Penn Virginia Corporation (NasdaqGS:PVAC) sent a draft of term sheet to acquire Lonestar Resources US Inc. (OTCPK:LONE) for approximately $120 million on June 23, 2021. Penn Virginia Corporation entered into a definitive merger agreement to acquire Lonestar Resources US Inc. July 10, 2021. The consideration paid is in all-stock. Under the terms of agreement, Lonestar shareholders will receive 0.51 shares of common stock of Penn Virginia for each share of common stock of Lonestar outstanding and the assumption of approximately $236 million of Net Debt by Penn Virginia. Upon completion of the transaction, Penn Virginia shareholders will own approximately 87% of the combined company, and Lonestar will own approximately 13% of the combined company. Upon termination of the merger agreement under certain circumstances, (i) Penn Virginia would be required to pay Lonestar a termination fee equal to $6,000,000 and (ii) Lonestar would be required to pay Penn Virginia a termination fee equal to $3,000,000. Following the transaction completion, Lonestar will have the right to nominate one independent director to the Penn Virginia Board of Directors. Edward Geiser will continue to serve as Chairman of the Board, and Darrin Henke will continue to serve as President and Chief Executive Officer of Penn Virginia following the closing of the transaction.

The closing of the transaction is subject to customary closing conditions, including regulatory approvals, approval of Penn Virginia and Lonestar shareholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the effectiveness of the registration statement on Form S-4 that Penn Virginia is obligated to file with the Securities and Exchange Commission in connection with the issuance of shares of Penn Virginia common stock in the first merger, the authorization for listing of shares of Penn Virginia common stock to be issued in the First Merger on the Nasdaq Stock Market LLC, the accuracy of each party's representations and warranties and compliance by each party with its covenants under the merger agreement in all material respects and the absence of legal restraints prohibiting the mergers. The gross proceeds of the Offering of $400 million and other funds will initially be deposited in an escrow account pending satisfaction of certain conditions, including the expected consummation of Penn Virginia's merger (“Lonestar Merger”) with Lonestar Resources US Inc. (“Lonestar”) on or prior to November 26, 2021. If the escrow release conditions are not satisfied on or before November 26, 2021, or at any time prior to such date the Lonestar Merger has been terminated or Penn Virginia has decided that it will not pursue the consummation of the Lonestar Merger. The transaction has been unanimously approved by the boards of directors of both Lonestar and Penn Virginia. In addition, following the execution of the merger agreement, Lonestar shareholders holding approximately 80% of the voting power of Lonestar and Penn Virginia shareholders holding approximately 60% of the voting power of Penn Virginia signed binding support agreements obligating them to vote in favor of the transaction. The Special Meeting of Shareholders of Penn Virginia Corporation will be held virtually, conducted via live audio webcast on October 5, 2021. The Penn Virginia Board unanimously recommends that the Penn Virginia shareholders vote “FOR” the transaction. On September 7, 2021 that the Registration Statement on Form S-4 (No. 333-259017) of Penn Virginia Corporation became effective. The transaction is expected to close in the second half of 2021 and by the fourth quarter of 2021. Penn Virginia intends to use the proceeds from the offering of $400 million to repay and discharge the long-term debt of Lonestar and to use the remainder, along with cash on hand, to repay Penn Virginia's second lien term loan in full and pay related expenses. The transaction is expected to be accretive to free cash flow and certain other key per share metrics to deliver long-term value to shareholders of Penn Virginia.

Evercore Inc. (NYSE:EVR), BofA Securities, Inc., and RBC Capital Markets, LLC are serving as financial advisors to Penn Virginia. Sean T. Wheeler, Debbie P. Yee, Enoch Varner, David Wheat and Rachael Lichman of Kirkland & Ellis LLP is serving as Penn Virginia's legal advisor. Barclays Capital Inc. is serving as financial advisor and T. Mark Kelly, Lande A. Spottswood, John Lynch, Lina Dimachkiehof, David D'Alessandro, Dario Mendoza, Sean Becker, Hill Wellford, Sarah Mitchell, John Grand, Elena Sauber, Darin Schultz of Vinson & Elkins LLP is serving as legal advisors to Lonestar. Stephens Inc. acted as fairness opinion provider to Lonestar.

Penn Virginia Corporation (NasdaqGS:PVAC) completed the acquisition of Lonestar Resources US Inc. (OTCPK:LONE) on October 5, 2021. As a part of closing, Lonestar will be continuing as the surviving corporation and became wholly-owned subsidiary of Penn and the combined company will be renamed Ranger Oil Corporation ("Ranger", “Ranger Oil”), effective October 18, 2021, begin trading under the NASDAQ ticker symbol of ROCC. As a part of closing, Darin G. Holderness has resigned from the Company's Board of Directors and Richard Burnett, former Chairman of the Board of Directors for Lonestar, has been appointed to the Company's Board to fill the vacancy. Burnett will also serve as Chairman of the Audit Committee. The net proceeds from the 9.25% Senior Notes due 2026 were used to repay and discharge $249.8 million of Lonestar's long-term debt including accrued interest and related expenses, and the remainder, along with cash on hand, of $146.2 million was used to repay the Second Lien Facility including a prepayment premium and accrued interest and related expenses. On August 10, 2021, Ranger, wholly-owned subsidiary Penn Virginia Escrow LLC (the “Escrow Issuer”) completed an offering of $400 million aggregate principal amount of the 9.25% Senior Notes due 2026.