SAN ANTONIO, Texas—Lilis Energy, Inc. (NYSE American: LLEX), an exploration and development company operating in the Permian Basin of west Texas and southeastern New Mexico, on May 23 announced that the company has entered into a crude oil gathering agreement with Salt Creek Midstream LLC, an ARM Energy Holdings’ affiliate. The agreement supports Lilis’ continuing strategic efforts to secure long-term infrastructure solutions including the efficient and cost-effective movement and price maximization of its oil production out of the Delaware Basin. Construction of the project is expected to commence immediately with service to begin in 2019.

Salt Creek is building a new regional pipeline system and will provide gathering and transportation service for Lilis’ oil production in Texas and New Mexico to the terminal in Winkler County, Texas. The Winkler terminal will allow Lilis to directly access long-haul downstream pipelines that are connected to Midland, Texas, and the Gulf Coast region. The project is supported by a dedicated area of mutual interest, which covers all of Lilis’ current acreage in Lea County, N.M., and Winkler and Loving counties, Texas. Lilis will provide its acreage dedication with no volume or CAPEX commitments and Salt Creek will provide all capital for the oil gathering system.

In addition to the crude oil gathering agreement, Lilis and Salt Creek have also entered into an agreement whereby Lilis received cash consideration in exchange for granting Salt Creek options to provide certain natural gas midstream services for Lilis's gas produced within an area of mutual interest.

Salt Creek’s system will be constructed, managed and operated by ARM Midstream Management LLC, an affiliate of ARM Energy. Salt Creek, a joint venture of ARM Energy Holdings LLC and funds managed by Ares Management LP, is a full-service midstream provider. Salt Creek also has a strategic partnership in the EPIC Pipeline, in addition to access to multiple transportation options for Lilis to provide access to Midland, Cushing and Gulf Coast markets.