Oil and gas exploration and production company Lilis Energy, Inc. LLEX recently agreed to acquire more than 4,000 net acres from a private firm in the Permian Basin of West Texas, adding to its existing holdings in the lucrative region. Lilis Energy will pay around $45.6 million in cash for the acreage.
The deal will help the company to increase its presence in the basin to 15,250 net acres, outdoing its 2017 acreage goal. The acreage is in the heart of the Delaware Basin and includes more than 150 net potential locations. The company expects the added assets to be highly accretive and support long-lateral developments. From the combined acreage, current production is around 2,952 net barrels of oil equivalent per day, of which 71% is liquid. Lilis Energy expects to add its second rig in its Permian assets in October 2017. The deal is expected to close by November 2017.
A $45 million loan will be taken by Lilis Energy from Varde Partners for the deal. Lilis Energy expects its predicted liquidity and future cash flow to be enough to back the acquisition and develop the combined acreage through 2018.
Among other companies increasing their presence in the Permian Basin are ExxonMobil Corporation XOM, ConocoPhillips COP, and Apache Corporation APA. At present, 566 companies are operating in the region. ExxonMobil recently declared that since May 2017, it has increased its Permian Basin presence by 22,000 acres.
About Lilis Energy and Zacks Rank
Lilis Energy is an independent oil and gas exploration and production company. It is engaged in the acquisition, drilling and production of oil and natural gas properties and prospects within the DJ Basin. Lilis Energy, formerly known as Recovery Energy, Inc., is based in Denver.
The company presently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lilis Energy has gained 57.1% of its value year to date against 23.9% fall of its industry.
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