Matador Closes $1.255B Paloma Deal, Adds 156 Locations in NM
Matador Resources closed its $1.255 billion Paloma acquisition, adding about 16,500 net acres and more than 156 net drilling locations in Eddy and Lea counties, New Mexico, World Oil reports.
Market Impact
Matador bought Paloma Permian LLC from EnCap Investments. Most of the acreage is held by production. The 156 net locations are normalized to two-mile laterals and span at least nine potential target benches. The assets also come with 59 approved drilling permits.
Matador expects to start drilling up to 25 wells on the acquired acreage by year-end 2027. Production from the assets has run about 10% above Matador’s underwriting estimates since June 1, 2026, driven mostly by Paloma’s newer Eddy County wells, according to the company. “We believe the Paloma assets hold some of the highest hydrocarbon resources per acre in the Lower 48,” said Joseph Wm. Foran, Matador’s founder, chairman and CEO.
Foran said the deal creates room to improve upstream capital efficiency and expand use of Matador’s wholly owned midstream infrastructure and its 51%-owned San Mateo Midstream system.
Paloma is one piece of a larger acreage push. Matador expects to close its previously announced Ridge Runner Resources II acquisition later in October. After both deals, it expects to hold about 240,000 net acres in the core Delaware Basin in the fourth quarter of 2026. Counting acreage from the May 2026 federal lease sale, that is a gain of nearly 20% over roughly 203,000 net acres in October 2025. Matador also expects to cut reserve-based lending borrowings by about $350 million to $400 million after the fourth-quarter closings, depending on commodity prices.
What It Means for Subcontractors
- Next gate is early November. Matador says it will detail fourth-quarter drilling plans with its third-quarter earnings announcement. That is the first point where rig, pad and completion scopes on the Paloma acreage should become visible. World Oil’s report names no contractors or open bid packages.
- Mind the timeline. The up-to-25-well figure runs through year-end 2027, not 2026. Inference: Eddy and Lea county work ramps over roughly 15 months, so plan crews and equipment for a phased build, not a single mobilization.
- Pitch Matador’s supply chain team before the earnings call. The 59 approved permits suggest near-term locations, and the acreage is mostly held by production, so there is no lease-expiration rush. Inference: civil and location crews (pads, roads), water hauling and flowback providers are the likeliest early scopes. Lead with capacity and local availability in southeastern New Mexico.
- Midstream and water tie-ins. Matador plans more use of its own midstream and San Mateo Midstream. Pipeline, facilities and E&I contractors already working those systems are best placed for tie-in work. For the produced-water side, see our Goodnight Estacado water pipeline coverage.
- Watch the Ridge Runner close. That deal is expected later in October and brings Matador to about 240,000 net core Delaware acres. A combined plan in the November update could mean larger, more consolidated packages than Paloma alone.
- Debt paydown may cap spending. Matador expects to cut RBL borrowings by $350 million to $400 million after the closings, depending on commodity prices. Inference: bids may come under cost pressure, so price accordingly and expect tight scope definitions.
