Matador Resources signs $1.6 billion deal with Advance Energy
The oil and gas company Matador Resources has acquired Advance Energy, the transaction amounted to $1.6 billion. First of all, the American producer of raw materials is interested in a number of fields with complexes for the production of resources, as well as undeveloped areas with mineral reserves. The deal is expected to be completed in the first half of 2023.
Through the acquisition of Advance, Matador will expand its oil and gas production assets in Delaware. Under the terms of the agreement, the buyer is required to pay an additional $7.5 million in cash each month until 2023. The clause will come into action if the average price of a barrel of oil exceeds $85. Matador analysts predict that even with the additional payments, the deal should generate annual profits in the range of $475 million to $525 million. In addition, the acquisition of the Advance assets will increase the scale of production in Delaware, which will have a positive impact on production costs.
Matador Resources develops and produces oil and natural gas in the United States. The company has a particular focus on shale production. Matador’s primary acreage is concentrated in Delaware and West Texas, with additional production in shale plays in Louisiana. The company also processes raw materials through its joint venture in San Mateo. Since 2010, Matador has been developing an oil shale business to diversify its asset portfolio.
The company was founded by Joseph Foran and Scott King in 2003. Their history began with the Foran Oil business in 1983. Five years later, it launched Matador Petroleum, which was sold to Tom Brown in 2003, after which it became Matador Resources. In 2012, the producer’s shares were listed on the New York Stock Exchange.
Advance Energy is engaged in the supply of oil and gas and related products. The acquisition will allow Matador to expand its market presence and provide customers with a full range of services, including oil production, refining, and fuel transportation. Advance uses innovative technology to produce a quality product that meets all industry standards.
It should be noted that the oil and gas sector is subject to fluctuations associated with rising prices, which are reflected in the cost of petroleum products. Therefore, many customers try to fix fuel prices by increasing their supplies. As a result, there is a rush in the market at different times, which makes suppliers and producers look for ways to optimize processes and reduce costs during production and transportation.