Matador Paloma Permian acquisition values EnCap-backed firm at $1.275bn

Matador Resources Company has agreed to acquire Paloma Permian, an EnCap Investments portfolio company, for $1.275 billion in a Matador Paloma Permian acquisition that would add oil and gas properties in southeast New Mexico. Matador said the deal expands its Delaware Basin asset base, while founder, chairman and chief executive Joseph Wm. Foran said in a statement that the assets are expected to support cash flow generation, efficiency gains, production increases and reserve growth.

Dallas-based Matador is an energy company founded in 2003. Paloma, based in Houston, is an oil and gas exploration and production company, according to PE Hub.

The transaction covers certain proved undeveloped acreage as well as oil and natural gas producing properties in southeast New Mexico. Proved undeveloped acreage generally refers to acreage tied to reserves classified as proved, where development activity has not yet been completed. Producing properties are assets already generating oil or natural gas output.

What is Matador buying from Paloma Permian?

Matador is buying Paloma Permian and, with it, acreage and producing oil and natural gas properties located in southeast New Mexico, according to PE Hub. The company described the assets as an expansion of its Delaware Basin position, a core oil and gas area within the broader Permian Basin.

The Paloma transaction is expected to close in the fourth quarter of 2026. The report did not state the financing mix, closing conditions or whether regulatory approvals are required.

Foran said Matador viewed the agreement as a catalyst for growth in its Delaware Basin operations. He said Matador expects to fold the assets into its operating plan efficiently, drawing a comparison with Matador’s previous transactions involving EnCap and EnCap-backed companies.

Matador has also agreed to acquire primarily undeveloped acreage from Ridge Runner Resources, another EnCap portfolio company. Matador said it believes the Ridge Runner acreage sits in the heart of the Woodford play in West Texas and southeast New Mexico. In oil and gas, a play is a targeted geological area where companies seek hydrocarbons using similar exploration and production concepts.

Who advised the companies?

Baker Botts L.L.P. served as legal adviser to Matador on both the Paloma acquisition and the Ridge Runner acquisition, according to PE Hub.

Vinson & Elkins LLP acted as legal adviser to Paloma, Ridge Runner and EnCap. RBC Richardson Barr served as financial adviser to Paloma, Ridge Runner and EnCap.

The agreement adds to private equity-backed deal activity in US oil and gas, where portfolio companies often assemble acreage and producing assets before selling to operators with larger development platforms. EnCap is the backer of both Paloma and Ridge Runner, according to PE Hub.

This story draws on original reporting from PE Hub.