Houston-based independent Lilis Energy Inc. has traded for more stakes in the Permian Basin to build its inventory in the Delaware formation in West Texas.
The acre-for-acre trade is for about 1,500 net acres in Winkler and Loving counties to increase gross working interests (GWI) in the Delaware by up to 35% and concentrate the land position in the company’s main operational area.
No financial details were disclosed nor was the name of the trading partner(s).
All of the acreage traded by Lilis is in nonoperated sections with lower working interests. The company now has about 19,000 acres in the Permian.
"This transaction is significant in achieving one of our key strategic objectives of 2018, to increase concentration and working interest in core areas,” said CEO Ronald D. Ormand. “This trade increases our working interests in our core operated blocks within our Delaware acreage in Texas, delivers an increase in current net production and is structured as an acre-for-acre trade.
“In addition, the production and working interests added from this transaction and additional wells in completion moves us closer to our year-end target of 7,500 boe/d net, which we expect to exceed well before year end.”
Lilis plans to continue to “actively seek to core up acreage and strategically increase our average working interest in the basin," Ormand said.
Once the transaction is completed, which is expected within 45 days, the acreage trade should provide Lilis with proved developed and undeveloped reserves, with a net gain of 500-1,000 boe/d.
The complementary acreage is concentrated in two sections of the main operational area, in which Lilis is completing wells. Operatorship in five key drilling units would increase up to 90% GWI. In addition, the transaction adds about 100 net operated locations that target the Wolfcamp A, B and XY, Bone Spring and additional benches.