8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (or Date of Earliest Event Reported): September 12, 2023

SilverBow Resources, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-8754	20-3940661
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

920 Memorial City Way, Suite 850

Houston, Texas 77024

(Address of principal executive offices)

(281) 874-2700

(Registrant’s telephone number)

Not Applicable

(Former Name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SBOW	New York Stock Exchange
Preferred Stock Purchase Rights	None	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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Item 8.01.    Other Events

On August 11, 2023, SilverBow Resources, Inc. (the “Company”) and its operating subsidiary, SilverBow Resources Operating, LLC, entered into a purchase and sale agreement with subsidiaries of Chesapeake Energy Corporation (“Chesapeake”), pursuant to which the Company will acquire Chesapeake’s oil and gas assets in South Texas (the “South Texas Rich Properties”). The Company is filing this Current Report on Form 8-K to make available (i) the audited statements of revenues and direct operating expenses of the Chesapeake South Texas Rich Properties for the years ended December 31, 2022 and 2021 and the related notes thereto, attached as Exhibit 99.1 hereto, (ii) the unaudited statements of revenues and direct operating expenses of the Chesapeake South Texas Rich Properties for the six months ended June 30, 2023 and 2022 and the related notes thereto, attached as Exhibit 99.2 hereto, and (iii) the unaudited pro forma condensed combined balance sheet of the Company as of June 30, 2023 and the unaudited pro forma condensed combined statements of operations of the Company for the six months ended June 30, 2023 and the year ended December 31, 2022, and the related notes thereto, attached as Exhibit 99.3 hereto.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
23.1	Consent of PricewaterhouseCoopers LLP
99.1	Audited statements of revenues and direct operating expenses of the South Texas Rich Properties for the years ended December 31, 2022 and 2021.
99.2	Unaudited statements of revenues and direct operating expenses of the South Texas Rich Properties for the six months ended June 30, 2023 and 2022.
99.3	Unaudited pro forma condensed combined financial information of SilverBow Resources, Inc. as of and for the six months ended June 30, 2023 and for the year ended December 31, 2022.
104	Cover Page Interactive Data File (formatted as Inline XBRL)

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SIGNATURE

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 hereunto duly authorized.

Date: September 12, 2023

SilverBow Resources, Inc.
By:	/s/ Christopher M. Abundis
	Christopher M. Abundis Executive Vice President, Chief Financial Officer and General Counsel

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EX-23

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in the Registration Statements on FormS-3 (Nos.333-259122, 333-260142, 333-261346, 333-264936, 333-266032 and 333-271821) and Form S-8 (Nos. 333-210936, 333- 215235, 333-218246, 333-233163 and 333-266584) of SilverBow Resources, Inc. of our report dated September 10, 2023 relating to the statements of revenues and direct operating expenses of the South Texas Rich Properties of Chesapeake Energy Corporation, which appears in this Current Report on Form 8-K.

/s/ PricewaterhouseCoopers LLP

Oklahoma City, OklahomaSeptember 12, 2023

EX-99.1

EXHIBIT 99.1

SOUTH TEXAS RICH PROPERTIES

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

Years Ended December 31, 2022 and 2021

with Report of Independent Auditors

Table of Contents

	Page
Report of Independent Auditors	2
Statements of Revenues and Direct Operating Expenses	4
Notes to Statements of Revenues and Direct Operating Expenses	5
Supplemental Oil and Gas Reserve Information (unaudited)	8

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Report of Independent Auditors

To the Management of Chesapeake Energy Corporation

Opinion

We have audited the accompanying statements of revenues and direct operating expenses of the South Texas Rich Properties (the “South Texas Rich Properties”) of Chesapeake Energy Corporation(the “Company”), for the years ended December 31, 2022 and 2021, including the related notes (collectively referred to as the “statements of revenues and direct operating expenses”).

In our opinion, the accompanying statements of revenues and direct operating expenses present fairly, in all material respects, the revenues and direct operating expenses described in Note 1of the South Texas Rich Properties for the years ended December 31, 2022 and 2021, in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Statements of Revenues and Direct Operating Expensessection of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter

The accompanying statements of revenues and direct operating expenses were prepared in connection with the Company’s divestiture of the South Texas Rich Properties and, as described in Note 1, were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. The statements of revenues and direct operating expenses are not intended to be a complete presentation of the financial position, results of operations or cash flows of the South Texas Rich Properties. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Statements of Revenues and Direct Operating Expenses

Management is responsible for the preparation and fair presentation of thestatements of revenues and direct operating expenses in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the statements of revenues and direct operating expenses that are free from material misstatement, whether due to fraud or error.

In preparing the statements of revenues and direct operating expenses, management is responsible for the evaluation of whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the South Texas Rich Properties’ ability to continue as a going concern for one year after the date the statements of revenues and direct operating expenses are available to be issued.

Auditors’ Responsibilities for the Audit of the Statements of Revenues and Direct Operating Expenses

Our objectives are to obtain reasonable assurance about whether the statements of revenues and direct operating expenses as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for

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one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the statements of revenues and direct operating expenses.

In performing an audit in accordance with US GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the statements of revenues and direct operating expenses, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the statements of revenues and direct operating expenses.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the South Texas Rich Properties' internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the statements of revenues and direct operating expenses.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the South Texas Rich Properties’ ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/PricewaterhouseCoopers LLP

Oklahoma City, Oklahoma

September 10, 2023

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SOUTH TEXAS RICH PROPERTIES

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

	Year Ended
$ in thousands	December 31, 2022		December 31, 2021
Revenues	$	483,383	$	347,489
Direct operating expenses	189,018		146,379
Excess of revenues over direct operating expenses	$	294,365	$	201,110

See accompanying Notes to the Statements of Revenues and Direct Operating Expenses

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SOUTH TEXAS RICH PROPERTIES

NOTES TO THE STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

1.    Basis of Presentation

On August 11, 2023, Chesapeake Energy Corporation (“Chesapeake”), through its wholly owned subsidiaries Chesapeake Exploration, L.L.C., Chesapeake Operating, L.L.C., Chesapeake Energy Marketing, L.L.C. and Chesapeake Royalty, L.L.C., entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with SilverBow Resources Operating, LLC, a subsidiary of SilverBow Resources, Inc. (“Buyer”) to sell a portion of its Eagle Ford assets (the “Transaction”). Under the terms of the Purchase Agreement, Chesapeake has agreed to sell approximately 42,000 net acres and approximately 540 wells, along with related property, plant and equipment (collectively, the “South Texas Rich Properties” or “the Properties”).

Under the terms and conditions of the Purchase Agreement, which has an economic effective date of February 1, 2023, the aggregate consideration to be paid to Chesapeake in the Transaction will consist of $700,000,000, comprised of (i) cash in the amount of $650,000,000, due at the closing of the Transaction, subject to certain purchase price adjustments and (ii) cash in the amount of $50,000,000 due on the first anniversary of the closing of the Transaction. Subject to satisfaction of certain commodity price triggers, Chesapeake may also receive additional cash consideration in an amount up to $50,000,000 shortly following the first anniversary of closing of the Transaction. Pursuant to the Purchase Agreement, upon the execution of the Purchase Agreement, the Buyer deposited $50,000,000 into escrow, which will be credited toward the cash consideration payable at the closing of the Transaction.

The accompanying Statements of Revenues and Direct Operating Expenses represent the direct undivided interests in the revenues and direct operating expenses associated with the producing wells in the Properties. The Statements of Revenues and Direct Operating Expenses have been derived from the historical financial records of Chesapeake. For purposes of these statements, all properties identified in the purchase and sale agreement are included herein. During the periods presented, the Properties were not accounted for or operated as a separate entity, subsidiary, segment or division by Chesapeake. Accordingly, a complete set of financial statements required by the Securities and Exchange Commission’s Regulation S-X, including a balance sheet and statement of cash flows, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) is not available or practicable to prepare for the Properties. The accompanying Statements of Revenues and Direct Operating Expenses vary from a complete income statement in accordance with U.S. GAAP in that they do not reflect certain expenses incurred in connection with the ownership and operation of the Properties, including but not limited to depreciation, depletion and amortization, impairments, accretion of asset retirement obligations, general and administrative expenses, interest expense and federal and state income taxes. These costs were not separately allocated to the working interests of the Properties in Chesapeake’s accounting records. In addition, these Statements of Revenues and Direct Operating Expenses are not indicative of the results of operations for the Properties on a go forward basis.

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2.    Summary of Significant Accounting Policies

Revenue Recognition

Revenue from the sale of natural gas, oil and NGL is recognized upon the transfer of control of the products, which is typically when the products are delivered to customers. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration Chesapeake expects to receive in exchange for those products.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. There are no significant judgments that significantly affect the amount or timing of revenue from contracts with customers.

Direct Operating Expenses

Direct operating expenses are recognized when incurred and consist of the direct expenses of operating the Properties. Direct operating expenses include lease operating expenses, production taxes and gathering, processing and transportation costs. Lease operating expenses include well repair expenses, saltwater disposal costs, facility maintenance expenses, and other field-related expenses. Lease operating expenses also include expenses directly associated with support personnel, support services, equipment and facilities directly related to natural gas and oil production activities.

Use of Estimates

The Statements of Revenues and Direct Operating Expenses are derived from the historical operating statements of Chesapeake. Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the Statements of Revenues and Direct Operating Expenses. Actual results could differ from those estimates. Revenues and direct operating expenses relate to the historical net revenue interest and net working interest, respectively, in the Properties.

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3.    Subsequent Events

Chesapeake has evaluated subsequent events through September 10, 2023, the date the Statements of Revenues and Direct Operating Expenses were available to be issued, and has concluded that no events, except as described in Note 1, need to be reported.

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SOUTH TEXAS RICH PROPERTIES

Supplementary Oil and Gas Information (Unaudited)

Natural Gas, Oil and NGL Reserve Quantities

Chesapeake’s petroleum engineers and independent petroleum engineering firms estimated all of Chesapeake's proved reserves as of December 31, 2022.

Proved natural gas, oil, and NGL reserves are those quantities of natural gas, oil, and NGL which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. Based on reserve reporting rules, the price is calculated using the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within the period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. A project to extract hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. The area of the reservoir considered as proved includes: (i) the area identified by drilling and limited by fluid contacts, if any, and (ii) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible natural gas or oil on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establish a lower contact with reasonable certainty. Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (i) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (ii) the project has been approved for development by all necessary parties and entities, including governmental entities.

Developed natural gas, oil, and NGL reserves are reserves of any category that can be expected to be recovered through existing wells with existing equipment and operating methods where production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.

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SOUTH TEXAS RICH PROPERTIES

Supplementary Oil and Gas Information (Unaudited) – continued

Natural Gas, Oil and NGL Reserve Quantities - continued

The information provided below on the Properties' natural gas, oil, and NGL reserves is presented in accordance with regulations prescribed by the Securities and Exchange Commission. These reserve estimates are generally based upon extrapolation of historical production trends, analogy to similar properties, and volumetric calculations. Accordingly, these estimates will change as future information becomes available and as commodity prices change. These changes could be material and could occur in the near term.

Presented below is a summary of change in estimated reserves for the periods presented:

	Natural Gas	Oil	NGL	Total
	(mcf)	(Bbl)	(Bbl)	(mcfe)
December 31, 2022
Proved reserves, beginning of period	285,251,264	28,654,405	38,955,911	690,913,165
Extensions, discoveries and other additions	11,755,384	1,984,143	1,509,852	32,719,354
Revisions of previous estimates	38,966,441	2,505,226	3,523,627	75,139,561
Production	(20,909,750)	(2,637,577)	(2,645,702)	(52,609,426)
Proved reserves, end of period	315,063,339	30,506,197	41,343,688	746,162,654
Proved developed reserves:
Beginning of period	183,596,848	20,348,596	25,086,112	456,205,097
End of period	229,553,642	22,276,526	30,178,639	544,284,628
Proved undeveloped reserves:
Beginning of period	101,654,416	8,305,809	13,869,799	234,708,068
End of period	85,509,697	8,229,671	11,165,049	201,878,026
December 31, 2021
Proved reserves, beginning of period	148,585,717	18,022,345	20,648,406	380,610,225
Extensions, discoveries and other additions	82,671,630	6,466,685	10,681,462	185,560,515
Revisions of previous estimates	74,107,492	6,720,786	10,479,354	177,308,332
Production	(20,113,575)	(2,555,411)	(2,853,311)	(52,565,907)
Proved reserves, end of period	285,251,264	28,654,405	38,955,911	690,913,165
Proved developed reserves:
Beginning of period	148,585,717	18,022,345	20,648,406	380,610,225
End of period	183,596,848	20,348,596	25,086,112	456,205,097
Proved undeveloped reserves:
Beginning of period	—	—	—	—
End of period(a)	101,654,416	8,305,809	13,869,799	234,708,068

(a) As of December 31, 2022 and December 31, 2021, there were no PUDs that had remained undeveloped for five years or more.

The natural gas, oil and NGL prices used in computing the reserves as of December 31, 2022 were $6.36 per mcf, $93.67 per bbl and $43.58 per bbl, respectively, before basis differential adjustments. The natural gas, oil and NGL prices used in computing the reserves as of December 31, 2021 were $3.60 per mcf, $66.56 per bbl and $35.81 per bbl, respectively, before basis differential adjustments.

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SOUTH TEXAS RICH PROPERTIES

Supplementary Oil and Gas Information (Unaudited) – continued

Standardized Measure of Discounted Cash Flows

The following summary sets forth the Properties' future net cash flows relating to proved natural gas, oil, and NGL reserves based on the standardized measure as of and for the years ended December 31, 2022 and 2021:

$ in thousands	2022		2021
Future cash inflows(a)	$	5,120,415	$	3,321,630
Future production costs	(1,153,162)		(805,328)
Future development costs(b)	(282,790)		(184,595)
Future income tax provisions	(743,654)		(473,873)
Future net cash flows	2,940,809		1,857,834
Less effect of a 10% discount factor	(1,462,980)		(899,630)
Standardized Measure of discounted future net cash flows	$	1,477,829	$	958,204

(a) Calculated using $6.36 per mcf, $93.67 per bbl of oil and $43.58 per bbl of NGL, respectively, before basis differential adjustments in 2022. Calculated using $3.60 per mcf, $66.56 per bbl of oil and $35.81 per bbl of NGL, respectively, before basis differential adjustments in 2021.

(b) Includes future plugging and abandonment costs.

$ in thousands	2022		2021
Standardized measure, beginning of period	$	958,204	$	192,122
Sales of natural gas and oil produced, net of production costs and gathering processing and transportation(a)	(294,365)		(201,110)
Net changes in prices and production costs	663,937		577,781
Extensions and discoveries, net of production and development costs	138,778		365,709
Changes in estimated future development costs	(86,658)		(34,445)
Previously estimated development costs incurred during the period	32,972		1,969
Revisions of previous quantity estimates	202,136		416,962
Accretion of discount	119,239		19,212
Net change in income taxes	(148,648)		(236,188)
Changes in production rates and other	(107,766)		(143,808)
Standardized Measure, end of period	$	1,477,829	$	958,204

(a) Production costs includes severance and ad valorem taxes.

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EX-99.2

EXHIBIT 99.2

SOUTH TEXAS RICH PROPERTIES

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

(UNAUDITED)

Six Months Ended June 30, 2023 and 2022

Table of Contents

	Page
Statements of Revenues and Direct Operating Expenses	2
Notes to Statements of Revenues and Direct Operating Expenses	3

1

SOUTH TEXAS RICH PROPERTIES

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (UNAUDITED)

	Six Months Ended
$ in thousands	June 30, 2023		June 30, 2022
Revenues	$	179,224	$	263,590
Direct operating expenses	80,418		92,732
Excess of revenues over direct operating expenses	$	98,806	$	170,858

See accompanying Notes to the Statements of Revenues and Direct Operating Expenses

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SOUTH TEXAS RICH PROPERTIES

NOTES TO THE STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (UNAUDITED)

1.    Basis of Presentation

On August 11, 2023, Chesapeake Energy Corporation (“Chesapeake”), through its wholly owned subsidiaries Chesapeake Exploration, L.L.C., Chesapeake Operating, L.L.C., Chesapeake Energy Marketing, L.L.C. and Chesapeake Royalty, L.L.C., entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with SilverBow Resources Operating, LLC, a subsidiary of SilverBow Resources, Inc. (“Buyer”) to sell a portion of its Eagle Ford assets (the “Transaction”). Under the terms of the Purchase Agreement, Chesapeake has agreed to sell approximately 42,000 net acres and approximately 540 wells, along with related property, plant and equipment (collectively, the “South Texas Rich Properties” or the “Properties”).

Under the terms and conditions of the Purchase Agreement, which has an economic effective date of February 1, 2023, the aggregate consideration to be paid to Chesapeake in the Transaction will consist of $700,000,000, comprised of (i) cash in the amount of $650,000,000, due at the closing of the Transaction, subject to certain purchase price adjustments and (ii) cash in the amount of $50,000,000 due on the first anniversary of the closing of the Transaction. Subject to satisfaction of certain commodity price triggers, Chesapeake may also receive additional cash consideration in an amount up to $50,000,000 shortly following the first anniversary of closing of the Transaction. Pursuant to the Purchase Agreement, upon the execution of the Purchase Agreement, the Buyer deposited $50,000,000 into escrow, which will be credited toward the cash consideration payable at the closing of the Transaction.

The accompanying Statements of Revenues and Direct Operating Expenses (the “Statements”) represent the direct undivided interests in the revenues and direct operating expenses associated with the producing wells in the Properties. The Statements of Revenues and Direct Operating Expenses have been derived from the historical financial records of Chesapeake. For purposes of these statements, all properties identified in the purchase and sale agreement are included herein. During the periods presented, the Properties were not accounted for or operated as a separate entity, subsidiary, segment or division by Chesapeake. Accordingly, a complete set of financial statements required by the Securities and Exchange Commission’s Regulation S-X, including a balance sheet and statement of cash flows, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) is not available or practicable to prepare for the Properties. The accompanying Statements of Revenues and Direct Operating Expenses vary from a complete income statement in accordance with U.S. GAAP in that they do not reflect certain expenses incurred in connection with the ownership and operation of the Properties, including but not limited to depreciation, depletion and amortization, impairments, accretion of asset retirement obligations, general and administrative expenses, interest expense and federal and state income taxes. These costs were not separately allocated to the working interests of the Properties in Chesapeake’s accounting records. In addition, these Statements of Revenues and Direct Operating Expenses are not indicative of the results of operations for the Properties on a go forward basis.

The accompanying Statements for the six months ended June 30, 2023 and 2022 are unaudited. The unaudited interim Statements have been prepared on the same basis as the annual Statements. In the opinion of management, such unaudited interim Statements reflect all normal recurring adjustments necessary for a fair statement of the revenues and direct operating expenses of the Properties.

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2.    Summary of Significant Accounting Policies

Revenue Recognition

Revenue from the sale of oil, natural gas and NGL is recognized upon the transfer of control of the products, which is typically when the products are delivered to customers. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration Chesapeake expects to receive in exchange for those products.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. There are no significant judgments that significantly affect the amount or timing of revenue from contracts with customers.

Direct Operating Expenses

Direct operating expenses are recognized when incurred and consist of the direct expenses of operating the Properties. Direct operating expenses include lease operating expenses, production taxes and gathering, processing and transportation costs. Lease operating expenses include well repair expenses, saltwater disposal costs, facility maintenance expenses, and other field-related expenses. Lease operating expenses also include expenses directly associated with support personnel, support services, equipment and facilities directly related to oil and natural gas production activities.

Use of Estimates

The Statements of Revenues and Direct Operating Expenses are derived from the historical operating statements of Chesapeake. Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the Statements of Revenues and Direct Operating Expenses. Actual results could differ from those estimates. Revenues and direct operating expenses relate to the historical net revenue interest and net working interest, respectively, in the Properties.

3.    Subsequent Events

Chesapeake has evaluated subsequent events through September 10, 2023, the date the Statements of Revenues and Direct Operating Expenses were available to be issued, and has concluded that no events, except as described in Note 1, need to be reported.

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EX-99.3

EXHIBIT 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Acquisition of Chesapeake's South Texas Assets

On August 11, 2023, SilverBow Resources, Inc. (“SilverBow” or the “Company”) and its operating subsidiary, SilverBow Resources Operating, LLC (“SilverBow Operating”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Chesapeake Energy Corporation, through its wholly owned subsidiaries Chesapeake Exploration, L.L.C., Chesapeake Operating, L.L.C., Chesapeake Energy Marketing, L.L.C. and Chesapeake Royalty, L.L.C. (collectively “Chesapeake”), to buy Chesapeake's South Texas assets (the “Chesapeake Transaction”). Under the terms and conditions of the Purchase Agreement, which has an economic effective date of February 1, 2023, the aggregate consideration to be paid to Chesapeake in the Chesapeake Transaction will consist of $700,000,000, comprised of cash in the amount of $650,000,000, due at the closing of the Chesapeake Transaction, subject to certain purchase price adjustments and cash in the amount of $50,000,000 due on the first anniversary of the closing of the Chesapeake Transaction. The Chesapeake Transaction also includes an earn-out payment contingent upon the average monthly settlement price of NYMEX West Texas Intermediate (“WTI”) crude oil for the 12 month period beginning on the first trading day of the next full calendar month following the closing date of the Chesapeake Transaction. If the average monthly settlement price of WTI during the 12 month period exceeds $80 per barrel, SilverBow shall pay Chesapeake an amount equal to $50 million or (b) is between $75 per barrel and $80 per barrel, SilverBow shall pay Chesapeake an amount equal to $25 million. If the average monthly settlement price of WTI during the 12 month period is below $75 per barrel, SilverBow shall not owe Chesapeake an earn-out payment.

The Chesapeake Transaction is expected to be funded with borrowings under the Company's existing Credit Facility, proceeds from its Second Lien Notes and cash on hand. In conjunction with the Chesapeake Transaction, the Company has secured $425 million of incremental commitments under its Credit Facility from existing and new lenders, which, subject to the closing of the Chesapeake Transaction, will increase lender commitments under the Credit Facility to $1.2 billion, and the Second Lien Notes will be upsized by $350 million, which, subject to the closing of the Chesapeake Transaction, will increase lender commitments under the Second Lien Notes to $500 million and extend the maturity date for the Second Lien Notes to December 15, 2028 (together, the “related financing”).

Acquisition of Sundance Assets

On June 30, 2022, SilverBow and its operating subsidiary, SilverBow Operating, closed the previously announced purchase and sale agreement dated April 13, 2022 with Sundance Energy, Inc. and certain affiliated entities (collectively, “Sundance”), thereby acquiring oil and gas assets in the Eagle Ford (the “Sundance Transaction” and together with the Chesapeake Transaction, the “Transactions”). After consideration of closing adjustments, total aggregate consideration was approximately $344.9 million, consisting primarily of $220.9 million in cash, 4,148,472 shares of our common stock valued at approximately $117.7 million based on the Company's share price on the closing date and contingent consideration with an estimated fair value of $7.4 million. The contingent consideration consists of up to two earn-out payments of $7.5 million each, contingent upon the average monthly settlement price of NYMEX West Texas Intermediate crude oil exceeding $95 per barrel for the period from April 13, 2022 through December 31, 2022 which would trigger a payment of $7.5 million in 2023 and $85 per barrel for 2023 which would trigger a payment of $7.5 million in 2024 (the “2022 WTI Contingency Payout”). The contingent payout for the period of April 13, 2022 through December 31, 2022 did not materialize. As part of our post-close settlement, we settled the 2022 WTI Contingency during the second quarter of 2023. As such, we are no longer required to make a contingency payment related to the 2022 WTI Contingency Payout. We incurred approximately $6.8 million in transaction costs during the year ended December 31, 2022 related to the Sundance Transaction.

Unaudited Pro Forma Condensed Combined Financial Statements

The following unaudited pro forma condensed combined financial statements are derived from the historical consolidated financial statements of SilverBow, historical South Texas Rich Properties Statements of Revenues and Direct Operating Expenses related to the Chesapeake Transaction and from the historical financial activity of Sundance through June 30, 2022, the closing date of the Sundance Transaction.

The Company expects to account for the Chesapeake Transaction as an asset acquisition under accounting principles generally accepted in the United States of America, as the assets and operations acquired in the Chesapeake Transaction do not meet the definition of a business under the Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations (referred to as “ASC 805”), since substantially all of the fair value of the assets acquired are concentrated in a single asset group.

1

Certain historical amounts of Sundance and Chesapeake have been reclassified to conform to SilverBow’s financial statement presentation. The unaudited pro forma condensed combined balance sheet as of June 30, 2023 presented below was prepared as if the Chesapeake Transaction and related financing had occurred on June 30, 2023. The unaudited pro forma condensed combined statement of operations for the six-month period ended June 30, 2023 and the year ended December 31, 2022 presented below was prepared as if the Transactions and related financing of each transaction had occurred on January 1, 2022.

The unaudited pro forma condensed combined financial statements reflect the following Transaction-related pro forma adjustments, based on available information and certain assumptions that SilverBow believes are reasonable:

•the Transactions, accounted for as asset acquisitions and the related financing of each Transaction;

•SilverBow’s related borrowing on its Credit Facility and Second Lien Notes, as applicable, to fund the cash portion of the Transactions;

•adjustments to conform the classification of expenses in Chesapeake’s historical statements of Revenues and Direct Operating Expenses to SilverBow’s classification for similar expenses;

•adjustments to conform the classification of revenues and expenses in Sundance’s historical statements of operations to SilverBow’s classification for similar revenues and expenses; and

•the recognition of estimated tax impacts of the pro forma adjustments.

Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed combined financial statements. In SilverBow’s opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial statements to give effect to the Transactions and the related financing.

The acquisition method of accounting as it relates to the Chesapeake Transaction is dependent upon certain valuations and other studies that, as of the date hereof, have yet to commence or progress to a stage where there is sufficient information for a definitive measure. SilverBow has performed a preliminary valuation analysis of the relative fair value of Chesapeake’s assets to be acquired and liabilities to be assumed and has made certain adjustments to the historical book values of the assets and liabilities of Chesapeake to reflect preliminary estimates of the relative fair value necessary to prepare the unaudited pro forma condensed combined financial statements. A final determination of the relative fair value of Chesapeake’s assets and liabilities will be based on the actual net tangible and intangible assets and liabilities of Chesapeake that exist as of the closing date of the Chesapeake Transaction and, therefore, cannot be made prior to the completion of the Chesapeake Transaction. As a result of the foregoing, the pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analysis is performed. The preliminary pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed combined financial statements presented below. SilverBow estimated the fair value of Chesapeake’s assets and liabilities based on discussions with Chesapeake’s management, preliminary valuation studies, due diligence, and information presented in Chesapeake’s historical financial statements. Any increases or decreases in the relative fair value of assets acquired and liabilities assumed upon completion of the final valuations will result in adjustments to the unaudited pro forma condensed combined balance sheet and/or statement of operations. The final purchase price allocation may be materially different than that reflected in the pro forma purchase price allocation presented herein.

The unaudited pro forma condensed combined financial information is not intended to represent what SilverBow’s financial position or results of operations would have been had the Transactions actually been consummated on the assumed dates nor does it purport to project the future operating results or financial position of the combined company following the Chesapeake Transaction. The unaudited pro forma condensed combined financial information does not reflect future events that may occur after the Chesapeake Transaction, including, but not limited to, the anticipated realization of ongoing savings from potential operating efficiencies, asset dispositions, cost savings, or economies of scale that the combined company may achieve with respect to the combined operations. Specifically, the unaudited pro forma condensed combined statement of operations does not include projected synergies expected to be achieved as a result of the Transactions and any associated costs that may be required to be incurred to achieve the identified synergies. The unaudited pro forma condensed combined statement of operations also exclude the effects of costs of integration activities and asset dispositions that may result from the Transactions.

The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes contained in SilverBow’s Annual Report on Form 10-K for the year ended December 31, 2022, the historical consolidated financial statements and accompanying notes thereto of Sundance filed as Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on June 6, 2022, and Quarterly Report on Form 10-Q for the six months ended

2

June 30, 2023 and historical South Texas Rich Properties Statements of Revenues and Direct Operating Expenses and accompanying notes thereto filed as Exhibit 99.1 and Exhibit 99.2 to the Current Report on Form 8-K of which this Exhibit 99.3 is a part.

3

SilverBow Resources, Inc. and Subsidiary Pro Forma Condensed Combined Balance Sheet As of June 30, 2023 (Unaudited)
(in thousands, except per share amounts)	SilverBow Historical		Chesapeake Transaction Adjustments (Note 2)			Pro Forma Combined
ASSETS
Current Assets:
Cash and cash equivalents	$	1,102	$	—		$	1,102
Accounts receivable, net	64,587		—			64,587
Fair value of commodity derivatives	72,590		—			72,590
Other current assets	3,935		—			3,935
Total Current Assets	142,214		—			142,214
Property and Equipment:
Property and equipment, full cost method, including $26,344 of unproved property costs not being amortized at the end of the period	2,756,694		673,018		(a)	3,429,712
Less – Accumulated depreciation, depletion, amortization & impairment	(1,097,935)		—			(1,097,935)
Property and Equipment, Net	1,658,759		673,018			2,331,777
Right of Use Assets	9,435		200		(a)	9,635
Fair Value of Long-Term Commodity Derivatives	21,903		—			21,903
Other Long-Term Assets	8,159		—			8,159
Total Assets	$	1,840,470	$	673,218		$	2,513,688
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	60,143	$	—		$	60,143
Fair value of commodity derivatives	9,711		—			9,711
Accrued capital costs	44,047		—			44,047
Accrued interest	2,755		—			2,755
Current lease liability	5,966		59		(a)	6,025
Undistributed oil and gas revenues	18,463		—			18,463
Deferred acquisition payment	—		50,000		(a)	50,000
Total Current Liabilities	141,085		50,059			191,144
Long-Term Debt, Net	722,904		599,805		(a)	1,322,709
Non-Current Lease Liability	3,571		141		(a)	3,712
Deferred Tax Liabilities	50,073		—			50,073
Asset Retirement Obligations	9,619		634		(a)	10,253
Fair Value of Long-Term Commodity Derivatives	2,032		22,579		(a)	24,611
Other Long-Term Liabilities	541		—			541
Stockholders' Equity:
Preferred stock	—		—			—
Common stock	231		—			231
Additional paid-in capital	578,817		—			578,817
Treasury stock, held at cost	(10,600)		—			(10,600)
Retained earnings	342,197		—			342,197
Total Stockholders’ Equity	910,645		—			910,645
Total Liabilities and Stockholders’ Equity	$	1,840,470	$	673,218		$	2,513,688
See accompanying notes to unaudited pro forma condensed combined financial information.

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SilverBow Resources, Inc. and Subsidiary Pro Forma Condensed Combined Statement of Operations For Six Months Ended June 30, 2023 (Unaudited)
(in thousands, except per share amounts)	SilverBow Historical		Chesapeake Historical		Chesapeake Reclassification Adjustments (Note 2)			Transaction Accounting Adjustments (Note 2)			Pro Forma Combined
Revenues:
Oil and gas sales	$	266,354	$	179,224	$	—		$	—		$	445,578
Operating Expenses:
Direct Operating Expenses	—		80,418		(80,418)		(b)	—			—
General and administrative, net	12,982		—		—			—			12,982
Depreciation, depletion, and amortization	93,850		—		—			40,319		(d)	134,169
Accretion of asset retirement obligations	464		—		—			—			464
Lease operating expenses	39,740		—		16,773		(b)	—			56,513
Workovers	1,590		—		766		(b)	—			2,356
Transportation and gas processing	23,292		—		50,964		(b)	—			74,256
Severance and other taxes	18,156		—		11,915		(b)	—			30,071
Total Operating Expenses	190,074		80,418		—			40,319			310,811
Operating Income (Loss)	76,280		98,806		—			(40,319)			134,767
Non-Operating Income (Expense)
Gain (loss) on commodity derivatives, net	112,243		—		—			—			112,243
Interest expense, net	(34,935)		—		—			(33,991)		(e)	(68,926)
Other income (expense), net	4		—		—			—			4
Income (Loss) Before Income Taxes	153,592		98,806		—			(74,310)			178,088
Provision (Benefit) for Income Taxes	34,163		—		—			5,450		(f)	39,613
Net Income (Loss)	$	119,429	$	98,806	$	—		$	(79,760)		$	138,475
Per Share Amounts:
Basic: Loss Per Share	$	5.30	$	—	$	—		$	—		$	6.15
Diluted: Loss Per Share	$	5.27	$	—	$	—		$	—		$	6.11
Weighted-Average Shares Outstanding - Basic	22,527		—		—			—			22,527
Weighted-Average Shares Outstanding - Diluted	22,654		—		—			—			22,654
See accompanying notes to unaudited pro forma condensed combined financial information.

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SilverBow Resources, Inc. and Subsidiary Pro Forma Condensed Combined Statement of Operations For the Year Ended December 31, 2022 (Unaudited)
			Sundance Historical
(in thousands, except per share amounts)	SilverBow Historical		January 1, 2022 Through March 31, 2022		Sundance Historical April 1, 2022 through June 30, 2022		Chesapeake Historical		Sundance Reclassification Adjustments (Note 2)			Chesapeake Reclassification Adjustments (Note 2)			Sundance Transaction Adjustments (Note 2)			Chesapeake Transaction Adjustments (Note 2)			Pro Forma Combined
Revenues:
Oil and gas sales	$	753,420	$	—	$	—	$	483,383	$	102,282	(c)	$	—		$	—		$	—		$	1,339,085
Oil sales			45,023		38,499		—		(83,522)		(c)	—			—			—			—
Natural gas sales			3,298		4,249		—		(7,547)		(c)	—			—			—			—
Natural gas liquid sales			6,384		4,829		—		(11,213)		(c)	—			—			—			—
Operating Expenses:
Direct Operating Expenses	—		—		—		189,018		—			(189,018)		(b)	—			—			—
General and administrative, net	21,395		1,727		—		—		—			—			—			—			23,122
Depreciation, depletion, and amortization	133,982		273		—		—		(137)		(c)	—			26,016		(d)	65,756		(d)	225,890
Accretion of asset retirement obligations	534		—		—		—		137		(c)	—			—			—			671
Lease operating expense	55,329		9,510		8,746				(2,016)		(c)	27,318		(b)	—			—			98,887
Workovers	1,655		—		—				2,016		(c)	2,050		(b)	—			—			5,721
Transportation and gas processing	32,989		3,624		3,621				—			133,376		(b)	—			—			173,610
Severance and other taxes	41,761		3,807		3,856				—			26,274		(b)	—			—			75,698
Exploration expense	—		—		—		—		—			—			—			—			—
Loss (gain) on commodity derivative financial instruments	—		29,818		—		—		(29,818)		(c)	—			—			—			—
Other expense, net	—		208		—		—		—			—			—			—			208
Total Operating Expenses	287,645		48,967		16,223		189,018		(29,818)			—			26,016			65,756			603,807
Operating Income (Loss)	465,775		5,738		31,354		294,365		29,818			—			(26,016)			(65,756)			735,278
Non-Operating Income (Expense)
Net gain (loss) on commodity derivatives	(73,885)		—		—		—		(29,818)		(c)	—			—			—			(103,703)
Interest expense, net	(41,948)		(2,289)		—		—		—			—			(2,720)		(e)	(67,982)		(e)	(114,939)
Other income (expense), net	95		—		—		—		—			—			—			—			95
Income (Loss) Before Income Taxes	350,037		3,449		31,354		294,365		—			—			(28,736)			(133,738)			516,731
Provision (Benefit) for Income Taxes	9,600		—		—		—		—			—			1,350		(f)	35,739		(f)	46,689
Net Income (Loss)	$	340,437	$	3,449	$	31,354	$	294,365	$	—		$	—		$	(30,086)		$	(169,477)		$	470,042
Per Share Amounts:
Basic:  Net Loss	$	17.24	$	—			$	—	$	—		$	—		$	—		$	—		$	23.80
Diluted:  Net Income Loss	$	16.94	$	—			$	—	$	—		$	—		$	—		$	—		$	23.39
Weighted Average Shares Outstanding - Basic	19,748		—				—		—			—			—			—			19,748
Weighted Average Shares Outstanding - Diluted	20,097		—				—		—			—			—			—			20,097
See accompanying notes to unaudited pro forma condensed combined financial information.

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

(1) Basis of Pro Forma Presentation

The accompanying unaudited pro forma condensed combined financial information was prepared based on the historical consolidated financial statements of the Company, the historical South Texas Rich Properties Statements of Revenues and Direct Operating Expenses related to the Chesapeake Transaction, and from the historical financial activity of Sundance through June 30, 2022, the closing date of the Sundance Transaction. Certain of Sundance’s historical amounts have been reclassified to conform to SilverBow’s financial statement presentation. The Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended June 30, 2023 and the year ended December 31, 2022 were prepared assuming the Transactions and related financing transactions occurred on January 1, 2022. The Unaudited Pro Forma Condensed Combined Balance Sheet at June 30, 2023 was prepared as if the Chesapeake Transaction and related financing had occurred on June 30, 2023.

The unaudited pro forma condensed combined financial statements reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions that SilverBow believes are reasonable, however, actual results may differ from those reflected in these statements. In SilverBow’s opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The unaudited pro forma condensed combined financial statements do not purport to represent what SilverBow’s financial position or results of operations would have been if the transactions had actually occurred on the dates indicated above, nor are they indicative of SilverBow’s future financial position or results of operations. These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and related notes of SilverBow, Sundance, Chesapeake, as applicable, for the period presented.

(2) Pro Forma Adjustments

The Company expects to account for the Chesapeake Transaction as an asset acquisition under accounting principles generally accepted in the United States of America, as the assets and operations acquired in the Chesapeake Transaction do not meet the definition of a business under the Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations (referred to as “ASC 805”), since substantially all of the fair value of the assets acquired are concentrated in a single asset group. The allocation of the preliminary estimated purchase price is based upon management’s estimates of and assumptions related to the relative fair value of assets to be acquired and liabilities to be assumed as of June 30, 2023 using currently available information. Due to the fact that the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on financial position and results of operations may differ significantly from the pro forma amounts included herein. SilverBow expects to finalize its allocation of the purchase consideration as soon as practicable after completion of the proposed transaction.

The preliminary purchase price allocation is subject to change due to several factors, including but not limited to:

•changes in the estimated fair value of Chesapeake’s assets acquired and liabilities assumed as of the date of the closing of the Chesapeake Transaction, resulting from the finalization of SilverBow’s detailed valuation analysis, including changes in future oil and gas commodity prices, reserve estimates, interest rates and other factors;

•valuation of ASC 842 Leases as it relates to Chesapeake’s lease obligations and right of use assets expected to be recorded as part of purchase accounting upon the closing of the Chesapeake Transaction; and

•changes in the estimated fair value of the Contingent Consideration as of the date of the closing of the Chesapeake Transaction.

The following adjustments have been made to the accompanying unaudited pro forma condensed combined financial statements:

(a)    Consideration for the Chesapeake Transaction was approximately $700.0 million, (i) cash in the amount of $650.0 million due at the closing of the transaction, subject to certain purchase price adjustments (estimated $58.0 million reduction in cash consideration below) and (ii) cash in the amount of $50.0 million due on the first anniversary of the closing of the transaction. The table below represents the allocation of the total cost of the Chesapeake Transaction to the assets acquired and liabilities assumed, as

7

follows:

	(in thousands)
Total Cost
Cash consideration	$	592,000
Deferred acquisition payment	50,000
Fair value of contingent consideration	22,579
Total Consideration	$	664,579
Transaction costs	7,805
Total Cost of Transaction	$	672,384
Allocation of Total Cost of Transaction
Assets
Oil and gas properties	$	673,018
Right of use asset	200
Total Assets	673,218
Liabilities
Asset retirement obligations	634
Current lease liability	59
Non-current lease liability	141
Total liabilities assumed	$	834
Net Assets Acquired and Liabilities Assumed	$	672,384

(b)    Chesapeake Reclassification and Conforming Adjustments:

•Reflects reclassification of approximately $80.4 million from Direct Operating Expenses to the respective operating expenses by category ($16.8 million to Lease operating expenses, $0.8 million to Workovers, $51.0 million to Transportation and gas processing and $11.9 million to Severance and other taxes) on the Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2023.

•Reflects reclassification of approximately $189.0 million from Direct Operating Expenses to the respective operating expenses by category ($27.3 million to Lease operating expenses, $2.1 million to Workover, $133.4 million to Transportation and gas processing and $26.3 million to Severance and other taxes) on the Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2022.

(c)    Sundance Reclassification and Conforming Adjustments:

•Reflects reclassification of approximately $102.3 million to oil and gas sales from the respective sales revenues by product ($83.6 million for oil sales, $7.5 million for gas sales and $11.2 million for NGL sales);

•Reflects reclassification of approximately $0.1 million from depreciation, depletion and amortization to accretion of asset retirement obligation;

•Reflects reclassification of approximately $2.0 million from lease operating expenses to workovers; and

•Reflects the reclassification of approximately $29.8 million of loss on commodity derivatives financial instruments from Operating Expenses to Non-Operating Income (Expense)

(d)    Depreciation, depletion and amortization (“DD&A”) relate to the Chesapeake Transaction for the six months ended June 30, 2023 and Sundance Transaction for the year ended December 31, 2022 was calculated using the unit-of-production method under the full cost method of accounting, and adjusts DD&A for (1) the increase in DD&A reflecting the relative fair values and production volumes attributable to the Transactions and (2) the revision to the Company’s DD&A rate reflecting the reserve volumes acquired in the Transactions.

(e)    Interest expense associated with borrowings under the Company's Second Lien Notes and Credit Facility utilizing current interest rates, as applicable, for each Transaction.

(f)    Adjustments to Income tax provision reflects the historical and adjusted Income (Loss) Before Income Taxes for each Transaction, as applicable, multiplied by 22.25% effective tax rate for the periods presented.

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(3) Supplemental Oil and Gas Reserve Information

Estimated Quantities of Proved Oil and Natural Gas Reserves

The following tables present information regarding net proved oil and natural gas reserves attributable to the Company's interests in proved properties as of December 31, 2022 and 2021. The information set forth in the tables regarding historical reserves of the Company is based on proved reserves reports prepared in accordance with Securities and Exchange Commission’s (“SEC”) rules. H.J. Gruy and Associates, Inc. (“Gruy”), independent petroleum engineers, prepared the Company's proved reserves reports as of December 31, 2022 and 2021.

In addition, the following tables also set forth information as of December 31, 2022 and 2021 about the estimated net proved oil and natural gas reserves attributable to the Chesapeake Transaction, and the pro forma estimated net proved oil and natural gas reserves as if the Chesapeake Transaction had occurred on January 1, 2021. The reserve estimates attributable to the Chesapeake Transaction at December 31, 2022 and 2021 presented in the table below were prepared based upon information provided by Chesapeake and was prepared in accordance with the authoritative guidance of the FASB and the SEC on oil and natural gas reserve estimation and disclosures.

In addition, the following tables also set forth information as of December 31, 2021 about the estimated net proved oil and natural gas reserves attributable to the Sundance Transaction, and the pro forma estimated net proved oil and natural gas reserves as if the Sundance Transaction had occurred on January 1, 2021. The Sundance Transaction closed on June 30, 2022. Therefore, the net proved oil and natural gas reserves attributable to the Sundance Transaction are reflected in SilverBow's historical reserves as of December 31, 2022. The reserve estimates attributable to the Sundance Transaction at December 31, 2021 presented in the table below were prepared based upon information provided by Sundance and was prepared in accordance with the authoritative guidance of the FASB and the SEC on oil and natural gas reserve estimation and disclosures.

Reserve estimates are inherently imprecise and are generally based upon extrapolation of historical production trends, analogy to similar properties and volumetric calculations. Accordingly, reserve estimates are expected to change, and such changes could be material and occur in the near term as future information becomes available.

9

	Natural Gas (Mcf)
	SilverBow Historical	Chesapeake Transaction	Sundance Transaction		Sundance Transaction Adjustments		Pro Forma Combined
Estimates of Proved Reserves
December 31, 2020	948,094,943	148,585,717	50,144,876		—		1,146,825,536
Revisions	(199,625,710)	74,107,492	(7,691,299)		—		(133,209,517)
Extensions, discoveries and other additions	324,625,474	82,671,630	19,805,640		—		427,102,744
Purchases of minerals in place	142,794,045	—	—		—		142,794,045
Production	(60,509,606)	(20,113,575)	(2,463,333)		—		(83,086,514)
December 31, 2021	1,155,379,146	285,251,264	59,795,884		—		1,500,426,294
Revisions	561,425	38,966,441	—		—		39,527,866
Extensions, discoveries and other additions	514,492,260	11,755,384	—		—		526,247,644
Purchases of minerals in place	126,849,989	—	—		(59,795,884)	(a)	67,054,105
Sales of minerals in place	(772,177)	—	(59,795,884)	(a)	59,795,884	(a)	(772,177)
Production	(70,958,470)	(20,909,750)	—		—		(91,868,220)
December 31, 2022	1,725,552,173	315,063,339	—		—		2,040,615,512
Proved Developed Reserves
December 31, 2020	415,390,459	148,585,717	22,666,672		—		586,642,848
December 31, 2021	525,736,580	183,596,848	15,499,234		—		724,832,662
December 31, 2022	695,481,580	229,553,642	—		—		925,035,222
Proved Undeveloped Reserves
December 31, 2020	532,704,484	—	27,478,205		—		560,182,689
December 31, 2021	629,642,566	101,654,416	44,296,646		—		775,593,628
December 31, 2022	1,030,070,593	85,509,697	—		—		1,115,580,290

	Oil (Bbl)
	SilverBow Historical	Chesapeake Transaction	Sundance Transaction		Sundance Transaction Adjustments		Pro Forma Combined
Estimates of Proved Reserves
December 31, 2020	12,531,501	18,022,345	28,897,502		—		59,451,348
Revisions	(1,644,367)	6,720,786	(5,250,851)		—		(174,432)
Extensions, discoveries and other additions	3,930,631	6,466,685	5,501,816		—		15,899,132
Purchases of minerals in place	10,942,051	—	—		—		10,942,051
Production	(1,461,657)	(2,555,411)	(1,554,079)		—		(5,571,147)
December 31, 2021	24,298,159	28,654,405	27,594,388		—		80,546,952
Revisions	(1,097,823)	2,505,226	—		—		1,407,403
Extensions, discoveries and other additions	5,423,639	1,984,143	—		—		7,407,782
Purchases of minerals in place	26,393,737	—	—		(27,594,388)	(a)	(1,200,651)
Sales of minerals in place	(194,839)	—	(27,594,388)	(a)	27,594,388	(a)	(194,839)
Production	(2,633,679)	(2,637,577)	—				(5,271,256)
December 31, 2022	52,189,194	30,506,197	—		—		82,695,391
Proved Developed Reserves
December 31, 2020	6,962,826	18,022,345	12,156,565		—		37,141,736
December 31, 2021	9,692,076	20,348,596	9,676,355		—		39,717,027
December 31, 2022	23,360,025	22,276,526	—		—		45,636,551
Proved Undeveloped Reserves
December 31, 2020	5,568,676	—	16,740,936		—		22,309,612
December 31, 2021	14,606,082	8,305,809	17,918,029		—		40,829,920
December 31, 2022	28,829,169	8,229,671	—		—		37,058,840

10

	Natural Gas Liquids (Bbl)
	SilverBow Historical	Chesapeake Transaction	Sundance Transaction		Sundance Transaction Adjustments		Pro Forma Combined
Estimates of Proved Reserves
December 31, 2020	13,855,188	20,648,406	8,171,134		—		42,674,728
Revisions	1,836,746	10,479,354	(855,428)		—		11,460,672
Extensions, discoveries and other additions	1,860,900	10,681,462	2,940,777		—		15,483,139
Purchases of minerals in place	3,019,773	—	—		—		3,019,773
Production	(1,472,222)	(2,853,311)	(424,929)		—		(4,750,462)
December 31, 2021	19,100,385	38,955,911	9,831,554		—		67,887,850
Revisions	548,238	3,523,627	—				4,071,865
Extensions, discoveries and other additions	3,366,839	1,509,852	—				4,876,691
Purchases of minerals in place	11,709,713	—	—		(9,831,554)	(a)	1,878,159
Sales of minerals in place	(119,211)	—	(9,831,554)	(a)	9,831,554	(a)	(119,211)
Production	(1,949,894)	(2,645,702)	—				(4,595,596)
December 31, 2022	32,656,070	41,343,688	—		—		73,999,758
Proved Developed Reserves
December 31, 2020	8,163,666	20,648,406	3,401,266		—		32,213,338
December 31, 2021	12,390,263	25,086,112	2,525,000		—		40,001,375
December 31, 2022	19,522,859	30,178,639	—		—		49,701,498
Proved Undeveloped Reserves
December 31, 2020	5,691,522	—	4,769,867		—		10,461,389
December 31, 2021	6,710,122	13,869,799	7,306,553		—		27,886,474
December 31, 2022	13,133,211	11,165,049	—		—		24,298,260

(a) Amounts and adjustments reflect the purchase and sale of minerals in place associated with the Sundance Transaction, which closed on June 30, 2022.

11

Changes in commodity prices may significantly impact the Company’s estimates of oil and natural gas reserves. Sustained lower commodity prices can reduce the quantity of the Company’s reserves by causing the economic limit of the proved developed and proved undeveloped wells (the point at which the costs to operate exceed the value of estimated future production, assuming constant prices and costs under SEC rules) to occur earlier in their productive lives than would be the case with higher prices. The undeveloped reserves may also be reduced by the elimination of wells because they would not meet the investment criteria to be economically producible at such prices and costs. The proved undeveloped reserves may also be eliminated by the deferral of drilling of otherwise economic wells beyond the five year proved reserve development horizon as a result of revisions to the Company’s development plan adopted in response to lower prices or otherwise.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves

The following table presents the Standardized Measure of Discounted Future Net Cash Flows relating to the proved oil and natural gas reserves of the Company, Chesapeake and Sundance on a pro forma combined basis as of December 31, 2022 and 2021. The Standardized Measure shown below represents estimates only and should not be construed as the current market value of the Company’s estimated oil and natural gas reserves or those acquired estimated oil and natural gas reserves attributable to the Chesapeake Transaction.

	December 31, 2022
	SilverBow Historical		Chesapeake Transaction		Pro Forma Combined
	(In thousands)
Future gross revenues	$	16,660,470	$	5,120,415	$	21,780,885
Future production costs	(4,039,248)		(1,153,162)		(5,192,410)
Future development costs	(2,063,508)		(282,790)		(2,346,298)
Future income taxes	(1,953,345)		(743,654)		(2,696,999)
Future net cash flows	8,604,369		2,940,809		11,545,178
Discount at 10% per annum	(4,564,123)		(1,462,980)		(6,027,103)
Standardized Measure of discounted future net cash flows	$	4,040,246	$	1,477,829	$	5,518,075

	December 31, 2021
	SilverBow Historical		Chesapeake Transaction		Sundance Transaction		Pro Forma Combined
	(In thousands)
Future gross revenues	$	6,370,628	$	3,321,630	$	2,188,156	$	11,880,414
Future production costs	(1,853,856)		(805,328)		(858,212)		(3,517,396)
Future development costs	(753,046)		(184,595)		(533,540)		(1,471,181)
Future income taxes	(584,613)		(473,873)		(47,186)		(1,105,672)
Future net cash flows	3,179,113		1,857,834		749,218		5,786,165
Discount at 10% per annum	(1,620,651)		(899,630)		(336,350)		(2,856,631)
Standardized Measure of discounted future net cash flows	$	1,558,462	$	958,204	$	412,868	$	2,929,534

12

The following table sets forth the principal changes in the Standardized Measure of discounted future net cash flows applicable to estimated net proved oil and natural gas reserves of the Company, the Chesapeake Transaction and of the Sundance Transaction on a pro forma combined basis as of December 31, 2022 and 2021:

	SilverBow Historical		Chesapeake Transaction		Sundance Transaction			Sundance Transaction Adjustments			Pro Forma Combined
	(In thousands)
January 1, 2022 balance	$	1,558,462	$	958,204	$	412,868		$	—		$	2,929,534
Net changes in prices, net of production costs	1,852,439		663,937		—			—			2,516,376
Net changes in future development costs	(208,188)		(86,658)		—			—			(294,846)
Net changes due to revisions in quantity estimates	(4,218)		202,136		—			—			197,918
Accretion of discount	181,678		119,239		—			—			300,917
Other	(176,112)		(107,766)		—			—			(283,878)
Total revisions	1,645,599		790,888		—			—			2,436,487
New field discoveries and extensions, net of future production and development costs	968,093		138,778		—			—			1,106,871
Purchase of reserves	1,051,869		—		—			(412,868)		(a)	639,001
Sales of minerals in place	(5,209)		—		(412,868)		(a)	412,868		(a)	(5,209)
Sales of oil and natural gas produced, net of production costs	(621,686)		(294,365)		—			—			(916,051)
Previously estimated development costs	108,566		32,972		—			—			141,538
Net change in income taxes	(665,448)		(148,648)		—			—			(814,096)
Net change in Standardized Measure of discounted future net cash flows	2,481,784		519,625		(412,868)			—			2,588,541
December 31, 2022 balance	$	4,040,246	$	1,477,829	$	—		$	—		$	5,518,075

(a) Amounts and adjustments reflect the purchase and sale of minerals in place associated with the Sundance Transaction, which closed on June 30, 2022.

	SilverBow Historical		Chesapeake Transaction		Sundance Transaction		Pro Forma Combined
	(In thousands)
January 1, 2021 balance	$	512,952	$	192,122	230,804		$	935,878
Net changes in prices, net of production costs	781,786		577,781		272,732		1,632,299
Net changes in future development costs	1,569		(34,445)		(42,547)		(75,423)
Net changes due to revisions in quantity estimates	(43,379)		416,962		(19,717)		353,866
Accretion of discount	52,627		19,212		23,109		94,948
Other	29,303		(143,808)		(30,765)		(145,270)
Total revisions	821,906		835,702		202,812		1,860,420
New field discoveries and extensions, net of future production and development costs	400,008		365,709		64,454		830,171
Purchase of reserves	345,300		—		—		345,300
Sales of minerals in place	—		—		—		—
Sales of oil and natural gas produced, net of production costs	(336,028)		(201,110)		(83,194)		(620,332)
Previously estimated development costs	59,318		1,969		22,035		83,322
Net change in income taxes	(244,994)		(236,188)		(24,043)		(505,225)
Net change in Standardized Measure of discounted future net cash flows	1,045,510		766,082		182,064		1,993,656
December 31, 2021 balance	$	1,558,462	$	958,204	$	412,868	$	2,929,534

13

XML

Document and Entity Information	Sep. 12, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Sep. 12, 2023
Entity Registrant Name	SilverBow Resources, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-8754
Entity Tax Identification Number	20-3940661
Entity Address, Address Line One	920 Memorial City Way
Entity Address, Address Line Two	Suite 850
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77024
City Area Code	281
Local Phone Number	874-2700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	SBOW
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0000351817