LILIS ENERGY, INC. (OTCMKTS:LLEX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On February 14, 2020, Lilis Energy, Inc. (the “Company”) entered into a Tenth>Amendment (the “Tenth>Amendment”) to the Second Amended and Restated Senior Secured Revolving Credit Agreement, dated October 10, 2018 (as amended from time to time, the “Revolving Credit Agreement”), among the Company, certain subsidiaries of the Company, as guarantors, the lenders party thereto, and BMO Harris Bank N.A., as administrative agent.
As previously disclosed, as a result of the January 17, 2020 redetermination of the borrowing base under the Revolving Credit Agreement, a borrowing base deficiency in the amount of $25 million (the “Borrowing Base Deficiency”) currently exists under the Revolving Credit Agreement. The Borrowing Base Deficiency constitutes the difference between the principal amount of borrowings currently outstanding under the Revolving Credit Agreement ($115 million) and the borrowing base as so redetermined ($90 million). The Company is required to repay the amount of the Borrowing Base Deficiency in four $6.25 million installments (each, an “Installment Payment”). Prior to the Tenth>Amendment, the first two Installment Payments were due to be paid on February 18, 2020, and the two subsequent Installment Payments were due to be paid on, March 16, 2020, and April 14, 2020, respectively.
The Tenth>Amendment amended the Revolving Credit Agreement to, among other things, provide that the due date for the first two Installment Payments is extended from February 18, 2020>to February 28, 2020. The due dates for the two subsequent Installment Payments remain March 16, 2020>and April 14, 2020.
The Tenth Amendment also amended the Revolving Credit Agreement to provide that $17.25>million of the net cash proceeds received by the Company from the Marlin Disposition (as defined below) must be applied to repay a portion of the Borrowing Base Deficiency upon consummation of the Marlin Disposition (as defined below). This payment will be applied to the required Installment Payments in the order in which they are due.
In addition to the Marlin Disposition, the Company is currently considering other transactions to fund the repayment of the Borrowing Base Deficiency. If the Company is unable to repay all or any portion of the Borrowing Base Deficiency as and when required under the Revolving Credit Agreement, an event of default would occur under the Revolving Credit Agreement.
The foregoing description of the terms of the Tenth>Amendment is not complete and is qualified in its entirety by reference to the full copy of the Tenth>Amendment filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 8.01. Other Events.
On February 12, 2020, the Company executed a Purchase and Sale Agreement for the sale of approximately 1,185 undeveloped net acres, being the Company’s northernmost acreage in Lea County, New Mexico, for expected net cash proceeds of approximately $24.9 million, subject to customary purchase price adjustments (the “Marlin Disposition”). As discussed above, proceeds will be used to fund a substantial portion of the Borrowing Base Deficiency with the balance to be used for general corporate purposes.
This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. These risks include, but are not limited to, the Company’s ability to consummate the Marlin Disposition and to make the required repayments of the Borrowing Base Deficiency; the ability to finance the Company’s continued exploration, drilling operations and working capital needs; all the other uncertainties, costs and risks involved in exploration and development activities; and the other risks identified in the Company’s Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this Current Report on Form 8-K are made as of the date hereof, and the Company does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
* Filed herewith
LILIS ENERGY, INC. Exhibit
EX-10.1 2 exhibit101llex8k20200214.htm EXHIBIT 10.1 Exhibit Execution VersionTENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENTThis TENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of February 14,…
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About LILIS ENERGY, INC. (OTCMKTS:LLEX)
Lilis Energy, Inc. is an upstream independent oil and gas company. The Company is engaged in the acquisition, drilling and production of oil and natural gas properties and prospects. The Company drills for, operates and produces oil and natural gas wells through its land holdings located in Wyoming, Colorado, and Nebraska. Its total net acreage in the Denver-Julesburg (DJ) Basin is approximately 7,200 acres. The Company’s primary targets within the DJ Basin are the conventional Dakota and Muddy J formations. In addition to its DJ Basin holdings, it focuses on the Permian’s Delaware Basin in Winkler and Loving Counties, Texas and Lea County, New Mexico. The Company’s net acreage in the Delaware Basin is approximately 4,433 net acres. The vertical well produces approximately 690 net million cubic feet (mcf) per day. The well holds the lease to all depths, from surface down to approximately 22,000 feet, including the Wolfcamp, Bone Springs, and Avalon formations.
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