Extraction Oil & Gas — Merger or Acquisition (June 2021)
25 slides from Extraction Oil & Gas's merger presentation, Jun 7, 2021
Slide 1: Civitas and Crestone Peak: Preeminent DJ Basin Pure Play
Civitas and Crestone Peak Preeminent DJ Basin Pure Play June 7, 2021
Slide 2: Important Disclosures
Important Disclosures No Offer or Solicitation This communication relates to proposed business combination transactions between Bonanza Creek Energy, Inc. (“BCEI”) and Extr act ion Oil & Gas, Inc. (“XOG”) (the “XOG Merger”) and between BCEI, Crestone Peak Resources LP (“CPR”), CPPIB Crestone Peak Re
Slide 3: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward - Looking Statements Forward - Looking Statements and Cautionary Statements Certain statements in this document concerning the Mergers, including any statements regarding the expected timetable for com ple ting the Mergers, the results, effects, benefits and sy
Slide 4: Preeminent Pure-play DJ Basin Operator
Net DJ Basin Acres x PDP PV10 3 x 2022E EBITDA 2 x 2022E Production x Enterprise Value 1 x Annual Synergies x Gross Locations 4 x Preeminent Pure - play DJ Basin Operator (1) Based on the equity market capitalization of Civitas as of June 4, 2021. Balance sheet data as of March 31, 2021, pro forma f
Slide 5: Delivering on the New E&P Business Model
High Quality Asset Base Ability to maintain production with ~50% reinvestment Delivering on the New E&P Business Model Front End of Cost Curve <$4.00 / Boe 1Q21 LOE + Cash G&A Fortress Balance Sheet 0.5x Pro Forma 1Q21 Net Debt / 2021E EBITDA Significant FCF Generation 2022E ~$575 MM Pro Forma FCF 1
Slide 6: Merger Overview
Expanded Merger of Peers Leadership & Governance Approvals & Timing Merger Overview • All - stock transaction • Crestone Peak is ~96% owned by CPP Investments • 37% BCEI, 37% XOG and 26% CPR stakeholders • Pro forma enterprise value ~$4.5 Bn 1 • Ben Dell – Chair of the Board • Board of Directors: fo
Slide 7: Best-in-Class, Shareholder-Aligned Management Team
Best - in - Class, Shareholder - Aligned Management Team • Premier DJ Basin management team • Brings to bear best practices from deep DJ Basin experience • 100% of executive incentive compensation expected to be in stock • Performance shares tied directly to total shareholder return Marianella Fosch
Slide 8: Accretive to 2022E Key Metrics
Accretive to 2022E Key Metrics Inventory quality and depth Credit profile and cost of capital Cash flow per share x Dividends per share Pro Forma for Synergies x x x
Slide 9: Strategy, Values, Priorities
Strategy, Values, Priorities Maximize Shareholder Return Fortress Balance Sheet ESG Leadership Highest Return Opportunities Return Cash to Shareholders • Distinctive competencies in operations, consolidation, sustainability and regulation • Highly energized management team • Best - in - class corpor
Slide 10: Free Cash Flow Generation & Capital Allocation Priorities
Free Cash Flow Generation & Capital Allocation Priorities 2022E Full Year Pro Forma FCF Generation 1 Disciplined Business Principles Pay Dividend Protect Balance Sheet x Prioritize Highest Return Opportunities for FCF Cash Returns 1 Return - Focused Operations 2 Consolidation Opportunities x 3 $0 $1
Slide 11: Returning Synergy Savings to Shareholders
Returning Synergy Savings to Shareholders • Combined surface access / extended laterals • Sale and avoided capital of facilities / equipment • Sale of redundant surface holdings • Net of cost of one - time and recurring synergies One - Time Civitas and Crestone Peak Savings $0 $100 One Time Savings
Slide 12: Low Leverage and Low-Cost
1Q21 LOE + Cash G&A ($/ Boe ) 1 1Q21 Net Debt / 2021E EBITDA Low Leverage and Low - Cost Note: Market data and consensus outlook data is sourced from Refinitiv (formerly Thomson Reuters). Crestone Peak figures bas ed on risked pro forma model. Peers include BRY, CDEV, CPE, ESTE, LPI, MGY, MTDR, MUR,
Slide 13: Scale Leads to Relevance and Liquidity
2022E Wall Street Consensus EBITDA ($MM) Scale Leads to Relevance and Liquidity Note: Market data and consensus outlook data is sourced from Refinitiv (formerly Thomson Reuters). Crestone Peak figures based o n risked pro forma model. Peers include BRY, CDEV, CPE, ESTE, LPI, MGY, MTDR, MUR, OAS, PDC
Slide 14: Compelling Valuation Given Peer Leading Free Cash Flow Generation
Compelling Valuation Given Peer Leading Free Cash Flow Generation 2022E FCF Yield Enterprise Value 1 / 2022E EBITDA Note: Market data and consensus outlook data is sourced from Refinitiv (formerly Thomson Reuters). Crestone Peak figures bas ed on risked pro forma model. Peers include BRY, CDEV, CPE,
Slide 15: DJ Basin Optionality
DJ Basin Optionality Development Area Approximate DJ Basin Net Acres Geography Western 135,000 Suburban / Rural Eastern 115,000 Rural Southern 125,000 Suburban / Rural Northern 150,000 Rural Net Production Mix (%) Combined Position Facilitates Asset Development Optimization Denver Jefferson Adams Ar
Slide 16: Relative Inventory Contribution by Area
Relative Inventory Contribution by Area Note: Single well economics valued at flat $55 WTI / $2.75 HH / 40% NGL differential. Average lateral length of ~9,700’. B - TAX Single Well IRRs at $55 WTI 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 201 401 601 801 1,001 West South East Location Counts Wes
Slide 17: Opportunity-Rich Basin
Opportunity - Rich Basin • Civitas is well - positioned to participate in future basin consolidation – Numerous privately held companies – Opportunity to increase efficiencies with scale – Operating expertise across the basin – Captured synergies returned to shareholders • Civitas will continue to b
Slide 18: Sustainability Leadership in Action
15.9 13.9 10.6 5.7 2017 2018 2019 2020 5.7 10.6 13.4 14.7 15.8 18.9 22.1 24.2 25.4 26.2 26.3 XOG XOG CPR Peer 6 Peer 5 Peer 4 HPR Peer 3 BCEI Peer 2 Peer 1 Sustainability Leadership in Action • High - grade emissions practices • Electrification of operations • Tankless development • Retrofit legacy
Slide 19: Colorado's First Carbon Neutral Operator
• Colorado’s First Carbon Neutral Operator – Aggressive operational emissions - reduction program coupled with a multi - year investment in certified emissions offsets • Project Canary & Payne Institute Partnership – Partnership providing certified, third - party real - time air monitoring – Forward
Slide 20: Expected Civitas Governance Structure
Expected Civitas Governance Structure Experience Technical -- -- -- -- Financial -- -- -- -- -- Colorado -- -- -- -- -- -- Industry Diversity -- -- -- -- -- -- -- Ben Dell Chair of the Board Morris Clark Chair, Audit Committee Carrie Fox Howard Willard Chair, Comp. Committee • Board brings together
Slide 21: Civitas + Crestone Peak = A Value Enhancing Combination
Civitas + Crestone Peak = A Value Enhancing Combination Creates the premier pure - play DJ Basin operator Preferred transaction partner in the basin Accelerates cash - return business model Maintain flat production at 50% reinvestment rate and increase dividend Strengthens credit profile and lowers
Slide 22: Appendix
\ y ANY Appendix
Slide 23: Pro Forma Shareholder Base
Pro Forma Shareholder Base • High - quality stockholder base • Increased market cap expands investor appeal • Added to the Russell 3000 index • Current index participation may increase • Top 10 holders own ~70%
Slide 24: Hedge Positions Enhance Financial Strength
$51.39 $45.11 $43.85 $44.98 $44.21 $32.78 - $51.19 $38.09 - $67.10 $40.00 - $72.70 $55.08 36,648 22,170 6,655 4,600 3,700 – 10,000 20,000 30,000 40,000 4Q21 2022 2023 2024 2025 Oil Swaps Oil Collars Oil Swaptions Hedge Positions Enhance Financial Strength Hedge position protects balance
Slide 25: Corporate Contact Information
Corporate Contact Information Investor Relations John Wren [email protected] Scott Landreth [email protected] Media & ESG Policy Brian Cain [email protected]
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