SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event
(Exact name of registrant as specified in its charter)
or other jurisdiction of
|(Commission File Number)||(I.R.S.
|(Address of principal executive offices)||(Zip Code)|
Registrant’s telephone number,
including area code: (
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading Symbol(s)||Name of each
exchange on which|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information provided below under “Board Composition” in Item 8.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.02.
Item 8.01. Other Events
This Current Report on Form 8-K of Bonanza Creek Energy, Inc. (the “Company”) is filed to facilitate the incorporation by reference of the information filed in this report into the Company’s two Registration Statements on Form S-4 (Registration Statement Nos. 333-251401 and 333-251402), and also into the respective joint proxy statement/prospectus and prospectus, that the Company filed under the Securities Act of 1933 in connection with the Agreement and Plan of Merger dated November 9, 2020, among the Company, Boron Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, and HighPoint Resources Corporation (“HPR”).
The plan supplement (the “Plan Supplement”) for the joint prepackaged plan of reorganization for HPR and its subsidiaries pursuant to Chapter 11 of the bankruptcy Code (as amended, the “Prepackaged Plan”) and the notice of posting the Plan Supplement (“Notice of Posting Plan Supplement”) are attached hereto as Exhibits 99.1 and 99.2 and are hereby incorporated by reference into this Item 8.01.
The Plan Supplement includes supplemental information to the Prepackaged Plan included in the Company’s Registration Statements on S-4 described above and updates certain information in the Joint Proxy Statement/Prospectus and the Exchange Prospectus (each as defined below), including with respect to the composition of the Company’s board following the merger and with respect to the proposed amendment to the Company’s credit facility:
As previously announced, as of the effective time, the Bonanza Creek board will have seven members consisting of (i) two independent directors appointed by the HPR Consenting Noteholders who are acceptable to Bonanza Creek and (ii) five directors appointed by Bonanza Creek, consisting of Brian Steck as Chairman of the Bonanza Creek board and four other directors of the Bonanza Creek Board, which will include Eric Greager, immediately prior to the effective time. The two independent directors to be appointed by the HPR Consenting Noteholders upon closing are expected to be Audrey Robertson and James E. Craddock. Their biographies are included below.
Audrey Robertson has served as the co-founder and Chief Financial Officer of Franklin Mountain Energy, LLC, a privateÐil and gas company operating in the Permian Basin since September 2018. She also serves as a co-founder and ManagingÐartner of Copper Trail Partners, LLC, a private equity platform based in Denver since November 2017. From 2005 toÒ016, she served as a Partner and Senior Managing Director at Kayne Anderson Capital Advisors. Prior thereto, she was anÐnvestment banker with Goldman Sachs & Co. Ms. Robertson served on the board of directors of Extraction Oil and Gas,ÐLC from September 2019 to January 2021 and has served on the boards of several private companies and not-for-profitÐrganizations. She holds a Bachelor of Science Degree in Applied Economics and Management from Cornell University and a Master’s Degree in Accounting from the University of Southern California.
James E. Craddock served as the Chairman and Chief Executive Officer of Rosetta Resources, Inc. from February 2013Ðhrough July 2015, when Rosetta merged with Noble Energy, Inc. Mr. Craddock served on Noble’s board of directors fromÒ015 until Noble was acquired by Chevron in 2020. He joined Rosetta in April 2008 as Vice President, Drilling andÐroduction Operations, and was named a Senior Vice President in January 2011. From April 2006 to March 2008,Ðr. Craddock was Chief Operating Officer for BPI Energy, Inc., an exploration and production start-up company focusedÐn coal bed methane development. Mr. Craddock began his industry career with Superior Oil Company in 1981 and thenÐeld a broad range of technical, operational, and strategic roles with Burlington Resources Inc. and its predecessorÜompanies for more than 20 years. At Burlington, he held a series of positions of increasing responsibility. Mr. CraddockÐerves on the board of directors of Crescent Point Energy, Inc. He also serves as a member of the Advisory Board of theÝepartment of Engineering at Texas A&M University. Mr. Craddock received his Bachelor of Science Degree in Mechanical Engineering from Texas A&M University.
Proposed Second Amendment to Bonanza Creek Credit Facility
In connection with the Merger (as defined below), the Company, JPMorgan Chase Bank, N.A., as the administrative agent, and a syndicate of financial institutions, as lenders, have proposed to enter into a Second Amendment (the “Proposed Second Amendment”) to that certain Credit Agreement dated as of December 7, 2018 (as amended, restated, supplemented or otherwise modified, the “Bonanza Creek Credit Facility”) to, among other things: (i) increase the aggregate maximum commitment amount from $750,000,000 to $1,000,000,000; (ii) increase the available borrowing base from $260,000,000 to $500,000,000; (iii) increase (A) the LIBOR floor from zero to .50% and (B) the alternate base rate floor from zero to 1.50%; (iv) increase the maximum total debt, included in the calculation of the maximum permitted leverage ratio, from $25,000,000 to $35,000,000; (v) decrease (A) on or after April 1, 2021, the maximum permitted net leverage ratio from 3.50 to 3.0 and (B) the maximum permitted leverage ratio for purposes of making a restricted payment, investment or optional or voluntary redemption from 2.75 to 1.0; and (vi) amend certain other covenants and provisions.
Under the Proposed Second Amendment, the Bonanza Creek Credit Facility will be guaranteed by all restricted domestic subsidiaries of the Company (each, a “Bonanza Creek Guarantor” and together with the Company, the “Bonanza Creek Credit Parties”) and by HPR and its subsidiaries (each a “New Obligated Party” and collectively, the “New Obligated Parties”), and will be secured by first priority security interests on substantially all assets, including a mortgage on at least 90% of the total value of the proved oil and gas properties evaluated in the most recently delivered reserve report prior to the Second Amendment effective date, including any engineering reports relating to the oil and gas properties of HPR and its subsidiaries, of each Bonanza Creek Credit Party and New Obligated Party, subject to customary exceptions.
No Offer or Solicitation
This communication relates to the proposed business combination transaction (the “Merger”) between the Company and HPR, which includes the commencement by the Company and HPR of (i) exchange offers (the “Exchange Offers”) to effect the exchange of unsecured senior notes of HPR (the “HighPoint Notes”) for shares of the Company’s common stock, par value $0.01 per share (the “BCEI common stock”), or unsecured senior notes to be issued by the Company in connection with the Exchange Offer, (ii) consent solicitations (the “Consent Solicitations”) to certain proposed amendments to the indentures governing the unsecured notes of the HighPoint Notes and (iii) the simultaneous solicitation of the Prepackaged Plan. The Merger, the Exchange Offers, the Consent Solicitations and the Prepackaged Plan are collectively referred to herein as 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 aspects 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, the Company and HPR have filed materials with the U.S. Securities and Exchange Commission (the “SEC”), including (1) a definitive joint proxy statement/prospectus (the “Joint Proxy Statement/Prospectus”), (2) a consent solicitation and prospectus with respect to the Exchange Offers and Consent Solicitations (the “Exchange Prospectus”), of which the Prepackaged Plan is 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 is 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 Exchange Prospectus is a part. The Registration Statements were declared effective by the SEC on February 9, 2021. On February 10, 2021, the Company filed the Joint Proxy Statement/Prospectus and the Exchange Prospectus and began mailing the Joint Proxy Statement/Prospectus to the Company’s stockholders and sending the definitive form of the Exchange Prospectus to the holders of the HighPoint Notes. This document is not a substitute for the Joint Proxy Statement/Prospectus, Exchange Prospectus or Registration Statements or for any other document that the Company or HPR has filed or may file with the SEC and send to the Company’s shareholders or HPR’s shareholders or debt holders in connection with the Transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND HPR ARE URGED TO CAREFULLY AND THOROUGHLY READ THE JOINT PROXY STATEMENT/PROSPECTUS, REGISTRATION STATEMENTS AND EXCHANGE PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY THE COMPANY AND HPR WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, HPR, 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 Exchange Prospectus, as each may be amended from time to time, and other relevant documents filed by the Company and HPR 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 the Company will be available free of charge from the Company’s website at www.bonanzacrk.com under the “For Investors” tab or by contacting the Company’s Investor Relations Department at (720) 225-6679 or firstname.lastname@example.org. Copies of documents filed with the SEC by HPR will be available free of charge from HPR’s website at www.hpres.com under the “Investors” tab or by contacting HPR’s Investor Relations Department at (303) 312-8514 or email@example.com.
Participants in the Solicitation
The Company, HPR and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from the Company’s shareholders and HPR’s shareholders in connection with the Transaction. Information regarding the executive officers and directors of the Company is included in its definitive proxy statement for its 2020 annual meeting filed with the SEC on April 24, 2020. Information regarding the executive officers and directors of HPR is included in its definitive proxy statement for its 2020 annual meeting filed with the SEC on March 18, 2020. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, are set forth in the Registration Statements, Joint Proxy Statement/Prospectus and other materials when they are filed with the SEC in connection with the Transaction. Free copies of these documents may be obtained as described in the preceding paragraph.
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 the Company’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. Forward-looking statements are all statements other than statements of historical facts. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely” “plan,” “positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. 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 the Company may not approve the issuance of new shares of BCEI common stock in the Transaction or that shareholders of HPR 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 the Company and HPR; the effects of the business combination of the Company and HPR, 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 requisite amount of HPR debt does not participate in the Exchange Offers and that HPR 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.
Additional factors that could cause results to differ materially can be found in (i) the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which is on file with the SEC and available from the Company’s website at www.bonanzacrk.com under the “For Investors” tab, (ii) in other documents the Company files with the SEC and (iii) HPR’s Annual Report on Form 10-K for the year ended December 31, 2020 attached to the Company’s report on Form 8-K filed on March 1, 2021.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. The Company does not 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.
|Item 9.01||Financial Statements and Exhibits.|
|99.1||Plan Supplement dated as of March 4, 2021.|
|99.2||Notice of Posting Plan Supplement dated as of March 4, 2021.|
|104||Cover Page Interactive Data File (embedded within the Inline XBRL document)|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|BONANZA CREEK ENERGY, INC.|
|Dated: March 5, 2021||By:||/s/ Cyrus D. Marter IV|
|Cyrus D. Marter IV|
|Executive Vice President, General Counsel and Secretary|