Weld County O&G operators to merge amid bankruptcy

DENVER — Bonanza Creek Energy Inc. (NYSE: BCEI) and HighPoint Resources Corp. (NYSE: HPR) have been granted permission to combine, a move that will consolidate two of the top-10 energy producers in Weld County by volume.

The two Denver-based operators were given the go-ahead to merge last Thursday by the Delaware Bankruptcy Court, where HighPoint had filed its Chapter 11 case.

Bonanza and HighPoint first announced their intentions to merge last November by exchanging two HighPoint long-term debt notes for Bonanza stock and unsecured debt. HighPoint declared bankruptcy as a backup plan after only 93% of the company’s debt holders agreed to the deal versus the 97.5% that was required to consummate the deal, according to filings with the U.S. Securities and Exchange Commission in February.

At the time of its bankruptcy, HighPoint declared $826.63 million in assets against $760.43 million in debt. Just over $641 million of that debt are long-term notes held by Deutsche Bank AG (NYSE: DB).

The combination will create one of the larger players in the Denver-Julesburg Basin in Weld County, as HighPoint was the seventh-largest producer and Bonanza was the ninth-largest producer in the county during 2019 before the pandemic induced a price crash and financial crisis for the energy industry in 2020. 

The two companies combined produced just more than 17.74 million barrels of oil and 54.51 million MCF of natural gas in all of 2019, which would have made them the sixth-largest operator by volume in the county that year.

The combined outputs of the companies in 2020 was 15.17 million barrels and 58.46 million MCF, according to data from the Colorado Oil and Gas Conservation Commission.

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