PDC Energy, Inc. (NasdaqGS:PDCE) entered into a definitive Membership Interest Purchase Agreement to acquire Great Western Petroleum, LLC from a group of shareholders for $1.3 billion on February 26, 2022. The purchase price of the acquisition will consist of approximately 4.0 million shares of PDC's common stock and approximately $543 million in cash, subject to customary post-closing adjustments plus debt consisting of Great Western's credit facility balance and senior secured notes outstanding of approximately $500 million. PDC shall deposit $50 million in cash with the Escrow Agent into an escrow account. The transaction is valued at approximately $1.3 billion, including net debt. The cash portion of the purchase price and debt payoffs related to the acquisition are expected to be financed with cash on hand and availability under PDC's revolving credit facility. The agreement may be terminated under certain circumstances. The purchase agreement provides that if the agreement is terminated solely as a result of the material breach or failure of PDC's representations, warranties, or covenants, the sellers collectively will retain a $50 million deposit put in escrow by PDC and be entitled to receive an additional $150 million as their sole and exclusive remedy as liquidated damages for PDC's breach. Alternatively, upon sellers' breach entitling PDC to terminate the purchase agreement, PDC may either (i) enforce specific performance or (ii) terminate, receive their $50 million deposit back and receive $50 million as liquidated damages from Great Western for sellers' breach.

The transaction is subject to customary closing conditions and the satisfaction of certain regulatory approvals and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, execution of Registration Rights Agreement, and Preliminary Settlement Statement, among others. The transaction is expected to close in the second quarter of 2022. As of May 5, 2022, the acquisition is expected to close on May 6, 2022. The transaction is expected to be accretive to key financial and operating metrics including adjusted free cash flow of PDC Energy. PJT Partners acted as exclusive financial advisor to PDC and John Elofson, Sam Niebrugge and Sam Seiberling of Davis, Graham and Stubbs LLP acted as PDC's legal advisor. Citi acted as exclusive financial advisor to Great Western, and David J. Miller, Nick S. Dhesi, Stephen Szalkowski, Matthew Jones, Tim Fenn, Jared Grimley, Adam Kestenbaum, Joshua Marnitz, Jason Cruise and Peter Todaro of Latham & Watkins LLP acted as Great Western's legal advisor. Robert Hughes and Daniel McEntee of Vinson & Elkins LLP acted as legal advisor to TPG Energy Solutions Green, L.P. John Franchini of Milbank LLP acted as legal advisor to ActOil Colorado, LLC.

PDC Energy, Inc. (NasdaqGS:PDCE) completed the acquisition of Great Western Petroleum, LLC from a group of shareholders on May 6, 2022. As reported, the consideration paid was $543 million (less $50 million previously placed into escrow) and approximately 4 million shares of PDC common stock. In addition, PDC paid off the Great Western secured credit facility which had an outstanding balance of approximately $227.0 million as of March 31, 2022. At closing, PDC is also expecting to pay off Great Western's $311.9 million of 12.0% Senior Notes due September 1, 2025, plus a redemption premium. The payments of the debt balances is expected to be funded through the availability under PDC's revolving credit facility. PDC Energy, Inc. borrowed $950 million under its revolving credit facility to finance the transaction.