Lilis Energy, Inc. announced today that it has entered into an agreement with a private party seller to acquire certain non-operated leasehold working interests including interests in 53 producing wells and a 640 gross (499 net) acre block of undeveloped leasehold for a purchase price of US$5.5 million. All of the assets are located in the core area of the Wattenberg Field in Weld County, Colorado. If the transaction is consummated, the Company’s acquisition would add, as of an agreed upon March 1, 2015 effective date, a pre–tax present value of estimated future net revenues discounted at 10% (PV 10%) of approximately US$3.7 million of proved developed producing reserves (“PDP”) and approximately US$32.4 million total proved reserves, calculated using strip prices as of April 30, 2015. Following the closing, it is anticipated that the Company would pay an aggregate of approximately US$1.6 million for its proportionate share of the ongoing cost of additional wells that are currently in varying stages of drilling and completion pursuant to outstanding authorizations for expenditure. The closing of the acquisition is anticipated to occur prior to June 1, 2015 subject to final due diligence and satisfaction of customary closing conditions. The purchase price is subject to pre and post-closing adjustments.
In addition, the agreement grants to Lilis a right of first refusal to acquire an additional 540 gross (416 net) acres in the core area of the Wattenberg Field from the sellers.
“This acquisition is one of numerous initiatives underway to increase our production and drive our reserve growth,” said Avi Mirman, CEO and Director of Lilis Energy. “These assets are positioned in the sweet spot of the Wattenberg Field and would immediately increase our daily production, with great upside production growth from the proved undeveloped reserves.”
The Company has secured a financing commitment to complete this acquisition from the recently announced US$50 million credit facility with Heartland Bank, as administrative agent.- Yahoo! Finance