Lilis Energy Inc., an independent producer focused on the Permian Basin, said it has entered into a long-term natural gas gathering, processing and purchase agreement with an affiliate of Lucid Energy Group to support a drilling program in the Delaware sub-basin.

San Antonio-based Lilis said Monday Lucid would receive, gather and process the exploration and production company’s (E&P) natural gas production in Lea County, NM, and Loving and Walker counties, TX. Although it did not disclose terms of the agreement, Lilis said it “secures sufficient term and capacity for Lilis during its development and exploitation lifecycle of the production areas committed to the new agreement.”

Lilis CEO Jim Linville said the agreement positions the company “with sufficient gathering and processing capacity as we execute our long-term development plans.”

CFO Joe Daches said the E&P’s “continued growth and well performance in the Delaware Basin is the primary reason we were able to gain very favorable gathering rates. This agreement will result in improved gathering rates and improved differentials for the company.”

Houston-based Republic Development Partners LLC consulted Lilis for the agreement.

Lilis began trading on the Nasdaq exchange last March. At that time the E&P also announced that it had drilled and completed its first two operated horizontal Wolfcamp B wells in the Delaware, with initial production rates exceeding its type curve.