Matador Resources to Acquire Paloma Permian for $1.275B, Boosting Delaware Basin Footprint

Matador Resources (NYSE: MTDR) announced a definitive agreement to acquire Paloma Permian LLC from EnCap Investments for $1.275 billion in cash, a move that significantly expands its presence in the Delaware Basin. The company's stock rose approximately 1% in pre-market trading Tuesday following the news.

Strategic Permian Expansion

The acquisition, expected to close in the fourth quarter of 2026, deepens Matador's inventory in its core operating area of Eddy and Lea Counties, New Mexico. According to the company's announcement, the deal includes:

• 16,235 net undeveloped acres.
• More than 156 net drilling locations.
• Approximately 55 million barrels of oil equivalent (BOE) in proved reserves.

Paloma Permian's assets were producing an estimated 11,100 BOE per day in the third quarter, with an oil weighting of 57%. This production profile aligns with Matador’s existing operational strategy.

Shareholder Returns and Market Reaction

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In a separate announcement, Matador's Board of Directors declared a quarterly cash dividend of $0.375 per share, equivalent to an annualized rate of $1.50 per share. The dividend is payable on September 8, 2026, to shareholders of record as of August 10, 2026, signaling a continued commitment to shareholder returns alongside strategic growth.

The stock's positive pre-market performance stood out against a weaker broader market, with major indices trading modestly lower. This suggests the gains were driven specifically by investor optimism regarding the acquisition and dividend news rather than a wider sector trend.

Outlook

Investors will be watching for the transaction to close later this year and will look for further details on the integration of the new assets. The company is also scheduled to release its second-quarter 2026 earnings results after the market close on August 5, 2026, which will provide an update on its performance after raising production guidance last quarter.