Bonanza Creek Energy Announces Second Quarter 2018 Financial Results and Operational Update

DENVER, Aug. 08, 2018 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE: BCEI) (the "Company" or "Bonanza Creek") today announced its second quarter 2018 financial results and operating outlook and has posted an updated investor presentation on its corporate website.

Bonanza Creek delivered solid performance in the second quarter driven by strong production growth and lower capital spend. The Company is on track to grow Wattenberg production by approximately 25% year-over-year and 50% when comparing the fourth quarter of 2018 to the fourth quarter of 2017.

  • Second quarter sales volumes averaged 18.0 MBoe per day including the negative effects of a prior-period adjustment of 0.6 Mboe per day related to non-operated wells
  • Rapidly improving well performance yields over 1,000 economic drilling locations in Wattenberg
  • Full year 2018 Wattenberg production guidance raised while lowering full year capex guidance
  • Accretive Mid-Continent divestiture of $117 million(1) bolsters balance sheet, improves unit operating costs and focuses operations on highest returning opportunities
  • Well head pressures effectively managed via Rocky Mountain Infrastructure's ("RMI") multiple third-party gas processing optionality
  • Second quarter GAAP net income of $4.9 million, or $0.24 per diluted share; Adjusted net income(1)of $24.2 million, or $1.18 per diluted share
  •  Adjusted EBITDAX(2) of $34.8 million, 17% growth over first quarter 2018

(1) Effective date of February 1, 2018

(2) Non-GAAP measures, see attached reconciliation schedules at the end of this release.

"Bonanza Creek delivered a solid quarter, marked by consistently improving operational and financial performance. We continue to be encouraged by the strong well performance across our Wattenberg position. Through a combination of improving well productivity from more recent completion designs, and attention to our base, we are able to raise our full year 2018 production guidance while lowering our full-year capex," said Eric Greager, President and CEO.

"As we look further into this year and next, we expect to see strong production growth, improving unit costs and increased operating cash flow as we accelerate our pace of development. Our balance sheet remains strong. We are well-funded to execute on our capital plan which provides for approximately 25% Rockies production growth in 2018 and greater than 50% growth in 2019."

Second Quarter 2018 Results

During the second quarter of 2018, the Company reported average daily sales of 18.0 MBoe per day, which was at the low end of the Company's guidance range of 18.0 – 18.6 MBoe per day. Otherwise strong production during the quarter was impacted by a negative adjustment of 0.6 MBoe per day related to our interest in several months of production from two outside-operated pads. If not for this adjustment, second quarter production would have been at the high-end of guidance. The Company's second quarter reported sales increased 7% sequentially as we continue to see strong well performance from the recent completion designs and consistently low wellhead gathering pressures on the Company's RMI system. As a result of these factors, we are raising our full-year production guidance, pro-forma for the Mid-Continent divestiture, as detailed below. Product mix for the second quarter of 2018 was 58% oil, 20% NGLs, and 22% residue natural gas.

Net revenue for the second quarter of 2018 was $71.9 million, compared to $44.1 million for the second quarter of 2017. The increase in second quarter 2018 net revenue compared to 2017 was primarily a result of increased production and improved commodity pricing.  Crude oil accounted for approximately 85% of total revenue. Differentials for the Company's Wattenberg oil production during the quarter averaged approximately $6.39 per barrel off of NYMEX WTI. Corporate average realized prices for the second quarter of 2018 are presented below.

Below is a breakout of the Company's regional operating expenses for the second quarter of 2018.Lease operating expenses ("LOE") for the second quarter of 2018 were $11.3 million, compared to $9.4 million in the second quarter of 2017.  LOE on a unit basis for the second quarter of 2018 increased by 6.6% to $6.90 per Boe from $6.47 per Boe in the second quarter of 2017. Gas plant and midstream expenses for the second quarter of 2018 were $3.2 million, compared to $2.6 million in the second quarter of 2017. On a unit basis, gas plant and midstream expenses increased 10% to $1.98 per Boe for the second quarter of 2018 from $1.80 per Boe in the second quarter of 2017. Unit operating costs were impacted by decisions to pull forward certain planned activities and to pursue high-returning maintenance opportunities. They were also impacted by some cost inflation and environmental compliance costs required by the air emissions consent order in the Wattenberg Field. The Company’s accelerated compressor replacement program is now largely complete and will continue to ensure Bonanza Creek’s product flows while helping to reduce future operating costs. Additional spending on the company’s base optimization efforts (e.g. pipeline pigging and well servicing) have helped improve base production volumes. Cost pressures due to a busier operating environment and air emissions compliance costs are expected to continue through 2018 and are reflected in our revised LOE, gas plant and midstream expense guidance.

Reported net income for the second quarter of 2018 was $4.9 million, or $0.24 per diluted share. Adjusted net income for the second quarter of 2018 was $24.2 million, or $1.18 per diluted share.The Company's general and administrative ("G&A") expense was $9.9 million for the second quarter of 2018, which includes $2.2 million in stock compensation. This represents a 48% decrease from the second quarter of 2017. Cash G&A expense, which excludes stock compensation, was $7.7 million for the quarter and is tracking at the low-end of the Company's full year 2018 guidance.

Adjusted EBITDAX for the second quarter of 2018 was $34.8 million.

Cash G&A, Adjusted net income, and Adjusted EBITDAX are non-GAAP financial measures. Please refer to the respective reconciliations in the schedules at the end of this release for additional information about these measures.

The table below summarizes the Company's annual results as compared to previously provided guidance.

* Cash G&A guidance is a non-GAAP measure that excludes the Company’s stock based compensation. The Company does not guide to GAAP G&A expense as it has excessive uncertainty due to the stock based compensation portion of GAAP G&A. Please refer to the non-GAAP disclosure at the end of this release for information regarding cash G&A.

The Company is updating its 2018 annual guidance to account for strong well performance in the Wattenberg and the sale of the Mid-Continent operations on August 6, 2018.  Third quarter 2018 production and operating expense guidance is also being provided for the full company and pro-forma for the sale of the Mid-Continent operations. Below is a table summarizing the Company's production, capital, and expense guidance for the remainder of 2018.

* Recurring Cash G&A is a non-GAAP measure that excludes the Company’s stock based compensation. The Company does not guide to GAAP G&A expense as it has excessive uncertainty due to the stock based compensation portion of GAAP G&A.

(1) Pro-forma is the Company estimate for the third quarter of 2018 excluding results from the Mid-Continent operations.

 

Operational Highlights

During the second quarter of 2018, the Company spud 12 gross (8.1 net) operated wells, ten of which were extended reach lateral ("XRL") wells, and completed 11 gross (11.0 net) operated wells, six of which were XRL wells.

The Company continues to be encouraged by its eight-well F26 pad on its western legacy acreage. These eight standard reach lateral ("SRL") wells have average cumulative production of 18.3 MBoe per 1,000 feet of lateral after 178 days of production. Additionally, the Company has finished completing and turned to production all eight XRL wells in the French Lake area. While two of the wells are currently hindered by mechanical issues, the Company is very pleased with the early results of the remaining six XRLs with results meeting or exceeding expectations.

The Company has provided updated production results for these wells in its August Investor Presentation, which is available on the Company's website.

The Company continued to benefit from multiple delivery points on the RMI system in the second quarter, including the Sterling interconnect which came online in the fourth quarter 2017. This delivery point flexibility, combined with consistent low line pressures on RMI, helped ensure minimal production curtailments. The Company entered into a new agreement with Cureton Front Range LLC (“Cureton”) whereby Cureton will gather and process gas from the Company’s northern acreage.  In addition to gathering and processing services, the new agreement provides flow assurance by adding 15 MMcf per day of firm gas processing capacity for up to twenty-five years. The Company also secured three years of downstream residue transportation from Cureton in order to support upcoming production needs. This improves the Company’s flexibility to manage system pressures across its Wattenberg position and provides the backbone infrastructure system to allow development of the northern acreage.

Upon completing the 2018 resource assessment and as a result of rapidly improving well performance, the Company has identified over 1,000 economic SRL equivalent locations in its Wattenberg position.

Financial Highlights

As of the end of the second quarter, the Company had liquidity of $153.7 million, which included cash on hand of $22.0 million and $131.7 million of borrowing capacity under its credit facility.  Pro forma for the Mid-Continent divestiture which closed on August 6, 2018, the Company had $256.6 million in liquidity.  The balance sheet strength and Wattenberg inventory provide the company with a strong position from which to deliver disciplined, return-oriented growth.

Commodity Derivative Position

The Company's current hedge position is summarized in the table below and reflects additional hedges the Company entered into through August 8, 2018. Subsequent to quarter-end, the Company entered into natural gas basis swaps between NYMEX Henry Hub price and the Colorado Interstate Gas (CIG) Rockies Natural Gas price, the index on which the majority of the Company's natural gas is sold.

Conference Call Information

The Company will host a conference call to discuss these financial and operating results on August 9, 2018 at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time). A webcast of the live event, as well as a replay, will be available on the Investor Relations section of the Company’s website at www.bonanzacrk.com. Dial-in information for the conference call is included below.

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 onshore oil and associated liquids-rich natural gas in the United States. The Company’s assets and operations are concentrated in the Rocky Mountain region in 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.” 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.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding development and completion expectations and strategy; decreasing operating and capital costs; impact of the Company's reorganization; and updated 2018 guidance. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; access to adequate gathering systems and pipeline take-away capacity; and pipeline and refining capacity constraints. Further information on such assumptions, risks and uncertainties is available in the Company’s SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2017, filed on March 15, 2018, and other filings submitted by us to the Securities Exchange Commission. The Company’s SEC filings are available on the Company’s website at www.bonanzacrk.com and on the SEC’s website atwww.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, including guidance, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

For further information, please contact:
Doug Atkinson
Senior Manager, Investor Relations
720-225-6690
datkinson@bonanzacrk.com

Note: The Predecessor Company followed the two-class method when computing the basic and diluted net income (loss) per share, which allocates earnings between common shareholders and unvested participating securities. The Successor Company follows the treasury stock method to compute basic and diluted net income (loss) per share. Please refer to Note 12 – Earnings per Share in the Form 10-Q, for a detailed calculation.
(1) The Company incurred impairment charges relating to the standard amortization of unproved properties within the Wattenberg Field during the Current Successor quarter.

Note: The Predecessor Company followed the two-class method when computing the basic and diluted net income (loss) per share, which allocates earnings between common shareholders and unvested participating securities. The Successor Company follows the treasury stock method to compute basic and diluted net income (loss) per share. Please refer to Note 12 – Earnings per Share in the Form 10-Q, for a detailed calculation.
(1) The Company incurred impairment charges relating to non-core leases expiring and the standard amortization of unproved properties within the Wattenberg Field during the Current Successor Period.

Schedule 6: 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 recurring profitability that is more comparable between periods by excluding items that are non-recurring in nature or items which are not easily estimable. Management believes adjusted net income provides external users of the Company's consolidated financial statements such as industry analysts, investors, creditors, and rating agencies with additional information to assist in their analysis of the Company. The Company defines adjusted net income as net income after adjusting first for (1) the impact of certain non-cash items and one-time transactions and then (2) the non-cash and one time items’ impact on taxes based on a tax rate that approximates the Company's effective tax rate 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.

 

Schedule 7: 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 Company's ability to internally generate funds for exploration and development of oil and gas properties. The metric excludes items which are non-recurring in nature and/or items which are not reasonably estimable. Management believes adjusted EBITDAX provides external users of the Company’s 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 expense, income taxes, depreciation, depletion, amortization, impairment, exploration expenses and other similar non-cash and non-recurring charges. Adjusted EBITDAX is not a measure of net income (loss) or cash flows as determined by GAAP.

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

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

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 cash G&A provides external users of the Company’s 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 cash G&A as GAAP general and administrative expense exclusive of the Company's stock based compensation and one-time charges, such as severance costs and advisor fees. The Company refers to cash G&A to provide typical cash G&A costs that are planned for in a given period. 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 cash G&A.

Bonanza Creek Energy, Inc.


Bonanza Creek Energy Provides Operational Update, Announces Year-End 2017 Proved Reserves and 2018 Guidance

  • Accelerating development program in the second half of 2018
  • Expected Rockies production growth of 20% in 2018 and in excess of 50% in 2019
  • Fourth quarter 2017 production of 14.8 MBoe per day, exceeds the high end of previous Company guidance
  • Year-end 2017 proved reserves increased 13% to 102.0 MMBoe
  • Enhanced completions continue to outperform expectations

DENVER, Jan. 29, 2018 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE:BCEI) (“Bonanza Creek” or the “Company”) announces a number of positive developments regarding its preliminary fourth quarter operational results and its 2018 budget.

Jack Vaughn, Chairman of the Board of Directors, commented, “Much has been accomplished since Bonanza Creek exited from bankruptcy last spring. In 2017, the results of our first enhanced completions exceeded our expectations. In 2018, we will accelerate and expand this learning process with additional slick-water tests and by applying enhanced completions to our northern and eastern acreage.

“In 2017, we secured our strategically important leasehold position in French Lake. In 2018, we will delineate this key acreage position with enhanced completions and lay the ground work for its future development. We will also consider the sale of non-core assets and will focus any potential acquisition activity on expanding our core footprint in the DJ Basin.

“In 2017, we reduced our annualized G&A and LOE by approximately $20 million. Further efficiency improvements will continue to be a focus for the Company, with our per-unit costs benefitting from production growth in 2018 and beyond. During the year, we also took important steps to improve our access to gas processing in the DJ Basin. We believe these steps will result in improved costs, greater reliability, and greater optionality than available to many other operators in the basin while enhancing the value of our Rocky Mountain Infrastructure system.

“Finally, in 2017, we began a dual-track process to secure permanent leadership for our Company and to consider strategic transactions. While the transaction with SandRidge Energy was unsuccessful, this process has provided significant insights regarding the quality of our team, our assets, and the desires of our shareholders. We remain dedicated to maximizing shareholder value and are focused on securing permanent leadership in the coming months.

“As we enter 2018, we are confident about our future, and thankful for the tireless efforts of our team and ongoing support of our shareholders. We look forward to more frequent and more detailed engagement with our shareholders as the year progresses.”

Fourth Quarter 2017 Operational Update

During the fourth quarter of 2017, the Company produced an average of 14.8 MBoe per day, exceeding the high-end of the Company’s previous guidance of 14.2 MBoe per day. This outperformance is primarily attributed to lower line pressures in the Company’s Rocky Mountain Infrastructure (“RMI”) system and better than expected performance from wells utilizing enhanced completion designs.

Midstream Contracts Provide Lower Line Pressure and Operational Flexibility

On November 11, 2017, the Company completed the previously announced connection with third-party gas processor Sterling Energy Investments, LLC (“Sterling”). Since that time, the Company has moved approximately 13% of its total Wattenberg gross gas production to Sterling. This connection, combined with added compression, reduced line pressures in the Company’s RMI system by up to 40%, resulting in improved production from both new and existing wells.

To ensure line pressures remain low as Bonanza Creek adds new wells to sales, the Company also recently entered into an agreement with Cureton Front Range LLC (“Cureton”), which will add a third gas processing partner connected directly to the Company’s RMI gathering system. Subject to the Company’s contractual obligations, the three separate processors and eight offtake points from the RMI system will allow flexibility in moving gas to the most advantageous locations, providing additional production flow assurance.

The agreement with Cureton is a 15-year gas gathering and processing contract under which Bonanza has dedicated approximately 22,000 net acres, or approximately 33% of its Wattenberg acreage. Based on the timetable in the agreement, the Company expects to commence gathering service with Cureton late in the second quarter of 2018 and to commence processing service at Cureton’s new 60 MMcf per day cryogenic gas plant in the second half of 2018. The agreement contains no minimum volume commitments and provides favorable netbacks compared to the Company’s other processing contracts. 

“DUC” Wells Production Outperforming Type Curve

The Company continues to be encouraged by the production from its North Platte 44-13 standard reach lateral (“SRL”) wells, which were completed in July 2017. The performance of these wells continues to exceed type curve projections and they are now forecast to produce an average EUR of 500 MBoe per 4,100 foot SRL well. An updated investor presentation on the Company website compares the performance of these four West SRL wells to (a) an offset pad that utilized a legacy completion design and (b) a legacy West SRL type curve.

During the fourth quarter of 2017, Bonanza Creek completed five additional wells on its legacy acreage, consisting of three extended reach lateral (“XRL”) wells and two SRLs. These wells are located on the Company’s central legacy acreage and, with approximately 75 days of data, the early production, GOR, and tubing pressures are encouraging for wells with an enhanced completion design. One of these SRL wells tested a slick-water completion with 1,500 pounds of proppant per foot. Early production data from this slick-water test is particularly encouraging as its production results are significantly outperforming those from offsetting wells with gel completions and similar proppant loading.

Record Drilling and Completion Efficiencies

Bonanza Creek recently finished drilling the last of the eight XRL wells on its French Lake acreage with one well setting a Company record drill time of fewer than 4.5 days from spud to total depth. The first of these eight French Lake wells has been recently turned online. The remaining seven French Lake wells are expected to be completed and turned online in the first half of 2018. In its western legacy acreage, the Company recently drilled and completed its eight-well SRL State North Platte F-26 pad. On this pad, the Company achieved a new SRL drilling record of 3.4 days from spud to total depth. Regarding completions, the Company achieved impressive efficiencies by pumping 336 stages in 24 days, including five days of pumping 18 stages and one day that achieved a Company record of 20 stages. All eight wells were recently turned online.

Year-End 2017 Proved Reserves

As of year-end 2017, the Company reports preliminary proved reserves of 102.0 MMboe, a 13% increase from year-end 2016.  The Company's year-end 2017 proved reserves were comprised of 52.9 MMBbls of oil, 22.8 MMBbls of NGLs, and 157.7 Bcf of natural gas and were 53% proved developed. Proved undeveloped reserves accounted for 48.1 MMBoe of the total proved reserves, a 20% increase in equivalent volumes from year-end 2016. The increase in proved undeveloped reserves is a combination of new PUD cases added during the year and improved production performance expectations for previously booked PUD wells due to the utilization of enhanced completion design. The Company reported all-in reserve replacement excluding price revisions of 202%. The PV-10 value using SEC pricing for estimated total proved reserves as of December 31, 2017 was $598 million, of which $470 million was attributable to its proved developed reserves.(1)As of year-end 2017, the Company estimates that its exit-to-exit corporate PDP decline rate will be approximately 30% in 2018, 20% in 2019, and 15% in 2020. The table below summarizes estimated proved reserves for 2017. Year-end 2017 reserves were prepared by Netherland, Sewell & Associates, Inc.

 

2018 Capital and Production Guidance 

In 2018, the Company plans to accelerate development while testing enhanced completion designs on large scale pads throughout the Company’s acreage position. The program contemplates running one rig in the first half of 2018 with a second rig added at mid-year to coincide with additional gas processing capacity from both Cureton and DCP.

The first rig is planned to drill large scale pads of up to nine wells throughout the legacy acreage position. Two of the pads drilled in the first half of the year will be completed using slick-water to further test and validate the improved performance from slick-water compared to historic gel completion designs. One of these pads is located in the western legacy acreage with the second pad located in the eastern legacy acreage. Data gathered from these tests will help inform completion design in the back half of the year. The addition of the second rig will provide additional data to inform completion techniques and development assumptions throughout the acreage position going forward.

Due to the large pads and anticipated third-quarter increase in activity, approximately 55% of the new drills for the year are expected to be turned online in 2019. The 2018 program is expected to grow Wattenberg annual production by approximately 20% in 2018 and annual production from this program is expected to grow by greater than 50% in 2019. Given that production growth is expected to be back-end-weighted in 2018, the Company is expecting unit costs for LOE, Midstream expense, and G&A to show sequential improvement throughout 2018 and into 2019 as greater production volumes are realized.

Allocated capital associated with this program is expected to be approximately $280 – $320 million, which will support drilling 90 gross wells and turning online 55 gross wells. Of the wells drilled, approximately 43 are planned as XRLs, 7 as medium reach lateral (“MRL”) wells, and 40 as SRLs. Of the 55 turned-online wells, 31 are expected to be XRLs, 2 as MRLs, and 22 as SRLs. XRL, MRL and SRL wells are targeted to cost $5.4 million, $4.2 million, and $3.0 million, respectively.

The 2018 program contemplates debt to EBITDAX leverage peaking at approximately 1.0x assuming $50 WTI.(2) Assuming strip pricing as of January 23, 2018, and the continuation of a two-rig program into 2019, the Company expects peak leverage to remain below 1.0x during 2018 and 2019, and to be cash flow positive by year-end 2019.

The table below provides production, capital and operating cost guidance for 2018. Production growth in 2018 is expected to be back-end-weighted due to tie-ins from our larger pads.

(3) Recurring cash G&A guidance is a non-GAAP measure that is defined as GAAP G&A expense less stock based compensation and anticipated costs for permanent CEO compensation.  The Company does not guide to GAAP G&A expense as it has excessive uncertainty due to the stock based compensation portion of GAAP G&A. Please refer to the Non-GAAP disclosure at the end of this release for information regarding Recurring cash G&A.
(4) Assumes strip pricing as of January 23, 2018.

An investor presentation with additional detail has also been posted to the IR section of the Company’s website at www. Bonanzacrk.com.

Fourth Quarter Earnings Release and Conference Call

The Company announces that it is scheduled to release its fourth quarter 2017 operating and financial results after market close on March 14, 2018 and will host a conference call to discuss these results on March 15, 2018 at 9:00 a.m. Mountain Time. A live webcast and replay of this event will be available on the Investor Relations section of the Company’s website at www.bonanzacrk.com. A dial-in replay of the event will be available through March 29, 2018. Dial-in information for the conference call is included below.

Non-GAAP Disclosure

PV-10
Year-end pre-tax PV-10 value is a non-GAAP financial measures as defined by the SEC.  Bonanza Creek believes that the presentation of pre-tax PV-10 value is relevant and useful to its investors because it presents the discounted future net cash flows attributable to reserves prior to taking into account corporate future income taxes and the Company's current tax structure. The Company further believes investors and creditors use pre-tax PV-10 values as a basis for comparison of the relative size and value of its reserves as compared with other companies. 

The GAAP financial measure most directly comparable to pre-tax PV-10 is the standardized measure of discounted future net cash flows ("Standardized Measure").  Bonanza Creek is not yet able to provide a reconciliation of pre-tax PV–10 to Standardized Measure because the discounted future income taxes associated with the Company's reserves is not yet calculable.  The Company expects to include a full reconciliation of pre-tax PV-10 to the GAAP financial measure of Standardized Measure in its Annual Report on Form 10-K for the year ended December 31, 2017, which it intends to file with the SEC on or about March 14, 2018. 

Recurring Cash G&A

The Company defines recurring cash G&A as GAAP G&A after adjusting for the impact of non-cash stock compensation expense and non-recurring items. This non-GAAP measure is used by management and investors as additional information as noted above and is subject to the same limitations of analytical tools as noted above and should not be considered as a GAAP substitute for general and administrative expense. 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding development and completion expectations and strategy; decreasing operating and capital costs; impact of the Company's reorganization; and updated 2017 guidance. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; access to adequate gathering systems and pipeline take-away capacity; and pipeline and refining capacity constraints. Further information on such assumptions, risks and uncertainties is available in the Company’s SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2016, filed on March 16, 2017, and other filings submitted by us to the Securities Exchange Commission. The Company’s SEC filings are available on the Company’s website at www.bonanzacrk.com and on the SEC’s website atwww.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, including guidance, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

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 onshore oil and associated liquids-rich natural gas in the United States. The Company’s assets and operations are concentrated primarily in the Rocky Mountain region in the Wattenberg Field, focused on the Niobrara and Codell formations, and in southern Arkansas, focused on oily Cotton Valley sands. The Company’s 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.

For further information please contact:

James R. Edwards
Director – Investor Relations
jedwards@bonanzacrk.com
720-440-6136
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(1)  The 12-month average benchmark pricing used to estimate SEC proved reserves and PV-10 value for crude oil and natural gas was $51.34 per Bbl of WTI crude oil and $2.98 per MMBtu of natural gas at Henry Hub before differential adjustments. Year-end 2017 benchmark prices for oil, and natural gas were both 20% higher from year-end 2016 SEC pricing. After differential adjustments, the Company's SEC pricing realizations for year-end 2017 were $46.76 per Bbl of oil, $19.57 per Bbl of NGLs, and $2.45 per Mcf of natural gas. Please refer to the Non-GAAP Disclosure at the end of this release for information regarding PV-10

(2) Pricing assumes $50 per barrel WTI and $3 per Mcf Henry Hub

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Bonanza Creek Energy, Inc.


Honeywell to provide Cryogenic Gas Processing Plant to Cureton Midstream, LLC

Honeywell’s turn-key design will support start up in about 12 months
Plant to recover valuable natural gas liquids

DES PLAINES, Ill., Sept. 20, 2017 – Honeywell (NYSE: HON) today announced that its UOP Russell business will provide a turn-key cryogenic gas processing plant to Cureton Midstream, LLC. The new plant is designed to extract 99 percent of ethane and 100 percent of propane from natural gas in Weld County, Colorado, located in the Niobrara basin.

The UOP Russell solution includes supply and installation of modular cryogenic, dehydration, acid gas removal, residue compression, control system, flare system and site electrical equipment, in addition to site utility systems and buildings for office, control room, motor control center, and compressor requirements. The turn-key plant design streamlines project schedules and delivers a custom, gas-specific plant with proven uptime and reliability, built on the experience of nearly 130 previous cryogenic units.

The plant uses an advanced cycle recycle split vapor (RSV) process to recover natural gas liquids (NGLs) from residue gas for use as petrochemical feedstocks, increasing the value of feed gas supplied to Cureton by independent gas producers.

“Cureton chose the UOP Russell solution because it’s a proven and cost-effective way to extract the more valuable natural gas liquids from the gas stream,” said Craig Ranta, business director, UOP Russell. “The plant is pre-engineered but customized for the unique feed gas composition in the basin, and the modular design provides quick installation and start up in about 12 months.”

Cryogenic gas processing plants cool the gas in a demethanizer column until the more valuable NGLs precipitate into a liquid. These heavier components extracted from the natural gas can be used as fuels, fuel blending components and other valuable petrochemicals.

The plant is designed to accommodate the NGL-rich gas in Weld County. The plant’s low capital and operating expense, coupled with ultra-high NGL recovery, allowed Cureton to offer gas producers more favorable processing terms, positioning the company to recover very high levels of ethane and propane as prices for those NGLs continue to rise.

Cureton is a Denver-based midstream company focused on providing commercial solutions to its customers. Cureton was founded in 2016, bringing experience in engineering, construction and operating assets across the United States. The company has overseen projects and operations in Colorado, North Dakota, Utah, Oklahoma, Texas, and Louisiana.

Honeywell UOP (www.uop.com) is a leading international supplier and licensor of process technology, catalysts, adsorbents, equipment, and consulting services to the petroleum refining, petrochemical, and gas processing industries. Honeywell UOP is part of Honeywell’s Performance Materials and Technologies strategic business group, which also includes Honeywell Process Solutions (www.honeywellprocess.com), a pioneer in automation control, instrumentation and services for the oil and gas, refining, petrochemical, chemical and other industries.

Honeywell (www.honeywell.com) is a Fortune 100 software-industrial company that delivers industry specific solutions that include aerospace and automotive products and services; control technologies for buildings, homes, and industry; and performance materials globally. Our technologies help everything from aircraft, cars, homes and buildings, manufacturing plants, supply chains, and workers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.

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Contact:
John Simley
847-391-2278
john.simley@honeywell.com