MTDR: San Mateo Acquires Cardinal Midstream for $752 Million in Cash

Research evidence excerpt

MTDR: San Mateo Acquires Cardinal Midstream for $752 Million in Cash

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Scott Hanold (Analyst)

Samuel Cox (Senior Associate)

Octavian Jordan (AVP)

June 29, 2026

Matador Resources Company

San Mateo Acquires Cardinal Midstream for $752 Million in Cash

NYSE: MTDR | USD 49.90 | Outperform | Price Target USD 77.00

Sentiment: Neutral

Our view. MTDR announced that its midstream entity San Mateo (SM) will acquire Cardinal Midstream for $752 million in cash. The

acquisition expands SM's processing capacity to over 1 Bcf/d and diversifies the customer base with nine new third-party customers.

Funding will come from a new term loan facility, cash on hand, borrowings under SM's credit facility, and capital contributions

from its partners. The value paid appears to be a reasonable 6.8x 2028 annualized EBITDA. The Cardinal acquisition meaningfully

strengthens SM's operational footprint and customer diversity, which is important as the partners pursue a value recognition

process that could include an IPO.

Press Release Summary

San Mateo Midstream (51% owned by MTDR, 49% owned by Five Point) agreed to purchase the operating subsidiaries of Cardinal

Midstream Partners from EnCap Flatrock Midstream for $752 million in cash. The deal is expected to close July 31, 2026.

Funding will occur with a new one-year term-loan facility of up to $650 million, cash on hand, borrowings under SM's credit facility,

and capital contributions from its partners. MTDR's potential contributions could be funded with drop-downs or sales of wholly-

owned midstream assets.

The annualized EBITDA from the Cardinal assets is expected at up to $110 million by 2028 when the plant is fully utilized. The deal