Lilis Energy, Salt Creek Midstream Enter into Gathering Agreement
Lilis Energy, an exploration and development company operating in the Permian Basin, entered into a crude oil gathering agreement with Salt Creek Midstream.
The agreement supports Lilis’ efforts to secure long-term infrastructure solutions to move its oil production out of the Delaware Basin. Construction of the project is expected to commence immediately with service to begin in 2019.
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.
The project is supported by 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 capital for the oil gathering system.
In addition to the crude oil gathering agreement, Lilis and Salt Creek have also entered into an agreement whereby Lilis received cash consideration in exchange for granting Salt Creek options to provide certain natural gas midstream services for Lilis’ gas produced within an Area of Mutual Interest.
Salt Creek’s system will be constructed, managed and operated by ARM Midstream Management, an affiliate of ARM Energy.
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