Sec Form 4 Filing - VARDE INVESTMENT PARTNERS LP @ LILIS ENERGY, INC. - 2018-01-04

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL OMB Number: 3235-0287 Expires: November 30, 2011 Estimated average burden hours per response... 0.5

1. Name and Address of Reporting Person VARDE INVESTMENT PARTNERS LP 2. Issuer Name and Ticker or Trading Symbol LILIS ENERGY, INC. [ LLEX] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director X __ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 901 MARQUETTE AVE. S., SUITE 3300 3. Date of Earliest Transaction (MM/DD/YY) 01/04/2018 (Street) MINNEAPOLIS, MN055402 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) _____ Form filed by One Reporting Person __ X __ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Convertible Debt $ 5.5 01/04/2018 J 2,970,240 01/04/2018 04/26/2021 Common Stock, $0.001 par value 2,970,240 ( 3 ) $ 5.5 10,017,280 I See footnotes ( 1 ) ( 2 ) ( 4 ) ( 10 ) ( 11 ) ( 12 ) Convertible Debt $ 5.5 01/04/2018 J 2,113,440 01/04/2018 04/26/2021 Common Stock, $0.001 par value 2,113,440 ( 3 ) $ 5.5 7,127,680 I See footnotes ( 1 ) ( 2 ) ( 5 ) ( 10 ) ( 11 ) ( 12 ) Convertible Debt $ 5.5 01/04/2018 J 928,200 01/04/2018 04/26/2021 Common Stock, $0.001 par value 928,200 ( 3 ) $ 5.5 3,130,400 I See footnotes ( 1 ) ( 2 ) ( 6 ) ( 10 ) ( 11 ) ( 12 ) Convertible Debt $ 5.5 01/04/2018 J 428,400 01/04/2018 04/26/2021 Common Stock, $0.001 par value 428,400 ( 3 ) $ 5.5 1,444,800 I See footnotes ( 1 ) ( 2 ) ( 7 ) ( 10 ) ( 11 ) ( 12 ) Convertible Debt $ 5.5 01/04/2018 J 214,200 01/04/2018 04/26/2021 Common Stock, $0.001 par value 214,200 ( 3 ) $ 5.5 722,400 I See footnotes ( 1 ) ( 2 ) ( 8 ) ( 10 ) ( 11 ) ( 12 ) Convertible Debt $ 5.5 01/04/2018 J 485,520 01/04/2018 04/26/2021 Common Stock, $0.001 par value 485,520 ( 3 ) $ 5.5 1,637,440 I See footnotes ( 1 ) ( 2 ) ( 9 ) ( 10 ) ( 11 ) ( 12 )

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other VARDE INVESTMENT PARTNERS LP 901 MARQUETTE AVE. S., SUITE 3300 MINNEAPOLIS, MN055402 X Varde Investment Partners G.P., LLC 901 MARQUETTE AVE. S., SUITE 3300 MINNEAPOLIS, MN055402 X VARDE PARTNERS LP 901 MARQUETTE AVE. S., SUITE 3300 MINNEAPOLIS, MN055402 X VARDE PARTNERS INC 901 MARQUETTE AVE. S., SUITE 3300 MINNEAPOLIS, MN055402 X Signatures VARDE INVESTMENT PARTNERS, L.P., By: Varde Investment Partners G.P., LLC, Its General Partner, By: Varde Partners, L.P., By: Varde Partners, Inc., By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 01/08/2018 Signature of Reporting Person Date VARDE INVESTMENT PARTNERS G.P., LLC, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 01/08/2018 Signature of Reporting Person Date VARDE PARTNERS, L.P., By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 01/08/2018 Signature of Reporting Person Date VARDE PARTNERS, INC., By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 01/08/2018 Signature of Reporting Person Date

Explanation of Responses:

( 1 )On April 26, 2017, Lilis Energy, Inc. (the "Issuer") entered into a Credit Agreement (the "Credit Agreement") among the Issuer, certain subsidiaries of the Issuer, as guarantors and The Varde Fund XI (Master), L.P., The Varde Fund XII (Master), L.P., The Varde Skyway Master Fund, L.P., The Varde Fund VI-A, L.P., Varde Investment Partners, L.P. and Varde Investment Partners (Offshore) Master, L.P. (collectively, the "Lenders"). Pursuant to the Credit Agreement, the Lenders extended a second lien term loan facility providing for convertible term loans. On January 4, 2018, the Issuer notified the Reporting Persons that the conditions precedent to the ability to convert an additional $45 million in delayed draw term loans that were borrowed on October 4, 2017 had been met. ( 2 )(Continued from Footnote 1) 70% of the aggregate principal amount of the term loans, plus accrued and unpaid interest to the conversion date and a "make-whole" premium is convertible, at the Lenders' option, into a number of the Issuer's shares of common stock at a conversion price (subject to adjustment) of $5.50 per share. ( 3 )The amount reported reflects the amount of shares of Common Stock issuable upon conversion of the additional $45 million of delayed draw terms loans. ( 4 )Reflects securities held directly by The Varde Fund XI (Master), L.P. ("Fund XI"). The Varde Fund XI G.P., LLC ("Fund XI GP") is the general partner of Fund XI. ( 5 )Reflects securities held directly by The Varde Fund XII (Master), L.P. ("Fund XII"). The Varde Fund XII G.P., L.P. ("Fund XII GP") is the general partner of Fund XII, and The Varde Fund XII UGP, LLC ("Fund XII UGP") is the general partner of Fund XII GP. ( 6 )Reflects securities held directly by The Varde Skyway Master Fund, L.P. ("Skyway Fund"). The Varde Skyway Fund G.P., LLC ("Skyway Fund GP") is the general partner of Skyway Fund . ( 7 )Reflects securities held directly by Varde Investment Partners (Offshore) Master, L.P. ("VIP Offshore"). Varde Investment Partners G.P., LLC ("VIP GP") is the general partner of VIP Offshore. ( 8 )Reflects securities held directly by The Varde Fund VI-A, L.P. ("Fund VI-A"). VIP GP is the general partner of Fund VI-A. ( 9 )Reflects securities held directly by Varde Investment Partners, L.P. ("VIP"). VIP GP is the general partner of Fund VIP. ( 10 )Varde Partners, L.P. ("Managing Member") is the managing member of each of Fund XI GP, Fund XII UGP, Skyway Fund GP and VIP GP. Varde Partners, Inc. ("General Partner") is the general partner of the Managing Member. Following the transaction described above, George G. Hicks may be deemed to beneficially own all of the securities which may be acquired upon conversion of the Initial Term Loan because, as the chief executive officer of the General Partner, he may be deemed to have voting and/or dispositive power over such securities. ( 11 )Due to limitations of the electronic filing system, certain Reporting Persons are filing a separate Form 4. ( 12 )Each of the Reporting Persons (other than to the extent it directly holds securities reported herein) disclaims beneficial ownership of the securities held by the other Reporting Persons, except to the extent of such Reporting Person's pecuniary interest therein, and, pursuant to Rule 16a-1(a)(4) under the Securities Exchange Act of 1934, each of the Reporting Persons (other than to the extent it directly holds securities reported herein) states that the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all of the reported securities for purposes of Section 16 or for any other purpose.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.