Matador Resources Co. has agreed to purchase Summit Midstream Partners LP’s Lane natural gas gathering and processing (G&P) system in New Mexico’s Eddy and Lea counties for $75 million.
In connection with the deal, Matador “will assume certain takeaway capacity on the Double E pipeline, a FERC-regulated natural gas pipeline operated by Summit,” the Dallas-based independent said. The transaction is expected to close by the end of the month.
The Lane system, which serves the Permian Basin’s Delaware sub-basin, includes a 60 MMcf/d cryogenic natural gas processing plant, three compressor stations and about 45 miles of natural gas gathering pipelines.
“This acquisition is a further extension of our strategy to control our midstream operations and to use our midstream assets to further enhance and assist our operations,” said Matador CEO Joseph Foran. “To accomplish this, we expect to expand the Lane G&P System to support our environmental, safety, exploration and production efforts in northern Eddy and Lea Counties, New Mexico.”
The additional takeaway capacity out of the Delaware will help “to ensure our third-party customers’ natural gas is transported to market,” Foran added.
Matador’s operations currently are focused on the Wolfcamp and Bone Spring plays in the southeastern New Mexico and West Texas portions of the Delaware. It also operates in the Eagle Ford and Cotton Valley shale plays.
Matador reported record production of 94,000 boe/d (57% oil) during the first quarter, with the Delaware accounting for 89,400 boe/d.
The company forecast a 14% sequential increase in production to 107,000 boe/d for the second quarter.
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