Matador Resources has revealed that it has recently acquired 8,400 gross acres in Lea and Eddy Counties in New Mexico during the Bureau of Land Management (BLM) New Mexico Oil and Gas Lease Sale for a price of around $387m.
According to Matador Resources, the acquired properties are estimated to immediately add an incremental 16.3 million barrels of oil equivalent (BOE), or 10%, in proved undeveloped reserves (PUDs) with a PV-10 of around $135m to its total proved reserves base.
The Texan oil and gas firm said that most of the acquired acreage is expected to be conducive to drilling longer laterals of up to 3.2km or more. By using central facilities and multi-well pad development, the company plans to cut down well costs and further boost well returns and economics.
The acquired acreage is said to blend well with the company’s existing properties, expanding and bolting on acreage in the Antelope Ridge asset area in Lea County, New Mexico. It will also establish a presence for the company in the Stateline area in Eddy County, New Mexico, while sustaining its weighted average all-in Delaware Basin acreage cost at around $11,000 per net acre.
The company expects to start realizing positive effects of the acquisition on its production and on potential additional midstream opportunities in late 2019, 2020 and beyond. This will be in line with the start of production from the properties with higher NRIs and lower costs per lateral foot, said Matador Resources.
Matador Resources chairman and CEO Joseph Wm. Foran said: “Over the past several years, Matador has followed a strategy of primarily building its Delaware Basin land position on a ‘brick by brick’ basis, but we have always believed it is also important to capture unique value-creating opportunities on a select basis, like the recent BLM lease sale, which was the largest BLM New Mexico Oil and Gas Lease Sale in the last 10 years.”
Headquartered in Dallas, Matador Resources currently focuses on operating in the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin. The company also operates in the Eagle Ford shale play and the Haynesville shale and Cotton Valley plays.