DALLAS, August 3 — San Mateo Midstream, LLC (“San Mateo”), a midstream joint venture between Matador Resources Company (“Matador”) and Five Point Infrastructure (“Five Point”), today announced that it has successfully completed the acquisition of the operating subsidiaries of Cardinal Midstream Partners, LLC (“Cardinal”), a portfolio company of EnCap Flatrock Midstream, for total cash consideration of $752 million, subject to customary post-closing adjustments (the “Cardinal Acquisition”).
The Cardinal Acquisition increases San Mateo’s integrated natural gas gathering and processing infrastructure across the northern Delaware Basin. With the addition of Cardinal’s assets, San Mateo now has designed natural gas processing capacity exceeding one billion cubic feet per day and more than 800 miles of natural gas gathering pipelines, further strengthening its ability to provide reliable flow assurance to both Matador and third-party customers.
Cardinal Acquisition Highlights
- Complementary Midstream Assets. Cardinal’s assets include a natural gas processing plant complex in Loving County, Texas (just across the southern border of New Mexico), which has a designed inlet capacity of approximately 320 million cubic feet of natural gas per day. Cardinal also has approximately 145 miles of gathering pipelines, which together with the processing plant will provide increased processing capacity and future expansion opportunities (see map, Exhibit A).
- Stronger Team. Notably, San Mateo offered employment to the 26 field employees of Cardinal, and all 26 of these experienced individuals accepted their employment offers. These employees further bolster San Mateo’s talented team of field employees, who are critical to San Mateo providing reliable flow assurance for its customers.
- Increased Scale. San Mateo is now the largest private natural gas processor in the northern Delaware Basin with more than one billion cubic feet per day of processing capacity.
- Third-Party Customer Relationships and Volumes. The acquisition adds nine new natural gas customers and increases San Mateo’s third-party customer base, volume throughput and revenue generation. With nearly 100 drilling rigs currently located within ten miles of its combined natural gas gathering and processing system, San Mateo anticipates further opportunities to add to its third-party business (see rig locations, Exhibit B).
- Enhanced Flow Assurance. The combined natural gas system provides greater operational flexibility by allowing natural gas volumes to move more easily throughout the northern Delaware Basin while enhancing reliable transport and processing for producers.
- Immediately Accretive. The Cardinal assets are expected to contribute meaningful Adjusted EBITDA1 and cash flow to San Mateo as the assets are fully integrated and utilized. Adjusted EBITDA from the Cardinal assets is expected to increase to up to $110 million on an annualized basis by 2028 when the Cardinal natural gas processing plant complex is anticipated to be completely full.