Lilis Energy, Inc. (ticker: LLEX) has closed a deal to acquire approximately 2,798 net acres in the southeastern New Mexico area of the Delaware Basin. The deal was part cash ($40 million) and part stock (~6.9 million shares, or ~$25.3 million), for an approximate total of $65.3 million.
“This strategic transaction enhances our overall position in the Northern Delaware Basin, provides the company substantial critical mass in a contiguous area surrounding our existing New Mexico properties and increases our net acreage position closer to our 2018 goal of 20,000 net acres. The acquisition also provides the company with multiple locations and benches for drilling, including a substantial number of longer laterals. We intend to drill four wells in New Mexico under our current 2018 budget, targeting the Wolfcamp A and XY, including two longer lateral wells. We are also reviewing expanding that activity with additional longer lateral length wells in 2018 and 2019,” said Lilis Executive Chairman Ron Ormand.
“The overall plan for 2018 is to focus on delineation and de-risking of our acreage position through the development of our eastern acreage in Texas. In addition, we intend to continue drilling out and proving up additional benches throughout our acreage, including the Wolfcamp A, B, and XY and the 2nd and 3rd Bone Springs. We have enhanced our growth prospects for 2018 and beyond with the addition of this acreage and our delineation program should further demonstrate the value of our acreage,” Ormand concluded.
- Approximately 2,798 overlapping (84% operated) and contiguous net acres in Lea County, New Mexico
- Largely contiguous acreage block adds more than 150 net locations
- Assuming 48 gross wells per section (640-acre section)
- Adds ~72 gross locations, suitable for longer lateral developments of ~1.5-mile laterals
- ~1,200 net locations across the combined acreage position
- Over ~70% of the acreage being HBP, providing Lilis the ability to control timing of development
- Average adjusted per acre cost of ~$17,274, with net production of 425 BOEPD for 2017
- Based-on $40,000 per flowing BOEPD
