Permian E&P Lilis Energy, Inc. (ticker: LLEX) has entered into a crude oil gathering agreement with Salt Creek Midstream, LLC. Salt Creek’s system will be constructed, managed and operated by ARM Midstream Management, LLC. Construction of the project is expected to commence immediately with service to begin in 2019.
No volume commitments, Salt Creek provides all capital
Salt Creek is building a new regional pipeline system and will provide gathering and transportation service for Lilis’ oil production in Texas and New Mexico to the terminal in Winkler County, Texas.
The Winkler terminal will allow Lilis to directly access long-haul downstream pipelines that are connected to Midland, Texas and the Gulf Coast region.
Lilis-Salt Creek, May 2018
The project is supported by a dedicated area of mutual interest, which covers all of Lilis’ current acreage in Lea County, New Mexico, and Winkler and Loving Counties in Texas. Lilis will provide its acreage dedication with no volume or CapEx commitments and Salt Creek will provide all the capital for the oil gathering system.
“This agreement brings numerous benefits to Lilis, and resolves for the company many of the issues that producers in the Delaware Basin are facing,” Lilis Energy CEO Ronald D. Ormand said. “This strategic agreement will substantially enhance and improve our long-term operational flexibility with multiple long-term infrastracture and takeaway solutions.”
In the interim, Lilis said it has firm trucking agreements in place for oil, and the company does not anticipate any interruptions in takeaway for its growing production.
Lilis Energy will be presenting at the upcoming EnerCom conference in Denver
Lilis Energy will be presenting at the 23rd annual edition of The Oil & Gas Conference®. The conference will take place August 19-22, 2018, at the Westin Denver Downtown. Investment and oil and gas professionals may register for the event through the conference website.
