<SEC-DOCUMENT>0001193125-21-276196.txt : 20211103
<SEC-HEADER>0001193125-21-276196.hdr.sgml : 20211103
<ACCEPTANCE-DATETIME>20210917164309
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER: 0001193125-21-276196
CONFORMED SUBMISSION TYPE: CORRESP
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20210917
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Bonanza Creek Energy, Inc.
CENTRAL INDEX KEY: 0001509589
STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311]
IRS NUMBER: 611630631
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: CORRESP
BUSINESS ADDRESS:
STREET 1: 410 17TH STREET, SUITE 1400
CITY: DENVER
STATE: CO
ZIP: 80202
BUSINESS PHONE: 720-440-6100
MAIL ADDRESS:
STREET 1: 410 17TH STREET, SUITE 1400
CITY: DENVER
STATE: CO
ZIP: 80202
FORMER COMPANY:
FORMER CONFORMED NAME: Bonanza Creek Energy, Inc.
DATE OF NAME CHANGE: 20110106
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September 17, 2021 </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Energy and
Transportation </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549-3561 </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Bonanza Creek Energy, Inc. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Amendment No. 1 to Registration Statement on Form <FONT STYLE="white-space:nowrap">S-4</FONT> </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Filed August 27, 2021 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>File <FONT STYLE="white-space:nowrap">No. 333-257882</FONT> </B></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Set forth below are the
responses of Bonanza Creek Energy, Inc. (the “<B><I>Company</I></B>”, “<B><I>we</I></B>,” “<B><I>us</I></B>” or “<B><I>our</I></B>”), to comments received from the staff of the Division of Corporation Finance
(the “<B><I>Staff</I></B>”) of the United States Securities and Exchange Commission (the “<B><I>Commission</I></B>”) by letter dated September 9, 2021, with respect to the Company’s Amendment No. 1 to Registration
Statement on Form <FONT STYLE="white-space:nowrap">S-4,</FONT> File <FONT STYLE="white-space:nowrap">No. 333-257882,</FONT> filed with the Commission on August 27, 2021 (“<B><I>Amendment
No.</I></B><B><I></I></B><B><I> 1</I></B>”). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">For your convenience, each response is prefaced by the exact text of the
Staff’s corresponding comment in bold, italicized text. All references to page numbers and captions correspond to Amendment No. 1 unless otherwise specified. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Amendment No. 1 to Registration Statement on Form <FONT STYLE="white-space:nowrap">S-4</FONT> filed August 27, 2021 </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Note 6. Crestone Peak Preliminary Acquisition Accounting and Pro Forma Adjustments Crestone Peak Pro Forma Adjustments, page 261 </U></B></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B><I>1.</I></B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B><I>We note your response to comment 2. Please further explain why you believe capitalizing interest incurred
on the $250 million Bonanza Creek credit facility that will be used to payoff the amount outstanding on the Crestone Peak credit facility as of June 30, 2021 is appropriate. Please also provide reference to the technical guidance that
supports your accounting and presentation in the pro forma financial statements. </I></B></P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><U>RESPONSE</U>: We
capitalized the interest incurred on the $250.0 million of borrowings on the Bonanza Creek credit facility consistent with the guidance in Accounting Standards Codification 835, <I>Capitalization of</I> <I>Interest</I> (“ASC 835”).
ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">835-20-05-01</FONT></FONT></FONT> provides for the capitalization of interest costs as a part of the historical cost of acquiring certain assets,
which includes the costs necessary to bring the asset to the condition and location necessary for its intended use. </P>
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<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September 17, 2021 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
2
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<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Accordingly, assets that qualify for interest capitalization are those produced for a company’s own use, which includes oil and gas properties and facilities. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The $231.5 million outstanding (net of $3.9 million of deferred financing costs) as of June 30, 2021 on the Crestone Peak credit facility was
borrowed for purposes of developing oil and gas properties. Bonanza Creek expects to borrow $250.0 million under its credit facility to repay and replace the Crestone Peak credit facility and to fund Bonanza Creek’s future development
activity. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Accordingly, the pro forma interest expense adjustments for the six months ended June 30, 2021 and the year ended December 31, 2021
have been presented net of capitalized interest of $0.6 million and $1.8 million, respectively, as it relates to total pro forma interest expense that would have been incurred on the $250.0 million of borrowings on the Bonanza Creek
credit facility. The remaining pro forma interest expense adjustments relate to the pro forma commitment fees and the pro forma amortization of the deferred financing costs on the additional borrowings. </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B><I>2.</I></B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B><I>We note you decreased the fair value of proved and unproved properties in the preliminary purchase price
allocations found on pages 255 and 260 of the pro forma financial statements. However, it appears that the remaining asset and liability balances are unchanged from the balances recorded in the historical balance sheets of Extraction and Crestone
Peak as of June 30, 2021. Please address the following points: </I></B></P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">•</TD>
<TD WIDTH="1%" VALIGN="top"> </TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><B><I>Explain in reasonable detail, the additional information identified and analysis performed, including
assumptions used, that supports the reductions to the fair value of the proved and unproved properties of Extraction and Crestone Peak since your last amendment.</I></B> </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">•</TD>
<TD WIDTH="1%" VALIGN="top"> </TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><B><I>Tell us why you have not adjusted the fair values of other assets and liabilities in the fair value
allocation, including the derivative assets and liability balances.</I></B> </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">•</TD>
<TD WIDTH="1%" VALIGN="top"> </TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><B><I>Explain why you believe no goodwill or gain from a bargain purchase should be recorded related to these
acquisitions.</I></B> </P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>RESPONSE</U>: We have prepared the preliminary fair value estimates of proved and unproved properties of
Extraction and Crestone Peak consistent with the guidance in ASC 805, <I>Business Combinations</I>. Per the guidance provided in ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">805-20-30-1,</FONT></FONT></FONT> we have measured the identifiable assets acquired and liabilities assumed at their acquisition-date fair values,
which are as of a preliminary date for purposes of Amendment No. 1 to our Registration Statement on Form <FONT STYLE="white-space:nowrap">S-4.</FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">With respect to information identified, analysis performed, and assumptions used, for purposes of estimating the preliminary fair values of proved and
unproved properties of Extraction and Crestone Peak, the majority of the reductions were based on the decreased forward strip price of oil used between our initial Form <FONT STYLE="white-space:nowrap">S-4</FONT> filing date of July 14, 2021
and the filing date of Amendment No. 1 on August 27, 2021, as summarized below: </P>
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<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September 17, 2021 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>S-4 Filed on<BR>July 14, 2021</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>S-4/A Filed on<BR>August 27, 2021</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Change</B></TD>
<TD VALIGN="bottom"> </TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom"><B>Forward strip prices</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Oil</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Gas</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Oil</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Gas</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Oil</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Gas</B></TD>
<TD VALIGN="bottom"> </TD></TR>
<TR BGCOLOR="#cceeff" STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">2021</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">71.52</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">3.25</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">68.03</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">3.98</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(3.49</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">0.73</TD>
<TD NOWRAP VALIGN="bottom"> </TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">2022</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">65.56</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">2.97</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">64.92</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">3.51</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(0.64</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">0.54</TD>
<TD NOWRAP VALIGN="bottom"> </TD></TR>
<TR BGCOLOR="#cceeff" STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">2023</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">60.63</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">2.72</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">60.55</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">3.05</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(0.08</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">0.33</TD>
<TD NOWRAP VALIGN="bottom"> </TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">2024</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">57.57</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">2.66</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">57.32</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">2.85</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(0.25</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">0.19</TD>
<TD NOWRAP VALIGN="bottom"> </TD></TR>
<TR BGCOLOR="#cceeff" STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">2025</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">57.57</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">2.66</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">57.32</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">2.85</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(0.25</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">0.19</TD>
<TD NOWRAP VALIGN="bottom"> </TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Other assumptions we made in performing the preliminary fair value estimates included the discount rate, inflation factor and
risk rating of probable reserves. For pro forma purposes, each of these inputs was considered to be within a reasonable range based on what a market participant would expect to receive to sell such assets in an orderly transaction, consistent with
the definitions of fair value and market participant provided in ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">805-20-20.</FONT></FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">With respect to the current and noncurrent assets acquired and liabilities assumed (including the derivative assets and liabilities) other than proved and
unproved oil and gas properties, prior to the close date of the Extraction and Crestone Peak acquisitions, we are limited in our access to, and availability of, detailed information from Extraction and Crestone Peak. Therefore, we have assumed that
book value approximates fair value and would not be materially different from the expected values at the respective acquisition dates. We do not have sufficient information to reasonably estimate whether there should be pro forma adjustments to
those assets and liabilities. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Our assessment that no goodwill or bargain purchase should be recorded with respect to the Extraction or Crestone Peak
acquisitions as of the date of our preliminary purchase price allocation for pro forma purposes is based on the allocation of the purchase price to the fair value of the net assets acquired in applying the acquisition method of accounting. The
underlying inputs, specifically commodity prices as it relates to the fair value of the oil and gas properties, tend to trend in their respective movements with the company’s stock price, particularly the price of oil, such that changes in the
fair value align directionally with changes in the stock merger consideration for the Extraction and Crestone Peak acquisitions. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Between July 7,
2021 (the date used for the closing price of the company’s common stock in our July 14, 2021 filing), and August 25, 2021 (the date used for the closing price of the company’s common stock in our August 27, 2021 filing), the
price of our common stock decreased by $8.91 per share, from $46.35 per share to $37.44 per share, representing a decrease of 19%. While the decrease in the price of our common stock caused a reduction in merger consideration for the Extraction and
Crestone Peak acquisitions, the decrease in forward strip prices significantly influenced the allocation of value to oil and gas properties which was partially offset by changes in liabilities assumed between the periods presented. Using these
facts, we determined that the fair value of the net assets acquired fell within a reasonable valuation range based on the reduced consideration for these acquisitions. </P>
</DIV></Center>
<p style="margin-top:1em; margin-bottom:0em; page-break-before:always">
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<Center><DIV STYLE="width:8.5in" align="left">
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September 17, 2021 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
4
</P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Management of the company also assessed the ranges of fair values of oil and gas properties for each of the
Extraction and Crestone Peak acquisitions as compared to the goodwill or gain from a bargain purchase that could result based on changes in our stock price. As demonstrated by the sensitivity analysis presented below, a 20 percent (20%) change
in our stock price would result in a potential $253 million and $129 million of goodwill and $(229) million and $(96) million of gain from a bargain purchase for the Extraction and Crestone acquisitions, respectively. </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="76%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:8pt" ALIGN="center">
<TR>
<TD WIDTH="60%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom" NOWRAP> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; display:table-cell; font-size:8pt; font-family:Times New Roman; "><B>BCEI stock price sensitivity</B></P></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>XOG</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>CPR</B></TD>
<TD VALIGN="bottom"> </TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Goodwill</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Bargain<BR>Purchase</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Goodwill</B></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Bargain<BR>Purchase</B></TD>
<TD VALIGN="bottom"> </TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="14" ALIGN="center"><B>(in millions)</B></TD>
<TD VALIGN="bottom"> </TD></TR>
<TR BGCOLOR="#cceeff" STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">10% change</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">117</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(92</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">45</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(17</TD>
<TD NOWRAP VALIGN="bottom">) </TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">15% change</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">185</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(161</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">87</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(54</TD>
<TD NOWRAP VALIGN="bottom">) </TD></TR>
<TR BGCOLOR="#cceeff" STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">20% change</P></TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">253</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(229</TD>
<TD NOWRAP VALIGN="bottom">) </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">129</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom">$</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">(96</TD>
<TD NOWRAP VALIGN="bottom">) </TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Based on this analysis, we determined that there was a reasonable range as it relates to the fair values of oil and gas
properties with respect to the Extraction acquisition and the Crestone Peak acquisition that would not result in recording goodwill or a gain from a bargain purchase. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Once each acquisition closes and the respective acquisition dates become known, we will follow the guidance in ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">805-10-25,</FONT></FONT> paragraphs 13 through 19, as well as ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">805-30-30</FONT></FONT> and ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">805-30-25,</FONT></FONT> which may or may not result in recording goodwill or gain from a bargain purchase, as disclosed in footnote 5 and footnote 6 of Amendment No. 1 for the Extraction and Crestone Peak
acquisitions, respectively. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">***** </P>
</DIV></Center>
<p style="margin-top:1em; margin-bottom:0em; page-break-before:always">
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<Center><DIV STYLE="width:8.5in" align="left">
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September 17, 2021 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
5
</P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Please direct any questions that you have with respect to the foregoing or if any additional
supplemental information is required by the Staff, please contact Stephen M. Gill or Shelley A. Barber of Vinson & Elkins L.L.P., at (713) <FONT STYLE="white-space:nowrap">758-4458</FONT> and (212)
<FONT STYLE="white-space:nowrap">237-0022,</FONT> respectively. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt">
<TR>
<TD WIDTH="100%"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Sincerely</P></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Shelley A. Barber</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Shelley A. Barber</P></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Enclosures </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" ALIGN="center">
<TR>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="97%"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">cc:</TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">John Hodgin, Securities and Exchange Commission</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Myra Moosariparambil, Securities and Exchange Commission</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Craig
Arakawa, Securities and Exchange Commission</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Lauren Nguyen, Securities and Exchange Commission</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Skip Marter, Bonanza Creek Energy, Inc.</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Stephen M. Gill, Vinson & Elkins L.L.P.</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Eric Christ, Extraction Oil & Gas, Inc.</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Julian Seiguer,
P.C., Kirkland & Ellis L.L.P</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Doug Bacon, P.C., Kirkland & Ellis L.L.P</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Bryan Flannery, Kirkland & Ellis L.L.P</P></TD></TR>
</TABLE>
</DIV></Center>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>