MTDR - Quick Take - Expands San Mateo Footprint By Acquiring Cardinal Midstream

Research evidence excerpt

MTDR - Quick Take - Expands San Mateo Footprint By Acquiring Cardinal Midstream

Truist Securities

Equity Research Report June 29, 2026

ENERGY: Exploration & Production Matador Resources Company (MTDR)

MTDR - Quick Take - Expands San Mateo Footprint By Acquiring Gabe Daoud

212-303-4193 Cardinal Midstream

Gabe.Daoud@truist.com

Frankie DiGiovanna San Mateo acquires Cardinal Midstream. This morning, MTDR announced it will expand

212-326-3158 its San Mateo Midstream footprint in the Delaware Basin by acquiring operating subsidiaries

Francis.DiGiovanna@truist.com of Cardinal Midstream (private) - a portfolio company of EnCap Flatrock Midstream (private)

- for a total cash consideration of $752MM. MTDR expects the acquisition to be cash

Eric Look neutral as management anticipates the use of distributions from San Mateo and/or proceeds

212-303-4174 from the potential drop-down to San Mateo (or sale of a portion of MTDR's wholly-owned

Eric.Look@truist.com midstream assets) to fund any required cash contributions to San Mateo related to deal.

Moreover, San Mateo anticipates the acquisition to be immediately accretive to both their

adj. EBITDA and cash flows. Adj. EBITDA from Cardinal Midstream assets is projected

to increase to ~$110MM on an annualized basis by '28 when the Cardinal plant complex

Current Price (Jun. 26, $49.90 is completed. This implies deal valuation at ~6.8x '28 EBITDA, which compares to recent 2026)

Western Midstream (WES, Not Rated) acquisition of Brazos at ~8.0x '27 EBITDA before

Stock Rating BUY declining to ~7.5x with the commercialization of available processing capacity and identified

Unchanged synergies. The deal would bring San Mateo's run-rate EBITDA to ~$500MM. Near-term,