DALLAS--(BUSINESS WIRE)--Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today announced that a wholly-owned subsidiary of its midstream joint venture, San Mateo Midstream, LLC (“San Mateo”), has entered into a long-term agreement with a producer in Eddy County, New Mexico relating to the gathering and processing of such producer’s natural gas production. As a result of this agreement, along with prior natural gas gathering and processing agreements entered into by San Mateo with Matador and other customers, San Mateo has now entered into contracts to provide firm gathering and processing services for over 200 million cubic feet of natural gas per day, or over 80% of the designed inlet capacity of 260 million cubic feet of natural gas per day, at its Black River cryogenic natural gas processing plant (the “Black River Processing Plant”) in the Rustler Breaks asset area in Eddy County, New Mexico.
Capital expenditures directly associated with this agreement are expected to be minimal due to capacity-enhancement projects that San Mateo has already undertaken, including the expansion of the Black River Processing Plant, which was completed on time and on budget in the first quarter of 2018. As a result, Matador’s estimated 2018 capital expenditures for midstream activities remains unchanged from previous guidance at $70 to $90 million, which primarily reflects 51% of San Mateo’s total estimated capital expenditures for 2018.
This is the second announcement in 2018 of a significant customer addition by San Mateo. In June 2018, Matador announced that San Mateo had entered into a long-term agreement with a significant producer in Eddy County, New Mexico relating to the gathering and disposal of such producer’s salt water. The agreement included the dedication of over 65 wells, which are located within five miles of San Mateo’s existing salt water gathering system in Eddy County, New Mexico. In addition, San Mateo completed its fourth and fifth commercial salt water disposal wells in Eddy County, New Mexico during the third quarter of 2018 and is presently evaluating a sixth and seventh salt water disposal well. San Mateo currently has total salt water disposal capacity of approximately 225,000 barrels per day in Eddy County, New Mexico and Loving County, Texas. San Mateo expects to dispose of over 200,000 barrels per day of salt water as early as the first quarter of 2019, which includes expected volumes from Matador and San Mateo’s other contracted producers in Eddy County, New Mexico and Loving County, Texas.
Joseph Wm. Foran, Matador’s Chairman and CEO, commented, “Our midstream team, San Mateo, continues to generate value for Matador’s shareholders. One of our midstream team’s primary goals for this year was to attract third-party volumes and further diversify San Mateo’s customer base. The announcement of two significant customers this year demonstrates San Mateo’s continued momentum on that front, as it has successfully grown its three-pipe offering—oil, natural gas and salt water—in Eddy County, New Mexico and Loving County, Texas throughout 2018.
“The Board and I congratulate the midstream team, and we look forward to continued success and future potential opportunities with our joint venture partner, Five Point Energy LLC, in continuing to establish San Mateo as a premier midstream company in the northern Delaware Basin.”
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 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. Additionally, Matador conducts midstream operations, primarily through its midstream joint venture, San Mateo, in support of its exploration, development and production operations and provides natural gas processing, oil transportation services, natural gas, oil and salt water gathering services and salt water disposal services to third parties.
For more information, visit Matador Resources Company at www.matadorresources.com.
About San Mateo Midstream, LLC
San Mateo Midstream, LLC is a strategic joint venture formed in February 2017 by a subsidiary of Matador Resources Company (NYSE: MTDR) and a subsidiary of Five Point Energy LLC. San Mateo provides an all-inclusive approach to midstream services for the three main product streams produced by oil and natural gas activities, including salt water gathering and disposal services, natural gas gathering, compression, treating and processing services, and oil gathering, transportation and blending services. San Mateo owns and operates oil, natural gas and water gathering and transportation systems in Eddy County, New Mexico and Loving County, Texas, the Black River Processing Plant in Eddy County, New Mexico with a designed inlet capacity of 260 million cubic feet of natural gas per day and eight commercial salt water disposal wells in Eddy County, New Mexico and Loving County, Texas. San Mateo serves as one of the primary midstream solutions for multiple customers across the northern Delaware Basin, including its anchor customer, Matador Resources Company.
For more information, visit San Mateo Midstream, LLC at www.sanmateomidstream.com.
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,” “hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements include, but are not limited to, statements about guidance, projected or forecasted financial and operating results, results in certain basins, objectives, project timing, expectations and intentions and other statements that are not historical facts. 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; delays and other difficulties related to regulatory and governmental approvals and restrictions; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions; 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; the operating results of the Company’s midstream joint venture’s expansion of the Black River cryogenic processing plant; the timing and operating results of the buildout by the Company’s midstream joint venture of oil, natural gas and water gathering and transportation systems and the drilling of any additional salt water disposal wells; 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 filings with the Securities and Exchange Commission (“SEC”), 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 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.