Matador Acquires Yates in Deal

1 Jan 2015

Matador Acquires Yates in Deal

Carlsbad - January 2015 - Matador Resources Co., based out of Dallas, announced recently in a news release that it has acquired Harvey E. Yates Co. (HEYCO) out of Roswell, which includes "certain oil and natural gas producing properties and undeveloped acreage located in Lea and Eddy Counties."

According to the news release, approximately 59,000 gross acres are located in Lea and Eddy counties.

The "combining" of HEYCO's assets in Lea and Eddy County, New Mexico, with Matador adds another notch up in oil weighting and growth opportunities. The area in question is part of an oily patch in which Delaware heavyweightConcho Resources (NYSE:CXO), EOG Resources (NYSE:EOG) and Devon (NYSE:DVN) also produce. HEYCO pioneered vertical development in the Bone Spring in the 1980s, which attests to the deep understanding of the Delaware Basin Matador gains from the acquisition.

The acquisition is comprised of the following:

The Deal:

  • Matador will pay about $37.4 million in cash (including debt obligations), issue 3,140,960 common stock shares and 150,000 preferred shares to HEYCO.
  • Matador acquires 58,600 gross (18,200 net) acres located in Lea and Eddy Counties, near Matador's existing acreage in its Ranger and Rustler Breaks prospect areas.
  • Approximately one-third of the acreage is operated, one-third is non-operated, and the remaining is to be pursued by Matador in various capacities.
  • Over 95% of the new acreage consists of state and federal leases, with revenue interests greater than 80%, and up to 87.5% in some cases; most of the acreage is held by production from existing wells and production units.
  • The two recent Bone Spring (second) wells drilled horizontally and completed, operated by a subsidiary of Concho Resources, averaged 1,063 boe per day (78% oil) and 992 boe per day (84% oil), based on 30-day initial production. HEYCO owns a 14.3% working interest (11.4% net revenue) in the wells.