Bonanza Creek Energy, Inc. (NYSE: BCEI) (“Bonanza Creek” or the
“Company”) and HighPoint Resources Corporation (“HighPoint”) (NYSE:
HPR) today announced that Bonanza Creek has commenced offers to
exchange (each, an “Exchange Offer” and, collectively, the
“Exchange Offers”) shares of its common stock and newly issued 7.5%
Senior Notes due 2026 (the “Bonanza Creek Senior Notes”) for any
and all of the 7.0% Senior Notes due October 15, 2022 (the “2022
Notes”) of HighPoint Operating Corporation (“HighPoint OpCo”) and
the 8.75% Senior Notes due June 15, 2025 of HighPoint OpCo (the
“2025 Notes” and, together with the 2022 Notes, the “HighPoint
Senior Notes”). The Exchange Offers are being commenced in
connection with Bonanza Creek’s proposed acquisition of HighPoint.
HighPoint OpCo is a wholly-owned subsidiary of HighPoint.
In connection with the Exchange Offers,
HighPoint is soliciting, on behalf of HighPoint OpCo, consents
(each, a “Consent Solicitation” and together, the “Consent
Solicitations”) to certain proposed amendments to the indentures
governing the HighPoint Senior Notes (the “Consents”) from all
eligible holders of the HighPoint Senior Notes.
Concurrently with the Exchange Offers and
Consent Solicitations, HighPoint is also soliciting votes from the
holders of the HighPoint Senior Notes to accept or reject a
prepackaged plan of reorganization under Chapter 11 of the United
States Bankruptcy Code (the “Prepackaged Plan” and such
solicitation, the “Plan Solicitation”).
The Exchange Offer and Consent Solicitation will
be conditioned on a minimum participation of not less than 97.5% of
the aggregate outstanding principal amount of each series of
HighPoint Senior Notes being validly tendered in accordance with
the terms of the Exchange Offers prior to the Expiration Deadline
(as defined below) (the “Minimum Participation Condition”). If the
Minimum Participation Condition is met, and if certain customary
closing conditions are satisfied (including approval by each
company’s shareholders), the companies will effect the Exchange
Offer and Consent Solicitation, and Bonanza Creek will acquire
HighPoint at closing outside of a chapter 11 bankruptcy case.
If the Minimum Participation Condition is not
met, HighPoint intends to file voluntary petitions under Chapter 11
with the United States Bankruptcy Court for the District of
Delaware (the “Court”) to effectuate the solicited Prepackaged Plan
and consummate the transaction. The consummation of the Prepackaged
Plan will be subject to confirmation by the Court in addition to
other conditions set forth in the Prepackaged Plan, a transaction
support agreement and related transaction documents.
On February 10, 2021, Bonanza Creek filed a
prospectus (“Prospectus”) with the U.S. Securities and Exchange
Commission (the “SEC”) relating to the Exchange Offers, the Consent
Solicitations and the Plan Solicitation. The Exchange Offers and
Consent Solicitations are being made upon the terms and subject to
the conditions set forth in the Prospectus. The Prospectus is
available on the “For Investors” section of Bonanza Creek’s
website, as well as www.sec.gov.
Exchange Consideration. In
exchange for each $1,000 principal amount of HighPoint Senior Notes
validly tendered prior to 5:00 p.m., New York City time, on March
11, 2021 (such date and time, as they may be extended by Bonanza
Creek and HighPoint, the “Expiration Deadline”), holders of
HighPoint Senior Notes will be eligible to receive at least the
following for each $1,000 principal amount of HighPoint Senior
Notes validly tendered and accepted for exchange, each of which is
subject to increase based on the level of participation in the
Exchange Offers:
- 14.90274240
shares of Bonanza Creek common stock (having a value of $352.30
based on the closing price of Bonanza Creek common stock on
February 5, 2021), subject to adjustment for fractional shares;
and
- $138.46153846
principal amount of new Bonanza Creek Senior Notes, subject to
adjustment for minimum denominations.
The aggregate Exchange Consideration will
consist of 9,314,214 shares of Bonanza Creek common stock and an
aggregate principal amount of Bonanza Creek Senior Notes equal to
$100 million minus the total principal amount of HighPoint Senior
Notes not validly tendered and accepted in the Exchange Offers. The
maximum amount of each type of consideration will be allocated pro
rata to holders of HighPoint Senior Notes validly tendered and
accepted in the Exchange Offers. Each type of consideration
received by holders of the HighPoint Senior Notes per $1,000
principal amount of notes will be at least equal to the minimum
amounts set forth above. However, the aggregate Notes Consideration
and the mix of consideration per $1,000 principal amount of notes
tendered will vary based on the principal amount of HighPoint
Senior Notes tendered at or above the 97.5% minimum participation
threshold.
The following table sets forth the minimum
amounts of each type of consideration tendering holders will
receive for each $1,000 principal amount of HighPoint Senior Notes
tendered, the implied total value of the minimum consideration, and
the consent fee payable in connection with the Change of Control
Amendment (as defined below). The graph following the table shows
numerical examples of the mix of consideration holders would
receive at specified participation levels between the threshold of
97.5% and 100.0% participation.
To view the accompanying "Exchange Offer
Consideration, Minimum Participation Condition and Consent
Free" infographic please
visit: https://www.globenewswire.com/NewsRoom/AttachmentNg/7131b545-5c0e-4ef6-8caa-5dcc21d93434
To view the accompanying "Indicative Mix
and Implied Value of Consideration per $1,000 Principal Amount of
HighPoint Senior Notes Tendered" infographic please
visit: https://www.globenewswire.com/NewsRoom/AttachmentNg/b660850a-acf7-4327-8d7f-fa14d4805290
(1) |
If less than 100% of HighPoint Senior Notes are validly tendered
and accepted in the Exchange Offers, holders will receive
additional shares of Bonanza Creek common stock upon proration of
the aggregate 9,314,214 shares of Bonanza Creek common stock (the
“Stock Consideration”). |
(2) |
If greater than 97.5% of HighPoint Senior Notes are validly
tendered and accepted in the Exchange Offers, holders will receive
a higher principal amount of Bonanza Creek Senior Notes upon
proration of the aggregate principal amount of Bonanza Creek Senior
Notes equal to $100 million minus the total principal amount of
HighPoint Senior Notes not validly tendered and accepted in the
Exchange Offers (the “Notes Consideration”). The aggregate Notes
Consideration equals $100 million minus the outstanding aggregate
principal amount of the HighPoint Senior Notes that are not validly
tendered and accepted in the Exchange Offers. If 97.5% of the
aggregate principal amount outstanding of HighPoint Senior Notes
are exchanged in the Exchange Offers, $84,375,000 aggregate
principal amount of Bonanza Creek Senior Notes will be issued and
$15,625,000 aggregate principal amount of HighPoint Senior Notes
will remain outstanding. If 100.0% of the aggregate principal
amount outstanding of HighPoint Senior Notes are exchanged in the
Exchange Offers, $100,000,000 aggregate principal amount of Bonanza
Creek Senior Notes will be issued. |
(3) |
Does not include accrued and unpaid interest to, but not including,
the Settlement Date (as defined below), which will be paid in cash
on the Settlement Date to holders of HighPoint Senior Notes
accepted for exchange in the Exchange Offers. If the Exchange
Offers are not consummated and the exchange is effected through the
Prepackaged Plan (as defined in the Prospectus), no cash payment
will be made for accrued and unpaid interest on the HighPoint
Senior Notes. |
(4) |
Provided for illustrative purposes only. Value of Bonanza Creek
common stock calculated based on the closing price per share of
Bonanza Creek common stock of $23.64 on February 5, 2021 as quoted
on the New York Stock Exchange. |
(5) |
The Exchange Offers are subject to the condition that not less than
97.5% of each series of the HighPoint Senior Notes is validly
tendered in the Exchange Offers. |
(6) |
Upon satisfaction of the Minimum Participation Condition, HighPoint
will pay consenting holders a consent fee of $2.50 per $1,000
principal amount of HighPoint Senior Notes (the “Change of Control
Consent Fee”). |
Exchange Offer Informational Website. Holders of
HighPoint Senior Notes may visit https:// dm.epiq11.com/HighPoint
to review information about the principal amount of HighPoint
Senior Notes that have been tendered, the calculation of the mix of
consideration holders would receive at those tendered amounts, and
the implied total value of that consideration consistent with the
preceding graph.
Interest. Holders of HighPoint Senior Notes
accepted for exchange in the Exchange Offers will also receive a
cash payment equal to the accrued and unpaid interest in respect of
such HighPoint Senior Notes from the most recent interest payment
date to, but not including, the Settlement Date. If the Exchange
Offers are not consummated and the exchange is effected through the
Prepackaged Plan, as described in the Prospectus, no cash payment
will be made for accrued and unpaid interest on the HighPoint
Senior Notes. Interest on the Bonanza Creek Senior Notes will
accrue from the Settlement Date.
No Withdrawal Rights. Holders of HighPoint
Senior Notes who tender HighPoint Senior Notes in the Exchange
Offers will not have withdrawal rights unless Bonanza Creek grants
withdrawal rights in connection with an amendment to certain terms
of the Exchange Offers as described in the Prospectus.
No Fractional Shares; Minimum Denominations.
Calculations of Stock Consideration will be rounded down with
respect to each holder to the nearest whole share, and no
fractional shares of Bonanza Creek common stock will be issued for
the HighPoint Senior Notes. Calculations of Notes Consideration
will be rounded down with respect to each holder to the nearest
amount that is equal to $2,000 and integral multiples of $1,000 in
excess thereof, and no additional shares of Bonanza Creek common
stock will be issued or payment made in compensation for such
adjustments.
Consent Solicitations. In
connection with the Exchange Offers, HighPoint is soliciting, on
behalf of HighPoint OpCo, Consents from holders of the HighPoint
Senior Notes to amend (the “Proposed Amendments”) the indentures
governing the HighPoint Senior Notes (the “HighPoint Indentures”),
upon the terms and subject to the conditions set forth in the
Prospectus, to (i) make such amendments to the definition of
“Change of Control” and other related provisions in the indentures
as are required to expressly exclude Bonanza Creek’s proposed
merger with HighPoint and the other transactions contemplated by
the merger agreement from such definitions and related provisions
(the “Change of Control Amendment”), and (ii) eliminate the
majority of the restrictive covenants and certain events of default
(the “Other Indenture Amendments”). Upon receipt of the Consent of
the holders of a majority of the aggregate principal amount of a
series of HighPoint Senior Notes outstanding, HighPoint OpCo will
enter into the applicable Supplemental Indentures to implement the
Proposed Amendments with respect to such series of HighPoint Senior
Notes. However, the Proposed Amendments will not become operative
until, in the case of the Change of Control Amendment, the payment
of the Change of Control Amendment Consent Fee and, in the case of
the Other Indenture Amendments, concurrently with the settlement of
the Exchange Offers on the Settlement Date, subject to satisfaction
or waiver of the conditions to the Exchange Offers. Upon
satisfaction of the Minimum Participation Condition, HighPoint will
pay consenting holders the Change of Control Amendment Consent Fee.
Holders of HighPoint Senior Notes who tender into the Exchange
Offers will also be required to waive, among other things, any
existing defaults on or with respect to the HighPoint Senior Notes
that may be modified or eliminated by majority vote of the
HighPoint Senior Notes and any rights to rescind their acceptance
of the Exchange Offers after the Expiration Deadline
Settlement Date. Bonanza Creek
plans to issue the Bonanza Creek common stock and the Bonanza Creek
Senior Notes offered in the Exchange Offers on the effective time
of the merger (such date, the “Settlement Date”), which is expected
to occur promptly following the satisfaction or waiver of the
closing conditions in the merger agreement and assuming that the
conditions to the Exchange Offers set forth below are satisfied or,
where permitted, waived, not later than on the third business day
following the Expiration Deadline. If the conditions to the
Exchange Offers are not satisfied or waived, but the conditions to
the Prepackaged Plan are satisfied, HighPoint will file the
HighPoint Chapter 11 cases and seek confirmation of the Prepackaged
Plan, in which case all HighPoint Senior Notes would be canceled in
exchange for Bonanza Creek common stock and the Bonanza Creek
Senior Notes, as set forth in the Prepackaged Plan. The treatment
of the HighPoint Senior Notes under the Prepackaged Plan and
Bonanza Creek’s obligations to consummate the merger if the
HighPoint Chapter 11 cases are commenced are described in the
Prospectus.
Conditions. Bonanza Creek’s
obligations under the Exchange Offers are subject to the
satisfaction, amendment or waiver of certain conditions, including
(i) the Minimum Participation Condition; and (ii) the satisfaction
of the closing conditions in the Agreement and Plan of Merger,
dated as of November 9, 2020, by and among Bonanza Creek, HighPoint
and Boron Merger Sub, Inc., a Delaware corporation and wholly owned
subsidiary of Bonanza Creek (as amended from time to time, the
“merger agreement”), providing for Bonanza Creek’s acquisition of
HighPoint.
Exchange Agent and Information Agent;
Voting Agent. The Exchange Agent and Information Agent for
the Exchange Offers and Consent Solicitations and the Voting Agent
for the Plan Solicitation is:
Epiq Corporate Restructuring
LLC10300 SW Allen BoulevardBeaverton, OR 97005Call
(Toll-Free): (855) 914-4726Call (International): (503) 520-4495By
E-mail: tabulation@epiqglobal.comReferencing “HighPoint Resources”
in the subject line
Requests for documents may be directed to the
Information Agent at the address and telephone numbers provided
above.
About the Companies
Bonanza Creek Energy, Inc. is an independent oil
and natural gas company engaged in the acquisition, exploration,
development, and production of oil and associated liquids-rich
natural gas in the Rocky Mountain region of the United States. The
Company’s assets and operations are concentrated in rural,
unincorporated Weld County, Colorado, within the Wattenberg Field,
focused on the Niobrara and Codell formations. The Company’s common
shares are listed for trading on the NYSE under the symbol:
“BCEI.”
HighPoint Resources Corporation (NYSE: HPR) is a
Denver, Colorado based company focused on the development of oil
and natural gas assets located in the Denver-Julesburg Basin of
Colorado. Additional information about HighPoint may be found on
its website at www.hpres.com.
No Offer or Solicitation
This communication relates to a proposed
business combination transaction (the “Merger”) between Bonanza
Creek and HighPoint, which includes the commencement by Bonanza
Creek and HighPoint of the Exchange Offers and Consent
Solicitations and the simultaneous Plan Solicitation (collectively,
the “Transaction”). Communications in this document do not
constitute an offer to sell or the solicitation of an offer to
subscribe for or buy any securities or a solicitation of any vote
or approval with respect to the Merger, the Exchange Offers and
Consent Solicitations or other aspect of the Transaction, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933.
Important Additional
Information
In connection with the Transaction, Bonanza
Creek and HighPoint have filed materials with the SEC, including
(1) a definitive joint proxy statement/prospectus (“Joint Proxy
Statement/Prospectus”), (2) the Prospectus, of which the
Prepackaged Plan forms a part, (3) a Registration Statement on Form
S-4, Registration No. 333-251401, with respect to the Merger (the
“Merger Registration Statement”), of which the Joint Proxy
Statement/ Prospectus forms a part, and (4) a Registration
Statement on Form S-4, Registration No. 333-251402, with respect to
the Exchange Offers and Consent Solicitations (together with the
Merger Registration Statement, the “Registration Statements”), of
which the Prospectus forms a part. The Registration Statements were
declared effective by the SEC on February 9, 2021. On February 10,
2021, Bonanza Creek filed the Joint Proxy Statement/Prospectus and
the Prospectus and began mailing the Joint Proxy
Statement/Prospectus to the Company’s stockholders and sending the
definitive form of the Prospectus to the holders of the HighPoint
Senior Notes. On February 10, 2021, HighPoint also filed a
definitive proxy statement and began mailing the definitive proxy
statement to its stockholders. These documents are not a substitute
for the Joint Proxy Statement/Prospectus, Prospectus or
Registration Statements or for any other document that Bonanza
Creek or HighPoint has filed or may file with the SEC and send to
Bonanza Creek’s shareholders or HighPoint’s shareholders or debt
holders in connection with the Transaction. INVESTORS AND
SECURITY HOLDERS OF BONANZA CREEK AND HIGHPOINT ARE URGED TO
CAREFULLY AND THOROUGHLY READ THE PROSPECTUS, JOINT PROXY
STATEMENT/PROSPECTUS, AND REGISTRATION STATEMENTS, AS EACH MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT
DOCUMENTS FILED BY BONANZA CREEK AND HIGHPOINT WITH THE SEC, WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT BONANZA CREEK, HIGHPOINT, THE TRANSACTION, THE
RISKS RELATED THERETO AND RELATED MATTERS.
Investors will be able to obtain free copies of
the Registration Statements, Joint Proxy Statement/Prospectus and
Prospectus, as each may be amended from time to time, and other
relevant documents filed by Bonanza Creek and HighPoint with the
SEC (when they become available) through the website maintained by
the SEC at www.sec.gov. Copies of documents filed with the SEC by
Bonanza Creek will be available free of charge from Bonanza Creek’s
website at www.bonanzacrk.com under the “For Investors” tab or by
contacting Bonanza Creek’s Investor Relations Department at (720)
225-6679 or slandreth@bonanzacrk.com. Copies of documents
filed with the SEC by HighPoint will be available free of charge
from HighPoint’s website at www.hpres.com under the “Investors” tab
or by contacting HighPoint’s Investor Relations Department at (303)
312-8514 or lbusnardo@hpres.com.
Forward-Looking Statements and
Cautionary Statements
Certain statements in this document concerning
the Transaction, including any statements regarding the expected
timetable for completing the Transaction, the results, effects,
benefits and synergies of the Transaction, future opportunities for
the combined company, future financial performance and condition,
guidance and any other statements regarding Bonanza Creek’s or
HighPoint’s future expectations, beliefs, plans, objectives,
financial conditions, assumptions or future events or performance
that are not historical facts are “forward-looking” statements
based on assumptions currently believed to be valid. The
forward-looking statements are intended to be subject to the safe
harbor provided by Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995.
These forward-looking statements involve
significant risks and uncertainties that could cause actual results
to differ materially from those anticipated, including, but not
limited to, the possibility that shareholders of Bonanza Creek may
not approve the issuance of new shares of Bonanza Creek common
stock in the Transaction or that shareholders of HighPoint may not
approve the Merger Agreement; the risk that a condition to closing
of the Transaction may not be satisfied, that either party may
terminate the Merger Agreement or that the closing of the
Transaction might be delayed or not occur at all; potential adverse
reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of
the transaction; the diversion of management time on
transaction-related issues; the ultimate timing, outcome and
results of integrating the operations of Bonanza Creek and
HighPoint; the effects of the business combination of Bonanza Creek
and HighPoint, including the combined company’s future financial
condition, results of operations, strategy and plans; the ability
of the combined company to realize anticipated synergies in the
timeframe expected or at all; changes in capital markets and the
ability of the combined company to finance operations in the manner
expected; regulatory approval of the transaction; the effects of
commodity prices; the risks of oil and gas activities; the risk
that the Minimum Participation Condition is not satisfied in the
Exchange Offers and that HighPoint may need to reorganize in
bankruptcy as a result; the risks and unpredictability inherent in
the bankruptcy process; and the fact that operating costs and
business disruption may be greater than expected following the
public announcement or consummation of the Transaction.
Expectations regarding business outlook, including changes in
revenue, pricing, capital expenditures, cash flow generation,
strategies for our operations, oil and natural gas market
conditions, legal, economic and regulatory conditions, and
environmental matters are only forecasts regarding these
matters.
All forward-looking statements speak only as of
the date they are made and are based on information available at
that time. Neither Bonanza Creek nor HighPoint assume any
obligation to update forward-looking statements to reflect
circumstances or events that occur after the date the
forward-looking statements were made or to reflect the occurrence
of unanticipated events except as required by federal securities
laws. As forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing undue
reliance on such statements.
For further information, please
contact:
Bonanza Creek Energy, Inc.
Scott LandrethSenior Director, Finance &
Investor Relations and
Treasurer720-225-6679slandreth@bonanzacrk.com
HighPoint Resources
Corporation
Larry C. Busnardo Vice President, Investor
Relations 303-312-8514 lbusnardo@hpres.com
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