Matador Resources Company announced that a wholly-owned subsidiary of its midstream joint venture, San Mateo Midstream, LLC, has entered into a long-term agreement with a producer in Eddy County, New Mexico, relating to the gathering and processing of such producer’s natural gas production. As a result of this agreement, along with prior natural gas gathering and processing agreements entered into by San Mateo with Matador and other customers, San Mateo has now entered into contracts to provide firm gathering and processing services for over 200 million cubic feet of natural gas per day, or over 80% of the designed inlet capacity of 260 million cubic feet of natural gas per day, at its Black River cryogenic natural gas processing plant in the Rustler Breaks asset area in Eddy County, New Mexico.
Capital expenditures directly associated with this agreement are expected to be minimal due to capacity-enhancement projects that San Mateo has already undertaken, including the expansion of the Black River Processing Plant, which was completed on time and on budget in the first quarter of 2018. As a result, Matador’s estimated 2018 capital expenditures for midstream activities remains unchanged from previous guidance at USD 70 to 90M, which primarily reflects 51% of San Mateo’s total estimated capital expenditures for 2018.
This is the second announcement in 2018 of a significant customer addition by San Mateo. In June 2018, Matador announced that San Mateo had entered into a long-term agreement with a significant producer in Eddy County, New Mexico, relating to the gathering and disposal of such producer’s salt water.