Matador Resources in $1.1B Delaware lease buy

ByAmeliaMay 22, 20268 Mins read7

Key Terms

net revenue interest

financial

Net revenue interest is the percentage of production income a property owner actually keeps after other claims such as royalties, taxes or operator fees are paid. Think of it as your slice of the pie after everyone else takes their share; it tells investors how much cash from sales will flow to the owner and directly affects expected revenue, valuation and return on an oil, gas or mineral asset.

reserve-based lending (rbl) facility

financial

A reserve-based lending (RBL) facility is a credit line for oil and gas companies where lenders base how much they will lend on the estimated value of the company’s proved hydrocarbon reserves. Think of it like a home equity line that uses an appraisal of your house instead of paychecks: as reserve estimates, commodity prices or production change, the available borrowing limit can rise or fall. Investors watch RBLs because they determine a company’s short-term liquidity, borrowing capacity and bankruptcy risk.

adjusted free cash flow

financial

Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company’s financial health more clearly.

midstream

technical

Midstream refers to the phase in the energy supply chain that involves the transportation, storage, and processing of oil and natural gas after extraction from the ground, but before they are refined into usable products. For investors, midstream companies are important because they often generate steady income through fees for moving and storing energy resources, making them a key link between resource producers and consumers.

05/21/2026 – 04:40 PM

DALLAS–(BUSINESS WIRE)–
Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) announces the successful bolt-on acquisition of 5,154 net undeveloped acres in the core of the Delaware Basin as part of the Bureau of Land Management (BLM) Oil and Gas Lease Sale this week.

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “Matador is pleased to announce a $1.1 billion expansion of its premier Delaware Basin asset base in Southeast New Mexico through the recent BLM Lease Sale. The company acquired 5,154 net undeveloped acres, all of which are in the ‘core-of-the-core’ of the Delaware Basin and are strategic and highly complementary to Matador’s current acreage position. This acquisition not only extends the amount and the duration of Matador’s high-quality inventory and reserve base but also enhances the Company’s current assets with increased operating efficiencies. These lease acquisitions lend themselves to extended reach laterals of three miles or more, leveraging of existing facilities and infrastructure with Matador’s existing field teams, and increased midstream value from potential future volume additions in the Delaware Basin.

HIGHLIGHTS

Prime Location: Acquired acreage located in most prolific areas of Delaware Basin, with nine or more discrete prospective formations
Strategic Alignment to Current Asset Base: Acreage directly adjacent to existing operated units, enabling further operating efficiencies in already established cost-advantaged operating areas with current completed cost per lateral foot averages 10-20% below Matador’s corporate average
Improved Economics and Lease Terms: 87.5% net revenue interest with 10-year term across all depths
San Mateo Connectivity: Key tracts and associated wells and volumes strategically located near existing infrastructure expected to be additive to San Mateo’s volume throughput and growing revenue streams
Locations and Efficiencies: Adds over 141 net operated locations (normalized to 2-mile laterals), including extended reach laterals, U-Turn well designs, multi-well developments and completions, emerging horizons and targets, with opportunities for enhanced water recycling processes and natural gas takeaway capacity
Maintenance of Strong Balance Sheet: Purchase price of approximately $1.143 billion implies approximately $7.3 million per location after accounting for anticipated midstream value and is expected to be funded through cash on hand and existing credit facility

Mr. Foran further commented, “We believe our proven track record of value creation over the years de-risks this transaction as evidenced by our 2018 acquisition of the State line and Rodney Robinson Federal tracts. To date, Matador has already recovered all associated capital invested in lease acquisitions, drilling, and completions associated with those tracts, as well as generating an additional $1.9 billion in returns from these projects. We have full confidence that our reservoir, geology, midstream, and operating teams will maximize the value of these new tracts in a similar manner.

“Matador has fully repaid its reserve-based lending (RBL) facility, providing ample liquidity for this transaction. Furthermore, under our current operating plan, we anticipate full-year 2026 adjusted free cash flow to approach $1.2 billion (assuming strip oil and natural gas pricing as of early May 2026). This strong cash generation gives us clear line of sight to substantially pay down this acquisition by year-end 2026 and to fully pay down the RBL in the first half of 2027.

“We would like to thank our shareholders, bondholders, directors, banks, and staff here in Dallas and the field for their continued support and recognition of Matador’s asset quality, cash flow and our expectations for another record year for the Company. We hope to see you at our Annual Meeting on June 11, 2026, here in Dallas where we will have more operational and financial news to share.”

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 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 anticipated financial and operational impact of the lease acquisitions described above, guidance, projected or forecasted financial and operating results, future liquidity, the payment of dividends, the amount and timing of share repurchases, 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 Matador’s acquisitions or dispositions making it more difficult to maintain business and operational relationships; significant transaction costs associated with Matador’s acquisitions or dispositions; the risk of litigation and/or regulatory actions related to Matador’s acquisitions or dispositions, as well as the following risks related to financial and operational performance: general economic conditions; Matador’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 Matador’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 or the construction, expansion or operation of Matador’s midstream assets; delays and other difficulties related to regulatory and governmental approvals and restrictions; impact on Matador’s operations due to seismic events; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions; availability of sufficient capital to execute its business plan, including from future cash flows, capital markets, 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 conditions, environmental conditions and natural disasters; the impact of the One Big Beautiful Bill Act; 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.

Adjusted Free Cash Flow

This press release includes the non-GAAP financial measure of adjusted free cash flow. This non-GAAP item is measured, on a consolidated basis for the Company and for San Mateo, as net cash provided by operating activities, adjusted for changes in working capital and cash performance incentives that are not included as operating cash flows, less cash flows used for capital expenditures, adjusted for changes in capital accruals. On a consolidated basis, these numbers are also adjusted for the cash flows related to non-controlling interest in subsidiaries that represent cash flows not attributable to Matador shareholders. Adjusted free cash flow should not be considered an alternative to, or more meaningful than, net cash provided by operating activities as determined in accordance with GAAP or an indicator of the Company’s liquidity. Adjusted free cash flow is used by the Company, securities analysts and investors as an indicator of the Company’s ability to manage its operating cash flow, internally fund its D/C/E capital expenditures, pay dividends and service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. Additionally, this non-GAAP financial measure may be different than similar measures used by other companies. The Company believes the presentation of adjusted free cash flow provides useful information to investors, as it provides them an additional relevant comparison of the Company’s performance, sources and uses of capital associated with its operations across periods and to the performance of the Company’s peers. In addition, this non-GAAP financial measure reflects adjustments for items of cash flows that are often excluded by securities analysts and other users of the Company’s financial statements in evaluating the Company’s cash spend. Where references are pro forma, forward-looking, preliminary or prospective in nature, and not based on historical fact, a reconciliation has not been provided. The Company could not provide such reconciliation without undue hardship because such Adjusted Fre Cash Flow numbers are estimations, approximations and/or ranges. In addition, it would be difficult for the Company to present a detailed reconciliation on account of many unknown variables for the reconciling items, including net change in operating assets and liabilities and net change in capital accruals.