San Mateo Midstream, a joint venture between Matador Resources and Five Point Infrastructure, has completed the previously announced $752m purchase of the operating subsidiaries of US-based Cardinal Midstream Partners.
Matador holds a 51% stake in San Mateo, with the remaining 49% owned by Five Point Infrastructure, while Cardinal was a portfolio company of EnCap Flatrock Midstream.
With the acquisition, San Mateo's designed natural gas processing capacity will be more than one billion cubic feet per day in the northern Delaware Basin. Its natural gas pipeline network surpasses 800 miles with the addition of Cardinal's assets.
The acquired assets include a natural gas processing plant complex in Loving County, Texas, offering an inlet capacity of around 320 million cubic feet per day (mcf/d), as well as roughly 145 miles of gathering pipelines. This increase in capacity positions San Mateo as the largest private natural gas processor in the area.
The deal introduces nine new natural gas customers to San Mateo and is expected to enhance third-party customer volumes and revenues.
The business expects additional opportunities based on the nearly 100 drilling rigs currently sited within ten miles of the combined pipeline and processing system.
Matador founder, chairman and CEO and San Mateo founder Joseph Wm. Foran said: "This acquisition represents another important catalyst and milestone in building one of the premier integrated midstream businesses in the Delaware Basin.
"The Cardinal system complements our existing infrastructure, provides another important connection across our natural gas gathering network, enhances the flow assurance San Mateo provides to Matador and other third-party customers, and positions San Mateo for future strategic transactions."
The Cardinal transaction was funded through a combination of a $650m term loan under San Mateo's existing credit facility, available cash and capital contributions from its partners. The term loan matures in July 2027.
Matador reported that it used $51m from distributions received via San Mateo to fund its share of the capital contribution required for the acquisition.
Baker Botts and O'Melveny & Myers advised San Mateo in the transaction, while Willkie Farr & Gallagher acted as counsel for Cardinal.
Last month, Matador signed a deal to acquire Paloma Permian from EnCap Investments in a deal valued at $1.27bn.
"San Mateo Midstream closes $752m acquisition of Cardinal Midstream" was originally created and published by Offshore Technology, a GlobalData owned brand.