DALLAS--(BUSINESS WIRE)--Sep. 15, 2015--
Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”), an
independent energy company engaged in the exploration, development,
production and acquisition of oil and natural gas resources, with an
emphasis on oil and natural gas shale and other unconventional plays and
with a current focus on its Permian (Delaware) Basin operations in
Southeast New Mexico and West Texas, today announced a definitive
agreement to sell a wholly-owned subsidiary of Matador that owns certain
natural gas gathering and processing assets in the Delaware Basin in
Loving County, Texas (the “Loving County System”), including a cryogenic
natural gas processing plant with approximately 35 million cubic feet
per day of inlet capacity (the “Processing Plant”) and approximately six
miles of high-pressure gathering pipeline which connects a Matador-owned
gathering system to the Processing Plant, to a subsidiary of EnLink
Midstream Partners, LP (NYSE: ENLK) (“EnLink”) for cash consideration of
approximately $143 million, subject to certain adjustments. The
Processing Plant, which has been operational for approximately two
weeks, is currently processing about 19 million cubic feet of natural
gas per day.
In conjunction with the sale of the Loving County System, Matador will
dedicate its current leasehold interests in Loving County pursuant to a
15-year, fixed-fee gathering and processing agreement and provide a
volume commitment in exchange for priority one service. Matador can, at
its option, dedicate any future leasehold acquisitions in Loving County
to a subsidiary of EnLink. In addition, Matador retains its natural gas
gathering system up to a central delivery point and its other midstream
assets in the area, including oil and water gathering systems and salt
water disposal wells. Finally, Matador has the ability to defer taxes
related to the sale of the Loving County System through potential
like-kind exchange transactions.
Upon closing, Matador expects to have over $500 million in liquidity
including nothing drawn against its revolving credit facility borrowing
base of $375 million. Thus, the Company has ample liquidity to execute
its capital plans in 2015 and 2016 and further capitalize on its current
opportunities in the Delaware Basin. In addition, immediately following
the closing of the transaction, Matador expects its net debt to trailing
12-month Adjusted EBITDA ratio to be approximately 1.0x.
Mr. Joseph Wm. Foran, Chairman and Chief Executive Officer of Matador,
said, “We are excited to announce this transaction with EnLink and my
long-time friend Barry Davis. Similar to our merger with Harvey E. Yates
Company earlier this year, this transaction demonstrates Matador’s
continued ability to create value for its shareholders and bondholders
in turbulent times. It further solidifies our already strong balance
sheet and will provide us with over $500 million in liquidity at closing
including nothing drawn on our revolving credit facility. This
transaction also reflects the tremendous opportunity both Matador and
EnLink see in the Delaware Basin, particularly in and around our Wolf
prospect area in Loving County, Texas. We have been very pleased with
the successful startup of our cryogenic natural gas processing plant and
are excited to be handing over day-to-day operations to EnLink, a
well-respected, experienced and quality midstream service provider,
while retaining priority on processing our natural gas and developing
our other midstream operations such as gathering and salt water
disposal. We had many opportunities to do a deal on these assets from a
number of midstream companies, but we picked EnLink because of its
record of integrity and performance.
“When we kicked off our midstream initiatives in our Wolf prospect area
in Loving County last year, our primary goals were to generate
significant value for our shareholders and ensure adequate firm takeaway
capacity for our production. Through the strong execution of our
midstream team, we have achieved both goals and placed ourselves in
position to expand along with EnLink as we continue to develop our
Loving County acreage and EnLink expands its footprint in the Delaware
Basin. Based on the success of our midstream initiatives in Loving
County, we are open to other opportunities to improve operational
efficiencies in areas with limited midstream infrastructure.”
EnLink Midstream is publicly traded through two entities: EnLink
Midstream, LLC (NYSE: ENLC), the publicly traded general partner entity,
and EnLink, the master limited partnership. EnLink Midstream is a
leading, integrated midstream company with a diverse geographic
footprint located in many of North America’s premier oil and natural gas
regions, including the Permian Basin. This transaction positions EnLink
Midstream in the Delaware Basin as a full-service midstream provider.
The Loving County System complements EnLink’s crude oil gathering,
transportation and marketing services in the Delaware Basin region,
which EnLink entered into when it acquired LPC Crude Oil Marketing LLC
in February 2015
Mr. Barry E. Davis, President and Chief Executive Officer of EnLink
Midstream, said, “We look forward to working with Matador and other
producers as we grow in one of the most promising regions in our
industry. These assets are located in a highly-attractive part of the
Delaware Basin, providing us with an immediate foothold in the region.
We plan to replicate the successful growth strategy we have used in the
Midland Basin by expanding our presence both organically and through
acquisitions. The Delaware Basin and the entire Permian region will be a
significant area for future growth.”
The transaction is expected to close in the fourth quarter and is
subject to customary regulatory approvals and closing conditions.
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 Permian (Delaware) Basin in Southeast New Mexico and West
Texas. Matador also operates in the Eagle Ford shale play in South Texas
and the Haynesville shale and Cotton Valley plays in Northwest Louisiana
and East Texas.
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” and similar expressions that are
intended to identify forward-looking statements, although not all
forward-looking statements contain such identifying words. 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, the following risks
related to financial and operational performance; general economic
conditions; the Company’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; costs of operations; delays and
other difficulties related to producing oil, natural gas and natural gas
liquids; its ability to make acquisitions on economically acceptable
terms; its ability to integrate acquisitions, including the HEYCO
merger; availability of sufficient capital to execute its business plan,
including from future cash flows, increases in its borrowing base and
otherwise; weather and environmental conditions; and other important
factors which 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
SEC filings, 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 and does not intend 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150915006491/en/
Source: Matador Resources Company
Matador Resources Company
Investor Relations
Mac Schmitz,
972-371-5225
mschmitz@matadorresources.com
