Lilis Energy to convert $15.6M of outstanding debentures to equity

Lilis Energy

Lilis Energy Inc. (Nasdaq:LLEX), an oil and gas exploration and production company focused on development in the Wattenberg field and surrounding areas of the Denver-Julesburg (DJ) Basin, has reached agreement with all of the holders of its outstanding series of Convertible Debentures to convert up to all of the debentures to shares of the company's common stock.

The terms of the agreement call for an immediate conversion of $9 million of the approximately $15.6 million in outstanding debentures; the balance of $6.6 million may, at the option of the holders, be converted upon receipt of shareholder approval of that conversion. The holders of any remaining debentures may elect to convert all or any portion of the remaining debentures outstanding within three business days of shareholder approval.

Under the terms of the agreement, debentures will be converted at a price of $2.00 per share, which is the reset conversion price following the company's recently announced private placement. In addition, the company will issue to debenture holders common stock purchase warrants equal to the number of shares issued pursuant to their conversion elections. The warrants will have an exercise price of $2.50 per share and are exercisable beginning six months from the issuance date, for a period of three years.

"In conjunction with our $7.5 million private placement in January, this debt conversion further strengthens our balance sheet, improves our fundamentals and positions us to execute on our growth plans for the company," said Avi Mirman, president. "These last three months we have made considerable strides towards raising the capital required to complete the initial horizontal development phases on our key Wattenberg prospects targeting the Niobrara and Codell formations."

Lilis Energy Inc. is a Denver-based independent oil and gas exploration and production company that operates in the Denver-Julesburg (DJ) Basin where it holds approximately 125,000 gross, 110,000 net acres. Lilis Energy's near-term E&P focus is to grow reserves and production in its Wattenberg Field acreage targeting the Niobrara benches and Codell Sandstone.

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