Matador Resources Company has entered into a definitive agreement to acquire Paloma Permian LLC for approximately $1.275 billion in cash. The agreement was signed on July 22, 2026, and announced by Matador on July 23, 2026.
Paloma Permian is a portfolio company of EnCap Investments. Through the acquisition, Matador is expected to acquire approximately 16,235 net acres in Eddy and Lea Counties, New Mexico, within the Delaware Basin.
The assets were estimated to produce approximately 11,100 barrels of oil equivalent per day (BOE/d) in the third quarter of 2026, with oil accounting for approximately 57% of the production.
The transaction is also important because it gives Matador additional future drilling opportunities. The acquired assets are expected to add more than 156 net operated locations, along with approximately 55 million BOE of immediate reserve additions.
Matador plans to finance the transaction using cash on hand and borrowings under its reserve-based lending facility. The company has also stated that reducing debt through future free cash flow will remain an important priority.
Deal Snapshot
| Deal Detail | Information |
| Acquirer | Matador Resources Company |
| Target | Paloma Permian LLC |
| Seller/Owner | EnCap Investments portfolio company |
| Deal Type | Acquisition |
| Deal Value | $1.275 billion cash |
| Announcement Date | July 23, 2026 |
| Agreement Date | July 22, 2026 |
| Location | Eddy & Lea Counties, New Mexico |
| Acquirer Country | USA |
| Exchange | NYSE:MTDR |
| Industry | Oil & Gas / Energy |
| Basin | Delaware Basin |
| Acreage | 16,235 net acres |
| Estimated Production | ~11,100 BOE/day |
| Oil Mix | ~57% |
| Operated Locations | 156+ net locations |
| Expected Closing | Q4 2026 |
Matador Resources Company Introduction
Matador Resources Company is an independent energy company based in the United States. The company is primarily involved in the exploration, development, production and acquisition of oil and natural gas properties.
Matador’s operations are heavily focused on the Delaware Basin, which is part of the broader Permian Basin in Texas and New Mexico.
The company is also involved in midstream operations through its San Mateo Midstream business, which provides natural gas gathering, processing and related infrastructure services.
Matador has been expanding its position in the Delaware Basin through acquisitions and development projects. The Paloma Permian transaction is one of the company’s major acquisitions aimed at increasing its production base, reserves and future drilling inventory.
What Is Paloma Permian?
Paloma Permian LLC is an oil and natural gas company whose assets are located primarily in the Southeast New Mexico portion of the Delaware Basin.
Paloma Permian was a portfolio company of EnCap Investments before the announced transaction.
In simple terms:
Matador Resources → acquires Paloma Permian → Paloma’s oil and gas assets become part of Matador’s portfolio.
The acquisition would give Matador both existing production and additional acreage that can be developed through future drilling.
Why Is Matador Resources Acquiring Paloma Permian?
The transaction is not simply about acquiring current oil and gas production.
A major objective is to expand Matador’s high-quality drilling inventory and acreage position in the Delaware Basin.
The Paloma assets include existing production as well as undeveloped acreage and future drilling opportunities. This means Matador could benefit from the acquisition in two ways:
- Current production can contribute to the company’s revenue and cash flow.
- Undeveloped acreage can provide opportunities for future drilling and production growth.
The acquisition therefore gives Matador a larger resource base within an area where the company already has significant operating experience.
What Does 16,235 Net Acres Mean?
The acquisition includes approximately 16,235 net acres in Eddy and Lea Counties, New Mexico.
In simple terms, acreage represents the land position over which the company has rights related to oil and gas development.
A significant portion of the acquired acreage is held by production, which can help maintain the company’s development position in the area.
Matador expects the transaction to add more than 156 net operated drilling locations, primarily associated with the Bone Spring and Wolfcamp formations.
This gives the acquisition a long-term development component:
Existing production → Future drilling → Potential additional production
Impact on Oil and Gas Production
Paloma’s assets were estimated to produce approximately 11,100 BOE per day during the third quarter of 2026.
Approximately 57% of this production was oil.
The production is important because it provides Matador with an existing producing asset base immediately upon closing, rather than requiring the company to develop the entire acreage from the beginning.
However, the 11,100 BOE/day figure should not be viewed as the total future production increase from the transaction. The acquired acreage also contains undeveloped resources and drilling locations that could support additional production over time.
Approximately 55 Million BOE of Immediate Reserve Additions
The Paloma transaction is also expected to add approximately 55 million barrels of oil equivalent (BOE) to Matador’s reserves.
Reserves are important for oil and gas companies because they represent resources that can potentially support future production.
In simple language:
Current production provides near-term output, while reserves and drilling inventory provide future production opportunities.
Therefore, the transaction expands both Matador’s current production base and its longer-term resource position.
Why Is the Delaware Basin Important?
The Delaware Basin is one of the major oil and natural gas producing regions within the broader Permian Basin.
Matador already has significant operations in the region. Acquiring Paloma’s assets allows the company to add acreage and production within an area where it already has infrastructure, operational experience and drilling capabilities.
Matador said in July 2026 that its Delaware Basin acreage was expected to reach approximately 240,000 net acres after the Paloma and other related acreage transactions.
This means the acquisition can increase Matador’s scale within its existing core operating area.
Matador’s Other Delaware Basin Expansion
The Paloma acquisition was not the only Delaware Basin transaction announced by Matador in July 2026.
The company also announced an agreement with Ridge Runner Resources II to acquire primarily undeveloped acreage in the Delaware Basin.
That transaction was expected to increase Matador’s Woodford position to approximately 50,000 contiguous net acres.
Taken together, these transactions show that Matador is expanding across several areas:
- Existing oil and gas production
- Undeveloped acreage
- Future drilling locations
- Delaware Basin scale
- Woodford development opportunities
The Paloma acquisition is therefore part of a broader strategy to expand Matador’s resource base in the region.
Woodford Exploration Results
Alongside the acquisition announcement, Matador also provided an update on its first Woodford exploration well, known as the Rae’s Creek well.
The well recorded initial production of more than 2,200 BOE/day during a 24-hour test on June 29, 2026, with approximately 72% oil.
Matador said the well was performing approximately 20% above the average Texas Woodford wells based on 60-day cumulative oil production.
The Woodford exploration program is separate from the Paloma acquisition, but both developments are relevant to Matador’s broader strategy in the Delaware Basin.
How Will Matador Finance the Acquisition?
Matador plans to use a combination of cash on hand and borrowings under its reserve-based credit facility to finance the $1.275 billion transaction.
The company had increased the elected commitment level of its reserve-based credit facility to $2.75 billion.
Matador has also indicated that future free cash flow will be used to reduce acquisition-related debt.
The company has stated a goal of bringing corporate leverage back toward approximately 1.0x over the 12–18 months following the transaction’s closing.
Potential Business Impact
1. Larger Production Base
The approximately 11,100 BOE/day estimated production from Paloma’s assets could increase Matador’s production base after closing.
2. More Drilling Opportunities
More than 156 net operated locations provide additional opportunities for future drilling and development.
3. Higher Reserves
The transaction is expected to add approximately 55 million BOE of immediate reserves.
4. Greater Delaware Basin Scale
The acquisition expands Matador’s position in an area where the company already operates.
5. Long-Term Development Potential
The transaction’s value is not limited to current production. Future drilling and development of the acquired acreage could become an important part of the deal’s long-term impact.
Key Factors to Watch
There are several factors that will determine the eventual impact of the transaction.
Deal Closing
The transaction remains subject to customary closing conditions. Until those conditions are completed, the acquisition remains pending.
Debt and Leverage
Because Matador plans to use borrowings as part of the financing, the transaction can temporarily increase the company’s debt levels.
Oil and Gas Prices
Changes in oil and natural gas prices can affect the cash flow generated by the acquired assets.
Drilling Performance
The long-term value of the acreage will depend partly on how successfully Matador develops the additional drilling locations.
Integration and Development
The company will need to integrate the acquired assets into its existing operations and infrastructure while managing development costs.
Outcome
The Paloma Permian acquisition represents a significant expansion of Matador Resources’ Delaware Basin acreage, production and future drilling inventory.
For approximately $1.275 billion, Matador is set to acquire approximately 16,235 net acres, estimated production of 11,100 BOE/day, more than 156 net operated locations and approximately 55 million BOE of immediate reserve additions.
The transaction therefore combines current production with future development potential.
Another important point is that the acquisition fits within Matador’s existing Delaware Basin operations. This could allow the company to build scale in an area where it already has operational experience and infrastructure.
Sources: Matador Resources
