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Five Point Capital forms North American midstream JV

The new venture, San Mateo Midstream, will focus on building out natural gas, oil and produced water assets in the US’s Southwest.

Houston-based Five Point Capital Partners has formed a joint venture with US oil and gas development company Matador Resources to build energy and water infrastructure in the country's Southwest.

San Mateo Midstream, the new venture, will own, operate and expand natural gas, oil and produced water midstream assets in the Delaware Basin in west Texas and southern New Mexico. Five Point, a midstream energy investment firm that manages around $600 million, has a 49 percent stake in San Mateo, while Matador owns 51 percent.

Five Point and its co-investors committed an initial cash consideration of $176.4 million to the venture. Both Five Point and Matador said they would spend up to $150 million to expand San Mateo's operations and assets.

“We firmly believe that the JV will create significant value, as the Delaware is one of the most promising producing basins in North America, yet currently lacks sufficient permanent 'in-basin' midstream infrastructure,” Five Point chief executive David Capobianco said.

Matador is contributing to San Mateo assets it already operates in the region, including a natural gas processing plant, four salt water disposal wells and all related oil, natural gas and water pipelines. The energy developer will continue to operate these assets.

One plan for San Mateo is to expand Matador's natural gas processing plant from 60 million cubic feet per day to 260 million cubic feet per day. The project is expected to be operational by the first quarter of 2018.