San Mateo JV to Acquire Cardinal Midstream Assets for $752M in Delaware Basin

San Mateo JV to Acquire Cardinal Midstream Assets for $752M in Delaware Basin

San Mateo Midstream, the joint venture between Matador Resources and Five Point Infrastructure, has agreed to acquire the operating subsidiaries of Cardinal Midstream Partners for $752 million in cash, Permian Basin Oil & Gas Magazine reports.

Market Impact

The deal, announced Monday by Dallas-based Matador Resources, brings Cardinal’s natural gas gathering and processing assets in the northern Delaware Basin under San Mateo’s control. San Mateo is 51 percent owned by Matador. Cardinal’s holdings include a cryogenic natural gas processing plant in Loving County, Texas, with an inlet capacity of roughly 320 million cubic feet per day, along with approximately 145 miles of gathering pipeline spanning west Texas and southern Eddy County, New Mexico.

The Loving County plant complex sits on about 75 acres and includes two residue gas takeaway connections and four NGL takeaway connections, giving San Mateo room to expand processing capacity down the line. The acquisition also brings nine new gathering and processing customers into San Mateo’s fold. Brian J. Willey, San Mateo’s chairman, said the deal gives the company “more processing capacity, a larger pipeline system and a more diverse customer base,” while also improving its position for future strategic transactions. The transaction is expected to close by July 31.

What It Means for Subcontractors

• Pipeline and facility integration work is likely as San Mateo folds in Cardinal’s 145 miles of gathering line and the Loving County plant, so E&I and pipefitting contractors active in west Texas and southern Eddy County, N.M. should reach out to San Mateo directly ahead of the July 31 close to get on bid lists for tie-in work.
• The Loving County plant’s spare takeaway connections (two residue, four NGL) point to planned expansion capacity, meaning mechanical and civil subs should expect facility upgrade or debottlenecking packages to surface at that site within the next year.
• Nine new gathering customers joining San Mateo’s system means additional wellsite tie-ins and metering work in the northern Delaware Basin; field service companies with existing relationships in Loving County and Eddy County should confirm those customer contracts transfer and inquire about tie-in scope.
• O&M contractors currently servicing Cardinal’s assets should confirm contract status with San Mateo as the transition unfolds, since JV consolidations often trigger re-bidding of maintenance and inspection contracts once new ownership takes over operations.
• Companies with cryogenic processing plant experience should position now for potential O&M or turnaround work at the Loving County facility, given Willey’s stated intent to position San Mateo for further strategic transactions.