Five Point Energy LLC recently formed a new strategic joint venture, San Mateo Midstream II LLC, in partnership with a wholly owned subsidiary of Matador Resources Co. San Mateo II is the second midstream partnership between Five Point Energy and Matador Resources and, similar to San Mateo Midstream I, will provide natural gas gathering and processing, crude oil gathering, and produced water gathering and disposal solutions to E&Ps throughout the Northern Delaware Basin.
To facilitate the formation of San Mateo II, Matador Resources has dedicated, under 15-year fixed fee contracts, approximately 25,500 acres in northern Eddy County (the Greater Stebbins Area) and southern Eddy County (the Stateline Area) near the Texas and New Mexico border. Here, San Mateo II will immediately begin development and construction of a 200-million-cubic-feetper- day natural gas processing plant and associated infrastructure, crude oil gathering, and produced water gathering and disposal infrastructure. At closing, Five Point Energy and Matador Resources owned 49 percent and 51 percent of the joint venture, respectively.
"The Delaware remains one of the most promising producing basins in North America, yet it lacks sufficient permanent 'in-basin' midstream infrastructure," said David Capobianco, CEO and managing partner of Five Point Energy.
Matt Morrow, COO and managing partner of Five Point Energy, added, "Collectively, we have built a world-class infrastructure business that is meeting the increasing needs of E&Ps in the Delaware Basin."
In connection with its initial dedication from Matador, San Mateo II plans to construct:
- A cryogenic natural gas processing plant with up to 200 million cubic feet per day of inlet capacity. The plant will be located in Eddy County, New Mexico, near San Mateo I's existing 260-million-cubic-feetper- day natural gas processing complex. The new plant is expected to be operational in mid-2020. Once completed, San Mateo will have up to 460 million cubic feet per day of natural gas processing capacity.
- At least two produced water disposal wells and related commercial- produced water disposal facilities, including one in the Greater Stebbins Area and one in the Stateline Area. Once the initial facilities are completed, San Mateo II expects to have up to 80,000 bpd of water disposal capacity.
- Related crude oil, natural gas and produced water gathering infrastructure in both the Greater Stebbins Area and the Stateline Area. San Mateo II will construct a large-diameter natural gas trunkline through the core of the Northern Delaware Basin to connect the Greater Stebbins Area, the Stateline Area and the new processing plant.
"This transaction represents another significant step forward for Matador and the midstream team, accomplishes one of our strategic goals for 2019, and was made possible, in part, by Matador's acquisition of its BLM properties at the September 2018 BLM Lease Sale," said Joseph Foran, CEO and chairman of Matador Resources. "We obviously are pleased with the progress of our existing joint venture with Five Point, and this transaction is a further testament to the existing joint venture's success and positive outlook."
For more information, visit www.sanmateomidstream.com or call (972) 371-5203.
