10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

Commission File Number: 001-35371

Bonanza Creek Energy, Inc.

(Exact name of registrant as specified in its charter)

Delaware	61-1630631
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

410 17th Street, Suite 1400
Denver, Colorado	80202
(Address of principal executive offices)	(Zip Code)

(720) 440-6100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x  Yes ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x  Yes ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨  Yes x  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 2, 2016, the registrant had 49,621,879 shares of common stock outstanding.

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BONANZA CREEK ENERGY, INC.

INDEX

			PAGE
Part I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	3
		Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	4
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	5
		Notes to the Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
	Item 4.	Controls and Procedures	26
Part II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	26
	Item 1A.	Risk Factors	27
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
	Item 3.	Defaults Upon Senior Securities	27
	Item 4.	Mine Safety Disclosures	27
	Item 5.	Other Information	27
	Item 6.	Exhibits	28

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PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements.

BONANZA CREEK ENERGY, INC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED BALANCE SHEETS(UNAUDITED)

	March 31, 2016			December 31, 2015
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	218,599		$	21,341
Accounts receivable:
Oil and gas sales	23,391			25,322
Joint interest and other	10,111			31,224
Prepaid expenses and other	5,700			4,078
Inventory of oilfield equipment	8,798			8,543
Derivative asset	21,052			29,566
Total current assets	287,651			120,074
Property and equipment (successful efforts method), at cost:
Proved properties	1,658,867			1,618,970
Less: accumulated depreciation, depletion and amortization	(967,941		)	(943,081		)
Total proved properties, net	690,926			675,889
Unproved properties	178,948			185,530
Wells in progress	27,058			51,196
Oil and gas properties and natural gas plant held for sale, net of accumulated depreciation, depletion and amortization of $646,917 and $636,917 in 2016 and 2015, respectively (note 3)	209,421			214,922
Other property and equipment, net of accumulated depreciation of $9,976 in 2016 and $9,407 in 2015	9,044			9,729
Total property and equipment, net	1,115,397			1,137,266
Other noncurrent assets	17,799			16,027
Total assets	$	1,420,847		$	1,273,367
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses (note 4)	$	78,992		$	96,360
Oil and gas revenue distribution payable	23,905			27,613
Contractual obligation for land acquisition	12,000			12,000
Total current liabilities	114,897			135,973
Long-term liabilities:
Long-term debt (note 5)	1,094,085			885,392
Ad valorem taxes	20,789			17,069
Asset retirement obligations	15,352			14,935
Asset retirement obligations for assets held for sale	10,779			10,591
Total liabilities	1,255,902			1,063,960
Commitments and contingencies (note 6)
Stockholders’ equity:
Preferred stock, $.001 par value, 25,000,000 shares authorized, none outstanding	—			—
Common stock, $.001 par value, 225,000,000 shares authorized, 49,635,517 and 49,754,408 issued and outstanding in 2016 and 2015, respectively	49			49
Additional paid-in capital	809,161			806,386
Retained deficit	(644,265		)	(597,028		)
Total stockholders’ equity	164,945			209,407
Total liabilities and stockholders’ equity	$	1,420,847		$	1,273,367

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BONANZA CREEK ENERGY, INC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(UNAUDITED)

	Three Months Ended March 31,
	2016			2015
	(in thousands, except per share amounts)
Operating net revenues:
Oil and gas sales	$	44,174		$	73,076
Operating expenses:
Lease operating expense	13,298			16,973
Gas plant and midstream operating expense	3,789			2,291
Severance and ad valorem taxes	3,154			6,496
Exploration	266			498
Depreciation, depletion and amortization	26,379			59,004
Impairment of oil and gas properties	10,000			—
Abandonment and impairment of unproved properties	6,906			5,469
General and administrative (including $3,004 and $3,427, respectively, of stock-based compensation)	17,685			16,872
Total operating expenses	81,477			107,603
Loss from operations	(37,303		)	(34,527		)
Other income (expense):
Derivative gain (loss)	(1,007		)	18,856
Interest expense	(14,547		)	(14,238		)
Gain on termination fee (note 3)	6,000			—
Other loss	(380		)	(49		)
Total other income (expense)	(9,934		)	4,569
Loss from operations before taxes	(47,237		)	(29,958		)
Income tax benefit	—			11,537
Net loss	$	(47,237	)	$	(18,421	)
Comprehensive loss	$	(47,237	)	$	(18,421	)
Basic net loss per common share	$	(0.96	)	$	(0.41	)
Diluted net loss per common share	$	(0.96	)	$	(0.41	)
Basic weighted-average common shares outstanding	49,131			44,520
Diluted weighted-average common shares outstanding	49,131			44,520

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BONANZA CREEK ENERGY, INC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Cash flows from operating activities:
Net loss	$	(47,237	)	$	(18,421	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	26,379			59,004
Deferred income benefit	—			(11,537		)
Impairment of oil and gas properties	10,000			—
Abandonment and impairment of unproved properties	6,906			5,469
Dry hole expense	232			—
Stock-based compensation	3,004			3,427
Amortization of deferred financing costs and debt premium	608			523
Accretion of contractual obligation for land acquisition	—			349
Derivative (gain) loss	1,007			(18,856		)
Derivative cash settlements	7,508			35,466
Other	(116		)	(27		)
Changes in current assets and liabilities:
Accounts receivable	23,044			16,298
Prepaid expenses and other assets	(1,622		)	(1,873		)
Accounts payable and accrued liabilities	(3,141		)	(1,981		)
Settlement of asset retirement obligations	(41		)	(285		)
Net cash provided by operating activities	26,531			67,556
Cash flows from investing activities:
Acquisition of oil and gas properties	(532		)	(11,382		)
Exploration and development of oil and gas properties	(34,822		)	(154,300		)
Natural gas plant capital expenditures	(50		)	(112		)
Increase in restricted cash	(2,533		)	—
Additions to property and equipment - non oil and gas	47			(1,490		)
Net cash used in investing activities	(37,890		)	(167,284		)
Cash flows from financing activities:
Proceeds from credit facility	209,000			44,000
Payments to credit facility	—			(77,000		)
Proceeds from sale of common stock	—			209,300
Offering costs related to sale of common stock	—			(6,492		)
Offering costs related to sale of Senior Notes	—			(19		)
Payment of employee tax withholdings in exchange for the return of common stock	(229		)	(2,127		)
Deferred financing costs	(154		)	(4		)
Net cash provided by financing activities	208,617			167,658
Net change in cash and cash equivalents	197,258			67,930
Cash and cash equivalents:
Beginning of period	21,341			2,584
End of period	$	218,599		$	70,514
Supplemental cash flow disclosure:
Cash paid for interest	$	9,500		$	9,894
Cash paid for income taxes	$	—		$	820
Changes in working capital related to drilling expenditures, natural gas plant expenditures, and property acquisition	$	(14,214	)	$	(30,880	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BONANZA CREEK ENERGY, INC. AND SUBSIDIARIES

NOTES TOTHE CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - ORGANIZATION AND BUSINESS

Bonanza Creek Energy, Inc. (“BCEI” or, together with our consolidated subsidiaries, the “Company”) is engaged primarily in acquiring, developing, exploiting and producing oil and gas properties. The Company's oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado and in the Dorcheat Macedonia Field in southern Arkansas.

NOTE 2 - BASIS OF PRESENTATION

These statements have been prepared in accordance with the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information with the condensed consolidated balance sheets (“balance sheets”) and the condensed consolidated statements of cash flows (“statements of cash flows”) as of December 31, 2015, being derived from audited financial statements. The quarterly financial statements included herein do not necessarily include all of the disclosures as may be required under generally accepted accounting principles for complete financial statements. There has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”), except as disclosed herein. These consolidated financial statements include all of the adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations. All such adjustments are of a normal recurring nature only. The results of operations for the quarter are not necessarily indicative of the results to be expected for the full fiscal year. The Company evaluated events subsequent to the balance sheet date of March 31, 2016, and through the filing date of this report. Certain prior period amounts are reclassified to conform to the current period presentation, when necessary.

Principles of Consolidation

The balance sheets include the accounts of the Company and its wholly owned subsidiaries, Bonanza Creek Energy Operating Company, LLC, Bonanza Creek Energy Resources, LLC, Bonanza Creek Energy Upstream LLC, Bonanza Creek Energy Midstream, LLC, Holmes Eastern Company, LLC and Rocky Mountain Infrastructure, LLC. All significant intercompany accounts and transactions have been eliminated.

Rocky Mountain Infrastructure, LLC

During the first quarter of 2015, the Company’s wholly owned subsidiary, Bonanza Creek Energy Operating Company, LLC, formed a wholly owned subsidiary, Rocky Mountain Infrastructure, LLC (“RMI”), to hold gathering systems, central production facilities and related infrastructure that service the Wattenberg Field.

Significant Accounting Policies

The significant accounting policies followed by the Company were set forth in Note 1 to the 2015 Form 10-K and are supplemented by the notes throughout this report. These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 Form 10-K.

Recently Issued Accounting Standards

In January 2016, the FASB issued Update No. 2016-01 – Financial Instruments - Overall to require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This authoritative guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures.

In February 2016, the FASB issued Update No. 2016-02 – Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing

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arrangements. This authoritative guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact in relation to the Company's leases.

In March 2016, the FASB issued Update No. 2016-08 – Revenue from Contracts with Customers, which clarifies the implementation guidance on principal versus agent considerations. This authoritative accounting guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has started going through its contracts and is assessing their impact, but does not currently believe this guidance will have a material effect on the Company's financial statements or disclosures.

In March 2016, the FASB issued Update No. 2016-09 – Compensation - Stock Compensation. The update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This authoritative guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures.

NOTE 3 - ASSETS HELD FOR SALE

Assets are classified as held for sale when the Company commits to a plan to sell the assets and there is reasonable certainty that the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated or depleted, and a measurement for impairment is performed to identify and expense any excess of carrying value over fair value less estimated costs to sell. Any subsequent decreases to the estimated fair value less the costs to sell impact the measurement of assets held for sale.

As of March 31, 2016, the accompanying balance sheets present $209.4 million of assets held for sale, net of accumulated depreciation, depletion and amortization, which consist of the Company’s ownership interests in RMI, all assets within the Company's Mid-Continent region and all assets in the North Park Basin. There is a corresponding asset retirement obligation liability of approximately $10.8 million for assets held for sale recorded in the asset retirement obligations for assets held for sale financial statement line item in the accompanying balance sheets. There were no other material assets or liabilities associated with the assets held for sale.

During the three months ended March 31, 2016, the Company recorded write-downs to fair value less estimated costs to sell of $10.0 million for its Mid-Continent assets. These write-downs are recorded in the impairment of oil and gas properties line item in the accompanying statements of operations. The Company also received $6.0 million upon termination of the purchase and sale agreement of its RMI interest which is shown in the gain on termination fee line item in the accompanying statements of operations.

The Company determined that none of these potential asset sales qualify for discontinued operations accounting as they did not result in a strategic shift of the Company.

NOTE4- ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses contain the following:

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	As of March 31,		As of December 31,
	2016		2015
	(in thousands)
Drilling and completion costs	$	18,245	$	32,459
Accounts payable trade	484		1,085
Accrued general and administrative cost	4,719		10,643
Lease operating expense	4,336		4,731
Accrued reclamation cost	162		162
Accrued interest	18,669		14,231
Production and ad valorem taxes and other	32,377		33,049
Total accounts payable and accrued expenses	$	78,992	$	96,360

NOTE 5- LONG-TERM DEBT

Long-term debt consisted of the following:

	As of March 31,		As of December 31,
	2016		2015
	(in thousands)
Revolving credit facility	$	288,000	$	79,000
6.75% Senior Notes due 2021	500,000		500,000
Unamortized premium on 6.75% Senior Notes	6,085		6,392
5.75% Senior Notes due 2023	300,000		300,000
Total long-term debt	$	1,094,085	$	885,392

Credit Facility

The Company’s senior secured revolving Credit Agreement, dated March 29, 2011, as amended (the “revolving credit facility”), provides for borrowings up to $1.0 billion. As of March 31, 2016, and through the filing date of this report, the borrowing base under the revolving credit facility was $475.0 million and equal to the commitment level under the Credit Agreement. The borrowing base is redetermined semiannually, generally occurring no later than May 15 and November 15; we currently expect our next redetermination to occur by May 30, 2016. The revolving credit facility is collateralized by substantially all of the Company’s assets and matures on September 15, 2017. As of March 31, 2016, the Company had $288.0 million outstanding under the revolving credit facility, an outstanding letter of credit of $12.0 million and no available borrowing capacity due to limitations on the incurrence of additional debt set by the indentures for our Senior Notes. As of December 31, 2015, the Company had $79.0 million outstanding under the revolving credit facility with an available borrowing capacity of $384.0 million, if the Company elected to take advantage of the entire borrowing base, after reduction for the outstanding letter of credit of $12.0 million. 

The revolving credit facility restricts, among other items, certain dividend payments, additional indebtedness, asset sales, loans, investments and mergers. The revolving credit facility also contains certain financial covenants, which require the maintenance of certain financial and leverage ratios, as defined by the revolving credit facility. The revolving credit facility contains a ratio of maximum senior secured debt to trailing twelve-month EBITDAX that must not exceed 2.50 to 1.00 and a minimum interest coverage ratio that must exceed 2.50 to 1.00. The maximum senior secured debt ratio is calculated by dividing borrowings under the revolving credit facility, balances drawn under letters of credit, and any outstanding second lien debt divided by trailing twelve-month EBITDAX (defined as earnings before interest expense, income tax expense, depreciation, depletion and amortization expense, and exploration expense and other non-cash charges). The minimum interest coverage ratio is calculated by dividing trailing twelve-month EBITDAX by trailing twelve-month interest expense. The revolving credit facility also contains a minimum current ratio covenant of 1.00 to 1.00. The Company was in compliance with all financial and non-financial covenants as of March 31, 2016, and through the filing date of this report.

SeniorUnsecuredNotes

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The $500.0 million aggregate principal amount of 6.75% Senior Notes that mature on April 15, 2021 (“6.75% Senior Notes”) and the $300.0 million aggregate principal amount of 5.75% Senior Notes that mature on February 1, 2023 (“5.75% Senior Notes” and, together with the 6.75% Senior Notes, the “Senior Notes”) are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and future unsecured senior debt, and are senior in right of payment to any future subordinated debt. The Senior Notes are jointly and severally guaranteed on a senior unsecured basis by our existing and future domestic subsidiaries that guarantee or are borrowers under our revolving credit facility. The Company is subject to certain covenants under the respective indentures governing the Senior Notes that limit the Company’s ability to incur additional indebtedness, issue preferred stock, and make restricted payments, including certain dividends. The incurrence by the Company or any of the Guarantors of additional indebtedness and letters of credit under the revolving credit facility in an aggregate principal amount at any one time outstanding is not to exceed the greater of (a) $300.0 million or (b) 35% of the Company's Adjusted Consolidated Net Tangible Assets (“ACNTA”). ACNTA is defined as the Company's PV-10 value plus capitalized costs for unproved properties plus consolidated net working capital and other tangible assets.

NOTE6- COMMITMENTS AND CONTINGENCIES

Legal Proceedings 

From time to time, the Company is involved in various commercial and regulatory claims, litigation and other legal proceedings that arise in the ordinary course of its business. The Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its condensed consolidated financial statements. In accordance with accounting authoritative guidance, an accrual is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the most likely anticipated outcome or the minimum amount within a range of possible outcomes. Because legal proceedings are inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about uncertain future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. No claims have been made, nor is the Company aware of any material uninsured liability which the Company may have, as it relates to any environmental cleanup, restoration or the violation of any rules or regulations. As of the filing date of this report, there were no material pending or overtly threatened legal actions against the Company of which it is aware.

Commitments

There have been no material changes from the commitments disclosed in the notes to the Company’s consolidated financial statements included in the 2015 Form 10-K.

NOTE 7 - STOCK-BASED COMPENSATION

Restricted Stock under the Long Term Incentive Plan

The Company grants shares of restricted stock to directors, eligible employees and officers under its Long Term Incentive Plan, as amended and restated (“LTIP”). Each share of restricted stock represents one share of the Company’s common stock to be released from restriction upon completion of the vesting period. The awards typically vest in one-third increments over three years. Each share of restricted stock is entitled to a non-forfeitable dividend, if the Company were to declare one, and has the same voting rights as a share of the Company’s common stock. Shares of restricted stock are valued at the closing price of the Company’s common stock on the grant date and are recognized as general and administrative expense over the vesting period of the award.

Total expense recorded for restricted stock for the three month periods ended March 31, 2016 and 2015 was $2.3 million and $2.9 million, respectively. As of March 31, 2016, unrecognized compensation cost was $10.5 million and will be amortized through 2018.

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A summary of the status and activity of non-vested restricted stock for the three months ended March 31, 2016 is presented below.

	Restricted Stock		Weighted- Average Grant-Date Fair Value
Non-vested at beginning of year	731,818		$	29.47
Granted	—		$	—
Vested	(248,447	)	$	33.57
Forfeited	(51,070	)	$	21.81
Non-vested at end of quarter	432,301		$	28.02

Performance Stock Units under the Long Term Incentive Plan

The Company grants performance stock units (“PSUs”) to certain officers under its LTIP. The number of shares of the Company’s common stock that may be issued to settle PSUs ranges from zero to two times the number of PSUs awarded. PSUs are determined at the end of each annual measurement period over the course of the three-year performance cycle in an amount up to two-thirds of the target number of PSUs that are eligible for vesting (such that an amount equal to 200% of the target number of PSUs may be earned during the performance cycle) although no stock is actually awarded to the participant until the end of the entire three-year performance cycle. Any PSUs that have not vested at the end of the applicable measurement period are forfeited. The performance criterion for the PSUs is based on a comparison of the Company’s total shareholder return (“TSR”) for the measurement period compared with the TSRs of a group of peer companies for the same measurement period. The TSR for the Company and each of the peer companies is determined by dividing (A)(i) the average share price for the last 30 trading days of the applicable measuring period, minus (ii) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period, by (B) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period. The number of earned shares of our common stock will be calculated based on which quartile our TSR percentage ranks as of the end of the annual measurement period relative to the other companies in the comparator group. The fair value of each PSU is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of PSUs to be earned during the performance period. Compensation expense associated with PSUs is recognized as general and administrative expense over the measurement period.

Total expense recorded for PSUs for the three months ended March 31, 2016 and 2015 was $0.7 million and $0.5 million, respectively. As of March 31, 2016, there was $4.1 million of total unrecognized compensation expense related to unvested PSUs to be amortized through 2019.

A summary of the status and activity of PSUs for the three months ended March 31, 2016 is presented below:

	PSU	Weighted-Average Grant-Date Fair Value
Non-vested at beginning of year (1)	114,833	$	35.27
Granted(1)	—	$	—
Vested(1)	—	$	—
Forfeited(1)	—	$	—
Non-vested at end of quarter(1)	114,833	$	35.27

____________________________

(1) The number of awards assumes that the associated performance condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two, depending on the level of satisfaction of the performance condition.

NOTE8- FAIR VALUE MEASUREMENTS

The Company follows fair value measurement authoritative guidance, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. The authoritative accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The statement establishes a hierarchy

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for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1: Quoted prices are available in active markets for identical assets or liabilities

Level 2: Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable

Level 3: Significant inputs to the valuation model are unobservable

Financial and non-financial assets and liabilities are to be classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The following tables present the Company’s financial and non-financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and December 31, 2015 and their classification within the fair value hierarchy:

	As of March 31, 2016
	Level 1		Level 2		Level 3
	(in thousands)
Derivative assets(1)	$	—	$	21,052	$	—
Proved properties(2)	$	—	$	—	$	100,000
Unproved properties(2)	$	—	$	—	$	178,947

	As of December 31, 2015
	Level 1		Level 2		Level 3
	(in thousands)
Derivative assets(1)	$	—	$	29,566	$	—
Proved properties(2)	$	—	$	—	$	811,913
Unproved properties(2)	$	—	$	—	$	185,530
Asset retirement obligations(3)	$	—	$	—	$	2,027

____________________________

(1) This represents a financial asset or liability that is measured at fair value on a recurring basis.

(2) This represents non-financial assets that are measured at fair value on a nonrecurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying balance sheets. Please refer to the Proved Oil and Gas Properties and Unproved Oil and Gas Properties sections below for additional discussion.

(3) This represents the revision to estimates of the asset retirement obligation, which is a non-financial liability that is measured at fair value on a nonrecurring basis. Please refer to the Asset Retirement Obligation section below for additional discussion.

Derivatives

Fair value of all derivative instruments are estimated with industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value of money, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. All valuations were compared against counterparty statements to verify the reasonableness of the estimate. The Company’s commodity swaps are validated by

11

observable transactions for the same or similar commodity options using the NYMEX futures index, and are designated as Level 2 within the valuation hierarchy. Presently, all of our derivative arrangements are concentrated with three counterparties, all of which are lenders under the Company’s revolving credit facility.

Proved Oil and Gas Properties

Proved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication that the carrying costs exceed the sum of the undiscounted cash flows. The Company uses Level 3 inputs and the income valuation technique, which converts future amounts to a single present value amount, to measure the fair value of proved properties through an application of risk-adjusted discount rates and price forecasts selected by the Company’s management. The calculation of the risk-adjusted discount rate is a significant management estimate based on the best information available. Management believes that the risk-adjusted discount rate is representative of current market conditions and reflects the following factors: estimates of future cash payments, expectations of possible variations in the amount and/or timing of cash flows, the risk premium, and nonperformance risk. The price forecast is based on the NYMEX strip pricing, adjusted for basis differentials. Future operating costs are also adjusted as deemed appropriate for these estimates. Proved properties classified as held for sale are valued using a market approach, based on an estimated selling price, as evidenced by the most current bid prices received from third parties. If a relevant estimated selling price is not available, the Company utilizes the income valuation technique discussed above. The Company impaired the Mid-Continent region which had a carrying value of $110.0 million to its estimated fair value, based on the latest received bid, of $100.0 million and recognized an impairment of $10.0 million for the three months ended March 31, 2016. No impairment was recognized for the Rocky Mountain region for the three months ended March 31, 2016. The Company impaired the Mid-Continent region which had a carrying value of $431.2 million to its fair value of $110.0 million and recognized an impairment of $321.2 million for the year ended December 31, 2015. The Company impaired the Rocky Mountain region which had a carrying value of $1.1 billion to its fair value of $701.9 million and recognized an impairment of $419.3 million for the year ended December 31, 2015.

Unproved Oil and Gas Properties

Unproved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication that the carrying costs may not be fully recoverable. To measure the fair value of unproved properties, the Company uses Level 3 inputs and the income valuation technique, which takes into account the following significant assumptions: future development plans, risk weighted potential resource recovery, remaining lease life and estimated reserve values. Unproved properties classified as held for sale are valued using a market approach, based on an estimated selling price, as evidenced by the most current bid prices received from third parties. If a relevant estimated selling price is not available, the Company uses the price received for similar acreage in recent transactions by the Company or other market participants in the principal market. The Company impaired non-core acreage in the Wattenberg Field due to leases expiring which had a carrying value of $185.8 million to their fair value of $178.9 million and recognized an impairment of unproved properties of $6.9 million for the three months ended March 31, 2016. The Company impaired non-core acreage in the Wattenberg Field due to leases expiring, which had a carrying value of $210.3 million to their fair value of $185.5 million and recognized an impairment of unproved properties for the year ended December 31, 2015 of $24.8 million. The Company also fully impaired the North Park Basin in 2015, due to a change in the Company’s development plan, recognizing an impairment of unproved properties of $8.7 million.

Asset Retirement Obligation

The Company utilizes the income valuation technique to determine the fair value of the asset retirement obligation liability at the point of inception by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Upon completion of wells and natural gas plants, the Company records an asset retirement obligation at fair value using Level 3 assumptions. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. There were no asset retirement obligations measured at fair value as of March 31, 2016. The Company had $2.0 million of asset retirement obligations recorded at fair value as of December 31, 2015.

Long-term Debt

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As of March 31, 2016, the Company had $500.0 million of outstanding 6.75% Senior Notes and $300.0 million of outstanding 5.75% Senior Notes, all of which are unsecured senior obligations. The 6.75% Senior Notes are recorded at cost, plus the unamortized premium, on the accompanying balance sheets at $506.1 million and $506.4 million as of March 31, 2016 and December 31, 2015, respectively. The fair value of the 6.75% Senior Notes as of March 31, 2016 and December 31, 2015 was $141.3 million and $301.3 million, respectively. The 5.75% Senior Notes are recorded at cost on the accompanying balance sheets at $300.0 million as of March 31, 2016 and December 31, 2015. The fair value of the 5.75% Senior Notes as of March 31, 2016 and December 31, 2015 was $81.8 million and $163.1 million, respectively. The Senior Notes are measured using Level 1 inputs based on a secondary market trading price. The Company’s revolving credit facility approximates fair value as the applicable interest rates are floating. The outstanding balance under the revolving credit facility as of March 31, 2016 and December 31, 2015 was $288.0 million and $79.0 million, respectively.

NOTE 9 - DERIVATIVES

The Company enters into commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices and the associated impact on cash flows. All contracts are entered into for other-than-trading purposes. The Company’s derivatives include oil swap arrangements and puts, none of which qualify as having hedging relationships. Effective March 10, 2016, the Company converted its three-way collars into fixed price swaps and puts.

As of March 31, 2016, and as of the filing date of this report, the Company had the following derivative commodity contracts in place:

Settlement Period	Derivative Instrument	Total Volumes (Bbls per day)	Average Fixed Price	Fair Market Value of Assets
				(in thousands)
Oil
2Q 2016	Swap	3,103	$49.87	$	2,815
3Q 2016	Swap	2,704	$51.78	2,434
4Q 2016	Swap	2,303	$52.83	2,062
2Q 2016	Put	5,430	$51.01	5,548
3Q 2016	Put	4,733	$51.01	4,409
4Q 2016	Put	4,031	$51.01	3,784
Total				$	21,052

Derivative Assets Fair Value

The Company’s commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets.

The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as of March 31, 2016 and December 31, 2015:

	As of March 31, 2016
	Balance Sheet Location	Fair Value
		(in thousands)
Derivative Assets:
Commodity contracts	Current assets	$	21,052
Commodity contracts	Noncurrent assets	—
Derivative Liabilities:
Commodity contracts	Current liabilities	—
Commodity contracts	Long-term liabilities	—
Total derivative asset		$	21,052

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	As of December 31, 2015
	Balance Sheet Location	Fair Value
		(in thousands)
Derivative Assets:
Commodity contracts	Current assets	$	29,566
Commodity contracts	Noncurrent assets	—
Derivative Liabilities:
Commodity contracts	Current liabilities	—
Commodity contracts	Long-term liabilities	—
Total derivative asset		$	29,566

The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations:

	Three months ended March 31,
	2016			2015
	(in thousands)
Derivative cash settlement gain:
Oil contracts	$	7,508		$	34,791
Gas contracts	—			675
Total derivative cash settlement gain(1)	$	7,508		$	35,466
Change in fair value loss	$	(8,515	)	$	(16,610	)
Total derivative gain (loss)(1)	$	(1,007	)	$	18,856

_______________________________

(1) Total derivative gain (loss) and the derivative cash settlement gain for the three months ended March 31, 2016 and 2015 is reported in the derivative (gain) loss line item and derivative cash settlements line item on the accompanying statements of cash flows within the net cash provided by operating activities.

NOTE 10 -EARNINGS PER SHARE

The Company issues shares of restricted stock entitling the holders to receive non-forfeitable dividends, if and when, the Company was to declare a dividend, before vesting, thus making the awards participating securities. The awards are included in the calculation of earnings per share under the two-class method. The two-class method allocates earnings for the period between common shareholders and unvested participating shareholders and losses to common shareholders only.

The Company issues PSUs, which represent the right to receive, upon settlement of the PSUs, a number of shares of the Company’s common stock that range from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the measurement period applicable to such PSUs. Please refer to Note7-Stock-Based Compensation for additional discussion.

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The following table sets forth the calculation of loss per basic and diluted shares for the three month periods ended March 31, 2016 and 2015.

	Three Months Ended March 31,
	2016			2015
	(in thousands, except per share amounts)
Net loss	$	(47,237	)	$	(18,421	)
Less: undistributed loss to unvested restricted stock	—			—
Undistributed loss to common shareholders	(47,237		)	(18,421		)
Basic net loss per common share	$	(0.96	)	$	(0.41	)
Diluted net loss per common share	$	(0.96	)	$	(0.41	)
Weighted-average shares outstanding - basic	49,131			44,520
Add: dilutive effect of contingent PSUs	—			—
Weighted-average shares outstanding - diluted	49,131			44,520

The Company was in a net loss position for the three months ended March 31, 2016 and 2015, which made any potentially dilutive shares anti-dilutive. There were no dilutive shares for the three months ended March 31, 2016 and 147,786 dilutive shares that were anti-dilutive for the three months ended March 31, 2015. The participating shareholders are not contractually obligated to share in the losses of the Company, and therefore, the entire net loss is allocated to the outstanding common shareholders.

NOTE 11 -CAPITAL STOCK

On February 6, 2015, the Company completed a public offering of 8,050,000 shares of its common stock generating net proceeds of $202.7 million after deducting underwriter discounts, commissions and offering expenses of approximately $6.6 million. The Company used a portion of the net proceeds to repay all of the then outstanding borrowings under its revolving credit facility and for general corporate purposes, including its drilling and development program and other capital expenditures.

NOTE 12 - INCOME TAXES

The Company uses the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the tax rate in effect at that time. During the three month periods ended March 31, 2016 and 2015, the effective tax rate was 0.0% and 38.5%, respectively.As of December 31, 2015 a full valuation allowance was placed against the net deferred tax assets. The Company’s current rate differs from the U.S. statutory income tax rate due to the full valuation allowance being placed against the net deferred tax assets as of March 31, 2016.    

The deferred income tax liability for an oil and gas exploration company is dependent on many variables such as estimating the economic lives of depleting oil and gas reserves and commodity prices. Accordingly, the liability is subject to continual recalculation, revision of the numerous estimates required, and may change significantly in the event of such things as major acquisitions, divestitures, product price changes, changes in reserve estimates, changes in reserve lives, and changes in tax rates or tax laws. 

As of March 31, 2016, the Company had no unrecognized tax benefits. The Company’s management does not believe that there are any new items or changes in facts or judgments that should impact the Company's tax position taken thus far in 2016. Given the substantial net operating loss carry forward at the federal level, neither significant interest expense nor penalties charged for any examining agents’ tax adjustments of income tax returns are anticipated, and any such adjustments would very likely adjust only net operating loss carry forward.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2015, as well as the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

Executive Summary

We are a Denver-based energy company engaged in the acquisition, exploration, development, and production of onshore oil and associated liquids-rich natural gas in the United States. Our predecessors were founded in 1999 and we went public in December of 2011. Our shares of common stock are listed for trading on the NYSE under the symbol “BCEI.”

Our operations are focused in the Wattenberg Field in Colorado and the Dorcheat Macedonia Field in southern Arkansas. The Wattenberg Field is one of the premier oil and gas resource plays in the United States benefiting from a low cost structure and strong production efficiencies, established reserves and prospective drilling opportunities, which allows for predictable production and reserve growth.

Despite the current depressed commodity pricing environment, we are committed to preserving value by maximizing the cash flows from our existing production, optimizing the Company’s liquidity and positioning existing leasehold for increased development activity when appropriate commodity price signals are observed. Our liquidity position strategies include potential asset sales and joint ventures, debt restructurings, the issuance of new debt or equity and the conservation of our liquid assets. Furthermore, we scaled back our capital expenditures for 2016 to match the current commodity pricing environment, as well as took steps to reduce our future operating and corporate costs. During the first quarter 2016, we took measures to reduce corporate costs by reducing headcount resulting in a one-time payment of $2.2 million and an annual expected reduction in general and administrative expense and lease operating costs of $7.6 million and $3.1 million, respectively.

We have become more efficient and negotiated with our service providers to reduce lease operating costs, drilling and completion costs and gathering and processing expenses. We will continue to pursue operating efficiencies and procurement savings although we expect the amount of future decreases will not be as significant as those achieved during 2015 and the first quarter of 2016, as margins in the industry are already compressed.

Senior Management Changes

The Company's Executive Vice President, General Counsel and Secretary, Christopher I. Humber, and its Executive Vice President and Chief Financial Officer, William J. Cassidy, separated from the Company effective March 30, 2016 and March 31, 2016, respectively. During this interim period we have contracted external counsel and named the Company's Chief Accounting Officer as the acting principal financial officer.

Financial and Operating Results

Our financial and operational results, most of which were impacted by depressed oil, natural gas and NGL prices, include:

• Net loss of $47.2 million, as compared to a net loss of $18.4 million for the first quarter 2015;

• Drew down $209.0 million on our revolving credit facility during the first quarter of 2016 to mitigate potential liquidity reductions;

• Total liquidity as of March 31, 2016 of $218.6 million, consisting of a period-end cash balance;

• Decrease in sales volumes of 11% to 2,213.1 MBoe in the first quarter of 2016 from 2,475.8 MBoe in the first quarter of 2015, with oil and NGL production representing approximately 75% of total sales volumes in the first quarter of 2016;

• Cash operating costs, which consist of lease operating expense, gas plant and midstream operating expense, severance and ad valorem taxes, and the cash portion of general and administrative expense, per barrel decreased by $0.06 per Boe to $15.78 per Boe or $1.86 per Boe to $13.98 per Boe for adjusted cash operating cash, which

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excludes severance and RMI lease operating expenses from the first quarter of 2016 for comparison purposes to the first quarter of 2015;  

• Beat the low-end of combined lease operating expense guidance for the first quarter 2016 by 21%;

• Drilled nine and completed 17 gross wells within our Rocky Mountain region during the first quarter of 2016; and

• Capital expenditures of $20.7 million, as compared with $123.4 million for the first quarter of 2015.

Outlook for 2016

Beginning in 2014, the oil and nature gas industry began to experience a sharp decline in commodity prices. Caused in part by global supply and demand imbalances and an oversupply of natural gas in the United States, the pricing declines have extended into 2016 and the timing of any rebound is uncertain. Low commodity prices resulted in a reduction of our revenues, profitability, cash flows, proved reserve values and our stock price. If the industry downturn continues for an extended period or becomes more severe, we could experience additional impairments and further material reductions in revenues, profitability, cash flows, proved reserves and declines in our stock price.

We estimate our capital expenditures in the Wattenberg Field for 2016 to range from $30.0 million to $40.0 million used to drill nine and complete twelve wells, $3.5 million in our Mid-Continent region to recomplete 38 wells to maintain value as we move towards the potential sale of assets, and $1.5 million for corporate expenditures, the majority of which was incurred in the first quarter. We currently do not have any active drilling planned for the remainder of 2016. Consequently we expect our production will decline in line with our normal decline curves, and we will experience further reductions in revenues, profitability and cash flows. The ultimate amount of capital we will expend may fluctuate materially based on, among other things, market conditions, commodity prices, strategic divestitures, the continuation of drilling as the year progresses and changes in the borrowing base under our revolving credit facility.

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Results of Operations

Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

The following table summarizes our revenues, sales volumes, and average sales prices for the periods indicated.

		Three Months Ended March 31,
								Percent
		2016		2015		Change		Change
		(In thousands, except percentages)
Revenues:
Crude oil sales	$	34,673	$	59,420	$	(24,747	)	(42	)%
Natural gas sales		4,614		7,988		(3,374	)	(42	)%
Natural gas liquids sales		4,887		5,668		(781	)	(14	)%
Product revenue	$	44,174	$	73,076	$	(28,902	)	(40	)%
Sales Volumes:
Crude oil (MBbls)		1,283.3		1,490.5		(207.2	)	(14	)%
Natural gas (MMcf)		3,320.6		3,506.9		(186.3	)	(5	)%
Natural gas liquids (MBbls)		376.4		400.8		(24.4	)	(6	)%
Crude oil equivalent (MBoe)(1)		2,213.1		2,475.8		(262.7	)	(11	)%
Average Sales Prices (before derivatives)(2):
Crude oil (per Bbl)	$	27.02	$	39.87	$	(12.85	)	(32	)%
Natural gas (per Mcf)	$	1.39	$	2.28	$	(0.89	)	(39	)%
Natural gas liquids (per Bbl)	$	12.98	$	14.14	$	(1.16	)	(8	)%
Crude oil equivalent (per Boe)(1)	$	19.96	$	29.52	$	(9.56	)	(32	)%
Average Sales Prices (after derivatives)(2):
Crude oil (per Bbl)	$	32.87	$	63.21	$	(30.34	)	(48	)%
Natural gas (per Mcf)	$	1.39	$	2.47	$	(1.08	)	(44	)%
Natural gas liquids (per Bbl)	$	12.98	$	14.14	$	(1.16	)	(8	)%
Crude oil equivalent (per Boe)(1)	$	23.35	$	43.84	$	(20.49	)	(47	)%

_____________________________

(1) Determined using the ratio of 6 Mcf of natural gas to 1 Bbl of crude oil.

(2) The derivatives economically hedge the price we receive for crude oil and natural gas. For the three months ended March 31, 2016 and 2015, the derivative cash settlement gain for oil contracts was $7.5 million and $34.8 million, respectively, and the derivative cash settlement gain for gas contracts was zero and $0.7 million, respectively. Please refer to Note 9 - Derivatives of Part I, Item 1 of this report for additional disclosures.

Revenues decreased by 40%, to $44.2 million, for the three months ended March 31, 2016 compared to $73.1 million for the three months ended March 31, 2015 largely due to a 32% decrease in oil equivalent pricing, coupled with an 11% decrease in sales volumes. The decreased volumes are a direct result of less capital spent for drilling and completion during the last three quarters of 2015 and the first quarter of 2016. During the period from March 31, 2015 through March 31, 2016, we drilled 63 and completed 80 gross wells in the Rocky Mountain region and drilled 15 and completed 16 gross wells in the Mid-Continent region, as compared to the period from March 31, 2014 through March 31, 2015, where we drilled 128 and completed 106 gross wells in the Rocky Mountain region and drilled 42 and completed 46 gross wells in the Mid-Continent region.

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The following table summarizes our operating expenses for the periods indicated.

		Three Months Ended March 31,
								Percent
		2016		2015		Change		Change
		(In thousands, except percentages)
Expenses:
Lease operating expense	$	13,298	$	16,973	$	(3,675	)	(22	)%
Gas plant and midstream operating expense		3,789		2,291		1,498		65	%
Severance and ad valorem taxes		3,154		6,496		(3,342	)	(51	)%
Exploration		266		498		(232	)	(47	)%
Depreciation, depletion and amortization		26,379		59,004		(32,625	)	(55	)%
Impairment of oil and gas properties		10,000		—		10,000		100	%
Abandonment and impairment of unproved properties		6,906		5,469		1,437		26	%
General and administrative		17,685		16,872		813		5	%
Operating Expenses	$	81,477	$	107,603	$	(26,126	)	(24	)%
Selected Costs ($ per Boe):
Lease operating expense	$	6.01	$	6.86	$	(0.85	)	(12	)%
Gas plant and midstream operating expense		1.71		0.93		0.78		84	%
Severance and ad valorem taxes		1.43		2.62		(1.19	)	(45	)%
Exploration		0.12		0.20		(0.08	)	(40	)%
Depreciation, depletion and amortization		11.92		23.83		(11.91	)	(50	)%
Impairment of oil and gas properties		4.52		—		4.52		100	%
Abandonment and impairment of unproved properties		3.12		2.21		0.91		41	%
General and administrative		7.99		6.81		1.18		17	%
Operating Expenses	$	36.82	$	43.46	$	(6.64	)	(15	)%

Lease operating expense.  Our lease operating expense decreased $3.7 million, or 22%, to $13.3 million for the three months ended March 31, 2016 from $17.0 million for the three months ended March 31, 2015 and decreased on an equivalent basis from $6.86 per Boe to $6.01 per Boe. The Company reduced operating costs and negotiated contract reductions resulting in decreased pumping and gauging costs of $1.3 million and well servicing costs of $2.1 million during the three months ended March 31, 2016 when compared to the same period in 2015.

Gas plant and midstream operating expense.  Our midstream operating expense increased $1.5 million, or 65%, to $3.8 million for the three months ended March 31, 2016 from $2.3 million for the three months ended March 31, 2015 and increased on an equivalent basis from $0.93 per Boe to $1.71 per Boe. The increase in aggregate midstream operating expense and equivalent basis is due to RMI's operations beginning in the second quarter of 2015.

Severance and ad valorem taxes.  Our severance and ad valorem taxes decreased 51% to $3.2 million for the three months ended March 31, 2016 from $6.5 million for the three months ended March 31, 2015. Severance and ad valorem taxes primarily correlate to revenue. Revenues decreased by 40% for the three months ended March 31, 2016 when compared to the same period in 2015 causing the severance and ad valorem taxes to decrease. 

Exploration.  Our exploration expense decreased $0.2 million to $0.3 million during the three months ended March 31, 2016 when compared to the same period in 2015. During the three months ended March 31, 2016, we incurred $0.2 million of charges for exploratory wells which we were unable to assign economic proved reserves. During the three months ended March 31, 2015, we incurred $0.5 million in delay rentals.

Depreciation, depletion and amortization.  Our depreciation, depletion and amortization expense decreased $32.6 million, or 55%, to $26.4 million for the three months ended March 31, 2016 from $59.0 million for the three months ended

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March 31, 2015 and decreased on an equivalent basis from $23.83 per Boe to $11.92 per Boe. The decrease in the first quarter of 2016 is primarily due to the proved property impairments realized in the fourth quarter of 2015 and the cessation of depletion for assets classified as held for sale late in 2015.

Impairment of oil and gas properties. Our impairment of proved properties increased 100% to $10.0 million for the three months ended March 31, 2016 when compared to the same period in 2015. The Company impaired its Dorcheat Field to the latest received bid price during the three months ended March 31, 2016. There were no proved property impairments for the three months ended March 31, 2015.

Abandonment and impairment of unproved properties.  Our abandonment and impairment of unproved properties increased 26% to $6.9 million for the three months ended March 31, 2016 when compared to the three months ended March 31, 2015. The Company incurred $6.9 million and $5.5 million of impairment charges relating to non-core leases expiring within the Wattenberg Field during the three months ended March 31, 2016 and 2015, respectively.

General and administrative. Our general and administrative expense increased 5%, to $17.7 million for the three months ended March 31, 2016 from $16.9 million for the comparable period in 2015 and increased on an equivalent basis to $7.99 per Boe from $6.81 per Boe. The increase in general and administrative expense was due to the payment of $1.6 million for executive severance and $0.6 million of severance for other employees who were part of the reduction in workforce offset by a decrease in accrued bonuses of $1.1 million between comparable periods.

Derivative gain (loss).  Our derivative gain decreased $19.9 million to a $1.0 million loss for the three month period ended March 31, 2016 when compared to the same period in 2015. The decrease is related to a reduction in hedged volumes during the three months ended March 31, 2016 when compared to the three months ended March 31, 2015. Please refer to Note 9 - Derivatives above for additional discussion.

Interest expense.  Our interest expense for the three months ended March 31, 2016 increased 2%, to $14.5 million compared to $14.2 million for the three months ended March 31, 2015. Interest expense, including amortization of the premium and financing costs on the Senior Notes was $13.0 million for the three month periods ended March 31, 2016 and 2015. Average debt outstanding for the three months ended March 31, 2016 was $950.2 million as compared to $821.7 million for the comparable period in 2015.

Income tax benefit. Our estimate for federal and state income tax benefit for the three months ended March 31, 2016 was zero as compared to $11.5 million for the three months ended March 31, 2015. We are allowed to deduct various items for tax reporting purposes that are capitalized for purposes of financial statement presentation. Our effective tax rates for the three month periods ended March 31, 2016 and 2015 were 0.0% and 38.5%, respectively. As of December 31, 2015 a full valuation allowance was placed against the net deferred tax assets.  The Company’s effective tax rate differs from the U.S. statutory income tax rate due to a full valuation allowance being placed against net deferred tax assets as of December 31, 2015. 

Liquidity and Capital Resources

We fund our operations, capital expenditures and working capital requirements with cash flows from our operating activities, borrowings under our revolving credit facility, divestitures of assets and by accessing the debt and capital markets.

We currently anticipate funding the remainder of our 2016 operations with operating cash flows and our outstanding revolving credit facility balance, until such point that we execute upon a strategic divestiture or commodity prices rebound. Due in part to the planned cessation of our drilling program for the remainder of 2016, we believe that we will have sufficient access to sources of cash to fund our business for at least the next twelve months and until such point that commodity prices rebound or we execute upon one or more of our 2016 liquidity strategies, but market conditions are variable and volatile and actual cash flows could be insufficient.

To the extent actual operating results are below our anticipated results, we are unsuccessful in our divestiture efforts or our borrowing base under our revolving credit facility is redetermined at a lower amount requiring a significant repayment, our liquidity would be adversely affected. Additionally, as a result of depressed commodity prices, we anticipate that our borrowing base will be reduced at our next redetermination, which is expected to occur by May 30, 2016. Depending on its magnitude, a reduction in our borrowing base could result in material repayment obligations to our secured lenders, resulting in less funds for general corporate expenditures, less availability for our drilling program and reduced availability to fund other subordinate corporate obligations.

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As of March 31, 2016, our borrowing base was $475.0 million, of which we had $288.0 million outstanding on our revolving credit facility, a $12.0 million letter of credit issued, and no available borrowing capacity due to limitations in the indenture of our Senior Notes. Please refer to Note 5 - Long-term debt above for additional discussion. Our weighted-average interest rates (excluding amortization of deferred financing costs and the accretion of our contractual obligation for land acquisition) on borrowings from our revolving credit facility were 2.34% and 1.67%, respectively, for the three months ended March 31, 2016 and 2015. Our commitment fees were $0.4 million and $0.5 million, respectively, for the three months ended March 31, 2016 and 2015.

On February 6, 2015, the Company completed a public offering of 8,050,000 shares of its common stock generating net proceeds of $202.7 million after deducting underwriter discounts, commissions and offering expenses of approximately $6.6 million. The Company used a portion of the net proceeds to repay all of the then outstanding borrowings under its revolving credit facility and used the remaining net proceeds for general corporate purposes, including its drilling and development program and other capital expenditures.

For the remainder of 2016, we have hedged oil swaps and puts with average quarterly volumes ranging from 2,303 to 3,103 Bbls per day and 4,031 to 5,430 Bbls per day, respectively, with average fixed prices ranging from $49.87 to $52.83 per Bbl and $51.01 per Bbl, respectively. Our swaps represent approximately 36% of our anticipated production for the remainder of 2016. We expect that our commodity derivative positions will provide partial stabilization of our expected cash flows from operations. Please refer to Note 9 - Derivatives above for a summary of derivatives in place and Item 3. Quantitative and Qualitative Disclosures About Market Risks below for additional discussion.  

The following table summarizes our cash flows and other financial measures for the periods indicated.

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Net cash provided by operating activities	$	26,531		$	67,556
Net cash used in investing activities	(37,890		)	(167,284		)
Net cash provided by financing activities	208,617			167,658
Cash and cash equivalents	218,599			70,514
Acquisition of oil and gas properties	532			11,382
Exploration and development of oil and gas properties	34,822			154,300

Cash flows provided by operating activities

During the three month period ended March 31, 2016, we generated $26.5 million of cash provided by operating activities, a decrease of $41.0 million from the comparable period in 2015. The decrease in cash flows from operating activities resulted primarily from a $28.9 million decrease in revenues due to a 32% decrease in oil equivalent pricing and a 11% decrease in sales volumes and a $28.0 million decrease in derivative cash settlements during the three months ended March 31, 2016 as compared to the three months ended March 31, 2015. See Results of Operations above for more information on the factors driving these changes.

Cash flows used in investing activities

Expenditures for development of oil and natural gas properties are the primary use of our capital resources. Net cash used in investing activities for the three months ended March 31, 2016 decreased $129.4 million as compared to the same period in 2015. For the three months ended March 31, 2016, cash used for the development of oil and natural gas properties was $34.8 million. For the three months ended March 31, 2015, cash used for the acquisition of oil and gas properties was $11.4 million and cash used for the development of oil and natural gas properties was $154.3 million.

Cash flows provided by financing activities

Net cash provided by financing activities for the three months ended March 31, 2016 increased $41.0 million compared to the same period in 2015. The increase was primarily due to borrowings in excess of payments on our revolving credit facility increasing by $242.0 million for the three months ended March 31, 2016, when compared to the same period in 2015 offset by net proceeds from the sale of common stock of $202.8 million that occurred in 2015.

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New Accounting Pronouncements

Please refer to Note 2 — Basis of Presentation under Part I, Item 1 of this report for any recently issued or adopted accounting standards.

Critical Accounting Policies and Estimates

Information regarding our critical accounting policies and estimates is contained in Part II, Item 7 of our 2015 Form 10-K.

Effects of Inflation and Pricing

Inflation in the United States increased slightly over the past few years, which did not have a material impact on

our results of operations for the periods ended March 31, 2016 and 2015. Although the impact of inflation has been

relatively insignificant in recent years, it is still a factor in the United States economy and we tend to experience inflationary

pressure on the cost of oilfield services and equipment as increasing oil and gas prices increase drilling activity in our areas of operations. Material changes in prices also impact the current revenue stream, estimates of future reserves, borrowing base

calculations, depletion expense, impairment assessments of oil and gas properties, asset retirement obligations, and values of properties in purchase and sale transactions. Material changes in prices can impact the value of oil and gas companies and their ability to raise capital, borrow money and retain personnel. Given the continued decline in oil and gas prices, we would anticipate that costs of materials and services to remain at the lower levels we have experienced in the last year.

Off-Balance Sheet Arrangements

Currently, we do not have any off-balance sheet arrangements.

Contractual Obligations

There were no material changes in our contractual obligations and other commitments as disclosed in our 2015 Form 10-K.

Cautionary Note Regarding Forward-Looking Statements

This report contains various statements, including those that express belief, expectation or intention, as well as those that are not statements of historic fact, that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). When used in this report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project,” “plan,” “will,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

Forward‑looking statements include statements related to, among other things:

• the Company's business and liquidity strategies;

• reserves estimates;

• estimated sales volumes for 2016;

• amount and allocation of forecasted capital expenditures and plans for funding capital expenditures and operating expenses;

• ability to consummate certain strategic divestitures;

• impact of proposed strategic divestitures;

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• the Wattenberg Field being a premier oil and resource play in the United States;

• anticipated continued reduction of costs of materials and services;

• anticipated reduction of general and administrative expense and lease operating costs as a result of the measures taken in first quarter 2016 to reduce headcount;

• ability to satisfy obligations related to ongoing operations;

• impact of lower commodity prices;

• plans to drill or participate in wells including the intent to focus in specific areas or formations;

• our estimated revenues and losses;

• the timing and success of specific projects;

• outcomes and effects of litigation, claims and disputes;

• impact of recently issued accounting pronouncements;

• the Company’s tax position and future tax adjustments;

• our financial position;

• the amount and availability of our borrowing base under our revolving credit facility and the effect of future borrowing base redeterminations;

• impacts from the divestiture of any of our assets;

• our cash flow and liquidity;

• our future production;

• impact of commodity derivative positions;

• 2016 outlook;

• impacts of the Company's workforce reduction; and

• other statements concerning our operations, economic performance and financial condition.

We have based these forward-looking statements on certain assumptions and analyses we have made in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining actual future results. The actual results or developments anticipated by these forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, and may not be realized or, even if substantially realized, may not have the expected consequences. Actual results could differ materially from those expressed or implied in the forward-looking statements.

Factors that could cause actual results to differ materially include, but are not limited to, the following: 

• the risk factors discussed in Part I, Item 1A of our 2015 Form 10-K;

• further declines or volatility in the prices we receive for our oil, natural gas liquids and natural gas;

• general economic conditions, whether internationally, nationally or in the regional and local market areas in which we do business;

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• ability of our customers to meet their obligations to us;

• our ability to generate sufficient cash flow from operations, borrowings or other sources to enable us to fully develop our undeveloped acreage positions;

• the presence or recoverability of estimated oil and natural gas reserves and the actual future sales volume rates and associated costs;

• uncertainties associated with estimates of proved oil and gas reserves and, in particular, probable and possible resources;

• the possibility that the industry may be subject to future local, state, and federal regulatory or legislative actions (including additional taxes and changes in environmental regulation);

• environmental risks;

• seasonal weather conditions;

• lease stipulations;

• drilling and operating risks, including the risks associated with the employment of horizontal drilling techniques;

• our ability to acquire adequate supplies of water for drilling and completion operations;

• availability of oilfield equipment, services and personnel;

• exploration and development risks;

• competition in the oil and natural gas industry;

• management’s ability to execute our plans to meet our goals;

• risks related to our derivative instruments;

• our ability to attract and retain key members of our senior management and key technical employees;

• our ability to maintain effective internal controls;

• access to adequate gathering systems and pipeline take-away capacity to provide adequate infrastructure for the products of our drilling program;

• our ability to secure firm transportation for oil and natural gas we produce and to sell the oil and natural gas at market prices;

• costs and other risks associated with perfecting title for mineral rights in some of our properties;

• continued hostilities in the Middle East and other sustained military campaigns or acts of terrorism or sabotage;

• availability of funds to operate our business if there is a significant further reduction in our borrowing base;

• the ability to realize recorded values for our assets held for sale; and

• other economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively impact our businesses, operations or pricing.

All forward-looking statements speak only as of the date of this report. We disclaim any obligation to update or revise these statements unless required by law, and you should not place undue reliance on these forward-looking statements.

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Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under Part II, Item 1A. Risk Factors and Part II, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. 

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

Oil and Natural Gas Price Risk

Our financial condition, results of operations and capital resources are highly dependent upon the prevailing market prices of oil and natural gas. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors that are beyond our control. Factors influencing oil and natural gas prices include the level of global demand for oil and natural gas, the global supply of oil and natural gas, the establishment of, and compliance with, production quotas by oil exporting countries, weather conditions which determine the demand for natural gas, the price and availability of alternative fuels, local and global politics, and overall economic conditions. It is impossible to predict future oil and natural gas prices with any degree of certainty. Sustained weakness in oil and natural gas prices may adversely affect our financial condition and results of operations, and may also reduce the amount of oil and natural gas reserves that we can produce economically. Any reduction in our oil and natural gas reserves, including reductions due to price fluctuations, can have an adverse effect on our ability to obtain capital for our exploration and development activities. Similarly, any improvements in oil and natural gas prices can have a favorable impact on our financial condition, results of operations and capital resources.

Commodity Derivative Contracts

Our primary commodity risk management objective is to reduce volatility in our cash flows. We enter into derivative contracts for oil using NYMEX futures or over-the-counter derivative financial instruments with counterparties who we believe are well-capitalized and have been approved by our board of directors.

The use of financial instruments may expose us to the risk of financial loss in certain circumstances, including instances when (1) sales volumes are less than expected requiring market purchases to meet commitments, or (2) our counterparties fail to purchase the contracted quantities of oil or otherwise fail to perform. To the extent that we engage in derivative contracts, we may be prevented from realizing the benefits of favorable price changes in the physical market. However, we are similarly insulated against decreases in such prices.

Presently, all of our derivative arrangements are concentrated with three counterparties, all of which are lenders under our revolving credit facility. If these counterparties fail to perform their obligations, we may suffer financial loss or be prevented from realizing the benefits of favorable price changes in the physical market.

The result of oil market prices exceeding our swap prices requires us to make payment for the settlement of our derivatives, if owed by us, generally up to 15 business days before we receive market price cash payments from our customers. This could have a material adverse effect on our cash flows for the period between derivative settlement and payment for revenues earned.

Please refer to Note 9 - Derivatives of Part I, Item 1 of this report for a derivative summary table.

Interest Rates

As of March 31, 2016, we had $288.0 million outstanding under our revolving credit facility. Borrowings under our revolving credit facility bear interest at a fluctuating rate that is tied to an adjusted bank base rate or London Interbank Offered Rate, at our option. Any increases in these interest rates can have an adverse impact on our results of operations and cash flow.

Counterparty and Customer Credit Risk

In connection with our derivatives activity, we have exposure to financial institutions in the form of derivative transactions. Three lenders under our revolving credit facility are counterparties on our derivative instruments currently in place and have investment grade credit ratings. We expect that any future derivative transactions we enter into will be with these or other lenders under our revolving credit facility that will carry an investment grade credit rating.

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We are also subject to credit risk due to concentration of our oil and natural gas receivables with certain significant customers. The inability or failure of our significant customers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results. We review the credit rating, payment history and financial resources of our customers, but we do not require our customers to post collateral.

Marketability of Our Production

The marketability of our production from the Mid-Continent and Rocky Mountain regions depends in part upon the availability, proximity and capacity of third-party refineries, access to regional trucking, pipeline and rail infrastructure, natural gas gathering systems and processing facilities. We deliver crude oil and natural gas produced from these areas through trucking services, pipelines and rail facilities that we do not own. The lack of availability or capacity on these systems and facilities could reduce the price offered for our production or result in the shut-in of producing wells or the delay or discontinuance of development plans for properties.

A portion of our production may also be interrupted, or shut in, from time to time for numerous other reasons, including as a result of accidents, field labor issues or strikes, or we might voluntarily curtail production in response to market conditions. If a substantial amount of our production is interrupted at the same time, it could adversely affect our cash flow.

There have not been material changes to the interest rate risk analysis or oil and gas price sensitivity analysis disclosed in our 2015 Form 10-K.

Item 4.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2016. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of March 31, 2016, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. 

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. To assist management, we have established an internal audit function to verify and monitor our internal controls and procedures. The Company’s internal control system is supported by written policies and procedures, contains self-monitoring mechanisms and is audited by the internal audit function. Appropriate actions are taken by management to correct deficiencies as they are identified. 

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended March 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

Item 1.   Legal Proceedings.

From time to time, we are subject to legal proceedings and claims that arise in the ordinary course of business. Like other oil and gas producers and marketers, our operations are subject to extensive and rapidly changing federal and state environmental, health and safety and other laws and regulations governing air emissions, wastewater discharges, and solid and hazardous waste management activities. As of the date of this filing, there are no material pending or overtly threatened legal actions against us of which we are aware.

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Item 1A. Risk Factors.

Our business faces many risks. Any of the risk factors discussed in this report or our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operation. For a discussion of our potential risks and uncertainties, see the information in Part I, Item 1A., Risk Factors, in our 2015 Form 10-K. There have been no material changes to our risk factors from those described in our 2015 Form 10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered sales of securities. There were no sales of unregistered equity securities during the three month period ended March 31, 2016.

Issuer purchases of equity securities.  The following table contains information about acquisitions of our equity securities during the three month period ended March 31, 2016.

					Maximum
				Total Number of	Number of
	Total			Shares	Shares that May
	Number of	Average Price		Purchased as Part of	Be Purchased
	Shares	Paid per		Publicly Announced	Under Plans or
	Purchased(1)	Share		Plans or Programs	Programs
January 1, 2016 - January 31, 2016	1,394	$	3.37	—	—
February 1, 2016 - February 29, 2016	18,140	$	1.77	—	—
March 1, 2016 - March 31, 2016	89,899	$	2.05	—	—
Total	109,433	$	2.02	—	—

____________________________________________________________________________

(1) Represent shares that employees surrendered back to us that equaled in value the amount of taxes required for payroll tax withholding obligations upon the vesting of restricted stock awards and performance stock units. These repurchases were not part of a publicly announced plan or program to repurchase shares of our common stock, nor do we have a publicly announced plan or program to repurchase shares of our common stock.

Our revolving credit facility and Senior Notes provide for restrictions on the payment of certain dividends.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit No.	Description of Exhibit
10.1†	Separation and General Release Agreement dated March 23, 2016 by and between Bonanza Creek Energy, Inc. and William J. Cassidy.
10.2†	Separation and General Release Agreement dated March 22, 2016 by and between Bonanza Creek Energy, Inc. and Christopher I. Humber.
31.1†	Certification of the Principal Executive Officer pursuant to Rule 13a-14(a).
31.2†	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a).
32.1†	Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2†	Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101†	The following materials from the Bonanza Creek Energy, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (Extensible Business Reporting Language) include (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text.

†                 Filed or furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BONANZA CREEK ENERGY, INC.
Date:	May 5, 2016	By:	/s/ Richard J. Carty
			Richard J. Carty
			PresidentandChief Executive Officer
			(principal executive officer)
		By:	/s/ Wade E. Jaques
			Wade E. Jaques
			Vice President and Chief Accounting Officer
			(principal financial and accounting officer)

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EX-10.1

Exhibit 10.1

RE: Separation and General Release Agreement

Dear Bill:

This Separation Agreement (“Agreement”) sets forth the terms and conditions between you (“Employee”) and Bonanza Creek Energy, Inc., a Delaware corporation (the “Company”), in connection with your separation from employment with the Company.

1.Separation from Employment. We have agreed your employment with the Company will terminate on the Effective Date of this Agreement (the “Separation Date”).

2.Accrued Salary and Vacation. Within one (1) business day of the Separation Date, the Company shall pay to you all accrued salary and accrued and unused vacation time earned through the Separation Date, subject to standard payroll deductions and withholdings.

3.Consideration.

a.In consideration of the provisions of this Agreement, if you execute this Agreement and do not rescind it, the Company agrees to make the following payments to you:

1.    within one (1) business day of the Separation Date, payment of a lump sum cash payment of Eight Hundred Thirty One Thousand Dollars ($831,000.00);

2.    on or before Monday, March 28, 2016 a payment of $283,500 constituting the bonus earned under the Company’s STIP;

3.    immediate vesting of all equity incentives held by Employee pursuant to the LTIP at the time of the execution of this Agreement, Management Incentive Plan or otherwise, with payment of such equity incentives payable in accordance with the applicable award agreement;

4.if and to the extent permitted under applicable law and without additional cost or penalty to the Company or Employee, during the portion, if any, of the 18-month period, commencing as of the date Employee is eligible to elect and timely elects to continue coverage for Employee and Employee’s eligible dependents under the Company’s or an Affiliate’s group health plan pursuant to COBRA or similar state law, the Company (or the Affiliate of the Company that employs Employee immediately prior to termination) shall reimburse Employee on a monthly basis for the difference between the amount Employee pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company or the applicable Affiliate pay for the same or similar coverage, with any such reimbursement payable on a monthly basis.

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4.    The Company agrees to reimburse Employee for legal fees he incurred for the negotiation and drafting of this Agreement, up to a maximum amount of Twenty Five Thousand Dollars ($25,000). The Company will pay this amount to Employee within seven days' of receipt by the Company of an itemized invoice from Employee's counsel identifying the fees incurred. The invoice must identify the dates legal services were provided and provide an itemization of such services on a daily basis, the amount of time spent and the cost.

5.    Employee acknowledges that upon payment of the amounts specified in this paragraph, he has been paid all compensation due to him relating in any manner to his employment or separation from employment with the Company.

b.Reporting of and withholding on the payments under this Section 3 for tax purposes shall be at the discretion of the Company in conformance with applicable tax laws. If a claim is made against the Company for any additional tax or withholding in connection with or arising out of the Severance, you shall pay any such claim within thirty (30) days of being notified by the Company and agree to indemnify the Company and hold it harmless against such claims, including, but not limited to, any taxes, attorney fees, penalties, and/or interest, which are or become due from the Company.

4.Release by Employee.

a.Employee, on Employee’s own behalf and on behalf of Employee’s heirs, agents, representatives, attorneys, assigns, executors and/or anyone acting on Employee’s behalf, and in consideration of the promises, assurances, and covenants contained herein, hereby releases, to the full extent permitted by law, Bonanza Creek Energy, Inc. and its successors or affiliates (the “Company”), its parents, subsidiaries, officers, shareholders, partners, members, individual employees, agents, representatives, directors, employees, attorneys, successors, and anyone acting on its behalf (“Released Parties”), from all claims and causes of action by reason of any injuries and/or damages or losses, known or unknown, foreseen or unforeseen, patent or latent which Employee has sustained or which may be sustained as a result of any facts and circumstances arising out of or in any way related to Employee’s employment by the Company or the termination of that employment, and any other disputes, claims, disagreements, or controversies between Employee and the Released Parties up to and including the date this release is signed by Employee. To the full extent permitted by law, Employee’s release includes, but is not limited to, any contract benefits, claims for quantum merit, claims for wages, bonuses, employment benefits, moving expenses, stock options, profits units, or damages of any kind whatsoever, arising out of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, any theory of unlawful discharge, torts and related damages (including, but not limited to, emotional distress, loss of consortium, and defamation) any legal restriction on the Company’s right to terminate Employee’s employment and/or services, or any federal, state or other governmental statute or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964 (as amended), the federal Age Discrimination in Employment Act of 1967 (29 U.S.C. § 21, et seq.) (as amended) (“ADEA”), the Older Workers’ Benefit Protection Act (“OWBPA”), the federal Americans with Disabilities Act of 1990, any state laws concerning discrimination or harassment including the Fair Employment and Housing Act, or any other legal limitation on contractual or employment relationships, and any and all claims for any loss, cost, damage, or expense with respect to Employee’s liability for taxes, penalties, interest or additions to tax on or with respect to any amount received from the Company or otherwise includible in Employee’s gross income, including, but not limited to, any liability for taxes, penalties, interest or additions to tax arising from the failure of this Agreement, or any other employment, severance, profit sharing, bonus, equity incentive or other compensatory plan to which Employee and the Company are or were parties, to comply with, or to be operated in compliance with the Internal Revenue Code of 1986, as amended, including, but not limited to, Section 409A thereof, or any provision of state or local income tax law; provided, however, that notwithstanding the foregoing, the release set forth in this Section shall not extend to: (a) vested rights, if any, under any pension plan; or (b) Employee’s rights, if any, to indemnification or defense under the Company’s certificate of incorporation, bylaws and/or policy or procedure, any indemnification agreement with Employee or under any insurance contract, in connection with Employee’s acts or omissions within the course and scope of Employee’s employment with the Company (this “Release”). Without limiting the generality of the foregoing in any respect, Employee acknowledges that he is releasing all rights, if any, under any applicable LTIP or STIP plan maintained by the Company.

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b.Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA and OWBPA. Employee also acknowledges that the consideration given for the waiver and release hereunder is in addition to anything of value to which Employee is already entitled. Employee further acknowledges that Employee has been advised by this writing, as required by the ADEA and OWBPA, that: (a) Employee's waiver and release hereunder do not apply to any rights or claims that may arise after the execution date of this release; (b) Employee has been advised hereby that Employee has the right to consult with an attorney prior to executing this release; (c) Employee has twenty-one (21) days to consider this release (although Employee may choose to voluntarily execute this release earlier); (d) Employee has seven (7) days following the execution of this Release to revoke this Release; and (e) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth (8th) day after this Release is executed by Employee (the “Effective Date”).

c.Excluded from this Release are any claims which by law cannot be waived in a private agreement between an employer and employee. Moreover, this Release does not prohibit Employee from filing a charge with the Equal Employment Opportunity Commission (the “EEOC”) or equivalent state agency in Employee's state or participating in an EEOC or state agency investigation; provided, however, Employee hereby agrees to waive Employee's right to monetary or other recovery should any claim be pursued with the EEOC, state agency, or any other federal, state or local administrative agency arising out of or related to Employee's employment with and/or separation from the Company.

d.It is the intention of Employee that this Release is a general release which shall be effective as a bar, to the full extent permitted by law, to each and every claim, demand, or cause of action it releases. Employee recognizes that Employee may have some claim, demand, or cause of action against the Released Parties of which Employee is totally unaware and unsuspecting which Employee is giving up by execution of this release. It is the intention of Employee in executing this Release that it will deprive Employee of each such claim, demand or cause of action and prevent Employee from asserting it against the released parties.

5.Release by the Company. With the exception of claims arising out of criminal conduct by Employee and subject to and as limited by applicable law including the Sarbanes-Oxley Act of 2002 (the “SOX Act”), the Company forever releases and discharges Employee and Employee's heirs, executor, administrators, successors and/or assigns of and from any claim that the Company has against Employee as of the Effective Date of this Agreement. Claims based on criminal conduct by Employee or claims related to any required clawback of compensation required under the SOX Act, are not released.

6.Compliance Obligations.

a.You acknowledge that you have fulfilled all obligations to raise any and all legal, regulatory or compliance concerns while you were employed with the Company and that you are not aware of any legal, regulatory or compliance related issues that you have not previously raised with the Company. You further acknowledge that you are aware of no conduct by any of the Released Parties that you reasonably believe constitutes a violation of any federal, state or local law, rule, ordinance or regulation.

b.The Company agrees that it will allow Employee to review and provide any suggestions Employee believes are appropriate to any press release prepared by the Company or form 8K filed in connection with Employee departure from employment with the Company.

7.No Pending or Future Proceedings. You represent and warrant that you do not presently have on file and have no knowledge of the existence of any proceeding against any of the Released Parties. In the event that any such proceeding has been filed by you or with your involvement, you agree that you immediately will take all actions necessary to withdraw from or terminate that Proceeding, unless the requirement for such withdrawal or termination is prohibited by applicable law.

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8.No Other Entitlement. You acknowledge that, except as expressly provided in this Agreement, you are not entitled to, and will not receive, any additional compensation, benefits, or separation pay or other payment of any kind. You acknowledge that you have been fully paid or provided all wages, compensation, bonuses, stock, stock options, vacation, or other benefits from the Company or the Released Parties which are or could be due to you under the terms of your employment or otherwise. Thus, for any employee benefits sponsored by the Company not specifically referenced in this Agreement, you will be treated as a terminated employee effective on your Separation Date. This includes, but is not limited to, any 401(k) plan, life insurance, accidental death and dismemberment insurance and short and long-term disability insurance. Without limiting the foregoing and except as otherwise described in Section 3, you expressly acknowledge and agree that you are not entitled to receive (a) any further bonus payments under the STIP, or otherwise; (b) equity incentive grants or awards under any of the Company’s incentive plans or programs, including, without limitation, the Company’s 2011 Long Term Incentive Plan, as amended (the “LTIP”), and the applicable Restricted Stock Agreements thereunder (and you expressly acknowledge that, except as specifically provided herein, all shares of the Company’s common stock granted to you under the LTIP will automatically forfeit on the Separation Date); (c) any further payment under the Amended and Restated Executive Change in Control and Severance Plan (“Severance Plan”), and that, by execution of this Agreement, you acknowledge that you have been paid the full amounts to which you are entitled under the Severance Plan and release any remaining claims under the Severance Plan; or (d) any additional severance or other compensation. You further acknowledge that you have received or been paid for all leaves of absence (paid and unpaid) to which you were entitled during your employment.

9.Proprietary Information Obligations. You are reminded of the Employee Restrictive Covenants, Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) that you entered into with the Companyand thatduring the course of your employment with the Company, you have had access to certain data and information relating to Bonanza’s operations and business strategies that is, or is considered by the Company to be, non-public, confidential or proprietary in nature, which, if revealed to a third party, could have an adverse impact on the Company, including, but not limited to, (a) geological and geophysical data, (b) hydrocarbon reserves and other engineering data, (c) acreage figures and locations, drilling sites and leasing information and (d) revenues, payroll records, profitability, operations, records, business practices, processes, analysis, legal files, board and committee materials, correspondence and other types of information relating to Bonanza’s business (collectively, “Confidential Information”). You hereby agree to (i) keep all Confidential Information strictly confidential and not to disclose such Confidential Information to any third party without the Company’s express written consent or unless such disclosure is required by law and (ii) continue to abide by the terms of the Confidentiality Agreement consistent with its terms.

10.Return of Property. You agree to return to the Company within two (2) business days of the Separation Date all Company documents (in hard copy and electronic forms, and all copies thereof, and other Bonanza property that you have had in your possession at any time, including, but not limited to, files, notes, drawings, records, business plans and forecasts, financial information, specifications, computer-recorded information (including email), tangible property (e.g., cell phone, laptop computer, tablet), automobiles, credit cards, entry cards, identification badges and keys, in each case, wherever and however kept; and, any materials of any kind that contain or embody any Confidential Information of Bonanza (and all reproductions thereof). You hereby represent and warrant that any Bonanza property or Confidential Information stored, created in or sent to or by any of your personal computers, phones, tablets or other devices or stored in any electronic data storage account will be permanently deleted or destroyed immediately following your Separation Date. If you later discover that you have retained any Bonanza property or information, you agree, immediately upon such discovery, to contact the Company and make arrangements for returning, deleting or destroying such items. Should you choose to sign this Agreement, amounts for any Company Property still in your possession will be deducted from the final severance payment.

11.Confidentiality. The existence of this Agreement and its provisions will be held in strictest confidence by you and the Company and will not be publicized or disclosed in any manner whatsoever; provided, however, that (i) you may disclose the existence of this Agreement in confidence: (a) to your parents, siblings, children or spouse; (b) to your attorney, accountant, auditor, tax preparer and financial advisor; (c) as may be necessary to enforce its terms, or (d) in response to compulsory process, and only then after giving the Company ten (10) days’ advance notice of the compulsory process and affording the Company the opportunity to obtain any necessary or appropriate protective orders; provided that you expressly agree not to disclose the terms of this Agreement to any

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current or former Bonanza employee, officer or director; or (ii) the Company may disclose the existence of this Agreement: (a) in any public disclosure required under applicable securities laws or the regulations promulgated thereunder or the rules or regulations of the securities exchange on which the Company’s common stock or other securities are listed for trading, (b) to the Company’s employees who need to know same, including accountants, any internal auditor, counsel and executive officers; (c) to the Company’s outside counsel, independent accountants, any tax preparer and other external advisor(s); or (d) as may be necessary to enforce its terms; or (e) in response to compulsory process.

12.Nondisparagement. (a) You covenant never to disparage or speak ill of the Company or any Company product or service, or of any employee, officer or director of the Company, regarding any such person’s performance, service or actions during his or her period of employment with the Company, nor shall you at any time harass or behave unprofessionally toward the Company or any of its employees, officers or directors.

(b)    The Company agrees that it will instruct the following employees and advise the Company’s directors that are identified below that, as to the employees, during the period of their employment with the Company or as to the directors, during their term as a director of the Company, they are not to disparage or speak ill of Employee, and that they shall not at any time harass or behave unprofessionally toward Employee: James Watt, Marvin Chronister, Kevin Neveu, Greg Raih, Jeff Wojahn, Richard Carty, and Ron Barauskas.

13.Covenant Not to Compete.Employee acknowledges that Employee executed an Employee Restrictive Covenants, Proprietary Information and Inventions Agreement (“ERC Agreement”) under which Employee assumed certain obligations relating to the Company’s confidential and proprietary business information and trade secrets and containing certain covenants relating to competition, solicitation and assignment of inventions. Employee agrees that, notwithstanding any other provision of this Release, the ERC Agreement shall by its terms survive the execution of this Release and that the parties’ rights and duties thereunder shall not in any way be affected by this Release with the following exceptions. Section 6.3 of the ERC Agreement shall remain in full force and effect except that the duration of the Post-Termination Non-Compete Term (as such term is used therein) shall be reduced to 1.25 years from 2.5 years.

14.Cooperation.

a.Employee acknowledges that because of Employee’s position with the Company, Employee may possess information that may be relevant to or discoverable in connection with claims, litigation or judicial, arbitral or investigative proceedings initiated by a private party or by a regulator, governmental entity, or self-regulatory organization, that relates to or arises from matters with which Employee was involved during Employee’s employment with the Company, or that concern matters of which Employee has information or knowledge (collectively, a “Proceeding”). Employee agrees that Employee shall testify truthfully in connection with any such Proceeding, shall cooperate with the Company in connection with every such Proceeding, and that Employee’s duty of cooperation shall include an obligation to meet with the Company representatives and/or counsel concerning all such Proceedings for such purposes, and at such times and places, as the Company reasonably requests, and to appear for deposition and/or testimony upon the Company’s request and without a subpoena. The Company agrees that, if the Company requests that Employee meet with Company representatives and/or counsel concerning any Proceeding, and if Employee requests that his counsel attend the meeting(s), the Company will reimburse the attorney for the time spent participating in the meetings with Company representatives at such attorney’s standard rate so long as the rate does not exceed $500 an hour. If the rate exceeds $500 an hour, the Company’s obligation to reimburse the attorney will be limited to $500 per hour.

b.Employee and the Company understand and agree that it is in their mutual best interest to minimize the effect of Employee’s separation upon the Company’s business and upon Employee’s professional reputation. Accordingly, Employee agrees to take all actions reasonably requested of Employee by the Company in order to accomplish that objective. To this end, Employee shall consult with the Company concerning business matters on an as-needed and as­ requested basis, the Company shall exercise reasonable efforts to avoid conflicts between such consulting and Employee’s personal and other business commitments Employee shall exercise reasonable efforts to fulfill the Company’s consulting requests in a timely manner.

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15.Breach of Agreement. If you breach this Agreement, you agree that such breach will cause the Company irreparable injury entitling the Company to the entry of an order for injunctive relief. Similarly, if the Company breaches this Agreement, the Company agrees that such breach will cause you irreparable injury entitling you to the entry of an order for injunctive relief. Nothing contained herein shall be construed as prohibiting you or the Company from pursuing any available remedies in the event of a breach, including any equitable remedies. In the event either Party initiates litigation asserting a breach of this Agreement, the Court shall award the prevailing their reasonable attorneys’ fees.

16.No Application. You agree that you will not apply for any job or position as an employee, consultant, independent contractor, or otherwise, with the Company or its subsidiaries or affiliates. You warrant that no such applications are pending at the time this Agreement is executed.

17.No Admission of Liability. You and the Company agree that nothing contained herein, and no action taken by either you or the Company hereto with regard to this Agreement, shall be construed as an admission by either you or the Company of liability or of any fact that might give rise to liability for any purpose whatsoever.

18.No Adverse Action. You represent and warrant to the Company that you have not taken any action adverse to the interests of the Company and its subsidiaries and affiliates prior to signing this Agreement.

19.Advice of Counsel. YOU ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, YOU HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND YOU HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.

20.Section 409A. This Agreement is intended to comply with Section 409A of the Code and Treasury Regulations promulgated thereunder (“Section 409A”) and shall be construed accordingly. It is the intention of the parties to this Agreement that payments or benefits payable under this Agreement not be subject to the additional tax or interest imposed pursuant to Section 409A. To the extent such potential payments or benefits are or could become subject to Section 409A, you and the Company agree to cooperate to amend this Agreement with the goal of giving you the economic benefits described herein in a manner that does not result in such tax or interest being imposed. You agree that you shall, at the request of the Company, take any reasonable action (or refrain from taking any action), required to comply with any correction procedure promulgated pursuant to Section 409A.

21.Miscellaneous. Except with respect to the Confidentiality Agreement, this Agreement is entered into without reliance on any agreements not contained herein. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company. The Company may assign its rights under this Agreement. No other assignment is permitted except by written permission of the parties to this Agreement. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, your heirs, and your and the Company’s respective successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified by the court so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of Colorado. Venue shall be in the federal or state courts in located in the City and County of Denver, Colorado. By execution of this Agreement, you submit to the jurisdiction of the federal and state courts of the State of Colorado and consent to the service of process in any suit, action, or proceeding in any of the aforesaid courts by the mailing of copies of process to you by certified or registered mail. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and electronic signatures shall be treated as originals.

[REMAINDER INTENTIONALLY LEFT BLANK, SIGNATURES FOLLOW]

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If this Agreement is acceptable to you, please sign below and return the original to me.

Sincerely,

BONANZA CREEK ENERGY, INC.

By: /s/ Richard J. Carty                

Richard Carty

President and Chief Executive Officer

Accepted and Agreed:

By: /s/ William J. Cassidy    

Name: William Cassidy

Dated: March 23, 2016

[SIGNATURE PAGE TO SEPARATION AND RELEASE AGREEMENT]

EX-10.2

Exhibit 10.2

March 22, 2015

RE: Separation and General Release Agreement

Dear Chris:

This Separation Agreement (“Agreement”) sets forth the terms and conditions between you (“Employee” or “You”) and Bonanza Creek Energy, Inc., a Delaware corporation (the “Company”), in connection with your separation from employment with the Company.

1.Separation from Employment. We have agreed your employment with the Company will terminate on the Effective Date of this Agreement (the “Separation Date”).

2.Accrued Salary, Vacation and Expenses. Within one (1) business day of the date hereof, the Company shall pay to you (a) all accrued salary and accrued and unused vacation time earned through the date hereof; and (b) reimbursement of all reimburseable business expenses submitted to the Company for which proper documentation has been provided.

3.Consideration.

a.In consideration of the provisions of this Agreement, if you execute this Agreement and do not rescind it, the Company agrees to make the following payments to you (collectively, the “Severance”):

1.    within one (1) business day of the Separation Date, payment of a lump sum cash payment of Seven Hundred Sixty-One Thousand, Nine Hundred Sixty Six Dollars ($761,966.00);

2.immediate vesting of all equity incentives held by Employee pursuant to the Company’s Amended and Restated 2011 Long Term Incentive Plan (“LTIP”) Management Incentive Plan or otherwise;

2.    if and to the extent permitted under applicable law and without additional cost or penalty to the Company or Employee, during the portion, if any, of the 18-month period, commencing as of the date Employee is eligible to elect and timely elects to continue coverage for Employee and Employee’s eligible dependents under the Company’s or an Affiliate’s group health plan pursuant to COBRA or similar state law, the Company (or the Affiliate of the Company that employs Employee immediately prior to termination) shall reimburse Employee on a monthly basis for the difference between the amount Employee pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company or the applicable Affiliate pay for the same or similar coverage, with any such reimbursement payable for the 60 day period immediately following the Effective Date being payable on the first business day 60 days following the Effective Date and any other such reimbursement payable being paid on a monthly basis thereafter;

3.    Employee acknowledges that upon payment of the amounts specified in Sections 3.a.1 and 3.a.3 above, he has been paid all compensation due to him relating in any manner to his employment or separation from employment with the Company.

b.Reporting of and withholding on the payments under this Section 3 for tax purposes shall be at the discretion of the Company in conformance with applicable tax laws. If a claim is made against the Company for any additional tax or withholding in connection with or arising out of the Severance, you shall pay any such claim within thirty (30) days of being notified by the Company and agree to indemnify the Company and hold it harmless

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against such claims, including, but not limited to, any taxes, attorney fees, penalties, and/or interest, which are or become due from the Company.

4.Release by Employee.

a.Employee, on Employee’s own behalf and on behalf of Employee’s heirs, agents, representatives, attorneys, assigns, executors and/or anyone acting on Employee’s behalf, and in consideration of the promises, assurances, and covenants contained herein, hereby releases, to the full extent permitted by law, Bonanza Creek Energy, Inc. and its successors or affiliates (the “Company”), its parents, subsidiaries, officers, shareholders, partners, members, individual employees, agents, representatives, directors, employees, attorneys, successors, and anyone acting on its behalf (“Released Parties”), from all claims and causes of action by reason of any injuries and/or damages or losses, known or unknown, foreseen or unforeseen, patent or latent which Employee has sustained or which may be sustained as a result of any facts and circumstances arising out of or in any way related to Employee’s employment by the Company or the termination of that employment, and any other disputes, claims, disagreements, or controversies between Employee and the Released Parties up to and including the date this release is signed by Employee. To the full extent permitted by law, Employee’s release includes, but is not limited to, any contract benefits, claims for quantum meruit, claims for wages, bonuses, employment benefits, moving expenses, stock options, profits units, or damages of any kind whatsoever, arising out of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, any theory of unlawful discharge, torts and related damages (including, but not limited to, emotional distress, loss of consortium, and defamation) any legal restriction on the Company’s right to terminate Employee’s employment and/or services, or any federal, state or other governmental statute or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964 (as amended), the federal Age Discrimination in Employment Act of 1967 (29 U.S.C. § 21, et seq.) (as amended) (“ADEA”), the Older Workers’ Benefit Protection Act (“OWBPA”), the federal Americans with Disabilities Act of 1990, any state laws concerning discrimination or harassment including the Fair Employment and Housing Act, or any other legal limitation on contractual or employment relationships, and any and all claims for any loss, cost, damage, or expense with respect to Employee’s liability for taxes, penalties, interest or additions to tax on or with respect to any amount received from the Company or otherwise includible in Employee’s gross income, including, but not limited to, any liability for taxes, penalties, interest or additions to tax arising from the failure of this Agreement, or any other employment, severance, profit sharing, bonus, equity incentive or other compensatory plan to which Employee and the Company are or were parties, to comply with, or to be operated in compliance with the Internal Revenue Code of 1986, as amended, including, but not limited to, Section 409A thereof, or any provision of state or local income tax law; provided, however, that notwithstanding the foregoing, the release set forth in this Section shall not extend to: (a) vested rights, if any, under any pension plan; or (b) Employee’s rights, if any, to indemnification or defense under the Company’s certificate of incorporation, bylaws and/or policy or procedure, any indemnification agreement with Employee or under any insurance contract, in connection with Employee’s acts or omissions within the course and scope of Employee’s employment with the Company (this “Release”). Without limiting the generality of the foregoing in any respect, Employee acknowledges that he is releasing all rights, if any, under any applicable LTIP or STIP plan maintained by the Company.

b.Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA and OWBPA. Employee also acknowledges that the consideration given for the waiver and release hereunder is in addition to anything of value to which Employee is already entitled. Employee further acknowledges that Employee has been advised by this writing, as required by the ADEA and OWBPA, that: (i) Employee’s waiver and release hereunder do not apply to any rights or claims that may arise after the execution date of this release; (ii) Employee has been advised hereby that Employee has the right to consult with an attorney prior to executing this release; (iii) Employee has twenty-one (21) days to consider this release (although Employee may choose to voluntarily execute this release earlier); (iv) Employee has seven (7) days following the execution of this Release to revoke this Release; and (v) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth (8th) day after this Release is executed by Employee (the “Effective Date”).

c.Excluded from this Release are any claims which by law cannot be waived in a private agreement between an employer and employee. Moreover, this Release does not prohibit Employee from filing a

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charge with the Equal Employment Opportunity Commission (the “EEOC”) or equivalent state agency in Employee’s state or participating in an EEOC or state agency investigation; provided, however, Employee hereby agrees to waive Employee’s right to monetary or other recovery should any claim be pursued with the EEOC, state agency, or any other federal, state or local administrative agency arising out of or related to Employee's employment with and/or separation from the Company.

d.It is the intention of Employee that this Release is a general release which shall be effective as a bar, to the full extent permitted by law, to each and every claim, demand, or cause of action it releases. Employee recognizes that Employee may have some claim, demand, or cause of action against the Released Parties of which Employee is totally unaware and unsuspecting which Employee is giving up by execution of this release. It is the intention of Employee in executing this Release that it will deprive Employee of each such claim, demand or cause of action and prevent Employee from asserting it against the released parties.

5.Release by the Company. With the exception of claims arising out of criminal conduct by Employee or intentionally tortious conduct by Employee and subject to and as limited by applicable law including the Sarbanes-Oxley Act of 2002 (the “SOX Act”), the Company forever releases and discharges Employee and Employee’s heirs, executor, administrators, successors and/or assigns of and from any claim that the Company has against Employee as of the Effective Date of this Agreement. Claims based on criminal conduct by Employee, or intentionally tortious conduct by Employee or claims related to any required clawback of compensation required under the SOX Act, are not released.

6.Compliance Obligations.

a.You acknowledge that you have fulfilled all obligations to raise any and all legal, regulatory or compliance concerns while you were employed with the Company and that you are not aware of any legal, regulatory or compliance related issues that you have not previously raised with the Company. You further acknowledge that you are aware of no conduct by any of the Released Parties that you reasonably believe constitutes a violation of any federal, state or local law, rule, ordinance or regulation. The Company acknowledges Employee’s conversation with the Chairman of the Company’s Board of Directors on Friday, March 18, 2016.

b.The Company agrees that it will allow Employee to review and provide any suggestions Employee believes are appropriate to any press release prepared by the Company or form 8K filed in connection with Employee departure from employment with the Company.

7.No Pending or Future Proceedings. You represent and warrant that you do not presently have on file and have no knowledge of the existence of any proceeding against any of the Released Parties. In the event that any such proceeding has been filed by you or with your involvement, you agree that you immediately will take all actions necessary to withdraw from or terminate that Proceeding, unless the requirement for such withdrawal or termination is prohibited by applicable law.

8.No Other Entitlement. You acknowledge that, except as expressly provided in this Agreement, you are not entitled to, and will not receive, any additional compensation, benefits, or separation pay or other payment of any kind. You acknowledge that you have been fully paid or provided all wages, compensation, bonuses, stock, stock options, vacation, or other benefits from the Company or the Released Parties which are or could be due to you under the terms of your employment or otherwise. Thus, for any employee benefits sponsored by the Company not specifically referenced in this Agreement, you will be treated as a terminated employee effective on your Separation Date. This includes, but is not limited to, any 401(k) plan, life insurance, accidental death and dismemberment insurance and short and long-term disability insurance. Without limiting the foregoing and except as otherwise described in Sections 2 and 3, you expressly acknowledge and agree that you are not entitled to receive (a) any further bonus payments under the STIP, or otherwise; (b) any further equity incentive grants or awards under any of the Company’s incentive plans or programs, including, without limitation, the LTIP; (c) any further payment under the Amended and Restated Executive Change in Control and Severance Plan (“Severance Plan”), and that, by execution of this Agreement, you acknowledge that you have been paid or the Company is otherwise obligated to pay pursuant to this Agreement the full amounts to which you are entitled under the Severance Plan and release any remaining claims

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under the Severance Plan; or (d) any additional severance or other compensation. You further acknowledge that you have received or been paid for all leaves of absence (paid and unpaid) to which you were entitled during your employment.

9.Proprietary Information Obligations. You are reminded of the Employee Restrictive Covenants, Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) that you entered into with the Companyand thatduring the course of your employment with the Company, you have had access to certain data and information relating to Bonanza’s operations and business strategies that is, or is considered by the Company to be, non-public, confidential or proprietary in nature, which, if revealed to a third party, could have an adverse impact on the Company, including, but not limited to, (a) geological and geophysical data, (b) hydrocarbon reserves and other engineering data, (c) acreage figures and locations, drilling sites and leasing information and (d) revenues, payroll records, profitability, operations, records, business practices, processes, analysis, legal files, board and committee materials, correspondence and other types of information relating to Bonanza’s business (collectively, “Confidential Information”). You hereby agree to (i) keep all Confidential Information strictly confidential and not to disclose such Confidential Information to any third party without the Company’s express written consent or unless such disclosure is required by law and (ii) continue to abide by the terms of the Confidentiality Agreement consistent with its terms.

10.Return of Property. You agree to return to the Company within two (2) business days of the Separation Date all Company documents (in hard copy and electronic forms, and all copies thereof, and other Bonanza property that you have had in your possession at any time, including, but not limited to, files, notes, drawings, records, business plans and forecasts, financial information, specifications, computer-recorded information (including email), tangible property (e.g., cell phone, laptop computer, tablet), automobiles, credit cards, entry cards, identification badges and keys, in each case, wherever and however kept; and, any materials of any kind that contain or embody any Confidential Information of Bonanza (and all reproductions thereof). You hereby represent and warrant that any Bonanza property or Confidential Information stored, created in or sent to or by any of your personal computers, phones, tablets or other devices or stored in any electronic data storage account will be permanently deleted or destroyed immediately following your Separation Date. If you later discover that you have retained any Bonanza property or information, you agree, immediately upon such discovery, to contact the Company and make arrangements for returning, deleting or destroying such items. Should you choose to sign this Agreement, amounts for any Company Property still in your possession will be deducted from the final severance payment.

11.Confidentiality. The existence of this Agreement and its provisions will be held in strictest confidence by you and will not be publicized or disclosed in any manner whatsoever; provided, however, that you may disclose the existence of this Agreement in confidence: (a) to your parents, siblings, children or spouse; (b) to your attorney, accountant, auditor, tax preparer and financial advisor; (c) as may be necessary to enforce its terms, or (d) in response to compulsory process, and only then after giving the Company ten (10) days advance notice of the compulsory process and affording the Company the opportunity to obtain any necessary or appropriate protective orders; provided that you expressly agree not to disclose the terms of this Agreement to any current or former Bonanza employee, officer or director. You also warrant that you have not previously disclosed any information which would be a violation of this or any other confidentiality provision if such disclosure were to be made after the execution of this Agreement.

12.Nondisparagement.

a.    You covenant never to disparage or speak ill of the Company or any Company product or service, or of any past or present employee, officer or director of the Company, nor shall you at any time harass or behave unprofessionally toward any past, present or future the Company employee, officer or director;

b.    The Company agrees that it will instruct the following directors and employees that, during the period of their tenure as a director or employment, as applicable, with the Company, they are not to disparage or speak ill of Employee, and that they shall not at any time harass or behave unprofessionally toward Employee: James Watt, Marvin Chronister, Kevin Neveu, Greg Raih, Jeff Wojahn, Richard Carty, Ron Barauskas, John Lipka, Michelle Springfield, Rick Hatcher and Celia Perez.

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13.Covenant Not to Compete.Employee acknowledges that Employee executed an Employee Restrictive Covenants, Proprietary Information and Inventions Agreement (“Confidentiality Agreement”) under which Employee assumed certain obligations relating to the Company’s confidential and proprietary business information and trade secrets and containing certain covenants relating to competition, solicitation and assignment of inventions. Employee agrees that, notwithstanding any other provision of this Release, the Confidentiality Agreement shall by its terms survive the execution of this Release and that the parties’ rights and duties thereunder shall not in any way be affected by this Release; provided that the Post-Termination Non-Compete Term, as defined in the Confidentiality Agreement, shall be amended and restated to a maximum of fifteen (15) months from the Effective Date, to the extent the covenant not to compete contained in Section 6.3 therein is enforceable under controlling law.

14.Cooperation.

a.Employee acknowledges that because of Employee’s position with the Company, Employee may possess information that may be relevant to or discoverable in connection with claims, litigation or judicial, arbitral or investigative proceedings initiated by a private party or by a regulator, governmental entity, or self-regulatory organization, that relates to or arises from matters with which Employee was involved during Employee’s employment with the Company, or that concern matters of which Employee has information or knowledge (collectively, a “Proceeding”). Employee agrees that Employee shall testify truthfully in connection with any such Proceeding, shall cooperate with the Company in connection with every such Proceeding, and that Employee’s duty of cooperation shall include an obligation to meet with the Company representatives and/or counsel concerning all such Proceedings for such purposes, and at such times and places, as the Company reasonably requests, and to appear for deposition and/or testimony upon the Company’s request and without a subpoena. The Company shall reimburse Employee for reasonable out-of-pocket expenses that Employee incurs in honoring Employee’s obligation of cooperation under this Section.

b.Employee and the Company understand and agree that it is in their mutual best interest to minimize the effect of Employee’s separation upon the Company’s business and upon Employee’s professional reputation. Accordingly, Employee agrees to take all actions reasonably requested of Employee by the Company in order to accomplish that objective. To this end, Employee shall consult with the Company concerning business matters on an as-needed and as­ requested basis, the Company shall exercise reasonable efforts to avoid conflicts between such consulting and Employee’s personal and other business commitments Employee shall exercise reasonable efforts to fulfill the Company’s consulting requests in a timely manner.

15.Breach of Agreement. If you breach this Agreement, you agree that such breach will cause the Company irreparable injury entitling the Company to the entry of an injunctive relief. Nothing contained herein shall be construed as prohibiting the Company from pursuing any available remedies in the event of a breach, including any equitable remedies. In the event either Party initiates litigation asserting a breach of this Agreement, the Court shall award the prevailing party their reasonable attorneys’ fees.

16.No Application. You agree that you will not apply for any job or position as an employee, consultant, independent contractor, or otherwise, with the Company or its subsidiaries or affiliates. You warrant that no such applications are pending at the time this Agreement is executed.

17.No Admission of Liability. You and the Company agree that nothing contained herein, and no action taken by either you or the Company hereto with regard to this Agreement, shall be construed as an admission by either you or the Company of liability or of any fact that might give rise to liability for any purpose whatsoever.

18.No Adverse Action. You represent and warrant to the Company that you have not taken any action adverse to the interests of the Company and its subsidiaries and affiliates prior to signing this Agreement.

19.Advice of Counsel. YOU ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, YOU HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND YOU HAVE READ AND UNDERSTAND ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.

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20.Section 409A. This Agreement is intended to comply with Section 409A of the Code and Treasury Regulations promulgated thereunder (“Section 409A”) and shall be construed accordingly. It is the intention of the parties to this Agreement that payments or benefits payable under this Agreement not be subject to the additional tax or interest imposed pursuant to Section 409A. To the extent such potential payments or benefits are or could become subject to Section 409A, you and the Company agree to cooperate to amend this Agreement with the goal of giving you the economic benefits described herein in a manner that does not result in such tax or interest being imposed. You agree that you shall, at the request of the Company, take any reasonable action (or refrain from taking any action), required to comply with any correction procedure promulgated pursuant to Section 409A.

21.Miscellaneous. Except with respect to the Confidentiality Agreement, this Agreement is entered into without reliance on any agreements not contained herein. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company. The Company may assign its rights under this Agreement. No other assignment is permitted except by written permission of the parties to this Agreement. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, your heirs, and your and the Company’s respective successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified by the court so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of Colorado. Venue shall be in the federal or state courts in located in the City and County of Denver, Colorado. By execution of this Agreement, you submit to the jurisdiction of the federal and state courts of the State of Colorado and consent to the service of process in any suit, action, or proceeding in any of the aforesaid courts by the mailing of copies of process to you by certified or registered mail. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and electronic signatures shall be treated as originals.

[REMAINDER INTENTIONALLY LEFT BLANK, SIGNATURES FOLLOW]

6

If this Agreement is acceptable to you, please sign below and return the original to me.

Sincerely,

BONANZA CREEK ENERGY, INC.

By: /s/ Richard J. Carty                

Richard Carty

President and Chief Executive Officer

Accepted and Agreed:

By: /s/ Christopher I. Humber    

Christopher I. Humber

Dated: March 22, 2016

[SIGNATURE PAGE TO SEPARATION AND RELEASE AGREEMENT]

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a‑ 14(a)

I, Richard J. Carty, certify that:

1.I have reviewed this Quarterly Report on Form 10‑Q for the period ended March 31, 2016 of Bonanza Creek Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 5, 2016

/s/ Richard J. Carty

Richard J. Carty

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a‑ 14(a)

I, Wade E. Jaques, certify that:

1.I have reviewed this Quarterly Report on Form 10‑Q for the period ended March 31, 2016 of Bonanza Creek Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 5, 2016

/s/ Wade E. Jaques

Wade E. Jaques

Vice President, Chief Accounting Officer and Principal Financial Officer

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002

In connection with the Quarterly Report of Bonanza Creek Energy, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Carty, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  May 5, 2016

/s/ Richard J. Carty

Richard J. Carty

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002

In connection with the Quarterly Report of Bonanza Creek Energy, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wade E. Jaques, Vice President, Chief Accounting Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2016

/s/ Wade E. Jaques

Wade E. Jaques

Vice President, Chief Accounting Officer and Principal Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document and Entity Information
Entity Registrant Name	Bonanza Creek Energy, Inc.
Entity Central Index Key	0001509589
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		49,621,879
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 218,599	$ 21,341
Accounts receivable:
Oil and gas sales	23,391	25,322
Joint interest and other	10,111	31,224
Prepaid expenses and other	5,700	4,078
Inventory of oilfield equipment	8,798	8,543
Derivative asset	21,052	29,566
Total current assets	287,651	120,074
Property and equipment (successful efforts method), at cost:
Proved properties	1,658,867	1,618,970
Less: accumulated depreciation, depletion and amortization	(967,941)	(943,081)
Total proved properties, net	690,926	675,889
Unproved properties	178,948	185,530
Wells in progress	27,058	51,196
Oil and gas properties and natural gas plant held for sale, net of accumulated depreciation, depletion and amortization of $646,917 and $636,917 in 2016 and 2015, respectively (note 3)	209,421	214,922
Other property and equipment, net of accumulated depreciation of $9,976 in 2016 and $9,407 in 2015	9,044	9,729
Total property and equipment, net	1,115,397	1,137,266
Other noncurrent assets	17,799	16,027
Total assets	1,420,847	1,273,367
Current liabilities:
Accounts payable and accrued expenses (note 4)	78,992	96,360
Oil and gas revenue distribution payable	23,905	27,613
Contractual obligation for land acquisition	12,000	12,000
Total current liabilities	114,897	135,973
Long-term liabilities:
Long-term debt (note 5)	1,094,085	885,392
Ad valorem taxes	20,789	17,069
Asset retirement obligations	15,352	14,935
Asset retirement obligations for assets held for sale	10,779	10,591
Total liabilities	$ 1,255,902	$ 1,063,960
Commitments and contingencies (note 6)
Stockholders’ equity:
Preferred stock, $.001 par value, 25,000,000 shares authorized, none outstanding	$ 0	$ 0
Common stock, $.001 par value, 225,000,000 shares authorized, 49,635,517 and 49,754,408 issued and outstanding in 2016 and 2015, respectively	49	49
Additional paid-in capital	809,161	806,386
Retained deficit	(644,265)	(597,028)
Total stockholders’ equity	164,945	209,407
Total liabilities and stockholders’ equity	$ 1,420,847	$ 1,273,367

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Oil and gas properties held for sale, accumulated depreciation, depletion and amortization (in dollars)	$ 646,917	$ 636,917
Other property and equipment, accumulated depreciation (in dollars)	$ 9,976	$ 9,407
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	225,000,000	225,000,000
Common stock, shares issued	49,635,517	49,574,408
Common stock, shares outstanding	49,635,517	49,574,408

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating net revenues:
Oil and gas sales	$ 44,174	$ 73,076
Operating expenses:
Lease operating expense	13,298	16,973
Gas plant and midstream operating expense	3,789	2,291
Severance and ad valorem taxes	3,154	6,496
Exploration	266	498
Depreciation, depletion and amortization	26,379	59,004
Impairment of oil and gas properties	10,000	0
Abandonment and impairment of unproved properties	6,906	5,469
General and administrative (including $3,004 and $3,427, respectively, of stock-based compensation)	17,685	16,872
Total operating expenses	81,477	107,603
Loss from operations	(37,303)	(34,527)
Other income (expense):
Derivative gain (loss)	(1,007)	18,856
Interest expense	(14,547)	(14,238)
Gain on termination fee (note 3)	6,000	0
Other loss	(380)	(49)
Total other income (expense)	(9,934)	4,569
Loss from operations before taxes	(47,237)	(29,958)
Income tax benefit	0	11,537
Net loss	(47,237)	(18,421)
Comprehensive loss	$ (47,237)	$ (18,421)
Basic loss per share:
Basic net income (loss) per common share (in dollars per share)	$ (0.96)	$ (0.41)
Diluted income (loss) per share:
Diluted net income (loss) per common share (in dollars per share)	$ (0.96)	$ (0.41)
Basic weighted-average common shares outstanding	49,131	44,520
Diluted weighted-average common shares outstanding	49,131	44,520

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
General and administrative, stock compensation	$ 3,004	$ 3,427

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (47,237)	$ (18,421)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	26,379	59,004
Deferred income benefit	0	(11,537)
Impairment of oil and gas properties	10,000	0
Abandonment and impairment of unproved properties	6,906	5,469
Dry hole expense	232	0
Stock-based compensation	3,004	3,427
Amortization of deferred financing costs and debt premium	608	523
Accretion of contractual obligation for land acquisition	0	349
Derivative (gain) loss	1,007	(18,856)
Derivative cash settlements	7,508	35,466
Other	(116)	(27)
Changes in current assets and liabilities:
Accounts receivable	23,044	16,298
Prepaid expenses and other assets	(1,622)	(1,873)
Accounts payable and accrued liabilities	(3,141)	(1,981)
Settlement of asset retirement obligations	(41)	(285)
Net cash provided by operating activities	26,531	67,556
Cash flows from investing activities:
Acquisition of oil and gas properties	(532)	(11,382)
Exploration and development of oil and gas properties	(34,822)	(154,300)
Natural gas plant capital expenditures	(50)	(112)
Increase in restricted cash	(2,533)	0
Additions to property and equipment - non oil and gas	47	(1,490)
Net cash used in investing activities	(37,890)	(167,284)
Cash flows from financing activities:
Proceeds from credit facility	209,000	44,000
Payments to credit facility	0	(77,000)
Proceeds from sale of common stock	0	209,300
Offering costs related to sale of common stock	0	(6,492)
Offering costs related to sale of Senior Notes	0	(19)
Payment of employee tax withholdings in exchange for the return of common stock	(229)	(2,127)
Deferred financing costs	(154)	(4)
Net cash provided by financing activities	208,617	167,658
Net change in cash and cash equivalents	197,258	67,930
Cash and cash equivalents:
Beginning of period	21,341	2,584
End of period	218,599	70,514
Supplemental cash flow disclosure:
Cash paid for interest	9,500	9,894
Cash paid for income taxes	0	820
Changes in working capital related to drilling expenditures, natural gas plant expenditures, and property acquisition	$ (14,214)	$ (30,880)

XML

ORGANIZATION AND BUSINESS

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS

ORGANIZATION AND BUSINESS

Bonanza Creek Energy, Inc. (“BCEI” or, together with our consolidated subsidiaries, the “Company”) is engaged primarily in acquiring, developing, exploiting and producing oil and gas properties. The Company's oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado and in the Dorcheat Macedonia Field in southern Arkansas.

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

These statements have been prepared in accordance with the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information with the condensed consolidated balance sheets (“balance sheets”) and the condensed consolidated statements of cash flows (“statements of cash flows”) as of December 31, 2015, being derived from audited financial statements. The quarterly financial statements included herein do not necessarily include all of the disclosures as may be required under generally accepted accounting principles for complete financial statements. There has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”), except as disclosed herein. These consolidated financial statements include all of the adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations. All such adjustments are of a normal recurring nature only. The results of operations for the quarter are not necessarily indicative of the results to be expected for the full fiscal year. The Company evaluated events subsequent to the balance sheet date of March 31, 2016, and through the filing date of this report. Certain prior period amounts are reclassified to conform to the current period presentation, when necessary.

Principles of Consolidation

The balance sheets include the accounts of the Company and its wholly owned subsidiaries, Bonanza Creek Energy Operating Company, LLC, Bonanza Creek Energy Resources, LLC, Bonanza Creek Energy Upstream LLC, Bonanza Creek Energy Midstream, LLC, Holmes Eastern Company, LLC and Rocky Mountain Infrastructure, LLC. All significant intercompany accounts and transactions have been eliminated.

Rocky Mountain Infrastructure, LLC

During the first quarter of 2015, the Company’s wholly owned subsidiary, Bonanza Creek Energy Operating Company, LLC, formed a wholly owned subsidiary, Rocky Mountain Infrastructure, LLC (“RMI”), to hold gathering systems, central production facilities and related infrastructure that service the Wattenberg Field.

Significant Accounting Policies

The significant accounting policies followed by the Company were set forth in Note 1 to the 2015 Form 10-K and are supplemented by the notes throughout this report. These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 Form 10-K.

Recently Issued Accounting Standards

In January 2016, the FASB issued Update No. 2016-01 – Financial Instruments - Overall to require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This authoritative guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures.

In February 2016, the FASB issued Update No. 2016-02 – Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This authoritative guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact in relation to the Company's leases.

In March 2016, the FASB issued Update No. 2016-08 – Revenue from Contracts with Customers, which clarifies the implementation guidance on principal versus agent considerations. This authoritative accounting guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has started going through its contracts and is assessing their impact, but does not currently believe this guidance will have a material effect on the Company's financial statements or disclosures.

In March 2016, the FASB issued Update No. 2016-09 – Compensation - Stock Compensation. The update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This authoritative guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures.

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ASSETS HELD FOR SALE

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

ASSETS HELD FOR SALE

ASSETS HELD FOR SALE

Assets are classified as held for sale when the Company commits to a plan to sell the assets and there is reasonable certainty that the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated or depleted, and a measurement for impairment is performed to identify and expense any excess of carrying value over fair value less estimated costs to sell. Any subsequent decreases to the estimated fair value less the costs to sell impact the measurement of assets held for sale.

As of March 31, 2016, the accompanying balance sheets present $209.4 million of assets held for sale, net of accumulated depreciation, depletion and amortization, which consist of the Company’s ownership interests in RMI, all assets within the Company's Mid-Continent region and all assets in the North Park Basin. There is a corresponding asset retirement obligation liability of approximately $10.8 million for assets held for sale recorded in the asset retirement obligations for assets held for sale financial statement line item in the accompanying balance sheets. There were no other material assets or liabilities associated with the assets held for sale.

During the three months ended March 31, 2016, the Company recorded write-downs to fair value less estimated costs to sell of $10.0 million for its Mid-Continent assets. These write-downs are recorded in the impairment of oil and gas properties line item in the accompanying statements of operations. The Company also received $6.0 million upon termination of the purchase and sale agreement of its RMI interest which is shown in the gain on termination fee line item in the accompanying statements of operations.

The Company determined that none of these potential asset sales qualify for discontinued operations accounting as they did not result in a strategic shift of the Company.

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2016

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses contain the following:

	As of March 31,		As of December 31,
	2016		2015
	(in thousands)
Drilling and completion costs	$	18,245	$	32,459
Accounts payable trade	484		1,085
Accrued general and administrative cost	4,719		10,643
Lease operating expense	4,336		4,731
Accrued reclamation cost	162		162
Accrued interest	18,669		14,231
Production and ad valorem taxes and other	32,377		33,049
Total accounts payable and accrued expenses	$	78,992	$	96,360

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LONG-TERM DEBT

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

Long-term debt consisted of the following:

	As of March 31,		As of December 31,
	2016		2015
	(in thousands)
Revolving credit facility	$	288,000	$	79,000
6.75% Senior Notes due 2021	500,000		500,000
Unamortized premium on 6.75% Senior Notes	6,085		6,392
5.75% Senior Notes due 2023	300,000		300,000
Total long-term debt	$	1,094,085	$	885,392

Credit Facility

The Company’s senior secured revolving Credit Agreement, dated March 29, 2011, as amended (the “revolving credit facility”), provides for borrowings up to $1.0 billion. As of March 31, 2016, and through the filing date of this report, the borrowing base under the revolving credit facility was $475.0 million and equal to the commitment level under the Credit Agreement. The borrowing base is redetermined semiannually, generally occurring no later than May 15 and November 15; we currently expect our next redetermination to occur by May 30, 2016. The revolving credit facility is collateralized by substantially all of the Company’s assets and matures on September 15, 2017. As of March 31, 2016, the Company had $288.0 million outstanding under the revolving credit facility, an outstanding letter of credit of $12.0 million and no available borrowing capacity due to limitations on the incurrence of additional debt set by the indentures for our Senior Notes. As of December 31, 2015, the Company had $79.0 million outstanding under the revolving credit facility with an available borrowing capacity of $384.0 million, if the Company elected to take advantage of the entire borrowing base, after reduction for the outstanding letter of credit of $12.0 million. 

The revolving credit facility restricts, among other items, certain dividend payments, additional indebtedness, asset sales, loans, investments and mergers. The revolving credit facility also contains certain financial covenants, which require the maintenance of certain financial and leverage ratios, as defined by the revolving credit facility. The revolving credit facility contains a ratio of maximum senior secured debt to trailing twelve-month EBITDAX that must not exceed 2.50 to 1.00 and a minimum interest coverage ratio that must exceed 2.50 to 1.00. The maximum senior secured debt ratio is calculated by dividing borrowings under the revolving credit facility, balances drawn under letters of credit, and any outstanding second lien debt divided by trailing twelve-month EBITDAX (defined as earnings before interest expense, income tax expense, depreciation, depletion and amortization expense, and exploration expense and other non-cash charges). The minimum interest coverage ratio is calculated by dividing trailing twelve-month EBITDAX by trailing twelve-month interest expense. The revolving credit facility also contains a minimum current ratio covenant of 1.00 to 1.00. The Company was in compliance with all financial and non-financial covenants as of March 31, 2016, and through the filing date of this report.

SeniorUnsecuredNotes

The $500.0 million aggregate principal amount of 6.75% Senior Notes that mature on April 15, 2021 (“6.75% Senior Notes”) and the $300.0 million aggregate principal amount of 5.75% Senior Notes that mature on February 1, 2023 (“5.75% Senior Notes” and, together with the 6.75% Senior Notes, the “Senior Notes”) are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and future unsecured senior debt, and are senior in right of payment to any future subordinated debt. The Senior Notes are jointly and severally guaranteed on a senior unsecured basis by our existing and future domestic subsidiaries that guarantee or are borrowers under our revolving credit facility. The Company is subject to certain covenants under the respective indentures governing the Senior Notes that limit the Company’s ability to incur additional indebtedness, issue preferred stock, and make restricted payments, including certain dividends. The incurrence by the Company or any of the Guarantors of additional indebtedness and letters of credit under the revolving credit facility in an aggregate principal amount at any one time outstanding is not to exceed the greater of (a) $300.0 million or (b) 35% of the Company's Adjusted Consolidated Net Tangible Assets (“ACNTA”). ACNTA is defined as the Company's PV-10 value plus capitalized costs for unproved properties plus consolidated net working capital and other tangible assets.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Legal Proceedings 

From time to time, the Company is involved in various commercial and regulatory claims, litigation and other legal proceedings that arise in the ordinary course of its business. The Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its condensed consolidated financial statements. In accordance with accounting authoritative guidance, an accrual is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the most likely anticipated outcome or the minimum amount within a range of possible outcomes. Because legal proceedings are inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about uncertain future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. No claims have been made, nor is the Company aware of any material uninsured liability which the Company may have, as it relates to any environmental cleanup, restoration or the violation of any rules or regulations. As of the filing date of this report, there were no material pending or overtly threatened legal actions against the Company of which it is aware.

Commitments

There have been no material changes from the commitments disclosed in the notes to the Company’s consolidated financial statements included in the 2015 Form 10-K.

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Restricted Stock under the Long Term Incentive Plan

The Company grants shares of restricted stock to directors, eligible employees and officers under its Long Term Incentive Plan, as amended and restated (“LTIP”). Each share of restricted stock represents one share of the Company’s common stock to be released from restriction upon completion of the vesting period. The awards typically vest in one-third increments over three years. Each share of restricted stock is entitled to a non-forfeitable dividend, if the Company were to declare one, and has the same voting rights as a share of the Company’s common stock. Shares of restricted stock are valued at the closing price of the Company’s common stock on the grant date and are recognized as general and administrative expense over the vesting period of the award.

Total expense recorded for restricted stock for the three month periods ended March 31, 2016 and 2015 was $2.3 million and $2.9 million, respectively. As of March 31, 2016, unrecognized compensation cost was $10.5 million and will be amortized through 2018.

A summary of the status and activity of non-vested restricted stock for the three months ended March 31, 2016 is presented below.

	Restricted Stock		Weighted- Average Grant-Date Fair Value
Non-vested at beginning of year	731,818		$	29.47
Granted	—		$	—
Vested	(248,447	)	$	33.57
Forfeited	(51,070	)	$	21.81
Non-vested at end of quarter	432,301		$	28.02

Performance Stock Units under the Long Term Incentive Plan

The Company grants performance stock units (“PSUs”) to certain officers under its LTIP. The number of shares of the Company’s common stock that may be issued to settle PSUs ranges from zero to two times the number of PSUs awarded. PSUs are determined at the end of each annual measurement period over the course of the three-year performance cycle in an amount up to two-thirds of the target number of PSUs that are eligible for vesting (such that an amount equal to 200% of the target number of PSUs may be earned during the performance cycle) although no stock is actually awarded to the participant until the end of the entire three-year performance cycle. Any PSUs that have not vested at the end of the applicable measurement period are forfeited. The performance criterion for the PSUs is based on a comparison of the Company’s total shareholder return (“TSR”) for the measurement period compared with the TSRs of a group of peer companies for the same measurement period. The TSR for the Company and each of the peer companies is determined by dividing (A)(i) the average share price for the last 30 trading days of the applicable measuring period, minus (ii) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period, by (B) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period. The number of earned shares of our common stock will be calculated based on which quartile our TSR percentage ranks as of the end of the annual measurement period relative to the other companies in the comparator group. The fair value of each PSU is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of PSUs to be earned during the performance period. Compensation expense associated with PSUs is recognized as general and administrative expense over the measurement period.

Total expense recorded for PSUs for the three months ended March 31, 2016 and 2015 was $0.7 million and $0.5 million, respectively. As of March 31, 2016, there was $4.1 million of total unrecognized compensation expense related to unvested PSUs to be amortized through 2019.

A summary of the status and activity of PSUs for the three months ended March 31, 2016 is presented below:

	PSU	Weighted-Average Grant-Date Fair Value
Non-vested at beginning of year (1)	114,833	$	35.27
Granted(1)	—	$	—
Vested(1)	—	$	—
Forfeited(1)	—	$	—
Non-vested at end of quarter(1)	114,833	$	35.27

____________________________

(1) The number of awards assumes that the associated performance condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two, depending on the level of satisfaction of the performance condition.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The Company follows fair value measurement authoritative guidance, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. The authoritative accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The statement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1: Quoted prices are available in active markets for identical assets or liabilities

Level 2: Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable

Level 3: Significant inputs to the valuation model are unobservable

Financial and non-financial assets and liabilities are to be classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The following tables present the Company’s financial and non-financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and December 31, 2015 and their classification within the fair value hierarchy:

	As of March 31, 2016
	Level 1		Level 2		Level 3
	(in thousands)
Derivative assets(1)	$	—	$	21,052	$	—
Proved properties(2)	$	—	$	—	$	100,000
Unproved properties(2)	$	—	$	—	$	178,947

	As of December 31, 2015
	Level 1		Level 2		Level 3
	(in thousands)
Derivative assets(1)	$	—	$	29,566	$	—
Proved properties(2)	$	—	$	—	$	811,913
Unproved properties(2)	$	—	$	—	$	185,530
Asset retirement obligations(3)	$	—	$	—	$	2,027

____________________________

(1) This represents a financial asset or liability that is measured at fair value on a recurring basis.

(2) This represents non-financial assets that are measured at fair value on a nonrecurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying balance sheets. Please refer to the Proved Oil and Gas Properties and Unproved Oil and Gas Properties sections below for additional discussion.

(3) This represents the revision to estimates of the asset retirement obligation, which is a non-financial liability that is measured at fair value on a nonrecurring basis. Please refer to the Asset Retirement Obligation section below for additional discussion.

Derivatives

Fair value of all derivative instruments are estimated with industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value of money, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. All valuations were compared against counterparty statements to verify the reasonableness of the estimate. The Company’s commodity swaps are validated by observable transactions for the same or similar commodity options using the NYMEX futures index, and are designated as Level 2 within the valuation hierarchy. Presently, all of our derivative arrangements are concentrated with three counterparties, all of which are lenders under the Company’s revolving credit facility.

Proved Oil and Gas Properties

Proved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication that the carrying costs exceed the sum of the undiscounted cash flows. The Company uses Level 3 inputs and the income valuation technique, which converts future amounts to a single present value amount, to measure the fair value of proved properties through an application of risk-adjusted discount rates and price forecasts selected by the Company’s management. The calculation of the risk-adjusted discount rate is a significant management estimate based on the best information available. Management believes that the risk-adjusted discount rate is representative of current market conditions and reflects the following factors: estimates of future cash payments, expectations of possible variations in the amount and/or timing of cash flows, the risk premium, and nonperformance risk. The price forecast is based on the NYMEX strip pricing, adjusted for basis differentials. Future operating costs are also adjusted as deemed appropriate for these estimates. Proved properties classified as held for sale are valued using a market approach, based on an estimated selling price, as evidenced by the most current bid prices received from third parties. If a relevant estimated selling price is not available, the Company utilizes the income valuation technique discussed above. The Company impaired the Mid-Continent region which had a carrying value of $110.0 million to its estimated fair value, based on the latest received bid, of $100.0 million and recognized an impairment of $10.0 million for the three months ended March 31, 2016. No impairment was recognized for the Rocky Mountain region for the three months ended March 31, 2016. The Company impaired the Mid-Continent region which had a carrying value of $431.2 million to its fair value of $110.0 million and recognized an impairment of $321.2 million for the year ended December 31, 2015. The Company impaired the Rocky Mountain region which had a carrying value of $1.1 billion to its fair value of $701.9 million and recognized an impairment of $419.3 million for the year ended December 31, 2015.

Unproved Oil and Gas Properties

Unproved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication that the carrying costs may not be fully recoverable. To measure the fair value of unproved properties, the Company uses Level 3 inputs and the income valuation technique, which takes into account the following significant assumptions: future development plans, risk weighted potential resource recovery, remaining lease life and estimated reserve values. Unproved properties classified as held for sale are valued using a market approach, based on an estimated selling price, as evidenced by the most current bid prices received from third parties. If a relevant estimated selling price is not available, the Company uses the price received for similar acreage in recent transactions by the Company or other market participants in the principal market. The Company impaired non-core acreage in the Wattenberg Field due to leases expiring which had a carrying value of $185.8 million to their fair value of $178.9 million and recognized an impairment of unproved properties of $6.9 million for the three months ended March 31, 2016. The Company impaired non-core acreage in the Wattenberg Field due to leases expiring, which had a carrying value of $210.3 million to their fair value of $185.5 million and recognized an impairment of unproved properties for the year ended December 31, 2015 of $24.8 million. The Company also fully impaired the North Park Basin in 2015, due to a change in the Company’s development plan, recognizing an impairment of unproved properties of $8.7 million.

Asset Retirement Obligation

The Company utilizes the income valuation technique to determine the fair value of the asset retirement obligation liability at the point of inception by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Upon completion of wells and natural gas plants, the Company records an asset retirement obligation at fair value using Level 3 assumptions. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. There were no asset retirement obligations measured at fair value as of March 31, 2016. The Company had $2.0 million of asset retirement obligations recorded at fair value as of December 31, 2015.

Long-term Debt

As of March 31, 2016, the Company had $500.0 million of outstanding 6.75% Senior Notes and $300.0 million of outstanding 5.75% Senior Notes, all of which are unsecured senior obligations. The 6.75% Senior Notes are recorded at cost, plus the unamortized premium, on the accompanying balance sheets at $506.1 million and $506.4 million as of March 31, 2016 and December 31, 2015, respectively. The fair value of the 6.75% Senior Notes as of March 31, 2016 and December 31, 2015 was $141.3 million and $301.3 million, respectively. The 5.75% Senior Notes are recorded at cost on the accompanying balance sheets at $300.0 million as of March 31, 2016 and December 31, 2015. The fair value of the 5.75% Senior Notes as of March 31, 2016 and December 31, 2015 was $81.8 million and $163.1 million, respectively. The Senior Notes are measured using Level 1 inputs based on a secondary market trading price. The Company’s revolving credit facility approximates fair value as the applicable interest rates are floating. The outstanding balance under the revolving credit facility as of March 31, 2016 and December 31, 2015 was $288.0 million and $79.0 million, respectively.

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DERIVATIVES

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

The Company enters into commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices and the associated impact on cash flows. All contracts are entered into for other-than-trading purposes. The Company’s derivatives include oil swap arrangements and puts, none of which qualify as having hedging relationships. Effective March 10, 2016, the Company converted its three-way collars into fixed price swaps and puts.

As of March 31, 2016, and as of the filing date of this report, the Company had the following derivative commodity contracts in place:

Settlement Period	Derivative Instrument	Total Volumes (Bbls per day)	Average Fixed Price	Fair Market Value of Assets
				(in thousands)
Oil
2Q 2016	Swap	3,103	$49.87	$	2,815
3Q 2016	Swap	2,704	$51.78	2,434
4Q 2016	Swap	2,303	$52.83	2,062
2Q 2016	Put	5,430	$51.01	5,548
3Q 2016	Put	4,733	$51.01	4,409
4Q 2016	Put	4,031	$51.01	3,784
Total				$	21,052

Derivative Assets Fair Value

The Company’s commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets.

The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as of March 31, 2016 and December 31, 2015:

	As of March 31, 2016
	Balance Sheet Location	Fair Value
		(in thousands)
Derivative Assets:
Commodity contracts	Current assets	$	21,052
Commodity contracts	Noncurrent assets	—
Derivative Liabilities:
Commodity contracts	Current liabilities	—
Commodity contracts	Long-term liabilities	—
Total derivative asset		$	21,052

	As of December 31, 2015
	Balance Sheet Location	Fair Value
		(in thousands)
Derivative Assets:
Commodity contracts	Current assets	$	29,566
Commodity contracts	Noncurrent assets	—
Derivative Liabilities:
Commodity contracts	Current liabilities	—
Commodity contracts	Long-term liabilities	—
Total derivative asset		$	29,566

The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations:

	Three months ended March 31,
	2016			2015
	(in thousands)
Derivative cash settlement gain:
Oil contracts	$	7,508		$	34,791
Gas contracts	—			675
Total derivative cash settlement gain(1)	$	7,508		$	35,466
Change in fair value loss	$	(8,515	)	$	(16,610	)
Total derivative gain (loss)(1)	$	(1,007	)	$	18,856

_______________________________

(1) Total derivative gain (loss) and the derivative cash settlement gain for the three months ended March 31, 2016 and 2015 is reported in the derivative (gain) loss line item and derivative cash settlements line item on the accompanying statements of cash flows within the net cash provided by operating activities.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The Company issues shares of restricted stock entitling the holders to receive non-forfeitable dividends, if and when, the Company was to declare a dividend, before vesting, thus making the awards participating securities. The awards are included in the calculation of earnings per share under the two-class method. The two-class method allocates earnings for the period between common shareholders and unvested participating shareholders and losses to common shareholders only.

The Company issues PSUs, which represent the right to receive, upon settlement of the PSUs, a number of shares of the Company’s common stock that range from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the measurement period applicable to such PSUs. Please refer to Note7-Stock-Based Compensation for additional discussion.

The following table sets forth the calculation of loss per basic and diluted shares for the three month periods ended March 31, 2016 and 2015.

	Three Months Ended March 31,
	2016			2015
	(in thousands, except per share amounts)
Net loss	$	(47,237	)	$	(18,421	)
Less: undistributed loss to unvested restricted stock	—			—
Undistributed loss to common shareholders	(47,237		)	(18,421		)
Basic net loss per common share	$	(0.96	)	$	(0.41	)
Diluted net loss per common share	$	(0.96	)	$	(0.41	)
Weighted-average shares outstanding - basic	49,131			44,520
Add: dilutive effect of contingent PSUs	—			—
Weighted-average shares outstanding - diluted	49,131			44,520

The Company was in a net loss position for the three months ended March 31, 2016 and 2015, which made any potentially dilutive shares anti-dilutive. There were no dilutive shares for the three months ended March 31, 2016 and 147,786 dilutive shares that were anti-dilutive for the three months ended March 31, 2015. The participating shareholders are not contractually obligated to share in the losses of the Company, and therefore, the entire net loss is allocated to the outstanding common shareholders.

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CAPITAL STOCK

3 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

CAPITAL STOCK

CAPITAL STOCK

On February 6, 2015, the Company completed a public offering of 8,050,000 shares of its common stock generating net proceeds of $202.7 million after deducting underwriter discounts, commissions and offering expenses of approximately $6.6 million. The Company used a portion of the net proceeds to repay all of the then outstanding borrowings under its revolving credit facility and for general corporate purposes, including its drilling and development program and other capital expenditures.

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INCOME TAXES

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company uses the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the tax rate in effect at that time. During the three month periods ended March 31, 2016 and 2015, the effective tax rate was 0.0% and 38.5%, respectively.As of December 31, 2015 a full valuation allowance was placed against the net deferred tax assets. The Company’s current rate differs from the U.S. statutory income tax rate due to the full valuation allowance being placed against the net deferred tax assets as of March 31, 2016.    

The deferred income tax liability for an oil and gas exploration company is dependent on many variables such as estimating the economic lives of depleting oil and gas reserves and commodity prices. Accordingly, the liability is subject to continual recalculation, revision of the numerous estimates required, and may change significantly in the event of such things as major acquisitions, divestitures, product price changes, changes in reserve estimates, changes in reserve lives, and changes in tax rates or tax laws. 

As of March 31, 2016, the Company had no unrecognized tax benefits. The Company’s management does not believe that there are any new items or changes in facts or judgments that should impact the Company's tax position taken thus far in 2016. Given the substantial net operating loss carry forward at the federal level, neither significant interest expense nor penalties charged for any examining agents’ tax adjustments of income tax returns are anticipated, and any such adjustments would very likely adjust only net operating loss carry forward.

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BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The balance sheets include the accounts of the Company and its wholly owned subsidiaries, Bonanza Creek Energy Operating Company, LLC, Bonanza Creek Energy Resources, LLC, Bonanza Creek Energy Upstream LLC, Bonanza Creek Energy Midstream, LLC, Holmes Eastern Company, LLC and Rocky Mountain Infrastructure, LLC. All significant intercompany accounts and transactions have been eliminated.

Significant Accounting Policies

Significant Accounting Policies

The significant accounting policies followed by the Company were set forth in Note 1 to the 2015 Form 10-K and are supplemented by the notes throughout this report. These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 Form 10-K.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In January 2016, the FASB issued Update No. 2016-01 – Financial Instruments - Overall to require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This authoritative guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures.

In February 2016, the FASB issued Update No. 2016-02 – Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This authoritative guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact in relation to the Company's leases.

In March 2016, the FASB issued Update No. 2016-08 – Revenue from Contracts with Customers, which clarifies the implementation guidance on principal versus agent considerations. This authoritative accounting guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has started going through its contracts and is assessing their impact, but does not currently believe this guidance will have a material effect on the Company's financial statements or disclosures.

In March 2016, the FASB issued Update No. 2016-09 – Compensation - Stock Compensation. The update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This authoritative guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures.

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2016

Payables and Accruals [Abstract]

Schedule of accounts payable and accrued expenses

Accounts payable and accrued expenses contain the following:

	As of March 31,		As of December 31,
	2016		2015
	(in thousands)
Drilling and completion costs	$	18,245	$	32,459
Accounts payable trade	484		1,085
Accrued general and administrative cost	4,719		10,643
Lease operating expense	4,336		4,731
Accrued reclamation cost	162		162
Accrued interest	18,669		14,231
Production and ad valorem taxes and other	32,377		33,049
Total accounts payable and accrued expenses	$	78,992	$	96,360

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LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt consisted of the following:

	As of March 31,		As of December 31,
	2016		2015
	(in thousands)
Revolving credit facility	$	288,000	$	79,000
6.75% Senior Notes due 2021	500,000		500,000
Unamortized premium on 6.75% Senior Notes	6,085		6,392
5.75% Senior Notes due 2023	300,000		300,000
Total long-term debt	$	1,094,085	$	885,392

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of the status and activity of non-vested restricted stock

A summary of the status and activity of non-vested restricted stock for the three months ended March 31, 2016 is presented below.

	Restricted Stock		Weighted- Average Grant-Date Fair Value
Non-vested at beginning of year	731,818		$	29.47
Granted	—		$	—
Vested	(248,447	)	$	33.57
Forfeited	(51,070	)	$	21.81
Non-vested at end of quarter	432,301		$	28.02

Summary of the status and activity of PSUs

A summary of the status and activity of PSUs for the three months ended March 31, 2016 is presented below:

	PSU	Weighted-Average Grant-Date Fair Value
Non-vested at beginning of year (1)	114,833	$	35.27
Granted(1)	—	$	—
Vested(1)	—	$	—
Forfeited(1)	—	$	—
Non-vested at end of quarter(1)	114,833	$	35.27

____________________________

(1) The number of awards assumes that the associated performance condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two, depending on the level of satisfaction of the performance condition.

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of financial assets and liabilities at fair value on recurring basis

The following tables present the Company’s financial and non-financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and December 31, 2015 and their classification within the fair value hierarchy:

	As of March 31, 2016
	Level 1		Level 2		Level 3
	(in thousands)
Derivative assets(1)	$	—	$	21,052	$	—
Proved properties(2)	$	—	$	—	$	100,000
Unproved properties(2)	$	—	$	—	$	178,947

	As of December 31, 2015
	Level 1		Level 2		Level 3
	(in thousands)
Derivative assets(1)	$	—	$	29,566	$	—
Proved properties(2)	$	—	$	—	$	811,913
Unproved properties(2)	$	—	$	—	$	185,530
Asset retirement obligations(3)	$	—	$	—	$	2,027

____________________________

(1) This represents a financial asset or liability that is measured at fair value on a recurring basis.

(2) This represents non-financial assets that are measured at fair value on a nonrecurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying balance sheets. Please refer to the Proved Oil and Gas Properties and Unproved Oil and Gas Properties sections below for additional discussion.

(3) This represents the revision to estimates of the asset retirement obligation, which is a non-financial liability that is measured at fair value on a nonrecurring basis. Please refer to the Asset Retirement Obligation section below for additional discussion.

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DERIVATIVES (Tables)

3 Months Ended

Mar. 31, 2016

Summary of all the Company's derivative positions reported on the accompanying balance sheets

The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as of March 31, 2016 and December 31, 2015:

	As of March 31, 2016
	Balance Sheet Location	Fair Value
		(in thousands)
Derivative Assets:
Commodity contracts	Current assets	$	21,052
Commodity contracts	Noncurrent assets	—
Derivative Liabilities:
Commodity contracts	Current liabilities	—
Commodity contracts	Long-term liabilities	—
Total derivative asset		$	21,052

	As of December 31, 2015
	Balance Sheet Location	Fair Value
		(in thousands)
Derivative Assets:
Commodity contracts	Current assets	$	29,566
Commodity contracts	Noncurrent assets	—
Derivative Liabilities:
Commodity contracts	Current liabilities	—
Commodity contracts	Long-term liabilities	—
Total derivative asset		$	29,566

Summary of the components of the derivative gain (loss) presented on the accompanying statements of operations

The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations:

	Three months ended March 31,
	2016			2015
	(in thousands)
Derivative cash settlement gain:
Oil contracts	$	7,508		$	34,791
Gas contracts	—			675
Total derivative cash settlement gain(1)	$	7,508		$	35,466
Change in fair value loss	$	(8,515	)	$	(16,610	)
Total derivative gain (loss)(1)	$	(1,007	)	$	18,856

_______________________________

(1) Total derivative gain (loss) and the derivative cash settlement gain for the three months ended March 31, 2016 and 2015 is reported in the derivative (gain) loss line item and derivative cash settlements line item on the accompanying statements of cash flows within the net cash provided by operating activities.

Commodity derivative

Summary of derivative commodity contracts in place

As of March 31, 2016, and as of the filing date of this report, the Company had the following derivative commodity contracts in place:

Settlement Period	Derivative Instrument	Total Volumes (Bbls per day)	Average Fixed Price	Fair Market Value of Assets
				(in thousands)
Oil
2Q 2016	Swap	3,103	$49.87	$	2,815
3Q 2016	Swap	2,704	$51.78	2,434
4Q 2016	Swap	2,303	$52.83	2,062
2Q 2016	Put	5,430	$51.01	5,548
3Q 2016	Put	4,733	$51.01	4,409
4Q 2016	Put	4,031	$51.01	3,784
Total				$	21,052

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of calculation of earnings per basic and diluted shares from continuing and discontinued operations

The following table sets forth the calculation of loss per basic and diluted shares for the three month periods ended March 31, 2016 and 2015.

	Three Months Ended March 31,
	2016			2015
	(in thousands, except per share amounts)
Net loss	$	(47,237	)	$	(18,421	)
Less: undistributed loss to unvested restricted stock	—			—
Undistributed loss to common shareholders	(47,237		)	(18,421		)
Basic net loss per common share	$	(0.96	)	$	(0.41	)
Diluted net loss per common share	$	(0.96	)	$	(0.41	)
Weighted-average shares outstanding - basic	49,131			44,520
Add: dilutive effect of contingent PSUs	—			—
Weighted-average shares outstanding - diluted	49,131			44,520

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ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Period within which sale of asset takes place to classify it as held for sale	1 year
Assets held for sale, net	$ 209,421	$ 214,922
Asset retirement obligations for assets held for sale	10,779	$ 10,591
Mid-Continent Region
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Write-down of disposal group to fair value	10,000
Rocky Mountain Infrastructure, LLC Subsidiary, Mid-Continent Region Assets, and North Park Field Assets
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets held for sale, net	209,400
Asset retirement obligations for assets held for sale	10,800
Rocky Mountain Infrastructure, LLC Subsidiary
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Termination fee received upon termination of purchase and sale agreement	$ 6,000

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts payable and accrued expenses contain the following:
Drilling and completion costs	$ 18,245	$ 32,459
Accounts payable trade	484	1,085
Accrued general and administrative cost	4,719	10,643
Lease operating expense	4,336	4,731
Accrued reclamation cost	162	162
Accrued interest	18,669	14,231
Production and ad valorem taxes and other	32,377	33,049
Total accounts payable and accrued expenses	$ 78,992	$ 96,360

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LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
LONG-TERM DEBT
Long-term debt	$ 1,094,085	$ 885,392
6.75% Senior Notes
LONG-TERM DEBT
Long-term debt	500,000
Long term debt - gross	500,000	500,000
Unamortized premium on 6.75% Senior Notes	$ 6,085	$ 6,392
Interest rate (as a percent)	6.75%	6.75%
5.75% Senior Notes
LONG-TERM DEBT
Long-term debt	$ 300,000	$ 300,000
Long term debt - gross	$ 300,000	$ 300,000
Interest rate (as a percent)	5.75%	5.75%
Revolver
LONG-TERM DEBT
Long-term debt	$ 288,000	$ 79,000

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LONG-TERM DEBT - NARRATIVE (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
LONG-TERM DEBT
Long-term debt	$ 1,094,085,000	$ 885,392,000
Maximum senior secured debt to trailing twelve month EBITDAX covenant	2.50
Minimum trailing twelve month interest to trailing twelve month EBITDAX coverage covenant	2.50
Minimum current ratio covenant	1.00
6.75% Senior Notes
LONG-TERM DEBT
Long-term debt	$ 500,000,000
Amount of notes issued	$ 500,000,000
Interest rate (as a percent)	6.75%	6.75%
Debt covenant, maximum aggregate principal outstanding on revolving credit	$ 300,000,000
Debt covenant, maximum aggregate principal outstanding as a percent of adjusted consolidated net tangible assets	35.00%
5.75% Senior Notes
LONG-TERM DEBT
Long-term debt	$ 300,000,000	$ 300,000,000
Amount of notes issued	$ 300,000,000
Interest rate (as a percent)	5.75%	5.75%
Revolver
LONG-TERM DEBT
Maximum borrowing capacity	$ 1,000,000,000
Borrowing base amount	475,000,000
Long-term debt	288,000,000	$ 79,000,000
Remaining borrowing capacity	0	384,000,000
Letters of credit outstanding	$ 12,000,000	$ 12,000,000

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COMMITMENTS AND CONTINGENT LIABILITIES (Details)	3 Months Ended
	Mar. 31, 2016 claim
Commitments and Contingencies Disclosure [Abstract]
Number of Claims	0

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STOCK-BASED COMPENSATION (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) shares	Mar. 31, 2015 USD ($)
PSUs | Minimum
STOCK-BASED COMPENSATION
Ratio at which award holders get common stock of the company	0
PSUs | Maximum
STOCK-BASED COMPENSATION
Ratio at which award holders get common stock of the company	2
2011 Long Term Incentive Plan | Restricted shares
STOCK-BASED COMPENSATION
Ratio of restricted stock to common stock to be released from restrictions upon completion of the vesting period | shares	1
Vesting portion of shares	0.333
Vesting period	3 years
Stock-based compensation expense	$ 2.3	$ 2.9
Unrecognized compensation cost	$ 10.5
Granted (in shares) | shares	0
2011 Long Term Incentive Plan | PSUs
STOCK-BASED COMPENSATION
Granted (in shares) | shares	0
2011 Long Term Incentive Plan | PSUs | Minimum
STOCK-BASED COMPENSATION
Ratio at which award holders get common stock of the company	0
2011 Long Term Incentive Plan | PSUs | Maximum
STOCK-BASED COMPENSATION
Ratio at which award holders get common stock of the company	2
2011 Long Term Incentive Plan | PSUs | Officers
STOCK-BASED COMPENSATION
Stock-based compensation expense	$ 0.7	$ 0.5
Unrecognized compensation cost	$ 4.1
Percentage of awards earned during performance cycle	200.00%
Measurement period	3 years
Vesting percent	66.67%
2011 Long Term Incentive Plan | PSUs | Officers | Last trading days in applicable measuring period
STOCK-BASED COMPENSATION
Number of trading days used to measure total shareholder return	30 days
2011 Long Term Incentive Plan | PSUs | Officers | Last trading days immediately preceeding the beginning of the applicable measuring period
STOCK-BASED COMPENSATION
Number of trading days used to measure total shareholder return	30 days
2011 Long Term Incentive Plan | PSUs | Officers | Minimum
STOCK-BASED COMPENSATION
Ratio at which award holders get common stock of the company	0
2011 Long Term Incentive Plan | PSUs | Officers | Maximum
STOCK-BASED COMPENSATION
Ratio at which award holders get common stock of the company	2

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STOCK-BASED COMPENSATION SUMMARY OF STATUS AND ACTIVITY OF NON-VESTED RESTRICTED STOCK (Details) - 2011 Long Term Incentive Plan - Restricted shares	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Restricted Stock
Non-vested at beginning of year (in shares) | shares	731,818
Granted (in shares) | shares	0
Vested (in shares) | shares	(248,447)
Forfeited (in shares) | shares	(51,070)
Non-vested at end of year (in shares) | shares	432,301
Weighted-Average Grant-Date Fair Value
Non-vested at beginning of year (in dollars per share) | $ / shares	$ 29.47
Granted (in dollars per share) | $ / shares	0.00
Vested (in dollars per share) | $ / shares	33.57
Forfeited (in dollars per share) | $ / shares	21.81
Non-vested at end of year (in dollars per share) | $ / shares	$ 28.02

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STOCK-BASED COMPENSATION SUMMARY OF STATUS AND ACTIVITY OF PSUS (Details) - 2011 Long Term Incentive Plan - PSUs	3 Months Ended
	Mar. 31, 2016 $ / shares shares
PSUs
Non-vested at beginning of year (in shares) | shares	114,833
Granted (in shares) | shares	0
Vested (in shares) | shares	0
Forfeited (in shares) | shares	0
Non-vested at end of year (in shares) | shares	114,833
Weighted-Average Grant-Date Fair Value
Non-vested at beginning of year (in dollars per share) | $ / shares	$ 35.27
Granted (in dollars per share) | $ / shares	0.00
Vested (in dollars per share) | $ / shares	0.00
Forfeited (in dollars per share) | $ / shares	0.00
Non-vested at end of year (in dollars per share) | $ / shares	$ 35.27

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FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financial assets and liabilities accounted for at fair value
Proved properties	$ 1,658,867	$ 1,618,970
Unproved properties	178,948	185,530
Asset retirement obligations	15,352	14,935
Level 1
Financial assets and liabilities accounted for at fair value
Derivative assets	0	0
Proved properties	0	0
Unproved properties	0	0
Asset retirement obligations		0
Level 2
Financial assets and liabilities accounted for at fair value
Derivative assets	21,052	29,566
Proved properties	0	0
Unproved properties	0	0
Asset retirement obligations		0
Level 3
Financial assets and liabilities accounted for at fair value
Derivative assets	0	0
Proved properties	100,000	811,913
Unproved properties	$ 178,947	185,530
Asset retirement obligations		$ 2,027

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FAIR VALUE MEASUREMENTS - NARRATIVE (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2016 USD ($) counterparty	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)
Derivatives measured at fair value
Total number of counterparties in derivative financial instruments | counterparty	3
Proved properties	$ 1,658,867,000		$ 1,618,970,000
Unproved properties	178,948,000		185,530,000
Unproved oil and gas property impairments	6,906,000	$ 5,469,000
Asset retirement obligations	15,352,000		14,935,000
Outstanding amount	1,094,085,000		885,392,000
Revolver
Derivatives measured at fair value
Outstanding amount	288,000,000		$ 79,000,000
6.75% Senior Notes
Derivatives measured at fair value
Outstanding amount	$ 500,000,000
Interest rate (as a percent)	6.75%		6.75%
Long-term debt	$ 506,100,000		$ 506,400,000
5.75% Senior Notes
Derivatives measured at fair value
Outstanding amount	$ 300,000,000		$ 300,000,000
Interest rate (as a percent)	5.75%		5.75%
Level 3
Derivatives measured at fair value
Proved properties	$ 100,000,000		$ 811,913,000
Unproved properties	178,947,000		185,530,000
Asset retirement obligations			2,027,000
Estimate of Fair Value Measurement | 6.75% Senior Notes
Derivatives measured at fair value
Fair value of senior notes	141,300,000		301,300,000
Estimate of Fair Value Measurement | 5.75% Senior Notes
Derivatives measured at fair value
Fair value of senior notes	81,800,000		163,100,000
Estimate of Fair Value Measurement | Level 3
Derivatives measured at fair value
Asset retirement obligations	0		2,000,000
Mid-Continent Region
Derivatives measured at fair value
Proved properties	110,000,000		431,200,000
Proved oil and gas property impairments	10,000,000		321,200,000
Mid-Continent Region | Estimate of Fair Value Measurement | Level 3
Derivatives measured at fair value
Proved properties	100,000,000		110,000,000
Rocky Mountain Region
Derivatives measured at fair value
Proved properties			1,100,000,000
Proved oil and gas property impairments	0		419,300,000
Rocky Mountain Region | Estimate of Fair Value Measurement | Level 3
Derivatives measured at fair value
Proved properties			701,900,000
Wattenberg Field
Derivatives measured at fair value
Unproved properties	185,800,000		210,300,000
Unproved oil and gas property impairments	6,900,000		24,800,000
Wattenberg Field | Estimate of Fair Value Measurement | Level 3
Derivatives measured at fair value
Unproved properties	$ 178,900,000		185,500,000
North Park Basin
Derivatives measured at fair value
Unproved oil and gas property impairments			$ 8,700,000

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DERIVATIVES - CONTRACTS IN PLACE (Details) $ in Thousands	Mar. 31, 2016 USD ($) bbl / d item $ / bbl	Dec. 31, 2015 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Number of derivative instruments qualified for hedging instruments | item	0
Commodity derivative
Derivative contract
Fair Market Value of Assets	$ 21,052	$ 29,566
Commodity derivative | 2016
Derivative contract
Fair Market Value of Assets	$ 21,052
Commodity derivative | Swap | Oil | Q2 2016
Derivative contract
Total Volumes (in units per day) | bbl / d	3,103
Average fixed price (in USD per barrel or mmbtu) | $ / bbl	49.87
Fair Market Value of Assets	$ 2,815
Commodity derivative | Swap | Oil | Q3 2016
Derivative contract
Total Volumes (in units per day) | bbl / d	2,704
Average fixed price (in USD per barrel or mmbtu) | $ / bbl	51.78
Fair Market Value of Assets	$ 2,434
Commodity derivative | Swap | Oil | Q4 2016
Derivative contract
Total Volumes (in units per day) | bbl / d	2,303
Average fixed price (in USD per barrel or mmbtu) | $ / bbl	52.83
Fair Market Value of Assets	$ 2,062
Commodity derivative | Put Option [Member] | Oil | Q2 2016
Derivative contract
Total Volumes (in units per day) | bbl / d	5,430
Average fixed price (in USD per barrel or mmbtu) | $ / bbl	51.01
Fair Market Value of Assets	$ 5,548
Commodity derivative | Put Option [Member] | Oil | Q3 2016
Derivative contract
Total Volumes (in units per day) | bbl / d	4,733
Average fixed price (in USD per barrel or mmbtu) | $ / bbl	51.01
Fair Market Value of Assets	$ 4,409
Commodity derivative | Put Option [Member] | Oil | Q4 2016
Derivative contract
Total Volumes (in units per day) | bbl / d	4,031
Average fixed price (in USD per barrel or mmbtu) | $ / bbl	51.01
Fair Market Value of Assets	$ 3,784

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DERIVATIVES - SUMMARY OF DERIVATIVE POSITIONS (Details) - Commodity derivative - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Derivatives measured at fair value
Total derivative asset	$ 21,052	$ 29,566
Current assets
Derivatives measured at fair value
Derivative assets	21,052	29,566
Noncurrent assets
Derivatives measured at fair value
Derivative assets	0	0
Current liabilities
Derivatives measured at fair value
Derivative liabilities	0	0
Long-term liabilities
Derivatives measured at fair value
Derivative liabilities	$ 0	$ 0

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DERIVATIVES - COMPONENTS OF DERIVATIVE GAINS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Components of the derivative gain (loss)
Derivative gain	$ (1,007)	$ 18,856
Commodity derivative
Components of the derivative gain (loss)
Derivative cash settlement gain (loss)	7,508	35,466
Change in fair value gain (loss)	(8,515)	(16,610)
Derivative gain	(1,007)	18,856
Commodity derivative | Oil
Components of the derivative gain (loss)
Derivative cash settlement gain (loss)	7,508	34,791
Commodity derivative | Natural gas
Components of the derivative gain (loss)
Derivative cash settlement gain (loss)	$ 0	$ 675

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EARNINGS PER SHARE (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares	Mar. 31, 2015 USD ($) $ / shares shares
Net income (loss):
Net loss | $	$ (47,237)	$ (18,421)
Less: undistributed income (loss) to unvested restricted stock | $	0	0
Undistributed income (loss) to common shareholders | $	$ (47,237)	$ (18,421)
Basic net income (loss) per common share (in dollars per share) | $ / shares	$ (0.96)	$ (0.41)
Diluted net income (loss) per common share (in dollars per share) | $ / shares	$ (0.96)	$ (0.41)
Weighted-average shares outstanding - basic	49,131,000	44,520,000
Add: dilutive effect of contingent PSUs	0	0
Weighted-average shares outstanding - diluted	49,131,000	44,520,000
Antidilutive securities excluded from EPS calculation	0	147,786
PSUs | Minimum
EARNINGS PER SHARE
Percentage of awards earned during performance cycle	0
PSUs | Maximum
EARNINGS PER SHARE
Percentage of awards earned during performance cycle	2

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CAPITAL STOCK (Details) - USD ($) $ in Thousands		3 Months Ended
	Feb. 06, 2015	Mar. 31, 2016	Mar. 31, 2015
Net proceeds		$ 0	$ 209,300
Underwriter discounts, commissions and offering expenses		$ 0	$ 6,492
IPO
Shares of common stock sold in initial public offering	8,050,000
Net proceeds	$ 202,700
Underwriter discounts, commissions and offering expenses	$ 6,600

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INCOME TAXES (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reconciliation of effective tax rate to expected federal tax rate
Effective tax rate (as a percent)	0.00%	38.50%