Matador Resources Company Receives Approximately $113 Million From Sale of Piñon Midstream, LLC

Rhea-AI Summary

Matador Resources Company (NYSE: MTDR) has received approximately $113 million from the sale of its 19% ownership stake in Piñon Midstream, to Enterprise Products Partners L.P. The ownership interest was initially acquired through Matador's Ameredev acquisition in September 2024. The company plans to use the proceeds to reduce its outstanding borrowings under its $2.25 billion credit facility, which currently stands at $980 million.

Positive

• Received $113 million in cash proceeds from Piñon sale
• Will reduce outstanding borrowings from $980 million to $867 million
• Maintains access to substantial credit facility of $2.25 billion

Negative

• Significant debt level of $980 million under credit facility

Insights

Financial Analyst

The sale of Matador's 19% stake in Piñon Midstream for $113 million represents a strategic move to strengthen the company's balance sheet. The immediate application of proceeds to reduce outstanding borrowings from $980 million to $867 million on their $2.25 billion credit facility demonstrates prudent financial management. This debt reduction will improve the company's leverage ratios and interest expense burden, particularly beneficial in the current high-interest-rate environment. The transaction also simplifies Matador's business structure while maintaining operational relationships with Enterprise Products Partners for their southern Lea County assets. This non-core asset monetization allows Matador to focus on its primary operations while improving financial flexibility.

DALLAS--(BUSINESS WIRE)-- Yesterday, on October 28, 2024, Enterprise Products Partners L.P. (“Enterprise”) announced that it had completed its acquisition of Piñon Midstream, LLC (“Piñon”). Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced it had received its share of the sales proceeds, or approximately $113 million, for Matador’s approximate 19% ownership interest in the parent company of Piñon.

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “Congratulations to the Enterprise team on a smooth and successful transaction. We were pleased to have acquired an approximate 19% ownership interest in the parent company of Piñon in connection with our recent Ameredev acquisition that closed in September 2024. We look forward to working with Enterprise going forward as we develop our assets in southern Lea County, New Mexico. We plan to use the approximate $113 million in sales proceeds to pay down our $980 million in current outstanding borrowings under our $2.25 billion credit facility.”

About Matador Resources Company

Matador is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Its current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Additionally, Matador conducts midstream operations in support of its exploration, development and production operations and provides natural gas processing, oil transportation services, natural gas, oil and produced water gathering services and produced water disposal services to third parties.

For more information, visit Matador Resources Company at www.matadorresources.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking statements” are statements related to future, not past, events. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “could,” “believe,” “would,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “should,” “continue,” “plan,” “predict,” “potential,” “project,” “hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements include, but are not limited to, statements about the expected use of proceeds received from the sale of Piñon, anticipated benefits, opportunities and results with respect to the Ameredev acquisition, guidance, projected or forecasted financial and operating results, future liquidity, the payment of dividends, results in certain basins, objectives, project timing, expectations and intentions, regulatory and governmental actions and other statements that are not historical facts. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, disruption from the Company’s acquisitions, including the Ameredev acquisition, making it more difficult to maintain business and operational relationships; significant transaction costs associated with the Company’s acquisitions, including the Ameredev acquisition; the risk of litigation and/or regulatory actions related to the Company’s acquisitions, including the Ameredev acquisition, as well as the following risks related to financial and operational performance: general economic conditions; the Company’s ability to execute its business plan, including whether its drilling program is successful; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and natural gas liquids; its ability to replace reserves and efficiently develop current reserves; the operating results of the Company’s midstream oil, natural gas and water gathering and transportation systems, pipelines and facilities, the acquiring of third-party business and the drilling of any additional salt water disposal wells; costs of operations; delays and other difficulties related to producing oil, natural gas and natural gas liquids; delays and other difficulties related to regulatory and governmental approvals and restrictions; impact on the Company’s operations due to seismic events; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions, including the Ameredev acquisition; availability of sufficient capital to execute its business plan, including from future cash flows, available borrowing capacity under its revolving credit facilities and otherwise; the operating results of and the availability of any potential distributions from our joint ventures; weather and environmental conditions; and the other factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. For further discussions of risks and uncertainties, you should refer to Matador’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section of Matador’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Matador undertakes no obligation to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except as required by law, including the securities laws of the United States and the rules and regulations of the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241029475679/en/

Mac Schmitz

Senior Vice President - Investor Relations

(972) 371-5225

investors@matadorresources.com

Source: Matador Resources Company

FAQ

How much did Matador Resources (MTDR) receive from the Piñon Midstream sale?

Matador Resources received approximately $113 million from the sale of its 19% ownership stake in Piñon Midstream to Enterprise Products Partners.

What will Matador Resources (MTDR) do with the Piñon sale proceeds?

Matador Resources plans to use the $113 million in proceeds to pay down its outstanding borrowings under its $2.25 billion credit facility.

What is Matador Resources' (MTDR) current outstanding credit facility balance?

Matador Resources currently has $980 million in outstanding borrowings under its $2.25 billion credit facility.

When did Matador Resources (MTDR) acquire its stake in Piñon Midstream?

Matador Resources acquired its approximate 19% ownership interest in Piñon Midstream through the Ameredev acquisition in September 2024.