Looking to hold onto its acreage and maintain liquidity as it waits out a depressed commodity market, Clayton Williams Energy Inc. announced this week that it has reached a credit agreement with lender Ares Management LP.

The transaction secures the Midland, TX-based exploration and production (E&P) company a $350 million second lien term loan that will be used to pay off its outstanding debt under its existing revolver. The agreement also “significantly eases” Clayton’s “financial covenants for three years.”

As part of the deal, Clayton has agreed to issue warrants to Ares to purchase 2.25 million shares of the exploration and production company’s common stock at $22/share (above current market price) and the right to appoint two members to the company’s board of directors. The transaction is expected to close by the end of the month.

During a conference call Thursday to announce Clayton’s fourth quarter and full-year 2015 results, management characterized the agreement with Ares as the best way to persevere through a lower-for-longer price environment without diluting shares or selling off valuable assets in a depressed market.

Clayton currently holds about 170,000 net acres in the Permian, and another 170,000 net acres in its “Giddings” area in the Eaglebine. Detailed information on the various oil and gas plays in Texas and other parts of the United States, along with basin-by-basin tables showing estimated acreage positions of onshore E&Ps, can be found in NGI’s North American Shale & Resource Plays Factbook, recently updated for 2016.

“Even with the trades we see going on these days in the Permian Basin, we think our assets in our areas are more valuable than that,” Clayton President Mel Riggs said. “And I think we’ll prove that up over time…The other option was to have massive shareholder dilution. We think for the stock where it was, that was the wrong thing to do. So, this is the decision we made. We’re not ashamed of it. We’re going to stick by it.”

But investors appeared to be spooked by the prospect of dilution should Ares opt to buy up the 2.25 million shares. After closing at over $20/share Monday, Clayton’s stock price has tumbled since Tuesday, when the Ares deal was announced. The company’s shares were trading as low $10.81 Thursday before settling at $12.44 at close.

Speaking to analysts during Thursday’s conference call, Riggs did little to hide how difficult the current downturn has been for operators like Clayton, but he expressed confidence that the company will be ready when prices recover.

“We’re ready to close the chapter on 2015. It was a tough time. It reminds me a lot of the 1980s…I worked at Clayton, and we made it. We made it through that time. We’re going to make it through this time,” Riggs said. The financing through Ares “fits our plan of limited drilling. We’re going to hold our acreage together. Things will get better and then we will be ramping up at some point in time.”

Management said Clayton plans about $66 million in capital expenditures (capex) in 2016, focused on drilling five operated wells and two non-operated wells in the Permian’s Delaware subbasin. That’s down from $124.5 million in capex for 2015.

Full-year 2015 production totaled 15.8 million boe/d, a little more than 100,000 boe/d above full-year 2014 production. Average realized prices for 2015 were $44.76/bbl for oil, $2.52/Mcf for gas and $13.07/bbl for natural gas liquids, compared with $86.81/bbl, $4.35/Mcf and $32.17/bbl in 2014.

For 4Q2015, production averaged 13.9 million boe/d, down from 16.5 million boe/d in the year-ago quarter. Production costs for 4Q2015 were also down year/year, to $15.89/boe compared with $18.61/boe in the year-ago quarter.

For full-year 2015, Clayton reported a net loss of $98.2 million (minus $5.78/share), compared with a net income of $43.9 million ($4.63/share) for full-year 2014.

Clayton reported a 4Q2015 net loss of $47.2 million (minus $1.82/share), compared with a net loss of $4.3 million (33 cents/share) in 4Q2014.