Proxy Statement - Merger or Acquistion (preliminary) (prem14a)

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RISK FACTORS

The following risk factors apply to the business and operations of Tema and will also apply to the business and operations of the post-combination company following the completion of the Business Combination. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of Tema and the post-combination company. You should carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein. Unless the context otherwise requires, (i) prior to the completion of the Business Combination, references to “Rosehill Operating” refer to the Assets, Liabilities and Operations of the Business to be Contributed to Rosehill Operating Company, LLC in connection with the Business Combination and (ii) following the completion of the Business Combination, references to “Rosehill Operating” refer to Rosehill Operating Company, LLC. The risk factors below under “Risks Related to the Company and the Business Combination” and “Risks Related to the Redemption” also apply to the Company and its existing shareholders.

Risks Related to Rosehill Operating’s Operations

Oil, natural gas and natural gas liquid (“NGL”) prices are volatile. A sustained decline in oil, natural gas and NGL prices could adversely affect Rosehill Operating’s business, financial condition and results of operations and its ability to meet its capital expenditure obligations and financial commitments.

Rosehill Operating’s revenues, profitability, cash flows and future growth, as well as liquidity and ability to access additional sources of capital, depends substantially on prevailing prices for oil, natural gas, and NGLs. Sustained lower prices will reduce the amount of oil, natural gas, and NGLs that Rosehill Operating can economically produce and may result in impairments of its proved reserves or reduction of its proved undeveloped reserves. Oil, natural gas, and NGL prices also affect the amount of cash flow available for capital expenditures and ability to borrow and raise additional capital.

The markets for oil, natural gas, and NGLs have historically been volatile. For example, since January 1, 2014, the WTI spot price for oil declined from a high of $107.95 per barrel on June 20, 2014 to $26.19 per barrel on February 11, 2016, and the Henry Hub spot price for natural gas declined from a high of $8.15 per MMBtu on February 10, 2014 to a low of $1.49 per MMBtu on March 4, 2016. Likewise, NGLs, which are made up of ethane, propane, isobutane, normal butane and natural gasoline, each of which have different uses and different pricing characteristics, have suffered significant recent declines in realized prices.

The market prices for oil, natural gas, and NGLs depend on factors beyond Rosehill Operating’s control. Some, but not all, of the factors that can cause fluctuation include:

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In the second half of 2014, oil prices began a rapid and significant decline as the global oil supply began to outpace demand. During 2015 and 2016, global oil supply outpaced demand, resulting in a sustained decline in realized prices for oil production. In general, this imbalance between supply and demand reflects the significant supply growth achieved in the United States as a result of shale drilling and oil production increases by certain other countries, including Russia and Saudi Arabia, as part of an effort to retain market share, combined with only modest demand growth in the United States and less-than-expected demand in other parts of the world, particularly in Europe and China. Although there has been a dramatic decrease in drilling activity in the industry, oil storage levels in the United States remain at historically high levels. Until supply and demand balance and the overhang in storage levels begins to decline, prices will likely remain under pressure. The U.S. dollar has also strengthened relative to other leading currencies, which has caused oil prices to weaken, as they are U.S. dollar-denominated. In addition, the lifting of economic sanctions on Iran has resulted in increasing supplies of oil from Iran, adding further downward pressure to oil prices. NGL prices generally correlate to the price of oil. Also adversely affecting the price for NGLs is the supply of NGLs in the United States, which has continued to grow due to an increase in industry participants targeting projects that produce NGLs in recent years. Prices for domestic natural gas began to decline during the third quarter of 2014 and remained weak throughout 2015 and 2016. The declines in natural gas prices are primarily due to an imbalance between supply and demand across North America.

The continued duration and magnitude of these commodity price declines cannot be accurately predicted. Compared to 2014, Rosehill Operating’s average realized oil price before the effects of commodity derivative settlements for 2015 fell 79% to $43.62 per barrel, and its average realized oil price for the nine months ended September 30, 2016, further decreased to $38.31 per barrel. Similarly, Rosehill Operating’s average realized natural gas price for 2015 dropped 72% to $2.37 per Mcf and its average realized price for NGLs declined 111% to $12.75 per barrel. For the nine months ended September 30, 2016, Rosehill Operating’s average realized price for natural gas was $2.03 per Mcf and its average realized price for NGLs was $11.33 per barrel.

Lower commodity prices may reduce Rosehill Operating’s cash flows and borrowing ability. If Rosehill Operating is unable to obtain needed capital or financing on satisfactory terms, its ability to develop future

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reserves could be adversely affected. Furthermore, using lower prices in estimating proved reserves may result in a reduction in proved reserve volumes due to economic limits. In addition, sustained periods with oil and natural gas prices at levels lower than current WTI or Henry Hub strip prices and the effect such prices may have on Rosehill Operating’s drilling economics and ability to raise capital may require Rosehill Operating to re-evaluate and postpone or eliminate development drilling, which could result in the reduction of some of Rosehill Operating’s proved undeveloped reserves and related standardized measure. If Rosehill Operating is required to curtail its drilling program, it may be unable to continue to hold leases that are scheduled to expire, which may further reduce Rosehill Operating’s reserves. As a result, a substantial or extended decline in commodity prices may materially and adversely affect Rosehill Operating’s future business, financial condition, results of operations, liquidity and ability to finance planned capital expenditures.

Rosehill Operating’s development and acquisition projects require substantial capital expenditures. Rosehill Operating may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in its ability to access or grow production and reserves.

The oil and natural gas industry is capital-intensive. Rosehill Operating makes substantial capital expenditures related to development and acquisition projects. Rosehill Operating expects to fund its capital expenditures with cash generated by operations and borrowings under its revolving credit facility; however, financing needs may require an alteration or increase in Rosehill Operating’s capitalization substantially through the issuance of debt or equity or the sale of assets. The issuance of additional indebtedness would require that a portion of the cash flow from Rosehill Operating’s operations be used for the payment of interest and principal on its indebtedness, thereby reducing Rosehill Operating’s ability to use cash flow from operations to fund working capital, capital expenditures and acquisitions. The issuance of additional equity securities by us would be dilutive to stockholders. The actual amount and timing of Rosehill Operating’s future capital expenditures may differ materially from its estimates as a result of, among other things: oil, natural gas and NGL prices; actual drilling results; the availability and cost of drilling rigs and other services and equipment; and regulatory, technological and competitive developments. A reduction in commodity prices from current levels may result in a decrease in Rosehill Operating’s actual capital expenditures, which would negatively impact its ability to grow production.

Rosehill Operating’s cash flow from operations and access to capital are subject to a number of variables, including:

If cash flow from operations or available borrowings under its revolving credit facility decrease as a result of lower oil, natural gas and NGL prices, operational difficulties, declines in reserves or for any other reason, Rosehill Operating may have limited ability to obtain the capital necessary to sustain operations at current levels. If additional capital is needed, Rosehill Operating may not be able to obtain debt or equity financing on acceptable terms, if at all. If cash flow from operations or available under existing or anticipated credit facilities are insufficient to meet its capital requirements, the failure to obtain additional financing could result in a curtailment of the development of Rosehill Operating’s properties, which in turn could lead to a decline in its reserves and production and could materially and adversely affect its business, financial condition and results of operations.

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Rosehill Operating may incur substantial additional debt, which could decrease its ability to maintain operations or service existing debt obligations.

Subject to the restrictions in the instruments governing its debt, Rosehill Operating may incur substantial additional debt in the future. Tema’s secured credit line of credit contains restrictions on its ability to incur indebtedness. This credit facility will not be transferred to Rosehill Operating at the closing of the Business Combination. Rosehill Operating expects to enter into a new credit facility concurrent with closing the Business Combination. It is expected that any new credit facility will contain restrictions on the ability to incur additional indebtedness. Rosehill Operating may also consider investments in joint ventures or acquisitions that may increase its indebtedness. Adding new debt to then existing debt levels could intensify the operational risks that Rosehill Operating now faces.

Drilling for oil and gas involves numerous and significant risks and uncertainties.

Risks that Rosehill Operating faces while drilling wells include:

Risks that Rosehill Operating faces while completing wells include:

In addition, certain of the new techniques Rosehill Operating is adopting may cause irregularities or interruptions in production due to offset wells being shut in and the time required to drill and complete multiple wells before any such wells begin producing. Furthermore, the results of Rosehill Operating’s drilling in new or emerging formations are more uncertain initially than drilling results in areas that are more developed and have a longer history of established production. Newer or emerging formations and areas have limited or no production history and, consequently, Rosehill Operating is more limited in assessing future drilling results in these areas. If Rosehill Operating’s drilling results are less than anticipated, the return on its investment for a particular project may not be as attractive as anticipated, and it could incur material writedowns of unevaluated properties and a decline in the value of Rosehill Operating’s undeveloped acreage.

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Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect Rosehill Operating’s business, financial condition or results of operations.

Rosehill Operating’s future financial condition and results of operations will depend on the success of its development, acquisition and production activities, which are subject to numerous risks beyond its control, including the risk that drilling will not result in commercially viable oil and natural gas production.

Rosehill Operating’s decisions to develop or purchase prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. For a discussion of the uncertainty involved in these processes, see “ Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of Rosehill Operating’s reserves ” below. In addition, Rosehill Operating’s cost of drilling, completing and operating wells is often uncertain.

Many factors may curtail, delay or cancel Rosehill Operating’s scheduled drilling projects, including the following:

Rosehill Operating may not be able to generate sufficient cash to service all of its indebtedness and may be forced to take other actions to satisfy its obligations under applicable debt instruments, which may not be successful.

Rosehill Operating’s ability to make scheduled payments on, or to refinance, its indebtedness obligations, including Rosehill Operating’s future credit facility or line of credit, depends on its financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain

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financial, business and other factors beyond its control. Rosehill Operating may not be able to maintain a level of cash flows from operating activities sufficient to permit it to pay the principal, premium, if any, and interest on its future indebtedness.

If Rosehill Operating’s cash flows and capital resources are insufficient to fund debt service obligations, it may be forced to reduce or delay investments and capital expenditures, sell assets, seek additional capital or restructure or refinance indebtedness. Rosehill Operating’s ability to restructure or refinance its indebtedness will depend on the condition of the capital markets and its financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require Rosehill Operating to comply with more onerous covenants, which could further restrict business operations. The terms of future debt instruments may restrict Rosehill Operating from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on outstanding indebtedness on a timely basis would likely result in a reduction of Rosehill Operating’s credit rating, which could harm Rosehill Operating’s ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, Rosehill Operating could face substantial liquidity problems and might be required to dispose of material assets or operations to meet debt service and other obligations. Rosehill Operating’s future credit agreement may restrict its ability to dispose of assets and its use of the proceeds from such disposition. Rosehill Operating may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit Rosehill Operating to meet scheduled debt service obligations.

Restrictions in Rosehill Operating’s future debt agreements could limit its growth and ability to engage in certain activities.

Rosehill Operating’s future credit agreements may contain a number of significant covenants, including restrictive covenants that may limit its ability to, among other things:

In addition, Rosehill Operating’s future credit agreement may require it to maintain certain financial ratios. Failure to do so could result in mandatory or full repayment of the indebtedness.

The restrictions in Rosehill Operating’s credit agreement may also limit its ability to obtain future financings to withstand a future downturn in its business or the economy in general, or to otherwise conduct necessary corporate activities. Rosehill Operating may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under its credit agreement impose on it.

A breach of any covenant in Rosehill Operating’s credit agreement likely would result in a default under the applicable agreement after any applicable grace periods. A default, if not waived, could result in acceleration of

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the indebtedness outstanding under Rosehill Operating’s credit agreement and in a default with respect to, and an acceleration of, the indebtedness outstanding under other debt agreements. The accelerated indebtedness may become immediately due and payable. If that occurs, Rosehill Operating may not be able to make all of the required payments or borrow sufficient funds to refinance such indebtedness. Even if new financing were available at that time, it may not be on terms that are acceptable to Rosehill Operating or us.

Any significant reduction in the borrowing base under Rosehill Operating’s anticipated revolving credit facility as a result of the periodic borrowing base redeterminations or otherwise may negatively impact its ability to fund its operations.

Rosehill Operating’s anticipated revolving credit facility is expected to limit (and any replacement facility is expected to limit) the amounts Rosehill Operating can borrow up to a borrowing base amount, which the lenders, in their sole discretion, determine at certain periods throughout the year. The borrowing base depends on, among other things, projected revenues from, and asset values of, the oil and natural gas properties securing Rosehill Operating’s loan. If Rosehill Operating does not furnish the information required for the redetermination by the specified date, the lender may nonetheless redetermine the borrowing base in their sole discretion until the relevant information is received.

In the future, Rosehill Operating may not be able to access adequate funding under its revolving credit facility (or a replacement facility) as a result of a decrease in its borrowing base due to the issuance of new indebtedness, the outcome of a subsequent borrowing base redetermination or an unwillingness or inability on the part of lending counterparties to meet their funding obligations and the inability of other lenders to provide additional funding to cover the defaulting lender’s portion. Declines in commodity prices could result in a determination to lower the borrowing base in the future and, in such a case, Rosehill Operating could be required to repay any indebtedness in excess of the redetermined borrowing base. As a result, Rosehill Operating may be unable to implement its respective drilling and development plan, make acquisitions or otherwise carry out business plans, which would have a material adverse effect on its financial condition and results of operations and impair its ability to service its indebtedness.

Rosehill Operating’s derivative activities could result in financial losses or could reduce its earnings.

A portion of Rosehill Operating’s oil and natural gas production has historically been hedged in order to protect cash flow from falling prices. The use of these arrangements limits its ability to benefit from increases in the prices of natural gas and oil. As of December 31, 2016, Rosehill Operating had entered into hedging contracts through December 2017 covering a total of 458 MBbls and 2,260 MMBtus, respectively, of its projected oil and natural gas production. It is anticipated that Tema’s hedging instruments will either be transferred to Rosehill Operating or will be settled at the closing of the Business Combination. Accordingly, Rosehill Operating’s earnings may fluctuate significantly as a result of changes in fair value of its commodity derivatives.

Commodity derivatives may also expose Rosehill Operating to the risk of financial loss in some circumstances, including when:

The use of commodity derivatives may, in some cases, require the posting of cash collateral with counterparties. If Rosehill Operating enters into commodity derivatives that require cash collateral, particularly if commodity prices or interest rates change in a manner adverse to Rosehill Operating, Rosehill Operating’s cash

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otherwise available for use in its operations would be reduced, which could limit its ability to make future capital expenditures and make payments on its indebtedness, and which could also limit the size of its borrowing base. Future collateral requirements will depend on arrangements with counterparties, highly volatile oil and natural gas prices and interest rates. In addition, commodity derivatives could limit the benefit Rosehill Operating would receive from increases in the prices for oil and natural gas, which could also have a material adverse effect on Rosehill Operating’s financial condition.

Rosehill Operating’s commodity derivative contracts expose it to risk of financial loss if a counterparty fails to perform under a contract. Disruptions in the financial markets could lead to sudden decreases in a counterparty’s liquidity, which could make the counterparty unable to perform under the terms of the contract, and Rosehill Operating may not be able to realize the benefit of the contract. Rosehill Operating is unable to predict sudden changes in a counterparty’s creditworthiness or ability to perform. Even if Rosehill Operating accurately predicts sudden changes, its ability to negate the risk may be limited depending upon market conditions.

During periods of declining commodity prices, Rosehill Operating’s commodity derivative contract receivable positions have generally increased, which has increased Rosehill Operating’s counterparty credit exposure. If the creditworthiness of Rosehill Operating’s counterparties deteriorates and results in their nonperformance, Rosehill Operating could incur a significant loss with respect to its commodity derivative contracts.

Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of Rosehill Operating’s reserves.

The process of estimating oil and natural gas reserves is complex. It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of Rosehill Operating’s reserves. In order to prepare reserve estimates, Rosehill Operating must project production rates and timing of development expenditures. Rosehill Operating must also analyze available geological, geophysical, production and engineering data. The extent, quality and reliability of this data can vary. The process also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves may vary from Rosehill Operating’s estimates. For instance, initial production rates reported by Rosehill Operating or other operators may not be indicative of future or long-term production rates, Rosehill Operating’s recovery efficiencies may be worse than expected, and production declines may be greater than Rosehill Operating estimates and may be more rapid and irregular when compared to initial production rates. In addition, Rosehill Operating may adjust reserve estimates to reflect additional production history, results of development activities, current commodity prices and other existing factors. Any significant variance could materially affect the estimated quantities and present value of Rosehill Operating’s reserves.

You should not assume that the present value of future net revenues from Rosehill Operating’s reserves is the current market value of its estimated reserves. Rosehill Operating generally bases the estimated discounted future net cash flows from reserves on prices and costs on the date of the estimate. Actual future prices and costs may differ materially from those used in the present value estimate. For example, Rosehill Operating’s estimated proved reserves as of December 31, 2015 and related standardized measure were calculated under SEC rules using twelve-month trailing average benchmark prices of $47.72 per barrel of oil (WTI) and $2.47 per MMBtu (Henry Hub spot), which, for certain periods in 2016, were substantially higher than the available spot prices. If spot prices are below such calculated amounts, using more recent prices in estimating proved reserves may result in a reduction in proved reserve volumes due to economic limits.

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Rosehill Operating will not be the operator on all of its acreage or drilling locations, and, therefore, it will not be able to control the timing of exploration or development efforts, associated costs, or the rate of production of any non-operated assets.

Rosehill Operating has leased or acquired approximately 4,789 net acres in the Delaware Basin, approximately 95% of which it operates, as of December 31, 2016. As of December 31, 2016, Rosehill Operating was the operator on 193 of its 202 identified gross horizontal drilling locations. Rosehill Operating will have limited ability to exercise influence over the operations of the drilling locations it does not operate, and the operators of those locations may at any time have economic, business or legal interests or goals that are inconsistent with Rosehill Operating’s. Furthermore, the success and timing of development activities by such operators will depend on a number of factors that will be largely outside of Rosehill Operating’s control, including:

This limited ability to exercise control over the operations and associated costs of some of Rosehill Operating’s non-operated drilling locations could prevent the realization of targeted returns on capital in drilling or acquisition activities.

Rosehill Operating participates in oil and gas leases with third parties who may not be able to fulfill their commitments to its projects.

Rosehill Operating owns less than 100% of the working interest on approximately 5% of the oil and gas leases on which it conducts operations, and other parties own the remaining portion of the working interest. Financial risks are inherent in any operation where the cost of drilling, equipping, completing and operating wells is shared by more than one person. Rosehill Operating could potentially be held liable for joint activity obligations of other working interest owners, such as nonpayment of costs and liabilities arising from the actions of other working interest owners. In addition, declines in oil, natural gas and NGL prices may increase the likelihood that some of these working interest owners, particularly those that are smaller and less established, are not able to fulfill their joint activity obligations. Other working interest owners may be unable or unwilling to pay their share of project costs, and, in some cases, may declare bankruptcy. In the event any other working interest owners do not pay their share of such costs, Rosehill Operating would likely have to pay those costs, and may be unsuccessful in any efforts to recover these costs from other working interest owners, which could materially adversely affect its financial position

Rosehill Operating’s identified drilling locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. In addition, Rosehill Operating may not be able to raise the substantial amount of capital that would be necessary to drill such locations.

Rosehill Operating has specifically identified and scheduled certain drilling locations as an estimation of its future multi-year drilling activities on its existing acreage. These drilling locations represent a significant part of Rosehill Operating’s growth strategy. Rosehill Operating’s ability to drill and develop these locations depends on a number of uncertainties, including oil and natural gas prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, gathering system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors. Because of these uncertain factors, Rosehill Operating does not

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know if the potential drilling locations its management has identified will ever be drilled or if it will be able to produce oil or natural gas in commercial qualities from these or any other drilling locations. In addition, unless production is established within the spacing units covering the undeveloped acres on which some of the drilling locations are obtained, the leases for such acreage will expire. As such, Rosehill Operating’s actual drilling activities may materially differ from those presently identified.

As of December 31, 2016, 202 horizontal drilling locations have been identified on Rosehill Operating’s acreage based on approximately 1,320-foot spacing with 40 wells per 640-acre section in the ten formations from the Brushy Canyon through Wolfcamp B formations. Horizontal lateral effective lengths range from 4,300 feet up to 4, 700 feet. As a result of the limitations described above, Rosehill Operating may be unable to drill many of the identified locations. Based on future operations or regulatory changes, Rosehill Operating may determine that certain formations cannot be physically or economically exploited or that spacing of wells may have to be changed. In addition, Rosehill Operating will require significant additional capital over a prolonged period in order to pursue the development of these locations, and it may not be able to raise or generate the capital required to do so. See “ Rosehill Operating’s development and acquisition projects require substantial capital expenditures. Rosehill Operating may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in its ability to access or grow production and reserves ” above. Any drilling activities Rosehill Operating is able to conduct on these locations may not be successful or result in Rosehill Operating’s ability to add additional proved reserves to its overall proved reserves or may result in a downward revision of its estimated proved reserves, which could have a material adverse effect on its future business and results of operations. Additionally, if Rosehill Operating curtails its drilling program, it may lose a portion of its acreage through lease expirations.

Certain of Rosehill Operating’s undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage, the primary term is extended through continuous drilling provisions or the leases are renewed.

As of December 31, 2016, approximately 89% of Rosehill Operating’s total net acreage was either held by production or under continuous drilling provisions. The leases for Rosehill Operating’s net acreage not held by production will expire at the end of their primary term unless production is established in paying quantities under the units containing these leases, the leases are held beyond their primary terms under continuous drilling provisions or the leases are renewed. If Rosehill Operating’s leases expire and it is unable to renew the leases, Rosehill Operating will lose the right to develop the related properties. Rosehill Operating’s ability to drill and develop these locations depends on a number of uncertainties, including oil and natural gas prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, gathering system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors.

Adverse weather conditions may negatively affect Rosehill Operating’s operating results and its ability to conduct drilling activities.

Adverse weather conditions may cause, among other things, increases in the costs of, and delays in, drilling or completing new wells, power failures, temporary shut-in of production and difficulties in the transportation of Rosehill Operating’s oil, natural gas and NGLs. Any decreases in production due to poor weather conditions will have an adverse effect on Rosehill Operating’s revenues, which will in turn negatively affect its cash flow from operations.

Rosehill Operating’s operations are substantially dependent on the availability of water. Restrictions on Rosehill Operating’s ability to obtain water may have an adverse effect on its financial condition, results of operations and cash flows.

Water is an essential component of deep shale oil and natural gas drilling and hydraulic fracturing processes. Drought conditions have persisted in Texas in past years. These drought conditions have led

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governmental authorities to restrict the use of water subject to their jurisdiction for hydraulic fracturing to protect local water supplies. If Rosehill Operating is unable to obtain water to use in its operations, it may be unable to economically produce oil and natural gas, which could have a material and adverse effect on its financial condition, results of operations and cash flows.

The core of Rosehill Operating’s producing properties are located in the Delaware Basin, a sub-basin of the Permian Basin, in West Texas and New Mexico, making Rosehill Operating vulnerable to risks associated with operating in a single geographic area.

The core of Rosehill Operating’s producing properties are geographically concentrated in the Delaware Basin, a sub-basin of the Permian Basin, in West Texas. At December 31, 2016, 92% of Rosehill Operating’s total estimated proved reserves were attributable to properties located in this area. As a result of this concentration, Rosehill Operating may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages or other drought related conditions or interruption of the processing or transportation of oil, natural gas or NGLs.

The marketability of Rosehill Operating’s production will be dependent upon transportation and other facilities, certain of which Rosehill Operating will not control. If these facilities are unavailable, Rosehill Operating’s operations could be interrupted and its revenues reduced.

The marketability of Rosehill Operating’s oil and natural gas production depends in part upon the availability, proximity and capacity of transportation facilities owned by third parties. Rosehill Operating’s oil production is purchased at the wellhead by Gateway Gathering and Marketing (“Gateway”), an affiliate of Tema, and transported through Gateway’s Raven Gathering System (“Raven”) pipeline to the interconnection between Raven pipeline and Plains Marketing, LP pipeline. The oil is then transported on a third party pipeline to Midland, Texas where it is sold. Rosehill Operating’s natural gas production is transported by Gateway on Gateway’s Loving County Gathering System (“LCGS”) pipeline from the wellhead to the interconnection between LCGS pipeline and ETC Field Services pipeline. The gas is sold by Rosehill Operating to the third party (ETC Field Services) at the interconnection between LCGS and ETC Field Services. ETC Field Services transports the gas to its processing facility. In connection with the Business Combination, Rosehill Operating and Gateway have agreed to enter into crude oil gathering and natural gas gathering agreements with ten-year terms.

Rosehill Operating does not control Gateway’s or the third-party’s transportation facilities and its access to the facilities may be limited or denied. Insufficient production from Rosehill Operating’s wells to support the construction of pipeline facilities by Rosehill Operating’s purchasers or a significant disruption in the availability of third-party transportation facilities or other production facilities could adversely impact Rosehill Operating’s ability to deliver to market or produce its oil and natural gas and thereby cause a significant interruption in its operations. If, in the future, Rosehill Operating is unable, for any sustained period, to implement acceptable delivery or transportation arrangements or encounter production related difficulties, it may be required to shut in or curtail production or flare natural gas. Any such shut-in, curtailment, or flaring or an inability to obtain favorable terms for delivery of the oil and natural gas produced from its fields, would materially and adversely affect Rosehill Operating’s financial condition and results of operations.

Rosehill Operating may incur losses as a result of title defects in the properties in which it invests.

The existence of a material title deficiency can render a lease worthless and can adversely affect Rosehill Operating’s results of operations and financial condition. While Rosehill Operating has historically obtained title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title may not be discovered until after a well is drilled, in which case Rosehill Operating may lose the lease and the right to produce all or a portion of the minerals under the property and may be required to pay damages to the actual owner of the lease.

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The development of Rosehill Operating’s estimated proved undeveloped reserves (“PUDs”) may take longer and may require higher levels of capital expenditures than currently anticipated. Therefore, Rosehill Operating’s estimated PUDs may not be ultimately developed or produced.

As of December 31, 2015, 41% of Rosehill Operating’s total estimated proved reserves were classified as PUDs. Development of these PUDS may take longer and require higher levels of capital expenditures than currently anticipated. Delays in the development of Rosehill Operating’s PUDs, increases in costs to drill and develop such reserves or decreases in commodity prices will reduce the value of Rosehill Operating’s estimated PUDs and future net revenues estimated for such reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could cause Rosehill Operating to have to reclassify its PUDs as unproved reserves. Further, Rosehill Operating may be required to write-down its PUDs if it does not drill those wells within five years after their respective dates of booking.

If commodity prices decrease to a level such that Rosehill Operating’s future undiscounted cash flows from its properties are less than their carrying value, Rosehill Operating may be required to take impairments or write-downs of the carrying values of Rosehill Operating’s properties.

Accounting rules require periodic review of the carrying value of Rosehill Operating’s properties for possible impairment. Based on prevailing commodity prices and specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, Rosehill Operating may be required to write-down the carrying value of its properties. A write-down constitutes a non-cash charge to earnings. Commodity prices have declined significantly in recent year. Since January 1, 2014, the WTI spot price for oil declined from a high of $107.95 per barrel on June 20, 2014 to $26.19 per barrel on February 11, 2016, and the Henry Hub spot price for natural gas declined from a high of $8.15 per MMBtu on February 10, 2014 to a low of $1.49 per MMBtu on March 4, 2016. Likewise, NGLs have suffered significant recent declines in realized prices. Rosehill Operating recognized impairment charges of $8.1 million and $27.6 million in the years ended December 31, 2015 and 2014, respectively. Lower commodity prices in the future could result in impairments of Rosehill Operating’s properties, which could have a material adverse effect on its results of operations for the periods in which such charges are taken.

Unless Rosehill Operating replaces its reserves with new reserves and develops those reserves, Rosehill Operating’s reserves and production will decline, which would adversely affect its future cash flows and results of operations.

Producing oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Unless Rosehill Operating conducts successful ongoing exploration and development activities or continually acquires properties containing proved reserves, Rosehill Operating’s proved reserves will decline as those reserves are produced. Rosehill Operating’s future reserves and production, and therefore its future cash flow and results of operations, are highly dependent on its success in efficiently developing its current reserves and economically finding or acquiring additional recoverable reserves. Rosehill Operating may not be able to develop, find or acquire sufficient additional reserves to replace the current and future production. If Rosehill Operating is unable to replace its current and future production, the value of its reserves will decrease, and its business, financial condition and results of operations would be materially and adversely affected.

Conservation measures and technological advances could reduce demand for oil and natural gas.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas. The impact of the changing demand for oil and natural gas may have a material adverse effect on Rosehill Operating’s business, financial condition, results of operations and cash flows.

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Rosehill Operating will depend upon significant purchasers for the sale of most of its oil, natural gas and NGL production.

Rosehill Operating has historically sold its production to a relatively small number of customers, as is customary in its business. For the years ended December 31, 2015 and 2014, four customers accounted for approximately 89% and 94%, respectively, of Rosehill Operating’s total revenue. During such years, no other purchaser accounted for 10% or more of Rosehill Operating’s revenue. The loss of any one or all of these four purchasers could materially and adversely affect Rosehill Operating’s revenues in the short-term.

Rosehill Operating’s operations may be exposed to significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to its business activities.

Rosehill Operating’s operations are subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of Rosehill Operating’s operations or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations applicable to Rosehill Operating’s operations, including the acquisition of a permit or other approval before conducting regulated activities; the restriction of types, quantities and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; the application of specific health and safety criteria addressing worker protection; the imposition of substantial liabilities for pollution resulting from Rosehill Operating’s operations. Numerous governmental authorities, such as the U.S. Environmental Protection Agency (“EPA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve taking difficult and costly compliance measures or corrective actions. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties, natural resource damages, the imposition of investigatory or remedial obligations, and the issuance of orders limiting or prohibiting some or all of Rosehill Operating’s operations; and plugging and abandonment responsibilities for wells which have ceased producing. In addition, Rosehill Operating may experience delays in obtaining, or be unable to obtain, required permits, which may delay or interrupt its operations and limit its growth and revenue.

Certain environmental laws impose strict as well as joint and several liabilities for costs required to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been stored or released. Rosehill Operating may be required to remediate contaminated properties currently or formerly operated by Rosehill Operating or its predecessors in interest or facilities of third parties that received waste generated by Rosehill Operating’s operations regardless of whether such contamination resulted from the conduct of others or from consequences of Rosehill Operating’s own actions that were in compliance with all applicable laws at the time those actions were taken. In connection with certain acquisitions, Rosehill Operating could acquire, or be required to provide indemnification against, environmental liabilities that could expose it to material losses. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of Rosehill Operating’s operations. Rosehill Operating’s insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against it. Moreover, public interest in the protection of the environment has increased dramatically in recent years. The trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability. For example, in June 2016, the EPA finalized a rule regarding criteria for aggregating multiple small surface sites into a single source for air-quality permitting purposes applicable to the oil and gas industry. This rule could cause small facilities, on an aggregate basis, to be deemed a major source, thereby triggering more stringent air permitting requirements. To the extent laws are enacted or other governmental action is taken that restricts drilling or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, Rosehill Operating’s business, prospects, financial condition or results of operations could be materially adversely affected.

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Rosehill Operating may incur substantial losses and be subject to substantial liability claims as a result of its operations. Additionally, Rosehill Operating may not be insured for, or the insurance may be inadequate to protect it against, these risks.

Rosehill Operating is not insured against all risks. Losses and liabilities arising from uninsured and underinsured events could materially and adversely affect Rosehill Operating’s business, financial condition or results of operations.

Rosehill Operating’s exploration and development activities are subject to all of the operating risks associated with drilling for and producing oil and natural gas, including the possibility of:

Any of these risks could adversely affect Rosehill Operating’s ability to conduct operations or result in substantial loss to us as a result of claims for:

Rosehill Operating may elect not to obtain insurance for any or all of these risks if it believes that the cost of available insurance is excessive relative to the risks presented. In addition, statutory and regulatory penalties, pollution and environmental risks generally are not fully insurable. The occurrence of an event that is not fully covered by insurance could have a material adverse effect on Rosehill Operating’s business, financial condition and results of operations.

Properties that Rosehill Operating decides to drill may not yield oil or natural gas in commercially viable quantities.

Properties that Rosehill Operating decides to drill that do not yield oil or natural gas in commercially viable quantities will adversely affect its results of operations and financial condition. There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable. The use of micro-seismic data and other technologies and the study of producing fields and data from other wells in the same area, or more fully explored prospects, will not enable Rosehill Operating to know conclusively prior to drilling whether oil or natural gas will be present or, if present, in commercial quantities. Further, drilling operations may be curtailed, delayed or cancelled as a result of numerous factors, including:

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Rosehill Operating may be unable to make attractive acquisitions or successfully integrate acquired assets or businesses, and any inability to do so may disrupt its business and hinder its ability to grow.

In the future, Rosehill Operating may make acquisitions of assets or businesses that complement or expand its current business. However, there is no guarantee Rosehill Operating will be able to identify attractive acquisition opportunities. In the event Rosehill Operating is able to identify attractive acquisition opportunities, it may not be able to complete the acquisition or do so on commercially acceptable terms. Competition for acquisitions may also increase the cost of, or cause Rosehill Operating to refrain from, completing acquisitions.

The success of any completed acquisition will depend on its ability to integrate effectively the acquired assets or business. The process of integrating acquired assets or businesses may involve unforeseen difficulties and may require a disproportionate amount of managerial and financial resources. In addition, possible future acquisitions may be larger and for purchase prices significantly higher than those paid for earlier acquisitions. No assurance can be given that Rosehill Operating will be able to identify additional suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully acquire identified targets. Rosehill Operating’s failure to achieve consolidation savings, to integrate the acquired businesses and assets into its existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on its financial condition and results of operations.

In addition, Rosehill Operating’s future credit agreements may impose limitations on its ability to enter into mergers or combination transactions. Such credit agreements may also limit Rosehill Operating’s ability to incur certain indebtedness, which could indirectly limit Rosehill Operating’s ability to engage in acquisitions of assets or businesses.

Certain of Rosehill Operating’s properties are subject to land use restrictions, which could limit the manner in which it conducts its business.

In order to bring equipment, supplies, water, personnel and produced products to and from certain of its properties, Rosehill Operating and/or its contractors must obtain permissions or rights-of-way from other parties, including private property owners and governmental agencies. There is no guarantee that Rosehill Operating or its contractors will be able to obtain or continue to obtain those permissions or rights or to obtain them at a reasonable cost. In addition, certain of Rosehill Operating’s properties are subject to land use restrictions, including ordinances, which could limit the manner in which it conducts its business. Although none of Rosehill Operating’s proposed drilling locations associated with proved undeveloped reserves as of December 31, 2016 are on properties currently subject to such land use restrictions, such restrictions may become effective in the future. All of the permissions, rights-of-way, and restrictions discussed above could affect, among other things, Rosehill Operating’s access to and the permissible uses of Rosehill Operating’s facilities as well as the manner in which it produces oil and natural gas and may restrict or prohibit drilling in general. The costs incurred to comply with such restrictions may be significant in nature, and Rosehill Operating may experience delays or curtailment in the pursuit of development activities and may even be precluded from the drilling of wells.

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The unavailability or high cost of additional drilling rigs, equipment, supplies, personnel and oilfield services could adversely affect Rosehill Operating’s ability to execute its development plans within its budget and on a timely basis.

Rosehill Operating does not own any drilling rigs, nor does it own other equipment and supplies that are critical to its continuing ability to drill for and produce oil, gas, and NGLs. It is dependent on access to qualified and competent contractors for such equipment and supplies, as well as the personnel to engage in Rosehill Operating’s drilling and production program. The demand for drilling rigs, pipe and other equipment and supplies, as well as for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers and other professionals in the oil and natural gas industry, can fluctuate significantly, often in correlation with oil and natural gas prices, causing periodic shortages. Rosehill Operating’s operations are concentrated in areas in which industry had increased rapidly, and as a result, demand for such drilling rigs, equipment and personnel, as well as access to transportation, processing and refining facilities in these areas, had increased, as did the costs for those items. However, beginning in the second half of 2014, commodity prices began to decline and the demand for goods and services has subsided due to reduced activity. To the extent that commodity prices improve in the future, any delay or inability to secure the personnel, equipment, power, services, resources and facilities access necessary for Rosehill Operating to resume or increase its development activities could result in production volumes being below Rosehill Operating’s forecasted volumes. In addition, any such negative effect on production volumes, or significant increases in costs, could have a material adverse effect on Rosehill Operating’s cash flow and profitability. Furthermore, if Rosehill Operating is unable to secure a sufficient number of drilling rigs at reasonable costs, it may not be able to drill all of its acreage before its leases expire.

Rosehill Operating could experience periods of higher costs if commodity prices rise. These increases could reduce Rosehill Operating’s profitability, cash flow and ability to complete development activities as planned.

Historically, Rosehill Operating’s capital and operating costs have risen during periods of increasing oil, natural gas and NGL prices. These cost increases result from a variety of factors beyond Rosehill Operating’s control, such as increases in the cost of electricity, steel and other raw materials that Rosehill Operating and its vendors rely upon; increased demand for labor, services and materials as drilling activity increases; and increased taxes. Decreased levels of drilling activity in the oil and gas industry in recent periods have led to declining costs of some drilling equipment, materials and supplies. However, such costs may rise faster than increases in Rosehill Operating’s revenue if commodity prices rise, thereby negatively impacting Rosehill Operating’s profitability, cash flow and ability to complete development activities as scheduled and on budget. This impact may be magnified to the extent that Rosehill Operating’s ability to participate in the commodity price increases is limited by its prior or future commodity derivative activities.

Should Rosehill Operating fail to comply with all applicable Federal Energy Regulatory Commission (“FERC”) administered statutes, rules, regulations and orders, Rosehill Operating could be subject to substantial penalties and fines.

Under the Domenici-Barton Energy Policy Act of 2005 (“EP Act of 2005”), FERC has civil penalty authority under the Natural Gas Act of 1938 (“NGA”) and the Natural Gas Policy Act (“NGPA”) to impose penalties of up to $1 million per day for each violation for current violations and disgorgement of profits associated with any violation. While Rosehill Operating’s operations have not been regulated by FERC as a natural gas company under the NGA, FERC has adopted regulations that may subject certain of Rosehill Operating’s otherwise non-FERC jurisdictional operations to FERC annual reporting and posting requirements. Rosehill Operating also must comply with the anti-market manipulation rules enforced by FERC. Additional rules and legislation pertaining to those and other matters may be considered or adopted by FERC from time to time. Failure to comply with those regulations in the future could subject Rosehill Operating to civil penalty liability.

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Climate change laws and regulations restricting emissions of greenhouse gasses (“GHGs”) could result in increased operating costs and reduced demand for the oil and natural gas that Rosehill Operating produces, while potential physical effects of climate change could disrupt Rosehill Operating’s production and cause it to incur significant costs in preparing for or responding to those effects.

In response to findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment, the EPA has adopted regulations pursuant to the federal Clean Air Act that, among other things, require preconstruction and operating permits for GHG emissions from certain large stationary sources that otherwise require such permits for non-GHG emissions. Facilities required to obtain preconstruction permits for their GHG emissions are also required to meet “best available control technology” standards that are being established by the states or, in some cases, by the EPA on a case-by-case basis. These regulatory requirements could adversely affect Rosehill Operating’s operations and restrict or delay Rosehill Operating’s ability to obtain air permits for new or modified sources. In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified onshore and offshore oil and natural gas production sources in the United States on an annual basis, which include certain of Rosehill Operating’s operations. Furthermore, in May 2016, the EPA finalized rules that establish new controls for emissions of methane from new, modified or reconstructed sources in the oil and natural gas source category, including production, processing, transmission and storage activities. The rule includes first-time standards to address emissions of methane from equipment and processes across the source category, including hydraulically fractured oil and natural gas well completions. The EPA has also announced that it intends to impose methane emission standards for existing sources as well but, to date, has not yet issued a proposal. Compliance with these rules will require enhanced record-keeping practices, the purchase of new equipment, such as optical gas imaging instruments to detect leaks, and increased frequency of maintenance and repair activities to address emissions leakage. The rules will also likely require additional personnel time to support these activities or the engagement of third party contractors to assist with and verify compliance. These new and proposed rules could result in increased compliance costs on Rosehill Operating’s operations.

While Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years. In the absence of such federal climate legislation, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of cap and trade programs. These programs typically require major sources of GHG emissions to acquire and surrender emission allowances in return for emitting those GHGs. In addition, efforts have been made and continue to be made in the international community toward the adoption of international treaties or protocols that would address global climate change issues. Most recently in April 2016, the United States was one of 175 countries to ratify the Paris Agreement, which requires member countries to review and “represent a progression” in their intended nationally determined contributions, which set GHG emission reduction goals, every five years beginning in 2020. Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact Rosehill Operating’s business, any such future laws and regulations imposing reporting obligations on, or limiting emissions of GHGs from, Rosehill Operating’s equipment and operations could require Rosehill Operating to incur costs to reduce emissions of GHGs associated with its operations. Substantial limitations on GHG emissions could adversely affect demand for the oil and natural gas Rosehill Operating produces and lower the value of its reserves. Finally, it should be noted that some scientists, reportedly a majority who have studied the issue, have concluded that increasing concentrations of GHGs in the earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods, droughts, and other climatic events. Rosehill Operating’s operations are onshore and not located in coastal or flood-prone regions of the United States, but if any such effects were to occur, they have the potential to cause physical damage to its assets or affect the availability of water for its operations and thus could have a material adverse effect on Rosehill Operating’s operations.

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Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs and additional operating restrictions or delays in the completion of oil and natural gas wells and adversely affect Rosehill Operating’s production.

Hydraulic fracturing is an important and common practice that is used to stimulate production of oil and/or natural gas from dense subsurface rock formations. The hydraulic fracturing process involves the injection of water, proppants and chemicals under pressure into targeted subsurface formations to fracture the surrounding rock and stimulate production. Rosehill Operating regularly uses hydraulic fracturing as part of its operations and expects to continue that practice. Hydraulic fracturing is typically regulated by state oil and natural gas commissions, but the EPA has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act (“SDWA”) over certain hydraulic fracturing activities involving the use of diesel fuels and published permitting guidance in February 2014 addressing the performance of such activities using diesel fuels. The EPA has also issued final regulations under the federal Clean Air Act establishing performance standards, including standards for the capture of air emissions released during hydraulic fracturing, and advanced notice of proposed rulemaking under the Toxic Substances Control Act to require companies to disclose information regarding the chemicals used in hydraulic fracturing, and also finalized rules in July 2016 that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants. In addition, the Bureau of Land Management (“BLM”) finalized rules in March 2015 that impose new or more stringent standards for performing hydraulic fracturing on federal and American Indian lands. The U.S. District Court of Wyoming set aside the rules as beyond BLM’s jurisdiction to promulgate. The district court’s decision is on appeal to the Tenth Circuit, with oral argument scheduled for March 2017. In addition, Congress has from time to time considered legislation to provide for federal regulation of hydraulic fracturing under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process. It is unclear how any additional federal regulation of hydraulic fracturing activities may affect Rosehill Operating’s operations.

In December 2016, the EPA released its final report on the potential impacts of hydraulic fracturing on drinking water resources. The final report concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources “under some circumstances,” noting that the following hydraulic fracturing water cycle activities and local- or regional-scale factors are more likely than others to result in more frequent or more severe impacts: water withdrawals for fracturing in times or areas of low water availability; surface spills during the management of fracturing fluids, chemicals or produced water; injection of fracturing fluids into wells with inadequate mechanical integrity; injection of fracturing fluids directly into groundwater resources; discharge of inadequately treated fracturing wastewater to surface waters; and disposal or storage of fracturing wastewater in unlined pits. As described elsewhere in this Proxy Statement, these risks are regulated under various state, federal, and local laws. The EPA’s study report did not find a direct link between the action of hydraulically fracturing the well itself and contamination of groundwater resources. The study report does not, therefore, appear to provide a reasonable basis to expect Congress to repeal the exemption for hydraulic fracturing under the federal Safe Drinking Water Act at the federal level.

At the state level, several states have adopted or are considering legal requirements that could impose more stringent permitting, disclosure and well construction requirements on hydraulic fracturing activities. For example, in May 2013, the Railroad Commission of Texas issued a “well integrity rule,” which updates the requirements for drilling, putting pipe down and cementing wells. The rule also includes testing and reporting requirements, such as (i) the requirement to submit cementing reports after well completion or after cessation of drilling, whichever is later, and (ii) the imposition of additional testing on wells less than 1,000 feet below usable groundwater. The well integrity rule took effect in January 2014. Local governments also may seek to adopt ordinances within their jurisdictions regulating the time, place and manner of drilling activities in general or hydraulic fracturing activities in particular. If new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where Rosehill Operating operates, it could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of development activities, and perhaps even be precluded from drilling wells.

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Legislation or regulatory initiatives intended to address seismic activity could restrict Rosehill Operating’s drilling and production activities, as well as its ability to dispose of produced water, including saltwater, gathered from such activities, which could have a material adverse effect on Rosehill Operating’s business.

State and federal regulatory agencies recently have focused on a possible connection between hydraulic fracturing related activities and the increased occurrence of seismic activity, and regulatory agencies at all levels are continuing to study the possible linkage between oil and gas activity and induced seismicity. For example, in 2015, the United States Geological Survey identified eight states, including Texas, with areas of increased rates of induced seismicity that could be attributed to fluid injection or oil and gas extraction. In addition, a number of lawsuits have been filed in other states, for example recent lawsuits in Oklahoma, alleging that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal. In response to these concerns, regulators in some states are seeking to impose additional requirements, including requirements in the permitting of produced water disposal wells or otherwise to assess any relationship between seismicity and the use of such wells. For example, in October 2014, the Railroad Commission of Texas published a rule governing permitting or re-permitting of disposal wells that would require, among other things, the submission of information on seismic events occurring within a specified radius of the disposal well location, as well as logs, geologic cross sections and structure maps relating to the disposal area in question. If the permittee or an applicant of a disposal well permit fails to demonstrate that the saltwater or other fluids are confined to the disposal zone or if scientific data indicates such a disposal well is likely to be or determined to be contributing to seismic activity, then the agency may deny, modify, suspend or terminate the permit application or existing operating permit for that well.

Rosehill Operating disposes of large volumes of produced water, including saltwater, gathered from its drilling and production operations pursuant to permits issued to Tema, which permits will be transferred to Rosehill Operating at the closing of the Business Combination, by governmental authorities overseeing such disposal activities and pursuant to permissions granted by the owners of properties where the disposal wells are located. While these permits are issued pursuant to existing laws and regulations, these legal requirements are subject to change. The permissions granted by property owners are subject to change. Any changes could result in the imposition of more stringent operating constraints or new monitoring and reporting requirements, owing to, among other things, concerns of the public or governmental authorities or property owners regarding such gathering or disposal activities. The adoption and implementation of any new laws or regulations or changes in permissions that restrict Rosehill Operating’s expected ability to use hydraulic fracturing or dispose of produced water gathered from its drilling and production activities by limiting volumes, disposal rates, disposal well locations or otherwise, or requiring Rosehill Operating to shut down disposal wells, could have a material adverse effect on its business, financial condition and results of operations.

Competition in the oil and natural gas industry is intense, making it more difficult for Rosehill Operating to acquire properties, market oil or natural gas and secure trained personnel.

Rosehill Operating’s ability to acquire additional prospects and to find and develop reserves in the future will depend on Rosehill Operating’s ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment for acquiring properties, marketing oil and natural gas and securing trained personnel. Also, there is substantial competition for capital available for investment in the oil and natural gas industry. Many of Rosehill Operating’s competitors possess and employ financial, technical and personnel resources substantially greater than Rosehill Operating’s. Those companies may be able to pay more for productive properties and exploratory prospects and to evaluate, bid for and purchase a greater number of properties and prospects than Rosehill Operating’s financial or personnel resources permit. In addition, other companies may be able to offer better compensation packages to attract and retain qualified personnel than Rosehill Operating is able to offer. The cost to attract and retain qualified may increase substantially in the future. Rosehill Operating may not be able to compete successfully in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel and raising additional capital, which could have a material adverse effect on its business.

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The loss of senior management or technical personnel could adversely affect Rosehill Operating’s operations.

Rosehill Operating depends on the services of its senior management and technical personnel. Rosehill Operating does not maintain, nor does it plan to obtain, any insurance against the loss of any of these individuals. The loss of the services of such senior management or technical personnel could have a material adverse effect on Rosehill Operating’s business, financial condition and results of operations.

Rosehill Operating’s business is difficult to evaluate because it may be susceptible to the potential difficulties associated with rapid growth and expansion.

Rosehill Operating’s assets have grown rapidly over the last several years. Rosehill Operating believes that its future success depends on its ability to manage the rapid growth that it has experienced and the demands from increased responsibility on management personnel. The following factors could present difficulties:

Rosehill Operating’s operating results could be adversely affected if it does not successfully manage these potential difficulties. The historical financial information incorporated herein is not necessarily indicative of the results that may be realized in the future.

Increases in interest rates could adversely affect Rosehill Operating’s business.

Rosehill Operating’s business and operating results can be harmed by factors such as the availability, terms of and cost of capital, increases in interest rates or a reduction in credit rating. These changes could cause Rosehill Operating’s cost of doing business to increase, limit its ability to pursue acquisition opportunities, reduce cash flow used for drilling and place it at a competitive disadvantage. For example, as of December 31, 2016, outstanding borrowings of Rosehill Operating subject to variable interest rates were approximately $55.0 million, and a 1.0% increase in interest rates would result in an increase in annual interest expense of approximately $0.6 million, assuming the $55.0 million of debt was outstanding for the full year. The expected credit facilities of Rosehill Operating may be subject to similar or greater interest rate expenses. Recent and continuing disruptions and volatility in the global financial markets may lead to a contraction in credit availability impacting Rosehill Operating’s ability to finance operations. Rosehill Operating requires continued access to capital. A significant reduction in cash flows from operations or the availability of credit could materially and adversely affect its ability to achieve planned growth and operating results.

Rosehill Operating may be subject to risks in connection with acquisitions of properties.

The successful acquisition of producing properties requires an assessment of several factors, including:

The accuracy of these assessments is inherently uncertain. In connection with these assessments, Rosehill Operating performs a review of the subject properties that it believes to be generally consistent with industry practices. However, these reviews will not reveal all existing or potential problems, nor will it permit Rosehill

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Operating to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems. Often Rosehill Operating may be entitled to contractual indemnification for environmental liabilities and has acquired properties on an “as is” basis.

Rosehill Operating’s disposition activities may be subject to factors beyond its control, and in certain cases it may retain unforeseen liabilities for certain matters.

Rosehill Operating has regularly sold non-core assets in order to increase capital resources available for other core assets and to create organizational and operational efficiencies. It has also occasionally sold interests in core assets for the purpose of accelerating the development and increasing efficiencies in such core assets. Various factors could materially affect Rosehill Operating’s ability to dispose of such assets in the future, including the approvals of governmental agencies or third parties and the availability of purchasers willing to acquire the assets with terms Rosehill Operating deems acceptable.

Sellers often retain certain liabilities or agree to indemnify buyers for certain matters related to the sold assets. The magnitude of any such retained liability or of the indemnification obligation is difficult to quantify at the time of the transaction and ultimately could be material. Also, as is typical in divestiture transactions, third parties may be unwilling to release Rosehill Operating from guarantees or other credit support provided prior to the sale of the divested assets. As a result, after a divestiture, Rosehill Operating may remain secondarily liable for the obligations guaranteed or supported to the extent that the buyer of the assets fails to perform these obligations.

As a result of future legislation, certain U.S. federal income tax deductions currently available with respect to oil and gas exploration and development may be eliminated and Rosehill Operating’s production may be subject to the imposition of new state or local taxes.

In past years, legislation has been proposed that would, if enacted into law, make significant changes to U.S. tax laws, including to certain key U.S. federal income tax provisions currently available to oil and gas exploration and production companies. Such legislative changes have included, but not been limited to, (i) the repeal of the percentage depletion allowance for oil and gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, (iii) the elimination of the deduction for certain domestic production activities, (iv) an extension of the amortization period for certain geological and geophysical expenditures. Congress could consider, and could include, some or all of these proposals as part of tax reform legislation, to accompany lower federal income tax rates. Moreover, other more general features of tax reform legislation, including changes to cost recovery rules and to the deductibility of interest expense, may be developed that also would change the taxation of oil and gas companies. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these proposals or any similar changes in U.S. federal income tax laws could eliminate or postpone certain tax deductions that are currently available with respect to oil and gas exploration and development, and any such changes, as well as any changes to or the imposition of new state or local taxes (including the imposition of, or increase in production, severance or similar taxes), could increase the cost of exploration and development of oil and gas resources, which would negatively affect Rosehill Operating’s financial condition, results of operations and cash flows.

Rosehill Operating’s use of seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas, which could adversely affect the results of Rosehill Operating’s drilling operations.

Even when properly used and interpreted, seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the

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interpreter to know whether hydrocarbons are, in fact, present in those structures. As a result, Rosehill Operating’s drilling activities may not be successful or economical. In addition, the use of advanced technologies, such as 3-D seismic data, requires greater pre-drilling expenditures than traditional drilling strategies, and Rosehill Operating could incur losses as a result of such expenditures.

Restrictions on drilling activities intended to protect certain species of wildlife may adversely affect Rosehill Operating’s ability to conduct drilling activities in areas where it operates.

Oil and natural gas operations in Rosehill Operating’s operating areas may be adversely affected by seasonal or permanent restrictions on drilling activities designed to protect various wildlife. Seasonal or permanent restrictions may limit Rosehill Operating’s ability to operate in protected areas and can intensify competition for drilling rigs, oilfield equipment, services, supplies and qualified personnel, which may lead to periodic shortages when drilling is allowed. These constraints and the resulting shortages or high costs could delay Rosehill Operating’s operations or materially increase Rosehill Operating’s operating and capital costs. Permanent restrictions imposed to protect endangered species could prohibit drilling in certain areas or require the implementation of expensive mitigation measures. The designation of previously unprotected species in areas where Rosehill Operating operates as threatened or endangered could cause Rosehill Operating to incur increased costs arising from species protection measures or could result in limitations on Rosehill Operating’s activities that could have a material and adverse impact on its ability to develop and produce its reserves.

The enactment of derivatives legislation could have an adverse effect on Rosehill Operating’s ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with its business.

The Dodd-Frank Act (“Dodd-Frank”), enacted on July 21, 2010, established federal oversight and regulation of the over-the-counter derivatives market and entities, such as Rosehill Operating, that participate in that market. Dodd-Frank requires the Commodity Futures Trading Commission (“CFTC”) and the SEC to promulgate rules and regulations implementing Dodd-Frank. In October 2011, the CFTC issued regulations to set position limits for certain futures and option contracts in the major energy markets and for swaps that are their economic equivalents. The initial position limits rules were vacated by the United States District Court for the District of Columbia in September 2012. However, in November 2013, the CFTC proposed new rules that would place limits on positions in certain core futures and equivalent swaps contracts for or linked to certain physical commodities, including certain energy commodities, subject to limited exceptions for certain bona fide hedging transactions. The CFTC re-proposed these rules (and adopted final related aggregation rules) in December 2016. As these new position limits rules are not yet in effect, the impact of those provisions on Rosehill Operating is uncertain at this time.

The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing. The CFTC has not yet proposed rules designating any other asset classes of swaps, including physical commodity swaps, for mandatory clearing. In addition, certain banking regulators and the CFTC have adopted final rules establishing minimum margin requirements for uncleared swaps. Although Rosehill Operating expects to qualify for the end-user exception from such clearing and margin requirements for swaps entered into to hedge its commercial risks, the application of such requirements to other market participants, such as swap dealers, may change the cost and availability of the swaps that it uses for hedging. If any of these swaps do not qualify for the commercial end-user exception, posting of collateral could impact liquidity and reduce cash available to Rosehill Operating for capital expenditures, therefore reducing Rosehill Operating’s ability to execute hedges to reduce risk and protect cash flow.

The full impact of Dodd-Frank and related regulatory requirements upon Rosehill Operating’s business will not be known until all the regulations are implemented and the market for derivatives contracts has adjusted. Dodd-Frank and any new regulations could significantly increase the cost of derivative contracts, materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks Rosehill Operating

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encounters, and reduce Rosehill Operating’s ability to monetize or restructure its existing derivative contracts. If Rosehill Operating reduces its use of derivatives as a result of Dodd-Frank and implementing regulations, its results of operations may become more volatile and cash flows may be less predictable, which could adversely affect its ability to plan for and fund capital expenditures. Finally, Dodd-Frank was intended, in part, to reduce the volatility of oil and natural gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and natural gas. Rosehill Operating’s revenues could therefore be adversely affected if a consequence of Dodd-Frank and implementing regulations is to lower commodity prices. Any of these consequences could have a material and adverse effect on Rosehill Operating and its financial condition.

In addition, the European Union and other non-U.S. jurisdictions are implementing regulations with respect to the derivatives market. To the extent Rosehill Operating transacts with counterparties in foreign jurisdictions, it and/or its transactions may become subject to such regulations, the impact of which is not clear at this time.

The standardized measure of Rosehill Operating’s estimated reserves is not an accurate estimate of the current fair value of its estimated oil and natural gas reserves.

Standardized measure is a reporting convention that provides a common basis for comparing oil and natural gas companies subject to the rules and regulations of the SEC. Standardized measure requires the use of specific pricing as required by the SEC as well as operating and development costs prevailing as of the date of computation. Consequently, it may not reflect the prices ordinarily received or that will be received for oil and natural gas production because of varying market conditions, nor may it reflect the actual costs that will be required to produce or develop the oil and natural gas properties. As a result, estimates included herein of future net cash flow may be materially different from the future net cash flows that are ultimately received, and the standardized measure of Rosehill Operating’s estimated reserves included in this proxy statement should not be construed as accurate estimates of the current fair value of Rosehill Operating’s proved reserves.

Rosehill Operating may not be able to keep pace with technological developments in the oil and natural gas industry.

The oil and natural gas industry is characterized by rapid and significant technological advancements and introductions of new products and services using new technologies. As others use or develop new technologies, Rosehill Operating may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial costs. In addition, other oil and natural gas companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before Rosehill Operating can. Rosehill Operating may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies Rosehill Operating uses now or in the future were to become obsolete, its business, financial condition or results of operations could be materially and adversely affected.

Rosehill Operating is dependent on technology that may be covered by patents or other intellectual property that may be owned by other parties.

Rosehill Operating does not own any patents. Many of Rosehill Operating’s operations involve products or technology that may be covered by patents owned by others or by trade secrets or other intellectual property controlled by others. In most cases, Rosehill Operating depends on contractors and suppliers to obtain the right to use applicable intellectual property. Because of the complexity of intellectual property rights, Rosehill Operating cannot ensure that its contractors and suppliers have obtained the applicable rights to use that intellectual property. There is no guarantee that these contractors and suppliers will be willing or able to defend and indemnify Rosehill Operating in the event that an intellectual property owner claims infringement. If Rosehill Operating loses the right to use certain products or technology or are forced to pay damages to the owner of intellectual property, its business, financial condition or results of operations could be materially and adversely affected.

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Information technology failures could harm Rosehill Operating’s business by increasing costs and negatively impacting operations.

The oil and natural gas industry has become increasingly dependent on digital technologies to conduct certain exploration, development, production, and processing activities. For example, the oil and natural gas industry depends on digital technologies to interpret seismic data, manage drilling rigs, production equipment and gathering systems, conduct reservoir modeling and reserves estimation, and process and record financial and operating data. At the same time, cyber incidents, including deliberate attacks or unintentional events, have increased. The U.S. government has issued public warnings that indicate that energy assets might be specific targets of cyber security threats.

Rosehill Operating relies extensively on information technology systems, including Internet sites, data hosting facilities and other hardware and platforms, some of which are hosted by third parties, to assist in conducting its business. Rosehill Operating’s information technology systems, as well as those of third parties used in its operations, may be vulnerable to a variety of cybersecurity risks or failures, such as those involving unauthorized access, malicious software, data privacy breaches by employees or others with authorized access, cyber or phishing-attacks and other security and operational issues. Although Rosehill Operating has implemented information technology controls and systems that are designed to protect information and prevent or minimize the risk of data loss and other cybersecurity risks and failures, such measures cannot entirely eliminate cybersecurity threats or prevent information technology failures, and the enhanced controls installed may be breached or may fail. If Rosehill Operating’s information technology systems cease to function properly or its cybersecurity is breached, Rosehill Operating could suffer disruptions to its operations and unauthorized persons may gain access to proprietary or confidential information, which could result in loss or disclosure of, or damage to, its or any of its customer’s or supplier’s data or confidential information; misuse or misappropriation of data, funds or other property; and other manipulation or improper use of its systems or networks. This could harm Rosehill Operating’s business by damaging its reputation, subjecting it to potential financial or legal liability, and requiring it to incur significant costs, including costs to repair or restore the security of its internal systems or to take other remedial steps.

A terrorist attack or armed conflict could harm Rosehill Operating’s business.

Terrorist activities, anti-terrorist efforts and other armed conflicts involving the United States, the Middle East, or other countries or regions may adversely affect the United States and global economies and could prevent Rosehill Operating from meeting its financial and other obligations. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on demand for Rosehill Operating’s services and causing a reduction in its revenues. Oil and natural gas related facilities could be direct targets of terrorist attacks, and Rosehill Operating’s operations could be adversely impacted if infrastructure integral to its customers’ operations is destroyed or damaged. Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

U.S. or global financial markets may impact Rosehill Operating’s business and financial condition.

A credit crisis or other turmoil in the U.S. or global financial system may have a negative impact on Rosehill Operating’s business and financial condition. Rosehill Operating’s ability to access the capital markets may be restricted at a time when it would like, or need, to raise financing. This could have an impact on Rosehill Operating’s flexibility to react to changing economic and business conditions. Deteriorating economic conditions could have a negative impact on its lenders, the purchasers of its oil and gas production and the working interest owners in properties it operates, causing them to fail to meet their obligations to Rosehill Operating.

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Risks Related to the Company and the Business Combination

We are a holding company. Our sole material asset after completion of the Business Combination will be our equity interest in Rosehill Operating and we will be accordingly dependent upon distributions from Rosehill Operating to pay taxes, make payments under the Tax Receivable Agreement and cover our corporate and other overhead expenses.

We are a holding company and, subsequent to the completion of the Business Combination, will have no material assets other than our equity interest in Rosehill Operating. Please see “Summary of the Proxy Statement—Organizational Structure.” We will have no independent means of generating revenue. To the extent Rosehill Operating has available cash, we intend to cause Rosehill Operating to make (i) generally pro rata distributions to its unitholders, including us, in an amount at least sufficient to allow us to pay dividends with respect to the Series A Preferred Stock, our taxes and to make payments under the Tax Receivable Agreement with Tema and (ii) non-pro rata payments to us to reimburse us for our corporate and other overhead expenses. To the extent that we need funds and Rosehill Operating or its subsidiaries are restricted from making such distributions or payments under applicable law or regulation or under the terms of any future financing arrangements, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.

We expect to be a “controlled company” within the meaning of the NASDAQ Listing Rules following the Transactions and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

Upon completion of the Business Combination, Tema and our Sponsor will control a majority of the combined voting power of all classes of our outstanding voting stock. Following the completion of the Business Combination, we expect to be a controlled company within the meaning of the NASDAQ corporate governance standards. Under the NASDAQ rules, a company of which more than 50% of the voting power is held by another person or group of persons acting together is a controlled company and may elect not to comply with certain NASDAQ corporate governance requirements, including the requirements that:

These requirements will not apply to us as long as we remain a controlled company. Following the Business Combination, we intend to utilize some or all of these exemptions. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NASDAQ. See “ Information About the Company—Status as a Controlled Company ”.

Subsequent to the consummation of the Business Combination, we may be required to take writedowns or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

Although we have conducted due diligence on Rosehill Operating, we cannot assure you that this diligence revealed all material issues that may be present in Tema’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our and Tema’s control will not later arise. As a result, we may be forced to later writedown or write-off assets, restructure our operations, or incur impairment or other charges that could result in losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to

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negative market perceptions about the post-combination company or its securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

Our Sponsor, directors and officers have agreed to vote in favor of the Business Combination, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the founders agree to vote their Founder Shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our Sponsor, directors and officers have agreed to vote any shares of Class A common stock or Class F common stock they own in favor of our initial business combination. As of the date hereof, our Sponsor, directors and officers own shares equal to approximately 20% of our issued and outstanding shares of common stock. Accordingly, it is more likely that the necessary stockholder approval will be received for the Business Combination than would be the case if our Sponsor, directors and officers agreed to vote their shares in accordance with the majority of the votes cast by our public stockholders.

Our initial stockholders, including our Sponsor, directors and officers, hold a significant number of Founder Shares. They will lose their entire investment in us if we do not complete an initial business combination.

Our Sponsor, directors and officers hold all of our 2,046,330 Founder Shares, representing 20% of the total outstanding shares of common stock upon completion of our IPO. The Founder Shares will be worthless if we do not complete an initial business combination by September 16, 2017. In addition, our Sponsor holds an aggregate of 8,408,838 private placement warrants that will also be worthless if we do not complete an initial business combination by September 16, 2017.

The Founder Shares are identical to the shares of Class A common stock included in the units, except that (i) the Founder Shares and the shares of Class A common stock into which the Founder Shares convert upon an initial business combination are subject to certain transfer restrictions, (ii) our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (a) to waive their redemption rights with respect to their founder shares and public shares owned in connection with the completion of an initial business combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by September 16, 2017 (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if we fail to complete an initial business combination by September 16, 2017) and (iii) the Founder Shares are automatically convertible into shares of our Class A common stock at the time of an initial business combination, as described herein.

The personal and financial interests of our Sponsor, directors and officers may have influenced their motivation in identifying and selecting Tema, completing the business combination with Tema and influencing the operation of Rosehill Operating following the business combination.

We will incur significant transaction and transition costs in connection with the Business Combination.

We have and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. All expenses incurred in connection with the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of Rosehill Operating, subject to certain adjustments as more particularly set forth in the Business Combination Agreement.

The Company’s transaction expenses as a result of the Business Combination are currently estimated at approximately $[            ], including $46,330 in deferred underwriting commissions to the underwriters of our IPO that were placed into the Trust Account at the time of our IPO.

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The unaudited pro forma condensed consolidated financial information included in this document may not be indicative of what our actual financial position or results of operations would have been.

The unaudited pro forma condensed consolidated financial information in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See the section entitled “Unaudited Pro Forma Condensed Consolidated Financial Information” for more information.

We may waive one or more of the conditions to the Business Combination.

We may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Business Combination, to the extent permitted by our current charter and bylaws and applicable laws. For example, it is a condition to our obligations to close the Business Combination that there be no breach by Tema of its representations and warranties under the Business Combination Agreement as of the closing date. However, if our board of directors determines that any such breach is not material to the business of Rosehill Operating, then the board may elect to waive that condition and close the Business Combination. We are not able to waive the condition that our stockholders approve the Business Combination.

If we are unable to complete an initial business combination, our public stockholders may receive only approximately $10.42 per share, on our redemption, and our warrants will expire worthless.

If we are unable to complete an initial business combination, our public stockholders may receive only approximately $10.42 per share on the liquidation of our Trust Account (or less than $10.42 per share in certain circumstances where a third party brings a claim against us that Mr. Kovalik is unable to indemnify us for (as described below)), and our warrants will expire worthless.

Our Sponsor and Tema will have significant influence over us after completion of the Business Combination.

Upon completion of the Business Combination, our Sponsor and Tema will beneficially own common stock representing approximately 8% and 71% of our outstanding voting power, respectively. As long as our Sponsor and Tema own or control a significant percentage of our outstanding voting power, they will have the ability to strongly influence all corporate actions requiring stockholder approval, including the election and removal of directors and the size of our board of directors, any amendment of our certificate of incorporation or bylaws, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. In addition, subject to specified ownership thresholds, our Sponsor will be entitled to designate two directors for appointment to the Board, Tema will be entitled to designate four directors and Anchorage will be entitled to designate one director. Each of our Sponsor, Tema and Anchorage will retain the right to appoint at least one director for so long as each holds at least 10% of the common stock or equity securities owned by such entity immediately subsequent to the Business Combination. Each of our Sponsor, Tema and Anchorage is entitled to have a representative or observer appointed to serve on each committee of the board of directors, other than the audit committee, for so long as such party has the right to designate at least one director to the board of directors. See the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements— Shareholders’ and Registration Rights Agreement” for additional information. Additionally, the Tax Receivable Agreement grants Tema the right to prevent certain dispositions of the assets we will acquire in the Business Combination for a period of up to three years after the Closing Date. See the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Tax Receivable Agreement” for additional information.

Additionally, our Sponsor’s and Tema’s interests may not align with the interests of our other stockholders. Our Sponsor and Tema are in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. Our Sponsor and Tema may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition

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opportunities may not be available to us. In addition, our certificate of incorporation provides that we renounce any interest or expectancy in the business opportunities of our Sponsor or Tema and of their officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries and each such party shall not have any obligation to offer us those opportunities unless presented to one of our directors or officers in his or her capacity as a director or officer. See the section entitled “Proposal No. 9—Approval of Additional Amendments to Current Certificate in Connection with the Business Combination” for additional information. However, the SHRRA we have entered into with our Sponsor, Tema and Anchorage provides that Mr. Kovalik and other non-independent directors designated by our Sponsor must notify the Board of Directors of certain potential opportunities in the Delaware Basin for the Company to acquire or sell oil & gas leases, assets, working interests, royalty interests or to acquire companies being marketed for sale or potentially becoming available for purchase that may have appeal to the Company.

If third parties bring claims against us, the proceeds held in our Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.40 per share.

Our placing of funds in our Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in our Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against our Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in our Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in our Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against our Trust Account for any reason. Upon redemption of our public shares, if we are unable to complete our Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.40 per share initially held in our Trust Account, due to claims of such creditors. Mr. Kovalik has agreed to be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in our Trust Account to below (i) $10.40 per public share or (ii) such lesser amount per public share held in our Trust Account as of the date of the liquidation of our Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay income taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to our Trust Account and except as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr. Kovalik will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether Mr. Kovalik has sufficient funds to satisfy their indemnity obligations and, therefore, Mr. Kovalik may not be able to satisfy those obligations. We have not asked Mr. Kovalik to reserve for such eventuality.

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Our directors may decide not to enforce the indemnification obligations of our President, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.40 per share or (ii) other than due to the failure to obtain such waiver such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay income taxes, and Mr. Kovalik asserts that he is unable to satisfy his obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against Mr. Kovalik to enforce his indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against Mr. Kovalik to enforce his indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.40 per share.

If, after we distribute the proceeds in our Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in our Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from our Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds in our Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in our Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in our Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete our Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

Even if we consummate the Business Combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless and the terms of our warrants may be amended.

The exercise price for our warrants is $11.50 per share of Class A common stock. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. In addition, our warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding

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public warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares their respective affiliates and associates have of Class A common stock purchasable upon exercise of a warrant.

Our Sponsor’s, directors’ and officers’ interests may be different from or in addition to (and which may conflict with) the interests of our stockholders.

Our Sponsor, officers and directors and their respective affiliates and associates have interests in and arising from the Business Combination that are different from or in addition to (and which may conflict with) the interests of our public stockholders, which may result in a conflict of interest. These interests include:

Our Sponsor, directors and officers have a conflict of interest in determining to pursue the Business Combination because they will not be eligible to be reimbursed for their out-of-pocket expenses if the Business Combination is not completed.

At the closing of the Business Combination, our Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our Sponsor, executive officers and directors may have influenced their motivation in identifying and selecting a target business combination and may influence their motivation in completing the Business Combination.

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Our ability to successfully effect the Business Combination and successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel, including the key personnel of Tema, substantially all of whom we expect to stay with Rosehill Operating following the Business Combination. The loss of such key personnel could negatively impact the operations and profitability of the post-combination business.

Our ability to successfully effect the Business Combination and successfully operate the business is dependent upon the efforts of certain key personnel, including the key personnel of Tema. Although we expect substantially all of such key personnel to remain with Rosehill Operating following the Business Combination, it is possible that we will lose some key personnel, the loss of which could negatively impact the operations and profitability of our post-combination business. Furthermore, while we have considered the qualifications of those individuals we intend to engage to stay with Rosehill Operating following the Business Combination, our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of our securities after the Business Combination can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities are not listed on, or become delisted from, NASDAQ for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on NASDAQ or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

There can be no assurance that our Class A common stock that may be issued upon the conversion of Series A Preferred Stock, exchange of Class B common stock, and exercise of warrants will be approved for listing on NASDAQ following the closing of the Business Combination, or that we will be able to continue to comply with the continued listing standards of NASDAQ.

Our Class A common stock, units and warrants are currently listed on NASDAQ. Our continued eligibility for listing may depend on the number of our shares that are redeemed. If, after the Business Combination, NASDAQ delists our Class A common stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including:

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We are not required to obtain and have not obtained an opinion from an independent investment banking or accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for Rosehill Operating is fair to the Company from a financial point of view.

We are not required to obtain an opinion from an independent investment banking or accounting firm that the price we are paying to acquire Rosehill Operating is fair to our company from a financial point of view. Our board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the Business Combination. In analyzing the Business Combination, our board of directors and management conducted due diligence on Tema and researched the industry in which Tema operates and our board of directors concluded that the Business Combination was in the best interest of its stockholders. Accordingly, investors will be relying solely on the judgment of our board of directors in valuing Tema’s business, and our board of directors may not have properly valued such business. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination. For more information about our decision-making process, see the section entitled “Proposal No. 1—Approval of the Business Combination—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination.”

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of the Company’s securities prior to the closing of the Business Combination may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement, or the date on which our stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Rosehill Operating’s equity securities and trading in the shares of our Class A common stock has not been active. Accordingly, the valuation ascribed to Rosehill Operating’s and our securities in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of the post-combination company’s securities following the Business Combination may include:

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Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and NASDAQ have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the post-combination company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Following the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about the post-combination company, its business, or its market, or if they change their recommendations regarding our Class A common stock adversely, the price and trading volume of our Class A common stock could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently, and may never, publish research on the Company or the post-combination company. If no securities or industry analysts commence coverage of the post-combination company, our stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the post-combination company change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock would likely decline. If any analyst who may cover the Company were to cease coverage of the post-combination company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

We have not registered the shares of our Class A common stock issuable upon exercise of the warrants under the Securities Act or states securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

We have not registered the public shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed, as soon as practicable, but in no event later than thirty (30) business days after the closing of the Business Combination, to use our best efforts to file a registration statement under the Securities Act covering such shares and no later than ninety (90) days after the closing of the Business Combination to use our best efforts to have an effective registration statement covering such shares, and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the

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provisions of the warrant agreement. Pursuant to the registration rights that we have agreed to provide to parties to the SHRRA and purchasers in the PIPE Investment, we will be required to file a registration statement within seven (7) days following the consummation of the Business Combination. Please see “Proposal No. 1—Approval of the Business Combination—Related Agreements—Shareholders’ and Registration Rights Agreement”. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we would be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. Notwithstanding the above, if Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky laws. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units.

Some of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our Class A common stock to drop significantly, even if our business is doing well.

Immediately after the IPO, the Company had 8,185,320 shares of Class A common stock and 2,046,330 shares of Class F common stock outstanding. The shares of Class A common stock sold in the IPO are freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining shares of Class A common stock, the shares of Class F common stock and the private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and are subject to certain transfer restrictions. Sales of a substantial number of shares of Class A common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Class A common stock.

After the Business Combination, our Sponsor and Tema will hold approximately 78.9% of our issued and outstanding shares of Class A common stock, including Class A common stock issuable upon exchange of Class B common stock. While the SHRRA restricts our Sponsor and Tema from transferring any of their common stock until one year following the date of the consummation of the Business Combination, these shares may be sold after the expiration of the lock-up. No later than seven (7) days following the consummation of the Business Combination, the Company is required to file a shelf registration statement relating to the offer and sale of the Registrable Securities (as defined in the SHRRA) owned by Sponsor, Tema, Anchorage and certain of their permitted transferees. As restrictions on resale end, the market price of our Class A common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them. See the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Shareholders’ and Registration Rights Agreement” for additional information. Additionally, the Tax Receivable Agreement grants Tema the right to prevent certain dispositions of the assets we will acquire in the Business Combination for a period of up to three years after the Closing Date. See the section entitled “Proposal No. 1—

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Approval of the Business Combination—Related Agreements—Tax Receivable Agreement” for additional information.

Additionally, in connection with the PIPE Investment, we will issue and sell 75,000 shares of Series A Preferred Stock (convertible into Class A common stock) and 5,000,000 warrants (exercisable for Class A common stock) to the PIPE investors. To the extent the Class A common stock that is issuable upon conversion or exercise of these securities is sold by such PIPE investors, the market price of our Class A common stock could decline.

The warrants issued will become exercisable for our Class A common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Simultaneously with the closing of the IPO, we consummated a private placement of 8,408,838 warrants at a price of $0.75 per warrant, of which 7,863,150 warrants were sold to our Sponsor, and 545,688 warrants were sold to EBC, the representative of the underwriters in the IPO, and its designees (the warrants, collectively, the “private placement warrants”). Each private placement warrant is exercisable to purchase one share of our Class A common stock at $11.50 per share. In connection with the Business Combination, we will issue 4,000,000 warrants to Tema, and in connection with the PIPE Investment, we will issue 5,000,000 warrants to the PIPE investors. To the extent such warrants are exercised, additional shares of our Class A common stock will be issued, which will result in dilution to the then existing holders of Class A common stock of the Company and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Class A common stock.

The private placement warrants are identical to the warrants sold as part of the units issued in our IPO except that, so long as they are held by the initial purchasers of the private placement warrants or their permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of the Business Combination and (iii) they may be exercised by the holders on a cashless basis.

Our public stockholders may experience dilution as a consequence of, among other transactions, the issuance of additional stock of the Company as consideration in the Business Combination and the issuance of securities exercisable or exchangeable for, or convertible into, Class A common stock in the PIPE Investment. Having a minority share position may reduce the influence that our current stockholders have on the management of the post-combination company.

It is anticipated that, upon completion of the Business Combination, the ownership of the Company will be as follows:

The number of shares and economic and voting interests set forth above assume that (i) no public stockholders elect to have their public shares redeemed, (ii) 4,250,000 shares of Class A common stock are issued upon conversion of the Founder Shares and (iii) none of the foregoing investors purchase shares of Class A common stock or warrants in the open market. The ownership percentages with respect to the post-combination company following the Business Combination do take into account the shares of Class A common

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stock issuable upon conversion of the Founder Shares, but do not take into account (i) warrants to purchase Class A common stock that may remain outstanding following the Business Combination, (ii) the issuance of any shares upon completion of the Business Combination under the LTIP or (iii) the conversion of Series A Preferred Stock or Class B common stock into shares of Class A common stock. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. To the extent that the Company’s public stockholders elect to have more than 30% of the outstanding shares of Class A common stock redeemed in connection with the Business Combination, our Sponsor and Rosemore, Inc. have agreed to purchase shares of Class A common stock or Series A Preferred Stock in an amount up to $20 million pursuant to a side letter entered into between Rosemore, Inc., our Sponsor and the Company, which we refer to as the “Side Letter,” a copy of which is attached to the accompanying proxy statement as Annex   G .

We may redeem the unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant; provided that the last reported sales price of the Class A common stock equals or exceeds $21.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders, provided there is an effective registration statement with respect to the shares of Class A common stock underlying such warrants and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by their initial purchasers or their permitted transferees.

Anti-takeover provisions contained in our proposed amended and restated charter, as well as provisions of Delaware law, could impair a takeover attempt.

Assuming the passage of Proposal Nos. 1 through 8 and 12 of this proxy statement, the combined company’s certificate of incorporation and bylaws will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions will include:

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Actions taken by affiliates of the Company to purchase, directly or indirectly, public shares of our Class A common stock will increase the likelihood of approval of the Business Combination Proposal and other proposals and may affect the market price of the Company’s securities.

Our Sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation of the Business Combination. None of our Sponsor, directors, officers, advisors or their affiliates will make any such purchases when such parties are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Although none of our Sponsor, directors, officers, advisors or their affiliates currently anticipate paying any premium purchase price for such public shares, in the event such parties do, the payment of a premium may not be in the best interest of those stockholders not receiving any such additional consideration. There is no limit on the number of shares that could be acquired by our Sponsor, directors, officers, advisors or their affiliates, or the price such parties may pay.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals and would likely increase the chances that such proposals would be approved. If the market does not view the Business Combination positively, purchases of public shares may have the effect of counteracting the market’s view, which would otherwise be reflected in a decline in the market price of our securities. In addition, the termination of the support provided by these purchases may materially adversely affect the market price of our securities.

As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals.

We may be required to make payments under the Tax Receivable Agreement for certain tax benefits that we may claim, and the amounts of such payments could be significant.

In connection with the closing of the Business Combination, we will enter into a Tax Receivable Agreement with Tema. This agreement will generally provide for the payment by the Company to Tema of 90% of the net

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cash savings, if any, in U.S. federal, state and local income tax and franchise tax that the Company actually realizes or is deemed to realize in certain circumstances in periods after the closing of the Business Combination as a result of certain increases in the tax basis in the assets of Rosehill Operating and certain benefits attributable to imputed interest. The Company will retain the benefit of the remaining 10% of these cash savings.

The term of the Tax Receivable Agreement will commence upon the completion of the Business Combination and will continue until all tax benefits that are subject to the Tax Receivable Agreement have been utilized or expired, unless we exercise our right to terminate the Tax Receivable Agreement early within thirty (30) days of certain mergers or other changes of control (or the Tax Receivable Agreement is terminated early due to our breach of a material obligation thereunder), and we make the termination payment specified in the Tax Receivable Agreement. In addition, payments we make under the Tax Receivable Agreement will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return.

The payment obligations under the Tax Receivable Agreement are our obligations and not obligations of Rosehill Operating, and we expect that the payments we will be required to make under the Tax Receivable Agreement will be substantial. Estimating the amount and timing of payments that may become due under the Tax Receivable Agreement is by its nature imprecise. For purposes of the Tax Receivable Agreement, cash savings in tax generally are calculated by comparing our actual tax liability (determined by using the actual applicable U.S. federal income tax rate and an assumed combined state and local income tax rate) to the amount we would have been required to pay had we not been able to utilize any of the tax benefits subject to the Tax Receivable Agreement. The actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including whether a gain is recognized by Tema with respect to the distribution to Tema of the Cash Consideration, shares of Class B common stock and Tema warrants and the assumption of the Tema Liabilities in connection with the Business Combination, the timing of redemptions by Rosehill Operating or the exchange by the Company, as applicable, of Rosehill Operating Common Units, the price of our Class A common stock at the time of each redemption or exchange, the extent to which such redemptions or exchanges are taxable transactions, the amount and timing of the taxable income we generate in the future, the U.S. federal income tax rates then applicable, and the portion of our payments under the Tax Receivable Agreement that constitute imputed interest or give rise to depreciable or amortizable tax basis.

The payments under the Tax Receivable Agreement will not be conditioned upon a holder of rights under the Tax Receivable Agreement having a continued ownership interest in us. For additional information regarding the Tax Receivable Agreement, see “ Summary of the Proxy Statement—Related Agreements—Tax Receivable Agreement ”.

In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement.

If we elect to terminate the Tax Receivable Agreement early within thirty (30) days of certain mergers or other changes of control or it is terminated early due our breach of a material obligation thereunder, our obligations under the Tax Receivable Agreement would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the Tax Receivable Agreement (determined by applying a discount rate of one-year LIBOR plus 150 basis points ). The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement, including (i) the assumption that we have sufficient taxable income to fully utilize the tax benefits covered by the Tax Receivable Agreement and (ii) the assumption that any units (other than those held by us) outstanding on the termination date are deemed to be exchanged on the termination date. Any early termination payment may be made significantly in advance of the actual realization, if any, of the future tax benefits to which the termination payment relates.

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As a result of an early termination, we could be required to make payments under the Tax Receivable Agreement that exceed our actual cash tax savings under the Tax Receivable Agreement. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or other forms of business combinations or changes of control. For example, if the Tax Receivable Agreement were terminated immediately after the closing of the Business Combination, the estimated termination payments would, in the aggregate, be approximately $        million (calculated using a discount rate equal to one-year LIBOR plus          150 basis points, applied against an undiscounted liability of $        million). The foregoing number is merely an estimate and the actual payment could differ materially. There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreement.

Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we will determine. Tema will not reimburse us for any payments previously made under the Tax Receivable Agreement if any tax benefits that have given rise to payments under the Tax Receivable Agreement are subsequently disallowed, except that excess payments made to Tema will be netted against payments that would otherwise be made to Tema, if any, after our determination of such excess. As a result, in such circumstances, we could make payments that are greater than our actual cash tax savings, if any, and may not be able to recoup those payments, which could adversely affect our liquidity. Please read “ Summary of the Proxy Statement—Related Agreements—Tax Receivable Agreement ”.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws, regulations and rules enacted by national, regional and local governments and NASDAQ. In particular, we are required to comply with certain SEC, NASDAQ and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.

Risks Related to the Redemption

Pursuant to the Business Combination Agreement, we may not be able to consummate the Business Combination in the event of significant redemptions.

Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon the consummation of the Business Combination (so that we are not subject to the SEC’s “penny stock” rules). As a result, we may be able to complete the Business Combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares.

However, unless waived by Tema, it is a condition to closing under the Business Combination Agreement that the Company shall have not less than $92,000,000 of Available Cash (as defined in the Business Combination Agreement).

Each redemption for Class A common stock by our public stockholders will decrease the amount in our Trust Account, which holds approximately $85,271,255 as of September 30, 2016. Although our Sponsor and Rosemore, Inc. have agreed to backstop redemptions by public stockholders in excess of 30% of the outstanding shares of Class A common stock by committing to purchase shares of Class A common stock or Series A Preferred Stock in an amount up to $20 million pursuant to the Side Letter, if the Cash Consideration payable under the Business Combination Agreement and the aggregate cash consideration we would be required to pay

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for all shares of Class A common stock that are validly submitted for redemption exceed the aggregate amount of cash available to us, including proceeds from the PIPE Investment and Side Letter (if any), we will not complete the Business Combination or redeem any shares, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

There is no guarantee that a stockholder’s decision whether to redeem their shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of the Company might realize in the future had the stockholder redeemed their shares. Similarly, if a stockholder does not redeem their shares, the stockholder will bear the risk of ownership of the public shares after the consummation of the Business Combination or any initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

If our stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares of our Class A common stock for a pro rata portion of the funds held in our Trust Account.

Holders of public shares are required to affirmatively vote either for or against the Business Combination Proposal in order to exercise their rights to redeem their shares for a pro rata portion of the Trust Account. In addition, in order to exercise their redemption rights, they are required to submit a request in writing and deliver their stock (either physically or electronically) to our transfer agent at least two (2) business days prior to the special meeting. Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account less income taxes payable, calculated as of two (2) business days prior to the anticipated consummation of the Business Combination. See the section entitled “Special Meeting of Company Stockholders—Redemption Rights” for additional information on how to exercise your redemption rights.

Stockholders of the Company who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline.

Public stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things as fully described in the section entitled “Special Meeting of Company Stockholders—Redemption Rights”, tender their certificates to our transfer agent or deliver their shares to the transfer agent electronically through the DTC prior to [            ] p.m., [            ] time, on [            ]. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers, which we refer to as “DTC”, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On December 20, 2016, KLR Energy Acquisition Corp. (“KLRE” or the “Company”) and Tema Oil and Gas Company (“Tema”) entered into a Business Combination Agreement for the acquisition of membership interests in Rosehill Operating Company LLC (“Rosehill Operating”), a newly formed company (collectively, the “Business Combination”). Pursuant to the terms of the Business Combination Agreement, KLRE (as Managing Member) will control Rosehill Operating. Rosehill Operating is a newly formed entity created to receive and operate oil and gas properties contributed by Tema.

In connection with the completion of the Business Combination, KLRE will acquire a portion of the equity of Rosehill Operating, a wholly-owned subsidiary of Tema, through (i) the contribution to Rosehill Operating by KLRE of $35,000,000 in cash (the “Cash Consideration”) and the issuance to Rosehill Operating by KLRE of 29,807,692 shares of newly created Class B common stock (which cash and shares of Class B common stock will immediately be distributed by Rosehill Operating to Tema), (ii) the assumption by Rosehill Operating of $55,000,000 in Tema indebtedness and (iii) the contribution to Rosehill Operating by KLRE of the remaining cash proceeds of KLRE’s initial public offering. Immediately following the Business Combination, Tema will own approximately 71% of the equity of Rosehill Operating (without giving effect to the conversion of any shares of Series A Preferred Stock issued in the PIPE Investment). In connection with the closing of the Business Combination, (i) KLRE will issue to Rosehill Operating 4,000,000 warrants exercisable for shares of Class A common stock (the “Tema warrants”) in exchange for 4,000,000 warrants exercisable for Rosehill Operating Common Units (such class of warrants, the “Rosehill warrants”) and (ii) the Tema warrants and $35,000,000 will immediately be distributed to Tema. In addition, KLRE will contribute the net proceeds from its issuance of 75,000 shares of 8.0% Series A Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”) and 5,000,000 warrants (the “PIPE Warrants”), exercisable for shares of Class A common stock, for net proceeds of $70.9 million (collectively, the “PIPE Investment”) to Rosehill Operating in exchange for Rosehill Operating Series A Preferred Units (the “Series A Preferred Units”) and additional Rosehill warrants. In connection with the Business Combination, KLR Sponsor agreed to transfer (i) 734,704 shares of Class A common stock to certain investors in the PIPE Investment (in lieu of the transfer by KLR Sponsor of such shares to KLRE for cancellation and the reissuance of such shares to such investors) and (ii) 750,000 warrants to purchase Class A common stock of KLRE to Rosemore Inc. (“Rosemore”), Tema’s parent (in lieu of the transfer by KLR Sponsor of such warrants to KLRE for cancellation and the reissuance of such warrants to Rosemore). Conversion of the Series A Preferred Stock into shares of KLRE Class A common stock with result in a reduction in Tema’s ownership in KLRE to approximately 61% and will cause the Series A Preferred Units also to convert into common units of Rosehill Operating. After giving effect to the conversion of the Series A Preferred Units into Common Units, KLRE will own approximately 39% of Rosehill Operating’s common equity and Tema will own the remaining 61%. The Business Combination has been unanimously approved by the board of directors of KLRE and the board of directors of Tema.

In connection with the completion of the Business Combination, KLRE anticipates that the current executive officers of Tema will become executive officers of KLRE. The completion of the Business Combination will result in Tema obtaining control of KLRE through its 29,807,692 shares of Class B common stock, which represent approximately 71% of the voting interest in KLRE (without giving effect to the conversion of any shares of Series A Preferred Stock issued in the PIPE Investment). As such, it is expected the Business Combination will be accounted for as a transaction between entities under common control, resulting in an initial measurement of the Rosehill Operating assets and liabilities transferred to KLRE equal to the carrying amounts of those assets and liabilities on the accounts of Tema (the ultimate parent) on the transfer date.

Under KLRE’s amended and restated certificate of incorporation, existing public stockholders have the right to redeem, upon the closing of a business combination, shares of Class A common stock then held by them for cash equal to their pro rata share of the aggregate amount of the deposit in the Trust Account. For illustrative purposes, based on the fair value of the marketable securities held in the Trust Account as of September 30, 2016 of $85.3 million, the estimated per share redemption price would have been approximately $10.42. Rosemore and

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Index to Financial Statements

KLR Sponsor have agreed to backstop redemptions by the public stockholders of KLRE in excess of 30% of the outstanding shares of Class A common stock by committing to purchase shares of Class A common stock or Series A Preferred Stock in an amount up to $20.0 million pursuant to a side letter entered into between Rosemore, KLR Sponsor and KLRE (the “Side Letter”).

The following unaudited pro forma condensed consolidated financial information reflects the combination of the historical results of both KLRE and Rosehill Operating on a pro forma basis to give effect to the following transactions, which are described in further detail below as if they had occurred on September 30, 2016 for pro forma condensed consolidated balance sheet purposes and on January 1, 2015 for pro forma condensed consolidated statements of operations purposes: