Lilis Energy Inc. agreed to sell a chunk of its northernmost Permian Basin acreage on Feb. 14 as the company continues to struggle with its debt payments.
In a news release, the Fort Worth-based independent said it had executed a purchase and sale agreement on Feb. 12 for the sale of about 1,185 undeveloped acres in New Mexico’s Lea County. An undisclosed buyer agreed to acquire the assets for net cash proceeds of roughly $24.9 million.
Lilis said it plans to use the proceeds to fund a substantial portion of its borrowing base deficiency, initial payments of which have been extended for a third time, according to the company’s release on Feb. 14.
The initial payments to cure the company’s $25 million borrowing base deficiency were originally due Jan. 24. The company’s bank lending group agreed on Feb. 14 to extend the due date for the first two installment payments, totaling $12.5 million, to Feb. 18 and Feb. 29. The final two installments continue to be due on March 16 and April 14.
Last month, Lilis received a non-binding cash take-private offer from Värde Partners Inc., one of the company’s major shareholders. The offer is valued at roughly $17 million, according to BMO Capital Markets.
In its proposal, Minneapolis-based alternative investment firm said it would acquire the roughly 75% of outstanding shares of Lilis common stock it doesn’t already own in a cash merger transaction for $0.25 per common share. The non-binding cash offer is set to expire Feb. 17.
“The company is continuing to consider transactions to fund the repayment of the borrowing base deficiency on a timely basis. ... If the company is unable to repay the borrowing base deficiency as and when required under the revolving credit agreement, an event of default would occur under the revolving credit agreement,” Lilis Energy said in the Feb. 14 release.
Lilis is receiving financial advice from Barclays Capital Inc. and BMO Capital Markets.
Recommended Reading
Quantum Capital’s View on AI: Lots of Benefits, Pain Points
2024-05-16 - The energy industry is lagging in the race to implement AI, but Sebastian Gass, CTO of Quantum Capital Group, offered a few solutions during Hart Energy’s 2024 SUPER DUG Conference & Expo.
Aramco Credits Adaptability, Collaboration for Driving Innovation
2024-05-15 - Aramco’s implementation of different approaches has led to the creation and commercialization of newer products, said Max Deffenbaugh, principal scientist for Aramco, at the 2024 Offshore Technology Conference in Houston.
OTC: E&Ps Improving Operational Safety with Digitization
2024-05-13 - Artificial intelligence and the digitization of the oilfield have allowed for several improvements in keeping operators out of harm’s way, panelists said during the 2024 Offshore Technology Conference.
Exclusive: Cost-effective Benefits of Extracting from Mature Assets
2024-05-13 - Baker Hughes' well abandonment leader Bart Joppe details the importance of extracting resources from mature assets and the company's approach to managing a well, in this Hart Energy Exclusive interview.
TGS Starts Up Multiclient Wind, Metaocean North Sea Campaign
2024-05-07 - TGS is utilizing two laser imaging and ranging buoys to receive detailed wind measurements and metaocean data, with the goal of supporting decision-making in wind lease rounds in the German Bright.