Lilis Energy Voluntarily Files for Chapter 11 Bankruptcy

New Director Appointed

FORT WORTH, Texas, June 29, 2020 (GLOBE NEWSWIRE) -- Lilis Energy, Inc. (NYSE American: LLEX) (the “Company”), an exploration and production company operating in the Permian Basin of West Texas and Southeastern New Mexico, announced today that it has filed petitions under Chapter 11 of the United States Bankruptcy Code to initiate voluntary cases in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Court”).

The Chapter 11 petitions were filed in accordance with a Restructuring Support Agreement (the “RSA”) entered into among the Company and certain of its subsidiaries, certain investment funds and entities affiliated with Värde Partners, Inc. (collectively, the “Värde Funds”), which collectively own all of the Company’s outstanding preferred stock, a subordinated portion of the indebtedness outstanding under the Company’s Second Amended and Restated Senior Secured Revolving Credit Agreement (as amended, the “Credit Agreement”), a portion of the Company’s common stock, and all other lenders under the Credit Agreement (the “RBL Lenders”).

Under the RSA, the Company and its subsidiaries, the RBL Lenders and the Värde Funds have agreed, subject to certain conditions set forth in the RSA, to support a restructuring of the Company and its subsidiaries under a Chapter 11 plan of reorganization (a “Plan”) to be proposed with terms set forth in the RSA. Such Plan, if consummated, is expected to reduce the Company’s funded debt obligations by more than $34.9 million, and right-size the Company’s bank indebtedness for future operations.

The Plan contemplated by the RSA further provides that shares of the Company’s common stock will be canceled for no consideration. The Company believes it is unlikely that the holders of shares of its common stock will receive any consideration for their shares under any plan approved by the Court, irrespective of whether such plan contemplates terms consistent with or similar to those agreed upon in the RSA. Consummation of any restructuring plan will be subject to confirmation by the Court and the satisfaction, or waiver by appropriate parties, of any conditions set forth in such plan and related transaction documents.