Bonanza Creek Energy, Inc. (NYSE:BCEI) signed an agreement to acquire Crestone Peak Resources LLC from Canada Pension Plan Investment Board, Kimmeridge Energy Management Company, LLC and Others for $1.1 billion on June 6, 2021. Under the terms of the definitive agreement, shareholders of Crestone will exchange 100% of the equity interests in Crestone for approximately 22.5 million shares of Bonanza Creek common stock. Upon completion of the all-stock transaction, Bonanza Creek and Extraction shareholders will each own approximately 37% of Civitas and Crestone shareholders, including CPP Investments, will own approximately 26% of Civitas. If the Crestone Peak Merger Agreement is terminated by Crestone Peak, Bonanza Creek Energy shall be required to pay the other party a termination fee of $37.5 million. Under reciprocal specified circumstances, Crestone Peak will be required to pay $37.5 million to Bonanza Creek Energy. The Company will be headquartered in Denver, Colorado. Following the closing of the transaction with Crestone, Civitas' board of directors will increase from eight to nine. Each of Bonanza Creek and Extraction will designate four directors, with CPP Investments designating one director. All board members will stand for re-election annually. As previously announced, Bonanza Creek President and Chief Executive Officer, Eric Greager, will serve as President and CEO of Civitas.

The transaction is subject to customary closing conditions, including approvals by Bonanza Creek shareholders and consummation of the Bonanza Creek / Extraction merger, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust, effectiveness of the registration statement on Form S-4 and authorization for listing of the BCEI Common Stock issuable in the Crestone Peak Merger on the NYSE. The closing of the Crestone Peak Merger is expressly conditioned on the closing of the previously announced merger of equals between Bonanza Creek Energy and Extraction Oil & Gas. The Crestone transaction is expected to close immediately following the Bonanza Creek/Extraction merger in the fall of 2021. As of August 9, 2021, the transaction is expected to close in the fourth quarter of 2021. The transaction has been unanimously approved by the boards of directors of Bonanza Creek, Extraction and Crestone, and fully approved by Crestone's shareholders and Board. Kimmeridge Energy and CPP Investments have entered into support agreements to vote in favor of the transaction. The acquisition of Crestone is expected to be accretive on all 2022 estimated key metrics, including cash flow per share, dividends per share, inventory quality, credit profile and cost of capital. Civitas, pro forma for the Crestone transaction, is expected to generate more than $1.3 billion in 2022E EBITDA and more than $575 million in 2022E free cash flow.

J.P. Morgan Securities LLC is serving as financial advisor and fairness opinion provider and Stephen M. Gill, Shelley A. Barber, Katherine Frank,James Meyer, Wendy Salinas, Shane Tucker, Sean Becker, Brett Santoli, Paul Heath, Larry Nettles, Suzanne Clevenger, John Grand and Elena Sauber of Vinson & Elkins LLP is serving as legal advisor to Bonanza Creek. Petrie Partners Securities, LLC is serving as financial advisor and Doug Bacon, Enoch Varner, Julian J. Seiguer, Bryan D. Flannery, Anthony Speier, Chris Heasley, Mark Dundon, Will Bos, Mitch McClellan, Stephen M. Jacobson, Stephanie Jeane, Jeffrey S. Quinn, R.D. Kohut, Sydney Jones and Mario Mancuso of Kirkland & Ellis LLP is serving as legal advisor to Extraction. Jefferies LLC is serving as lead financial advisor, TD Securities (USA) LLC is serving as financial advisor, and Beau Stark of Gibson, Dunn & Crutcher LLP is serving as legal advisor to Crestone. Royal Bank of Canada acted as financial advisor to Canada Pension Plan Investment Board. Thomas Brandt and Jeffrey Muñoz of Latham & Watkins LLP acted as legal advisors to Canada Pension Plan Investment Board.