Pump jack. Credit: blake.thornberry.

US oil and natural gas exploration and production firm Matador Resources Company has acquired land position in Lea and Eddy Counties, New Mexico, US, for around $387m.

The company purchased 8,400 gross acres in the recently conducted Bureau of Land Management (BLM) New Mexico oil and gas lease sale.

Of the total acquired acreage, around 2,800 gross/net acres are located in the Stateline area, 4,800 acres in the Antelope Ridge asset area, 400 in the Arrowhead asset area and 400 acres in the Twin Lakes asset area.

With the acquisition, Matador will be able to strengthen its Delaware Basin leasehold and mineral portfolio, taking the aggregate position to around 217,400 gross acres.

Matador Resources Company chairman and CEO Joseph Foran said: “Each tract we acquired was evaluated based on rock quality, the number of potential commercial zones, potential additional reserves bookings, the added value from the lower 1/8th royalty interest, available midstream opportunities and the tract’s strategic fit within our existing portfolio of properties.

“While some of the acreage values were higher than Matador and others have paid in the past, we were able to acquire each tract for less than our full valuation.”

“As a result, while some of the acreage values were higher than Matador and others have paid in the past, we were able to acquire each tract for less than our full valuation.”

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The company purchased the assets based on the projection that they should immediately add an incremental 16.3 million barrels of oil equivalent (BOE) in proved undeveloped reserves (PUDs).

Additionally, the leases provide an 87.5% net revenue interest (NRI), which will allow Matador to retain an additional 17% of the net production from each well drilled and completed on these properties.

The company also expects the acquired acreage to support drilling longer laterals of up to two miles or more, leading to reduced well costs and improved well economics.