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Lilis Energy Inks Acreage Swap Deal to Lift Delaware Footing

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Lilis Energy, Inc. recently entered into an acreage swap transaction in a bid to upgrade its portfolio in the Permian Basin. The pure-play Permian operator is set to trade its non-operated holdings with 1,500 acres of West Texas land in the Delaware Basin. The company, with which it has entered into the swap deal, has not been undisclosed yet. Subject to satisfactory closing conditions, the deal is set for closure by the end of July.

The acquired acreage located in Winkler and Loving counties of West Texas will add more than 100 operated locations in its core holdings in the Wolfcamp and Bone Spring zones; thereby boosting the company’s working interest in the Delaware Basin by about 35%. The Houston-based upstream player will hold more than 19,000 acres in the prolific Delaware Basin. The deal will lead to immediate increase in its proved developed and undeveloped reserves.

The company expects the added assets to be highly accretive and support long-lateral developments. The transaction advances the company closer to its 2018 production target of 7,500 barrels of oil equivalent per day, which it now expects to surpass before the year-end.

Lilis Energy has been working to boost its acreage in the lucrative Delaware basin since quite some time. In March 2018, it closed a $65 million acquisition that added around 2,798 acres to its core holdings. This Zacks Rank #3 (Hold) company also aims at de-risking its acreage position by developing its eastern properties in Texas. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

It also entered into a crude oil gathering agreement with Salt Creek Midstream, LLC in May to boost its infrastructural solutions in a cost-effective way. The project is expected to commence in 2019. Other companies bolstering their presence in the low-cost high margin Permian Basin are ExxonMobil Corp. (XOM - Free Report) , ConocoPhillips (COP - Free Report) and Apache Corp. (APA - Free Report) , among others.   

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