Cardinal Midstream Partners and EnCap Flatrock Midstream announced that they have entered into a definitive agreement to sell Cardinal’s Delaware Basin assets to San Mateo Midstream for $752 million.
The transaction includes the sale of Cardinal’s wholly owned subsidiaries Cardinal Delaware Basin and Cardinal New Mexico.
The deal is expected to close in the third quarter of 2026, subject to regulatory approval and customary closing conditions.
Cardinal’s field employees are expected to remain with the business and become part of San Mateo after the transaction closes.
San Mateo is a Delaware Basin midstream company with a track record of safe and reliable operations.
Cardinal is based in Dallas and operates nearly 150 miles of high- and low-pressure natural gas gathering pipelines in the core of the Delaware Basin.
The company also operates 320 million cubic feet per day of design processing capacity.
Cardinal was founded in 2022 and partnered with EnCap Flatrock Midstream that same year.
The company is led by four founding partners: CEO Doug Dormer, CFO Doug Gale, COO Clay Hewett, and CCO Justin Garrity.
Cardinal focuses on midstream acquisition and development opportunities across North America, particularly natural gas gathering and processing.
The company’s leadership team has more than 90 years of combined energy industry experience, including experience creating, managing, constructing, and operating midstream businesses through their full life cycles.
EnCap Flatrock Midstream provides growth capital to management teams focused on midstream infrastructure opportunities across North America.
The firm was formed in 2008 through a partnership between EnCap Investments and Flatrock Energy Advisors.
EnCap Flatrock is based in San Antonio with an office in Houston and manages investment commitments of more than $9 billion from institutional investors.
Willkie Farr & Gallagher, led by Nathan Meredith, served as counsel to Cardinal.
Baker Botts, led by Preston Bernhisel, and O’Melveny & Myers, led by Jason Schumacher, served as counsel to San Mateo.
KEY QUOTES:
“From initial acquisition to commissioning major system expansions, the Cardinal team has worked cohesively together to execute on our vision of growth and best-in-class customer service. I congratulate each of our employees on their unique contributions to this goal and thank our customers, vendors, and local communities for their ongoing loyalty and support.”
Doug Dormer, CEO of Cardinal Midstream Partners
“We are proud of the tradition of value creation by the Cardinal franchise. Today marks our fourth full-cycle iteration since EnCap Flatrock’s initial partnership with Doug Dormer in 2009. Cardinal’s impressive success underscores the need for additional gathering and processing infrastructure in the current midstream era to support the next decade of natural gas demand growth.”
Matthew Melton, Managing Director at EnCap Flatrock Midstream
