(WO) — Matador Resources has completed its previously announced $1.255 billion acquisition of Paloma Permian LLC from EnCap Investments, expanding its Delaware Basin position with approximately 16,500 net acres and more than 156 net drilling locations in southeastern New Mexico.
The acquired acreage is located in Eddy and Lea counties, with most of the position held by production. Matador identified more than 156 net drilling locations, normalized to two-mile laterals, across at least nine potential target benches. The assets also include 59 approved drilling permits.
Matador expects to commence drilling operations on up to 25 wells associated with the acquired acreage by year-end 2027.
According to the company, production from the acquired assets has exceeded its underwriting estimates by approximately 10% since June 1, 2026, largely driven by the performance of Paloma’s newer wells in Eddy County.
“We believe the Paloma assets hold some of the highest hydrocarbon resources per acre in the Lower 48,” said Joseph Wm. Foran, Matador’s founder, chairman and CEO.
Foran said the acquisition also presents opportunities to improve upstream capital efficiency and expand utilization of Matador’s wholly owned midstream infrastructure and its 51%-owned San Mateo Midstream system.
The transaction is part of Matador’s broader effort to expand its Delaware Basin acreage position. Following the Paloma acquisition and the anticipated closing of its previously announced Ridge Runner Resources II acquisition later in October, Matador expects to hold approximately 240,000 net acres in the core Delaware Basin during the fourth quarter of 2026.
Combined with acreage acquired through the May 2026 federal lease sale, the transactions are expected to increase Matador’s net acreage position by nearly 20% compared with its approximately 203,000 net acres in October 2025.
Matador expects to integrate the Paloma assets into its existing development program and provide additional details on its fourth-quarter drilling plans during its third-quarter earnings announcement in early November.
The company also expects to reduce borrowings under its reserve-based lending facility by approximately $350 million to $400 million following the anticipated fourth-quarter acquisition closings, depending on commodity prices.
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