GlobeNewswire Inc | Feb 17, 2021 04:48PM EST

February 17, 2021

DENVER, Feb. 17, 2021 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE: BCEI) (the Company or Bonanza Creek) today announced its fourth quarter and full-year 2020 financial results, and has posted an updated investor presentation to its website.

Highlights for the fourth quarter and full-year 2020 include:

-- Average sales volumes of 25.0 thousand barrels of oil equivalent per day (MBoe/d) for the fourth quarter, with oil representing 54% of total volumes -- Average sales volumes of 25.2 MBoe/d for the full year (54% oil), up 8% over full-year 2019; at the mid-point of the most recent annual 2020 guidance range of 25.0 to 25.5 MBoe/d -- Total capital expenditures for the fourth quarter of $3.2 million, bringing the total 2020 capital expenditures to approximately $67.7 million; within the annual guidance range of $60 to $70 million -- Lease operating expenses (LOE) of $2.20 per Boe for the fourth quarter; down slightly from the third quarter of 2020, and down 27% from the fourth quarter of 2019 -- Full-year 2020 LOE of approximately $2.38 per Boe down 19% from 2019; below our most recent annual guidance range of $2.40 to $2.60 per Boe -- Rocky Mountain Infrastructure (RMI) net effective cost of $1.01 per Boe for the fourth quarter, which is comprised of approximately $1.57 per Boe of operating expenses, offset by $0.56 per Boe of RMI operating revenue from working interest partners -- Full-year 2020 RMI net effective cost of $1.03 per Boe, with operating expenses of $1.62 per Boe versus annual guidance range of $1.50 to $1.80 per Boe -- Recurring cash general and administrative (G&A)(1) expense, which excludes stock-based compensation, cash severance costs and other non-recurring expenses, was $7.4 million for the quarter, or $3.20 per Boe, up sequentially from $2.56 per Boe in the third quarter of 2020 primarily related to lower volumes and year-end accrual adjustments -- Full-year recurring cash G&A expense was $27.4 million, within the Companys expectations and full-year guidance of $26 to $28 million. On a per unit basis, recurring cash G&A was $2.97 per Boe in 2020, down 21% from $3.74 per Boe in 2019 -- Exited 2020 with approximately $285 million of liquidity, including an undrawn credit facility and approximately $25 million of cash -- 2020 GAAP net income of $103.5 million -- Adjusted EBITDAX(1) of $169.4 million, or $8.10 per diluted share -- Year-end 2020 proved reserves of 118.2 MMBoe, down 3% from 2019 year-end reserves, with a Standardized Measure and PV-10 of $437.1 million

(1) Non-GAAP measure; see attached reconciliation schedules at the end of this release.

Eric Greager, President and Chief Executive Officer, commented, Despite the significant challenges presented in 2020, I couldnt be more proud of how the BCEI team responded. The Company continued to deliver the safe and consistent operational performance that our shareholders have come to expect. Due to the skill and tenacity of our employees, we exceeded production expectations for the year, continued to improve our margins, and concluded with the announcement of a transformative acquisition of HighPoint Resources in the fourth quarter.

Greager continued, We continue to make steady progress toward closing the HighPoint transaction. Last week we announced key milestones, and we look forward to providing additional updates regarding the transaction and plan for the combined companies following our March 12th stockholder meeting.

Fourth Quarter 2020 Results

During the fourth quarter of 2020, the Company reported average daily sales of 25.0 MBoe/d. Product mix for the fourth quarter was 54% oil, 20% NGLs, and 26% residue natural gas, which was relatively consistent with the third quarter of 2020. The table below provides sales volumes, product mix, and average sales prices for the fourth quarter and full-year 2020 and 2019.

Three Months Ended Twelve Months Ended 12/31/2020 12/31/2019 % 12/31/2020 12/31/2019 % Change ChangeAvg. DailySales Volumes:Crude oil 13,389 13,871 (3 )% 13,714 14,071 (3 )%(Bbls/d)Naturalgas (Mcf/ 39,946 37,413 7 % 38,704 32,786 18 %d)Naturalgas 4,982 4,228 18 % 5,077 3,921 29 %liquids(Bbls/d)Crude oilequivalent 25,029 24,334 3 % 25,242 23,456 8 %(Boe/d) Product MixCrude oil 54 % 57 % 54 % 60 % Natural 26 % 26 % 26 % 23 % gasNaturalgas 20 % 17 % 20 % 17 % liquids Average Sales Prices (before derivatives):Crude oil $ 38.02 $ 51.98 (27 )% $ 34.42 $ 51.89 (34 )%(per Bbl)Naturalgas (per $ 1.87 $ 1.98 (6 )% $ 1.45 $ 2.06 (30 )%Mcf)Naturalgas $ 16.71 $ 12.51 34 % $ 10.39 $ 11.22 (7 )%liquids(per Bbl)Crude oilequivalent $ 26.65 $ 34.85 (24 )% $ 23.02 $ 35.88 (36 )%(per Boe)

Capital expenditures were $3.2 million for the fourth quarter of 2020 and $67.7 million for the full-year 2020. The Company did not have any drilling or completion related activity or wells turned to sales during the fourth quarter of 2020. For the year, the Company drilled 14 gross (10.5 net) operated wells. Of the 14 gross operated wells drilled, all were drilled during the first quarter of the year, and all were standard reach lateral (SRL) wells. The Company completed 9 gross (8.5 net) operated wells during the year, including 8 in the first quarter, and 1 in the second quarter. Of the 9 gross operated wells completed in 2020, 4 were SRLs and 5 were extended reach lateral (XRL) wells. The Company also turned to sales 26 gross (23.1 net) operated wells during the year, including 16 during the first quarter, 8 in the second quarter, and 2 in the third quarter. Of the 26 gross operated wells turned to sales, 9 were SRLs and 17 were XRLs.

Net oil and gas revenue for the fourth quarter of 2020 increased to $62.6 million compared to $58.9 million for the third quarter of 2020. The increase was a result of higher oil, natural gas, and NGL realized prices, partially offset by a slight decline in sales volumes. Crude oil accounted for approximately 75% of total revenue for the quarter. Differentials for the Companys oil production averaged approximately $4.53 per barrel and $5.08 per barrel off NYMEX WTI for the fourth quarter and full-year, respectively. The Companys annual oil differential guidance for 2020 had been $4.75 to $5.25 per barrel.

LOE for the fourth quarter of 2020 on a unit basis remained relatively flat at $2.20 per Boe, compared to $2.23 per Boe in the third quarter of 2020. Full-year 2020 LOE of $2.38 per Boe was below the Companys annual guidance range of $2.40 to $2.60 per Boe.

RMI net effective cost for the fourth quarter 2020 was $1.01 per Boe, which consists of $1.57 per Boe of RMI operating expense offset by $0.56 per Boe of RMI operating revenue from working interest partners. RMI full-year 2020 net effective cost was $1.03 per Boe, which consists of $1.62 per Boe of RMI operating expense offset by $0.59 per Boe of RMI operating revenue from working interest partners. RMI operating revenue from working interest partners is based on production volumes, and the fees are not tied to oil or natural gas prices. RMI operating expense for full-year 2020 was within the Companys annual guidance range of $1.50 to $1.80 per Boe.

The Companys general and administrative (G&A) expenses were $9.1 million for the fourth quarter of 2020, which included $1.7 million in non-cash stock-based compensation. Recurring cash G&A, which excludes non-recurring and non-cash items, was $7.4 million for the fourth quarter of 2020. On a per unit basis, the Companys recurring cash G&A increased 25% sequentially from $2.56 per Boe in the third quarter of 2020 to $3.20 per Boe in the fourth quarter of 2020. For full-year 2020, recurring cash G&A of $27.4 million was within the Companys expectations and full-year guidance of $26 to $28 million.

RMI net effective cost and recurring cash G&A are non-GAAP measures. Please see Schedule 8 and Schedule 9 at the end of this release for a reconciliation to the most comparable GAAP measure.

2020 Proved Reserves, Costs Incurred, and Finding and Development Costs

As of year-end 2020, the Company had proved reserves of 118.2 MMBoe, a 3% decrease from year-end 2019 reserves.The Company's year-end 2020 proved reserves were comprised of 52.8 MMbbls of oil, 26.1 MMbbls of NGLs, and 235.7 Bcf of natural gas, and 50% of the total proved reserves were proved-developed-producing. At year-end, the Companys proved reserves PV-10, utilizing Securities and Exchange Commission (SEC) pricing, was $437.1 million. Bonanza Creeks independent reserve engineering firm, Ryder Scott Company, LP., completed its estimate of the Companys year-end 2020 proved reserves in accordance with SEC guidelines using pricing of $39.57 per barrel for crude oil and $1.99 per million British Thermal Units (MMBtu) for natural gas. Please see Schedule 7 at the end of this release for information on SEC pricing and a reconciliation of PV-10 to the GAAP figure Standardized Measure of Oil and Gas.

A breakout of the Companys costs incurred are provided in the table below.

(in thousands) Year Ended December 31, 2020Acquisition^(1) $ 11,296 Development^(2)(3) 55,934 Exploration 595 Total $ 67,825

(1)Acquisition costs for unproved and proved properties were $2.3 million and $9.0 million, respectively. (2)Development costs include workover costs of $1.2 million.(3)Includes amounts relating to asset retirement obligations of $(1.0) million.

Proved Reserve Roll-Forward

Net Reserves (MBoe)Balance as of December31, 2019 121,941 Extensions and discoveries 18,007 Production (9,239 )Sales of minerals in place ? Removed from capital program (22,908 )Purchases of minerals in place 2,910 Revisions to previous estimates 7,481 Balance as of December31, 2020 118,192

First Quarter 2021 Bonanza Creek Guidance

The Company previously provided guidance for the first quarter of 2021 for Bonanza Creek as a stand-alone company. We have since updated our production guidance to a range of 20.0 to 23.0 MBoe/d, down from 22.0 to 24.0 MBoe/d. This change captures impacts due to extreme weather that occurred in mid-February. We have also updated our expectations for oil mix for the quarter to a range of 48% to 50%, up from 45% to 50%. Additional guidance for 2021 will be provided after the closing of the HighPoint transaction.

1Q 2021 Guidance Low HighCapital Expenditures ($MM) $35 -- $40 Production (MBoe/d) 20.0 -- 23.0 % Oil 48% -- 50% Lease Operating Expenses ($MM) $5.0 -- $5.5 RMI Operating Expenses ($MM) $3.5 -- $4.0 Recurring Cash G&A ($MM) $6.0 -- $6.5 Production Taxes (% of revenue) 5% -- 6% Oil Differential ($/Bbl) $4.00 -- $5.00

Note: Guidance is forward-looking information that is subject to considerable change and numerous risks and uncertainties, many of which are beyond the Companys control. See Forward-Looking Statements below.

Conference Call Information

The Company will host a conference call to discuss these results on February 18, 2020 at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time). A live webcast and replay will be available on the Investor Relations section of the Companys website at www.bonanzacrk.com. Dial-in information for the conference call is included below.

Type Phone Number PasscodeLive participant 877-793-4362 784 8187Replay 855-859-2056 784 8187

About Bonanza Creek Energy, Inc.

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 Companys assets and operations are concentrated in rural, unincorporated Weld County, Colorado, within the Wattenberg Field, focused on the Niobrara and Codell formations. The Companys common shares are listed for trading on the NYSE under the symbol: BCEI. For more information about the Company, please visit www.bonanzacrk.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.

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 solicitation of the Prepackaged Plan (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 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, Bonanza Creek and HighPoint have filed materials with the SEC, including (1) 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 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 Exchange 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 Exchange Prospectus and began mailing the Joint Proxy Statement/Prospectus to the Companys 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 Bonanza Creek or HighPoint has filed or may file with the SEC and send to Bonanza Creeks shareholders or HighPoints 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 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 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 Exchange 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 Creeks website at www.bonanzacrk.com under the For Investors tab or by contacting Bonanza Creeks 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 HighPoints website at www.hpres.com under the Investors tab or by contacting HighPoints Investor Relations Department at (303) 312-8514 or lbusnardo@hpres.com.

Participants in the Solicitation

Bonanza Creek, HighPoint 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 Bonanza Creeks shareholders and HighPoints shareholders in connection with the Transaction. Information regarding the executive officers and directors of Bonanza Creek 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 HighPoint 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 StatementsCertain 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 Creeks 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 companys 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 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. Bonanza Creek 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.

For further information, please contact:Scott LandrethSenior Director, Finance, Investor Relations and Treasurer720-225-6679slandreth@bonanzacrk.com

Schedule 1: Statement of Operations(in thousands, expect for per share amounts, unaudited)

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Operating net revenues: Oil and gas sales $ 62,635 $ 79,667 $ 218,090 $ 313,220 Operating expenses: Lease operating expense 5,070 6,737 21,957 25,249 Midstream operating expense 3,610 3,713 14,948 12,014 Gathering, transportation, 4,962 3,906 16,932 16,682 and processingSeverance and ad valorem 2,199 6,901 3,787 25,598 taxesExploration 45 259 596 797 Depreciation, depletion, 23,936 21,896 91,242 76,453 and amortizationAbandonment and impairment 6,754 8,565 37,343 11,201 of unproved propertiesBad debt expense 140 ? 818 ? Merger transaction costs 5,767 ? 6,676 ? General and administrative(including $1,720, $1,697,$6,156, and $6,886, 9,091 9,667 34,936 39,668 respectively, ofstock-basedcompensation)Total operating expenses 61,574 61,644 229,235 207,662 Other income (expense): Derivative gain (loss) (11,141 ) (21,668 ) 53,462 (37,145 )Interest expense, net (488 ) (792 ) (2,045 ) (2,650 )Gain (loss) on property ? 1,483 (1,398 ) 1,177 transactions, netOther income 5,960 99 4,107 127 Total other income (5,669 ) (20,878 ) 54,126 (38,491 )(expense)Income (loss) before taxes (4,608 ) (2,855 ) 42,981 67,067 Income tax benefit 65,236 ? 60,547 ? Net income (loss) $ 60,628 $ (2,855 ) $ 103,528 $ 67,067 Comprehensive income (loss) $ 60,628 $ (2,855 ) $ 103,528 $ 67,067 Net income (loss) per common share:Basic $ 2.91 $ (0.14 ) $ 4.98 $ 3.25 Diluted $ 2.89 $ (0.14 ) 4.95 $ 3.24 Weighted-average common shares outstanding:Basic 20,836 20,638 20,774 20,612 Diluted 21,012 20,638 20,912 20,681

Schedule 2: Statement of Cash Flows(in thousands, unaudited)

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Cash flows from operating activities:Net income (loss) $ 60,628 $ (2,855 ) $ 103,528 $ 67,067 Adjustments to reconcile netincome (loss) to net cash provided by operatingactivities:Depreciation, depletion, and 23,936 21,896 91,242 76,453 amortizationDeferred income tax benefit (65,209 ) ? (60,520 ) ? Abandonment and impairment 6,754 8,565 37,343 11,201 of unproved propertiesWell abandonment costs and ? 110 (8 ) 172 dry hole expenseStock-based compensation 1,720 1,697 6,156 6,886 Non-cash lease component (81 ) (51 ) (249 ) 668 Amortization of deferred 92 116 864 487 financing costsDerivative (gain) loss 11,141 21,668 (53,462 ) 37,145 Derivative cash settlements 6,912 (2,075 ) 49,406 1,691 (Gain) loss on property ? (1,483 ) 1,398 (1,177 )transactions, netOther 1,229 4,459 71 3,559 Changes in current assets and liabilities:Accounts receivable 683 (740 ) 24,945 (2,688 )Prepaid expenses and other (12 ) (1,235 ) 3,352 (2,415 )assetsAccounts payable and accrued 414 12,254 (41,278 ) 28,320 liabilitiesSettlement of asset (855 ) (687 ) (3,992 ) (2,722 )retirement obligationsNet cash provided by 47,352 61,639 158,796 224,647 operating activitiesCash flows from investing activities:Acquisition of oil and gas (2,357 ) (1,119 ) (3,210 ) (14,087 )propertiesExploration and development (3,933 ) (58,368 ) (60,149 ) (242,487 )of oil and gas propertiesProceeds from sale of oil ? 604 ? 1,757 and gas propertiesAdditions to property and ? (49 ) (440 ) (341 )equipment - non oil and gasNet cash used in investing (6,290 ) (58,932 ) (63,799 ) (255,158 )activitiesCash flows from financing activities:Proceeds from credit ? 15,000 45,000 55,000 facilityPayments to credit facility (20,000 ) (15,000 ) (125,000 ) (25,000 )Payment of employee taxwithholdings in exchange for (48 ) (76 ) (1,122 ) (1,176 )the return of common stockDeferred financing costs (10 ) 6 (23 ) (220 )Principal payments on (31 ) ? (102 ) ? finance lease obligationsNet cash provided by (used (20,089 ) (70 ) (81,247 ) 28,604 in) financing activitiesNet change in cash, cashequivalents, and restricted 20,973 2,637 13,750 (1,907 )cash:Cash, cash equivalents, and restricted cash:Beginning of period 3,872 8,458 11,095 13,002 End of period $ 24,845 $ 11,095 $ 24,845 $ 11,095

Schedule 3: Balance Sheets(in thousands, unaudited)

As of December 31, 2020 2019ASSETS Current assets: Cash and cash equivalents $ 24,743 $ 11,008 Accounts receivable, net: Oil and gas sales 32,673 43,714 Joint interest and other 14,748 38,136 Prepaid expenses and other 3,574 7,048 Inventory of oilfield equipment 9,185 7,726 Derivative assets 7,482 2,884 Total current assets 92,405 110,516 Property and equipment (successful efforts method):Proved oil and gas properties 1,056,773 935,025 Less: accumulated depreciation, depletion, and (211,432 ) (126,614 )amortizationTotal proved oil and gas properties, net 845,341 808,411 Unproved properties 98,122 143,020 Wells in progress 50,609 98,750 Other property and equipment, net of accumulated 3,239 3,394 depreciation of $3,737 in 2020 and $3,142 in 2019Total property and equipment, net 997,311 1,053,575 Long-term derivative assets ? 121 Right-of-use assets 29,705 38,562 Deferred income tax assets 60,520 ? Other noncurrent assets 2,871 3,544 Total assets $ 1,182,812 $ 1,206,318 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable and accrued expenses $ 37,425 $ 57,638 Oil and gas revenue distribution payable 18,613 29,021 Lease liability 12,044 11,690 Derivative liability 6,402 6,390 Total current liabilities 74,484 104,739 Long-term liabilities: Credit facility ? 80,000 Lease liability 17,978 27,540 Ad valorem taxes 15,069 28,520 Derivative liability 1,330 921 Asset retirement obligations for oil and gas 28,699 27,908 propertiesTotal liabilities 137,560 269,628 Commitments and contingencies Stockholders? equity: Preferred stock, $.01 par value, 25,000,000 ? ? shares authorized, none outstandingCommon stock, $.01 par value, 225,000,000 sharesauthorized, 20,839,227 and 20,643,738 issuedand 4,282 4,284 outstanding as of December31, 2020 and 2019,respectivelyAdditional paid-in capital 707,209 702,173 Retained earnings 333,761 230,233 Total stockholders? equity 1,045,252 936,690 Total liabilities and stockholders? equity $ 1,182,812 $ 1,206,318

Schedule 4: Per unit operating margins(unaudited)

Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 Percent 2020 2019 Percent Change ChangeCrude oilequivalent 2,303 2,239 3 % 9,239 8,561 8 %sales volumes(MBoe) Realized price(before $ 26.65 $ 34.85 (24 )% $ 23.02 $ 35.88 (36 )derivatives)^ %(1) Per unit costs ($/Boe)Lease operating $ 2.20 $ 3.01 (27 )% $ 2.38 $ 2.95 (19 )expense %RMI neteffective cost^ $ 1.01 $ 0.92 10 % $ 1.03 $ 0.70 47 %(1)Gathering, )transportation, $ 2.15 $ 1.74 24 % $ 1.83 $ 1.95 (6 %and processingRecurringseverance and $ 2.56 $ 3.08 (17 )% $ 2.17 $ 2.99 (27 )ad valorem %taxes^(2)Recurring cashgeneral and $ 3.20 $ 3.41 (6 )% $ 2.97 $ 3.74 (21 )administrative^ %(3)Total cash $ 11.12 $ 12.16 (9 )% $ 10.38 $ 12.33 (16 )costs %Cash cost )margin (before $ 15.53 $ 22.69 (32 )% $ 12.64 $ 23.55 (46 %derivatives)Derivative cash $ 3.00 $ (0.93 ) (423 )% $ 5.35 $ 0.20 2,575 %settlementsCash cost )margin (after $ 18.53 $ 21.76 (15 )% $ 17.99 $ 23.75 (24 %derivatives) Non-cash andnon-recurring itemsDepreciation,depletion, and $ 10.39 $ 9.78 6 % $ 9.88 $ 8.93 11 %amortizationSeverance andad valorem $ (1.61 ) $ ? (100 )% $ (1.76 ) $ ? (100 )taxes %adjustmentNon-cash andnon-recurring $ 0.75 $ 0.91 (18 )% $ 0.81 $ 0.89 (9 )general and %administrative ^(1) Crude oil and natural gas sales excludes $1.3 million, $1.7 million, $5.4million, and $6.1 million of oil transportation and gas gathering revenues fromthird parties, which do not have associated sales volumes for three monthsended December31, 2020 and 2019 and for the year ended December31, 2020 and2019, respectively. Alternatively, the aforementioned oil transportation andgas gathering revenues from third parties have been netted against themidstream operating expense to arrive at the RMI net effective cost. SeeSchedule 9 for a reconciliation from GAAP midstream operating expense to RMInet effective cost.^(2) Recurring severance and ad valorem taxes exclude non-recurring taxadjustments based on current mill levies, taxing districts, and company andindustry results.^(3) Recurring cash general and administrative expense excludes stock-basedcompensation, cash severance costs, and other non-recurring fees. Please seeSchedule 8 for a reconciliation from GAAP G&A to recurring cash G&A.

Schedule 5: Adjusted Net Income (in thousands, except per share amounts, unaudited)

Adjusted net income is a supplemental non-GAAP financial measure that is used by management to present a more comparable, recurring profitability between periods. The Company defines adjusted net income as net income after adjusting for (1) the impact of certain non-cash items and one-time transactions and correspondingly (2) the related tax effect in each period. Adjusted net income is not a measure of net income as determined by GAAP.

The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of adjusted net income.

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Net income (loss) $ 60,628 $ (2,855 ) $ 103,528 $ 67,067 Adjustments to net income (loss):Abandonment and impairment 6,754 8,565 37,343 11,201 of unproved propertiesStock-based compensation^ 1,720 1,697 6,156 6,886 (1)Severance costs^(1) ? 333 1,337 751 Merger transaction costs 5,767 ? 6,676 ? (Gain) loss on property ? (1,483 ) 1,398 (1,177 )transactions, netSeverance and ad valorem (3,705 ) ? (16,291 ) ? taxes adjustment^(2)Derivative (gain) loss 11,141 21,668 (53,462 ) 37,145 Derivative cash settlements 6,912 (2,075 ) 49,406 1,691 Non-cash lease component (81 ) (51 ) (249 ) 668 Well abandonment andexploratory dry hole ? 110 (8 ) 172 expenseTotal adjustments before 28,508 28,764 32,306 57,337 taxesTax effect of adjustments^ (7,298 ) (7,364 ) (8,270 ) (14,678 )(3)Total adjustments after 21,210 21,400 $ 24,036 $ 42,659 taxes Adjusted net income $ 81,838 $ 18,545 $ 127,564 $ 109,726 Adjusted net income per $ 3.89 $ 0.89 $ 6.10 $ 5.31 diluted share Diluted weighted-average 21,012 20,903 20,912 20,681 common shares outstanding ^(1) Included as a portion of general and administrative expense in theconsolidated statements of operations and comprehensive income.^(2) Included as a portion of severance and ad valorem taxes in theconsolidated statements of operations and comprehensive income.^(3) Estimated using the federal and state effective tax rate of 25.6%.

Schedule 6: Adjusted EBITDAX(in thousands, unaudited)

Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management to provide a metric of the Companys ability to internally generate funds for exploration and development of oil and gas properties. The metric excludes items which are non-recurring in nature. Management believes adjusted EBITDAX provides external users of the Companys consolidated financial statements such as industry analysts, investors, lenders, and rating agencies with additional information to assist in their analysis of the Company. The Company defines Adjusted EBITDAX as earnings before interest, income taxes, depreciation, depletion, and amortization, impairment, exploration expenses and other similar non-cash and non-recurring charges. Adjusted EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted EBITDAX.

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Net Income (loss) $ 60,628 $ (2,855 ) $ 103,528 $ 67,067 Exploration 45 259 596 797 Depreciation, depletion and 23,936 21,896 91,242 76,453 amortizationAmortization of deferred ? ? ? 248 financing costsAbandonment and impairment 6,754 8,565 37,343 11,201 of unproved propertiesStock-based compensation ^ 1,720 1,697 6,156 6,886 (1)Severance costs ^(1) ? 333 1,337 751 Merger transaction costs 5,767 ? 6,676 ? (Gain) loss on property ? (1,483 ) 1,398 (1,177 )transactions, netInterest expense, net 488 792 2,045 2,650 Severance and ad valorem (3,705 ) ? (16,291 ) ? taxes adjustment ^(2)Derivative (gain) loss 11,141 21,668 (53,462 ) 37,145 Derivative cash settlements 6,912 (2,075 ) 49,406 1,691 Income tax benefit (65,236 ) ? (60,547 ) ? Adjusted EBITDAX $ 48,450 $ 48,797 $ 169,427 $ 203,712 ^(1) Included as a portion of general and administrative expense in theconsolidated statement of operations and comprehensive income.^(2) Included as a portion of severance and ad valorem taxes in theconsolidated statements of operations and comprehensive income.

Schedule 7: PV-10 of Estimated Proved Reserves

PV-10 is derived from the Standardized Measure, which is the most directly comparable GAAP financial measure. PV-10 is a computation of the Standardized Measure on a pre-tax basis. PV-10 is equal to the Standardized Measure at the applicable date, before deducting future income taxes, discounted at 10%. We believe that the presentation of PV-10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to our estimated net proved reserves prior to taking into account future corporate income taxes, and it is a useful measure for evaluating the relative monetary significance of our oil and natural gas properties. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. We use this measure when assessing the potential return on investment related to our oil and natural gas properties. PV-10, however, is not a substitute for the Standardized Measure. Our PV-10 measure and the Standardized Measure do not purport to present the fair value of our proved oil and natural gas reserves.

The following table presents a reconciliation of non-GAAP financial measure of PV-10 to the GAAP Standardized Measure (in thousands).

12/31/2020PV-10 ^(1) $ 437,054 Present value of future income taxes discounted at 10% ^(2) ? Standardized Measure $ 437,054 ^(1) The 12-month average benchmark pricing used to estimate SEC provedreserves and PV-10 value for crude oil and natural gas was $39.57 per Bbl ofWTI crude oil and $1.99 per MMBtu of natural gas at Henry Hub beforedifferential adjustments. After differential adjustments, the Company?s SECpricing realizations for year-end 2020 were $34.96 per Bbl of oil, $6.12 perBbl of NGLs, and $0.95 per Mcf of natural gas.^(2) The tax basis of the Company?s oil and gas properties as of December31,2020 provides more tax deduction than income generation when reserve estimateswere prepared using 2020 SEC pricing.

Schedule 8: Recurring Cash G&A(in thousands, unaudited)

Recurring cash G&A is a supplemental non-GAAP financial measure that is used by management to provide only the cash portion of its G&A expense, which can be used to evaluate cost management and operating efficiency on a comparable basis from period to period. Management believes recurring cash G&A provides external users of the Companys consolidated financial statements such as industry analysts, investors, lenders, and rating agencies with additional information to assist in their analysis of the Company. The Company defines recurring cash G&A as GAAP general and administrative expense exclusive of the Companys stock-based compensation and one-time charges. The Company refers to recurring cash G&A to provide typical recurring cash G&A costs that are planned for in a given period. Recurring cash G&A is not a fully inclusive measure of general and administrative expense as determined by GAAP.

The following table presents a reconciliation of the GAAP financial measure of general and administrative expense to the non-GAAP financial measure of recurring cash G&A.

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019General and $ 9,091 $ 9,667 $ 34,936 $ 39,668 administrative expenseStock-based compensation (1,720 ) (1,697 ) (6,156 ) (6,886 )Cash severance costs ? (333 ) (1,337 ) (751 )Recurring cash G&A $ 7,371 $ 7,637 $ 27,443 $ 32,031

Schedule 9: Rocky Mountain Infrastructure (RMI) Net Effective Cost(in thousands, unaudited)

RMI net effective cost is a supplemental non-GAAP financial measure that is used by management to assess only the net cash impact the Companys wholly owned subsidiary, Rocky Mountain Infrastructure, LLC, has on the Companys consolidated financials. Management believes the net effective cost provides external users of the Companys consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies, with additional information to assist in their analysis of the Company. The Company defines the RMI net effective cost as GAAP midstream operating expense less revenue generated from working interest partners utilizing the RMI assets.

The following table presents a reconciliation of the GAAP financial measures of midstream operating expense and RMI working interest partner revenue to the non-GAAP financial measure of RMI net effective cost.

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Midstream operating $ 3,610 $ 3,713 $ 14,948 $ 12,014 expenseRMI working interest (1,279 ) (1,651 ) (5,430 ) (6,057 )partner revenueRMI net effective cost $ 2,331 $ 2,062 $ 9,518 $ 5,957