San Mateo Midstream Expands Delaware Basin Footprint with $752M Cardinal Acquisition
Event summary
- San Mateo Midstream to acquire Cardinal Midstream for $752M, expanding its Delaware Basin footprint with complementary midstream assets.
- Cardinal’s assets include a 320 MMcf/d cryogenic processing plant and 145 miles of gathering pipelines in West Texas and New Mexico.
- The acquisition is expected to increase San Mateo’s processing capacity to over 1 Bcf/d and add nine new third-party customers.
- Financing includes a $650M term loan led by PNC Bank and Truist Bank, with the remainder funded through cash on hand and capital contributions.
The big picture
San Mateo’s acquisition of Cardinal Midstream solidifies its position as a leading midstream provider in the Delaware Basin, enhancing its ability to handle increasing production volumes from both Matador and third-party operators. The deal reflects broader industry consolidation trends as midstream companies seek scale and operational efficiency to support growing upstream activity in key basins.
What we're watching
- Integration Synergies
- How San Mateo will leverage Cardinal’s assets to enhance flow assurance and system flexibility for Matador and third-party customers.
- Financial Performance
- Whether the acquisition will meet its projected $110M annualized Adjusted EBITDA by 2028 as processing capacity reaches full utilization.
- Strategic Positioning
- The pace at which San Mateo can pursue additional third-party volumes and strategic transactions following the acquisition.
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