Matador (NYSE: MTDR) closes Paloma buy for $1.25 billion in cash

What happened

Matador Resources Company (NYSE: MTDR) closed its previously announced acquisition of Paloma Permian LLC on Oct. 1, 2026, for $1.25 billion in cash.

The target and its subsidiaries own proved undeveloped acreage and oil and natural gas producing properties in Eddy and Lea counties, New Mexico.

The press release says the deal adds over 156 net locations, 59 approved drilling permits and about 16,500 net primarily undeveloped acres.

Matador also said it expects to start drilling up to 25 wells tied to the acreage by year-end 2027.

The company said production tied to the acquisition has outperformed its underwriting estimates by about 10% since June 1, 2026.

Key numbers

Metric	Latest	Change	Source
Purchase price	$1.25 billion		Matador press release
Net locations added	over 156 net locations		Matador press release
Approved drilling permits	59 approved drilling permits		Matador press release
Net acreage position	approximately 240,000 net acres	from 203,000 net acres, +37,000 net acres	Calculated from Matador press release
Expected debt paydown	approximately $350 million to $400 million		Matador press release

Read more: Matador Resources (MTDR) stock analysis and investment case

Why it matters

OptimistFi's case is that Matador works if its Delaware Basin acreage and related midstream exposure keep turning drilling and acquisition capital into high-return cash flow per share.

This closing supports that view by adding acreage, drilling inventory and a stated path to debt reduction.

Using the October 2025 base of 203,000 net acres and the fourth-quarter 2026 target of about 240,000 net acres, Matador is up about 37,000 net acres.

That is about 18.2% and shows the deal expands the company's acreage base quickly.

The filing links the payoff to future drilling and operations, not to cash received at closing.

The main caveat is that the free cash flow and debt-repayment benefits are still expected, and the planned paydown is only about $350 million to $400 million depending on commodity prices.

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What's next

Matador said it will discuss the Paloma assets in its third-quarter 2026 earnings release and conference call in early November.

It also expects the Ridge Runner Resources II, LLC acquisition to close later this month.

Matador expects to pay down its reserves-based lending credit facility led by PNC Bank after the fourth-quarter closings.

Those updates will show whether the deal is turning acreage into cash flow and debt reduction, or just adding to the asset base.

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