Matador Resources' Subsidiary Completes Pipeline System

A wholly-owned subsidiary of Matador Resources Company’s (NYSE:MTDR) midstream joint venture — San Mateo Midstream, LLC (“San Mateo”) — has brought online crude oil gathering and transportation system in the Rustler Breaks asset area in Eddy County, New Mexico.

The event follows a successful open season earlier this year to determine shipper interest in secured crude oil interstate transportation service on the Rustler Breaks Pipeline System.

The Rustler Breaks Pipeline System comprises about 17 miles of 10-inch diameter crude oil gathering and transportation pipelines. It originates from Eddy County to interconnect with Plains Pipeline, L.P.

Per the announcement made on Jan 22, 2018, San Mateo and a subsidiary of Plains All American Pipeline, L.P. (NYSE:PAA) agreed on a strategic relationship to collect and transfer crude oil for upstream producers in Eddy County.

The subsidiaries of San Mateo and Plains All American Pipeline will work together under a Joint Tariff arrangement and related transactions. The units will offer crude oil transportation services to producers from a joint development area of about 400,000 acres in Eddy County to Midland, TX.

To accommodate increasing oil flow from the wellhead in Eddy County, oil is being transported to Midland through a connection with Plains All American Pipeline. Therefore, the completion of the Rustler Breaks Pipeline System is vital.

Currently, Matador (MTDR) transports 65% of its oil production from the Wolf and Rustler Breaks asset areas in the Delaware Basin, courtesy of commissioning of the Rustler Breaks Pipeline System. The pipeline is capable of supporting the growing volumes from Matador and other producers without major additional capital investment.

Zacks Rank & Key Picks

Currently, Matador Resources carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Enterprise Products Partners L.P. (NYSE:EPD) and SunCoke Energy, Inc (NYSE:SXC) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Houston, TX, Enterprise Products Partners is among the leading midstream energy players in North America. It pulled off an average positive earnings surprise of 9.3% in the last four quarters.

SunCoke acquires, owns and operates the coke making and coal mining operations. The company delivered an average positive earnings surprise of 302.6% in the last four quarters.

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