Matador Resources Company (“Matador” or the “Company”) today announced that a wholly-owned subsidiary of its midstream joint venture, San Mateo Midstream, LLC (“San Mateo”), has placed into service its crude oil gathering and transportation system in the Rustler Breaks asset area in Eddy County, New Mexico (the “Rustler Breaks Pipeline System”) following a successful open season to gauge shipper interest in committed crude oil interstate transportation service on the Rustler Breaks Pipeline System earlier this year. The Rustler Breaks Pipeline System includes approximately 17 miles of 10-inch diameter crude oil gathering and transportation pipelines from origin points in Eddy County, New Mexico to an interconnect with Plains Pipeline, L.P.
As previously announced on January 22, 2018, San Mateo and a subsidiary of Plains All American Pipeline, L.P. (NYSE: PAA) (“Plains”) have entered into a strategic relationship to gather and transport crude oil for upstream producers in Eddy County, New Mexico. Subsidiaries of San Mateo and Plains have agreed to work together through a Joint Tariff arrangement and related transactions to offer producers located within a joint development area of approximately 400,000 acres in Eddy County, New Mexico (the “Joint Development Area”) crude oil transportation services from the wellhead to Midland, Texas with access to other end markets. The completion of the Rustler Breaks Pipeline System is an important step in this strategic relationship as oil has begun flowing from the wellhead in Eddy County, New Mexico to Midland, Texas through a connection with Plains. With the Rustler Breaks Pipeline System in service, Matador currently has on pipe almost all of its oil production from the Wolf and Rustler Breaks asset areas. Additionally, the Rustler Breaks Pipeline System is sufficient to support growing volumes from Matador and other producers without significant additional capital investment.
Joseph Wm. Foran, Matador’s Chairman and CEO, commented, “Placing the Rustler Breaks Pipeline System into service is another significant accomplishment for our midstream joint venture, San Mateo. With the Rustler Breaks Pipeline System in service, Matador currently has approximately 65% of its operated Delaware Basin oil production on pipeline, which provides added reliability and operational advantages. In addition, it immediately enhances our net pricing realizations in Rustler Breaks compared to trucking crude oil at current rates and potentially further improves our net pricing realizations if we elect to sell our crude oil into other markets, including the Gulf Coast (LLS), Houston, Corpus Christi and Cushing crude oil markets.
“As we look forward, the full-service midstream solution San Mateo provides should not only assist in increasing volumes from producers in the northern Delaware Basin but also increase the overall value of San Mateo, which should continue to drive returns for Matador shareholders. The Board and I congratulate the midstream team on providing best-in-class service across all three production streams—crude oil, natural gas and produced water. We look forward to continued success for San Mateo and future potential opportunities with our joint venture partner, Five Point Energy LLC.”
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.