Clayton Williams Energy Inc. (CWEI) will sell about 5 million common shares to funds managed by Ares Management LP for $150 million in cash proceeds, or about $29.70 per share.

Proceeds from this sale will provide additional liquidity for potential debt reduction transactions related to the 2019 senior notes, and for development drilling on its 65,000 net acre position in the southern Delaware Basin’s core, CWEI said.

In connection with the transaction, lenders under the term loan credit facility waived certain restrictions to enable the company to use proceeds from equity issuances and specified asset sales for debt reduction and capex.

The board of directors approved the transaction, which is expected to close during the third quarter of 2016, subject to regulatory approvals and Securities and Exchange Commission filing requirements.

CWEI also said that its board of directors will be expanded to nine directors, up from seven. Ares will have the right to nominate one of the two new directors, subject to approval by the board’s nominating and governance committee.

Vinson & Elkins LLP was CWEI’s legal adviser, and Kirkland & Ellis LLP was legal adviser to Ares. Goldman Sachs & Co. and Potter Anderson & Corroon LLP were financial and legal adviser, respectively, to the transaction committee of the board of directors.

CWEI also said it retained an executive search firm to assist in recruiting executives to fill two senior management positions. In March 2015, Mel Riggs vacated the position of COO when he became president. Michael Pollard will step down as CFO upon the employment of his successor.

Clayton Williams Energy Inc. is based in Midland, Texas.