Matador Resources (MTDR) announced today that San Mateo Midstream has entered into an agreement to acquire Cardinal Midstream for $752MM in cash, expanding its reach in the Delaware Basin. The purchase is expected to close on or before July 31.
Cardinal Midstream operates a G&P system in Loving and Reeves counties, TX and Eddy County, NM. The acquisition includes the 360 MMcf/d Pecos River gas plant, expanding San Mateo’s processing capacity from 720 to 1,080 MMcf/d. The acquisition is bolt-on for MTDR and creates a Delaware supersystem connecting the northern and southern ends of the basin (see map below from MTDR investor relations).
The largest producers on Cardinal Midstream are BP and Devon Energy, according to system data in Energy Data Studio, accounting for ~84% of the volumes produced on the G&P system (see figure). MTDR disclosed that nine of the customers on the Cardinal system would be new to San Mateo. EDA modeling shows that BP would be one of those new customers, providing San Mateo with large exposure to a high-quality counterparty in the basin.
Matador did not provide a transaction multiple but did say it plans to fill the Pecos River plant by 2028, and that filling the plant to capacity would generate up to $110MM in annual EBITDA from Cardinal Midstream. Based on a plant capacity of 360 MMcf/d, the EBITDA forecast backs into an implied $0.84/Mcf gathering and processing EBITDA margin for the Cardinal system. Using this implied rate and historical plant flows, we estimate $30.3MM in 2025 EBITDA for Cardinal Midstream:
The 2025 earnings estimate would imply an astronomical purchase multiple of 24.8x for the Cardinal system. However, if San Mateo is able to fill the plant and attain the full $110MM EBITDA target, the incremental earnings uplift would be $79.7MM, and the sales multiple becomes a much more attractive 6.84x. These figures demonstrate that the performance outlook for the deal is contingent on the ability of San Mateo to fill the processing plant to capacity with volumes from the existing MTDR–San Mateo system. In other words, MTDR bought the system for what it could be rather than for what it currently is.
One Market, One Model: Gain a Holistic View of North America Supply & Demand
East Daley Analytics is pleased to announce the Canada Supply & Demand report. The Canada S&D completes our North American model, providing a fully integrated supply and demand forecast for crude oil and natural gas. East Daley follows molecules from Canadian production through US infrastructure to end-markets. Clients now have a continental view to anticipate trends, from how Canadian gas is reshaping Midwest markets, to how crude imports flow to Gulf Coast refiners. The Canada S&D report and dataset is available exclusively in Energy Data Studio. Reach out to learn more about East Daley’s North American energy model.
Reading the Signals: Staying Ahead of Gas, Crude & NGL Markets Through Year-End
Volatility is defining today’s energy markets, and East Daley’s July webinar will help you make sense of what’s next.
Prices are the signal producers can’t ignore. Natural gas prices remain under pressure while crude oil markets continue to react to geopolitical tensions in the Middle East. When realized prices compress, producers respond: deferring completions, high-grading acreage, and re-underwriting economics in real time. The question isn’t whether producers are adapting, it’s how fast, and where the next pressure point emerges.
Infrastructure is the other half of the equation. In the NGL market, rising Waha gas prices, driven by new pipeline capacity, are eroding the cost advantage that’s long favored ethane rejection. In the Permian, the math is even more binding: how much longer can oil and associated gas production keep growing as crude takeaway capacity tightens? Infrastructure doesn’t just move barrels. It sets the ceiling on what producers can economically bring to market.
And none of this happens in isolation. Gas, crude, and NGLs are structurally linked through associated production, processing economics, and shared basin infrastructure. A shift in one commodity’s price or takeaway capacity ripples through the others, which means forecasting any single molecule in a vacuum gets you the wrong answer.
Join East Daley’s analysts as they connect these dots: breaking down the market forces shaping H2 2026, what they mean for producers and midstream operators, and the key indicators to watch in the months ahead.
Click here to register for our July webinar on Wednesday, July 29, at 10:00 a.m. MT.
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