Lilis Energy Inc. agreed to sell a chunk of its northernmost Permian Basin acreage on Feb. 14 as the company continues to struggle with its debt payments.

In a news release, the Fort Worth-based independent said it had executed a purchase and sale agreement on Feb. 12 for the sale of about 1,185 undeveloped acres in New Mexico’s Lea County. An undisclosed buyer agreed to acquire the assets for net cash proceeds of roughly $24.9 million.

Lilis said it plans to use the proceeds to fund a substantial portion of its borrowing base deficiency, initial payments of which have been extended for a third time, according to the company’s release on Feb. 14.

The initial payments to cure the company’s $25 million borrowing base deficiency were originally due Jan. 24. The company’s bank lending group agreed on Feb. 14 to extend the due date for the first two installment payments, totaling $12.5 million, to Feb. 18 and Feb. 29. The final two installments continue to be due on March 16 and April 14.

Last month, Lilis received a non-binding cash take-private offer from Värde Partners Inc., one of the company’s major shareholders. The offer is valued at roughly $17 million, according to BMO Capital Markets.

In its proposal, Minneapolis-based alternative investment firm said it would acquire the roughly 75% of outstanding shares of Lilis common stock it doesn’t already own in a cash merger transaction for $0.25 per common share. The non-binding cash offer is set to expire Feb. 17.

“The company is continuing to consider transactions to fund the repayment of the borrowing base deficiency on a timely basis.  ... If the company is unable to repay the borrowing base deficiency as and when required under the revolving credit agreement, an event of default would occur under the revolving credit agreement,” Lilis Energy said in the Feb. 14 release.

Lilis is receiving financial advice from Barclays Capital Inc. and BMO Capital Markets.

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