BAKERSFIELD, Calif., April 17 /PRNewswire/ -- Bonanza Creek Energy Company, LLC ("Bonanza Creek" or the "Company") announced today that on April 11, 2008 it closed a significant producing property acquisition in southwest Arkansas from Macquarie Oil and Gas Holdings Inc., a subsidiary of Macquarie Group Limited, for an undisclosed price.
The acquisition properties, located in Union, Lafayette and Columbia counties, are currently producing approximately 1200 BOE per day (70% oil and natural gas liquids) and provide significant development and exploration upside in the Cotton Valley, Travis Peak, Rodessa, James Lime and Lower Smackover formations. The properties include 93 producing wells (68 operated) with an average working interest of 73% and 15,100 gross acres (12,237 net acres). Proved reserves are nine million BOE with an additional four million BOE probable and possible reserve upside. The Company has identified over $50 million of investment opportunities in the proved reserve base, which they plan to develop within the next three to four years. Included in the acquisition is a 15 million SCFPD gas plant with 225 miles of gathering system, which processes production from both the properties and other producers in the area.
"This purchase for Bonanza Creek increases the Company's proved reserves to over 19 million BOE with a PV-10 of $420 million (year-end prices held constant), of which approximately $200 million is proved producing," states Michael Starzer, President & CEO of Bonanza Creek. "To date, the Company's developed reserve F&D cost is an attractive $18 per BOE. Full life cycle F&D cost is projected at $16 per BOE, increasing production to over 4700 BOEPD within the next four years. Gary Grove, Chief Operating Officer for Bonanza Creek states, "During the past two years the Company has increased PV-10 twenty fold and proved reserves over ten fold. The Company has acquired 112,000 acres of fee and leasehold with an additional 74 million BOE probable and possible reserve upside valued at over $1,025 million."
"Equally attractive with the assets is the combination of sixty personnel with a proven record of value creation," states Mr. Starzer. "The opening of our Houston office under the leadership of Burt Williams will expand Bonanza Creek's exposure to growth opportunities in the Gulf Coast and Mid-Continent regions in concert with our Rocky Mountain and Western Region holdings." Mr. Starzer further stated, "I wish to thank our investors, Laminar Direct Capital and the Berry Family investor group, along with the Company's excellent employees for their continued support in Bonanza Creek's growth objectives."
Todd Overbergen, a director of Laminar Direct Capital L.P. and a senior vice president of D. E. Shaw & Co., L.P. states, "We dedicate significant attention to the energy sector, and are extremely excited about Bonanza Creek's acquisition and plans to open a Houston office. Mike, Gary, and their staff did an outstanding job of identifying, evaluating, and closing this transaction. We look forward to this next step in the growth and value creation of Bonanza Creek." Hank Bennett, Chairman of Bonanza Creek, states, "On behalf of the Berry Family, we are pleased with the ability of the Company to find attractive investments and look forward to aggressively expanding operations in the Gulf and Mid-Continent Regions."
Rivington Capital Advisors, LLC served as financial advisor and Thompson & Knight, LLP served as legal advisor to Bonanza Creek for the acquisition.
About Bonanza Creek Energy Company, LLC
Bonanza Creek Energy Company, LLC, with its predecessor company, Bonanza Creek Oil Company, LLC, was founded in 1999. Bonanza Creek is an independent energy company based in Bakersfield, California with regional offices in Denver and Houston. In 2005, Bonanza Creek Oil Company sold a substantial portion of its assets and through distributions, generating a 12-to-1 return for its owners. Bonanza Creek Energy Company was formed in May 2006 with the addition of Laminar Direct Capital L.P. to the Company's investor base. The Company currently produces 2400 BOEPD generating $35 million per year EBITDA and drills between fifty and seventy wells per year.
About Laminar Direct Capital L.P.
Laminar Direct Capital L.P. ("LDC") and a number of its affiliates are members of the D. E. Shaw group focused on providing debt and equity capital to businesses across all industry sectors throughout North America, Latin America, and Europe. Founded in 1988 and headquartered in New York, the D. E. Shaw group is a global investment firm that encompasses a number of closely related entities with approximately US $35 billion in aggregate investment capital as of January 1, 2008.
About Rivington Capital Advisors, LLC
Rivington Capital Advisors, LLC is an investment banking boutique specializing in private capital and mergers and acquisition (M&A) transactions for the small and mid-cap energy sectors. Founded in 2002, Rivington has successfully closed 48 transactions having a total transaction value exceeding $2.8 billion.
Cautionary Statement
Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, particularly any express or implied statements concerning future financial condition or operating results. Although Bonanza Creek Energy Company, LLC believes that the expectations reflected herein are reasonable, the matters discussed in this release involve risks, uncertainties, and other factors that may delay, prevent or adversely affect the transaction or its planned activities and operations. There can be no assurance that such expectations will prove correct. All forward-looking statements are expressly qualified by this cautionary statement.
Bonanza Creek Energy Company, LLC
