Matador Resources' San Mateo Midstream Acquires Cardinal Midstream from EnCap Flatrock for $752 Million, Crossing 1 Bcf/d Processing Threshold in Delaware Basin

San Mateo Midstream has agreed to acquire Cardinal Midstream Partners from EnCap Flatrock Midstream for $752 million in cash. San Mateo is a Delaware Basin joint venture that is 51 percent owned by Matador Resources Company and 49 percent owned by Five Point Infrastructure. The deal, announced June 29, 2026, pushes San Mateo's combined gas processing capacity above 1 billion cubic feet per day for the first time.

Cardinal Assets: 320 MMcf/d Plant and 145 Miles of Gathering Pipeline

Cardinal Midstream Partners owns a cryogenic natural gas processing plant complex in Loving County, Texas, with approximately 320 million cubic feet per day of inlet capacity. The plant complex sits on approximately 75 acres and connects to two residue gas takeaway lines and four natural gas liquids takeaway lines. Cardinal also holds approximately 145 miles of low-pressure and high-pressure natural gas gathering pipelines spanning West Texas and southern Eddy County, New Mexico.

Cardinal's nine customers are all new to San Mateo, adding a mix of major, mid-cap and private Delaware Basin producers to the joint venture's throughput base. Closing is expected on or before July 31, 2026, subject to customary conditions. Post-closing, San Mateo's combined gathering pipeline network will extend beyond 800 miles in the Delaware Basin.

JV Ownership and Financing Structure

San Mateo Midstream is structured as a joint venture in which Matador Resources holds a 51 percent operating interest and Five Point Infrastructure holds the remaining 49 percent. EnCap Flatrock Midstream, the Cardinal seller, is the dedicated midstream investment affiliate of EnCap Investments, a firm with which Matador holds a relationship spanning multiple decades. Matador founder and CEO Joseph Foran stated in the press release that "midstream money is being used to fund midstream acquisitions," distinguishing the transaction from upstream capital allocation.

San Mateo will finance the purchase with a new term loan of up to $650 million, led by PNC Bank and Truist Bank. That term loan covers 86 percent of the $752 million purchase price. The remaining $102 million will come from cash on hand, existing credit facility borrowings, and proportional partner contributions from Matador and Five Point.

EBITDA Multiple and Processing Cost per MMcf/d

Matador's press release projects Cardinal's assets will generate up to $110 million in annualized adjusted EBITDA by 2028, when the Cardinal plant complex is expected to reach full throughput. At that projection, the $752 million purchase price implies a forward EBITDA multiple of 6.8 times. Oil Authority calculates an implied cost of $2.35 million per MMcf/d of new inlet processing capacity, dividing the $752 million price by Cardinal's 320 MMcf/d plant capacity.

Post-close, San Mateo's combined processing capacity exceeds 1 Bcf per day across its Delaware Basin footprint. Foran described the Cardinal system as one that "effectively completes the circle" for San Mateo's infrastructure in the region. The phrase reflects the joint venture's strategy of building contiguous gathering and processing coverage rather than isolated point assets.

Midstream Consolidation Wave and Permian Context

The Cardinal acquisition closes in the same week that Williams Companies announced a $5.5 billion bid for Momentum Midstream, targeting Haynesville gas and LNG export pipeline access, as Oil Authority reported. The two transactions together represent more than $6.2 billion in midstream consolidation announced in a single week, spanning the Permian Basin and the Haynesville Shale. Midstream capacity acquisition at scale is accelerating as upstream consolidation creates larger, better-capitalized operators needing processing certainty.

Matador has particular incentive to lock in midstream scale. A June 28 Oil Authority analysis found Permian Basin operating margins at $1.86 per barrel. San Mateo's fee-based throughput revenue insulates a portion of Matador's cash flow from oil price volatility. Adding nine new third-party customers through Cardinal further diversifies that revenue stream beyond Matador's own production acreage.