MTDR locks in $1.275 billion Delaware Basin deal as Woodford well clears commercial threshold

A $1.275 billion cash deal to acquire Paloma Permian LLC puts Matador Resources (NYSE: MTDR) on track for a fourth-quarter 2026 close, with a simultaneous acreage buy from Ridge Runner Resources II expanding the company's Woodford footprint to approximately 50,000 contiguous net acres. Both sellers are portfolio companies of EnCap Investments L.P. Together, the transactions push Matador's Delaware Basin total to approximately 240,000 net acres.

The Paloma numbers

The Paloma Permian deal adds 16,235 net undeveloped acres in Eddy and Lea Counties, New Mexico, with the majority of that acreage held by production. Acquired properties carry third-quarter 2026 production guidance of approximately 10,600 to 11,600 BOE per day, weighted 57% to oil, with proved reserves of 55 million BOE. Matador assigned a PV-10 (a non-GAAP reserve valuation that excludes income taxes) of $816 million to those reserves as of May 31, 2026, calculated at $70.00 per barrel of oil and $3.00 per MMBtu of natural gas. The inventory adds over 156 net locations, normalized to two-mile laterals, primarily in the Bone Spring and Wolfcamp formations.

Woodford: acreage assembled, first well result in hand

The Ridge Runner acquisition adds over 150 net operated Woodford locations at approximately $1.3 million per location. Combined with prior purchases and Matador's ongoing land program, the full 50,000-acre Woodford block was assembled at an average cost of $4,000 per acre.

The commercial case rests on the Rae's Creek well in Southeast Lea County, New Mexico. On its official 24-hour test dated June 29, 2026, the well recorded initial production exceeding 2,200 BOE per day (72% oil). Matador reports the well is running approximately 20% above the average of Woodford wells in Texas on a 60-day cumulative oil production basis, the metric the company cites as evidence of commercial viability in this part of the Delaware Basin.

Chairman and CEO Joseph Wm. Foran said the company expects to cut well costs in the Woodford area by 30 to 40% over the next 12 to 18 months, citing efficiency gains previously achieved at Matador's Stateline and Rodney Robinson assets, both acquired in 2018.

Balance sheet and what to watch

Matador expects to fund both acquisitions through cash on hand and its reserve-based lending facility, which carried no balance after being fully repaid in May 2026. Full-year 2026 adjusted free cash flow is guided at approximately $1 billion, based on May 2026 corporate guidance and strip pricing as of July 2026. Management targets returning the corporate leverage ratio closer to 1.0x within 12 to 18 months of closing, with debt repayment listed as the top capital allocation priority.

The next date on the tape is August 6, 2026: Matador's Q2 2026 earnings call, where management will address both acquisitions alongside quarterly results.