Lilis Energy Inc. bolted on more acreage to its position in the Delaware Basin, the company said Oct. 13.
The Denver-based company said it acquired certain properties located in Winkler County in West Texas for $3 million. The bolt-on purchase was from an undisclosed seller out of bankruptcy.
In June, Lilis completed its acquisition of Brushy Resources Inc., a San Antonio-based company with about 3,500 core net acres in the Southern Delaware. The acquisition marked Lilis' entry into the Permian Basin.
Since entering the basin, Lilis has increased its acreage position in the Delaware by 28% to about 4,433 net acres.
RELATED: Another Company Enters Sought-After Permian Basin
"Through existing relationships in the field, combined with an operating presence, we have demonstrated a highly competitive advantage in securing offsetting acreage at a discount relative to surrounding basin activity," Avi Mirman, CEO of Lilis Energy, said in a statement.
Lilis' newly acquired properties consist of 500 net acres and includes a 78% working interest in a producing vertical well. The properties offset the company's existing acreage position.
The vertical well currently produces about 690,000 net cubic feet per day and has an estimated PV-10 proved developed producing value of $3.5 million, based on current commodity prices. The well holds lease to all depths, from surface down to 22,000 feet, including the Wolfcamp, Bone Springs and Avalon formations.
The company said it hasn't estimated the reserve potential for any further horizontal development yet.
In addition, Lilis said it is in the process of drilling its first Wolfcamp lateral, the Bison #1H. The successful kick-out from the vertical casing went as engineered. The horizontal portion is currently being drilled and is a planned 6,000-foot lateral.
The company added that upon reaching total depth, the rig will move to drill the next Wolfcamp location, the Grizzly #1H.
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