Matador Resources Co. (MTDR) said Sept. 15 it is selling midstream assets in the Delaware Basin to EnLink Midstream Partners LP (ENLK) for $143 million.
The Dallas-based company has entered an agreement to sell a subsidiary that owns certain natural gas gathering and processing assets in Loving County, Texas, to a subsidiary of EnLink.
The assets include a cryogenic natural gas processing plant with about 35 million cubic feet per day (MMcf/d) of inlet capacity and about six miles of high-pressure gathering pipeline. The pipeline connects a Matador-owned gathering system to the processing plant.
The processing plant has been operational for about two weeks and is currently processing about 19 MMcf/d of natural gas.
In conjunction with the sale, Matador will dedicate its current leasehold interests in Loving County pursuant to a fixed-fee gathering and processing agreement and provide a volume commitment in exchange for priority one service. The company has the option to dedicate any future leasehold acquisitions in Loving County to a subsidiary of EnLink.
In addition, Matador retains its natural gas gathering system up to a central delivery point and its other midstream assets in the area. This includes oil and water gathering systems and saltwater disposal wells.
Matador also has the ability to defer taxes related to the sale of the Loving County system through potential like-kind exchange transactions.
Upon closing, Matador expects to have more than $500 million in liquidity. The company said it will have nothing drawn against its revolving credit facility borrowing base of $375 million. It also expects its net debt to trailing 12-month adjusted EBITDA ratio to be about 1x.
The company said it has ample liquidity to execute its capital plans in 2015 and 2016 and further capitalize on its current opportunities in the Delaware Basin.
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