Matador Pays About $1.255 Billion Cash To Close Paloma Deal, Gaining 59 Approved Drilling Permits
The producer says wells tied to the deal are running about 10% above its estimates and it expects to cut credit-facility debt by $350-400 million.
Matador Resources closed its purchase of EnCap-backed Paloma Permian on Thursday, paying an as-adjusted $1.255 billion in cash, according to an 8-K filed Monday. The contract price was $1.275 billion, and the final figure remains subject to customary post-closing adjustments.
What the filing and release say
The 8-K says a Matador subsidiary bought all membership interests in Paloma for $1.275 billion, adjusted for items such as working capital and title and environmental defects. The target owns mostly undeveloped acreage and producing oil and gas properties in Eddy and Lea Counties, New Mexico. The purchase agreement is dated July 22, 2026.
The company's press release says the assets add over 156 net locations, normalized to two-mile laterals, across nine or more potential targeted benches. They also carry 59 approved drilling permits and about 16,500 net, primarily undeveloped acres, most of it held by production.
Matador expects to start drilling up to 25 Paloma wells by year-end 2027.
What it changes
Founder, Chairman and CEO Joseph Wm. Foran said production tied to the deal has beaten Matador's underwriting estimates by about 10% since June 1, 2026, largely because of Paloma's newest wells in Eddy County. He added that "most of the acquisition's current value stems from its undeveloped drilling locations."
On debt, Matador expects to pay down its reserves-based lending credit facility, led by PNC Bank, by about $350-400 million after the fourth-quarter closings, depending on commodity prices. Foran said the deal should add to free cash flow and planned debt repayments.
A second purchase, of Ridge Runner Resources II acreage, is expected to close later in October. With both deals in place, Matador expects about 240,000 net acres in the core of the Delaware Basin in the fourth quarter of 2026. Together with the May 2026 federal lease sale, the company said, that lifts net acreage almost 20% above its October 2025 position of 203,000 net acres.
What to watch
Matador plans to discuss Paloma, including its fourth-quarter plans, in its third-quarter earnings release and call in early November. Ridge Runner is due to close before then.
The next checkpoint is the Ridge Runner closing later this month, followed by the early-November call where Matador has said it will lay out its Paloma plans.
