Oil and gas driller Halcón Resources Corp. closed its sale of all its water infrastructure assets in the Delaware Basin to a subsidiary of WaterBridge Resources LLC, receiving an initial payment of $200 million in cash.

Halcón has potential to earn another $125 million from the sale through incentive payments of up to $25.0 million per year for the next five years. The payments kick in if the company meets certain thresholds related to its development program.

With the deal closing, Halcón boosted its senior secured revolving borrowing base to $275 million. Proceeds from the sale and the borrowing base increase will be used to fund Halcón's capital program in 2019 and beyond, Halcón Chairman, CEO and President Floyd Wilson said in a Dec. 20 news release.

Scotiabank and BMO Capital Markets served as advisers for Halcón on the divestiture. Halcón's operations are focused in the Delaware Basin.