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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 July 26, 2019, Lilis Energy, Inc. (the “Company”) entered into a Third Amendment (the “Third Amendment”) to its existing senior secured revolving credit agreement, dated as of October 10, 2018 (the “Revolving Credit Agreement”), by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors (the “Guarantors”), BMO Harris Bank, N.A., as administrative agent, and the lenders party thereto.
Among other matters, the Third Amendment provided for the July 1, 2019 scheduled redetermination of the borrowing base under the Revolving Credit Agreement, which became effective on July 31, 2019, in connection with the consummation of certain asset sales (the “Asset Sales”) and the use of the net proceeds therefrom as required by the Third Amendment. As so redetermined, the borrowing base is $115 million until the next redetermination date, reflecting a decrease of $10 million from the previously in effect borrowing base of $125 million. The Third Amendment required the Company to use the net cash proceeds of the Asset Sales to reduce outstanding borrowings under the Revolving Credit Agreement to $105 million or less and to pay certain payables and ordinary course expenses of the Company and the Guarantors. The material terms of the Asset Sales will be disclosed on a separate Current Report on Form 8-K to be filed in the near future, resulting in proceeds of $39 million to the Company.
As previously disclosed, the Revolving Credit Agreement contains a leverage ratio covenant requiring that, as of the last day of each fiscal quarter commencing with the quarter ended December 31, 2018, the Company’s ratio of Total Debt (as defined in the Revolving Credit Agreement) as of that day to EBITDAX (as defined in the Revolving Credit Agreement) for the four fiscal quarters then ended be not greater than 4.00 to 1.00. The Credit Agreement also contains a current ratio covenant requiring that, as of the last day of each fiscal quarter commencing with the quarter ended December 31, 2018, the Company’s ratio of Current Assets (as defined in the Revolving Credit Agreement) as of such day to Current Liabilities (as defined in the Revolving Credit Agreement) as of such day be not be less than 1.00 to 1.00.
The Third Amendment amended the Revolving Credit Agreement to provide that EBITDAX, Total Debt and Current Liabilities as of and for the period ended June 30, 2019, shall be calculated after giving pro forma effect to the Asset Sales and the use of the proceeds therefrom as contemplated by the Third Amendment. The Third Amendment also amended the current ratio covenant to provide that, subject to the consummation of the Asset Sales and the required use of the proceeds therefrom, (a) the Company’s ratio of Current Assets to Current Liabilities as of September 30, 2019 may not be less than 0.85 to 1.00, rather than 1.00 to 1.00 as required for other future measurement dates and (b) the current portion of the Company’s capital expenditure obligations under the Asset Sales with respect to certain wells will be excluded from the calculation of Current Liabilities up to an agreed amount.
The foregoing description of the terms of the Third Amendment is not complete and is qualified in its entirety by reference to the full copy of the Third Amendment filed as Exhibit 10.1 to this Current Report on Form 8‑K.
Item 2.03 Creation of a Direct Financial Obligation.
The information set forth in Item 1.01 above is incorporated herein by reference.
Item 9.01 Financial Statements & Exhibits.
(d) Exhibits
*Filed herewith
LILIS ENERGY, INC. Exhibit
EX-10.1 2 exhibit101llexmaterialagre.htm EXHIBIT 10.1 Exhibit Execution VersionTHIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENTThis THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of July 26,…
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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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This post first appeared on SEC Filings – Market Exclusive