07:29 AM EST, 12/06/2024 (MT Newswires) -- Matador Resources ( MTDR ) said it has agreed to contribute its Pronto Midstream subsidiary to its San Mateo Midstream joint venture with Five Point Energy for an implied valuation of about $600 million.

Upon deal closing, expected to occur on Dec. 31, Matador will receive an upfront cash payment of about $220 million for the contribution, the company said.

Matador could also earn up to $75 million in incentive payments from Five Point Energy, the company said.

San Mateo is owned 51% by Matador, with the remaining 49% owned by an affiliate of Five Point Energy, the company said.

Matador said it intends to use the up-front cash payment to pay down debt under its revolving credit facility.