Matador Resources' San Mateo JV inks two Delaware Basin gas deals

What happened

Matador Resources said its San Mateo Midstream joint venture signed two long-term agreements with an unnamed large Delaware Basin producer. San Mateo plans a Marlan plant expansion, including a 300-million-cubic-foot-per-day processing train, a nitrogen rejection unit, 20 miles of pipeline and carbon dioxide treatment capacity, targeted for completion in 2028.

Confirmed

Global impact / market context

The agreements could bring more gas to San Mateo’s facilities, while the planned equipment and pipeline add capacity to gather and process it. If completed and supplied as expected, that added throughput could increase service revenue and adjusted EBITDA, though construction costs and timing affect the outcome.

Analyst inference

The project links Matador’s production needs with midstream infrastructure, the facilities that move and process gas. San Mateo expects immediate use of the added capacity after the 2028 expansion and more than $100 million in adjusted EBITDA by year-end 2029, but these are company expectations, not guaranteed results.

Analyst inference

What to watch

1. Track whether San Mateo completes the Marlan expansion by 2028, including the processing train, pipeline, nitrogen rejection unit and carbon dioxide treatment facility. Analyst inference
2. Watch for updates on gas volumes from the newly dedicated acreage and Matador, since those volumes determine how fully the added capacity can be used. Analyst inference
3. Compare reported adjusted EBITDA with San Mateo’s expectation of more than $100 million by year-end 2029, and note any changes to the agreements or project timing. Analyst inference

Evidence

• seekingalpha.com