Bonanza Creek Energy Announces First Quarter 2013 Operational and Financial Results

DENVER, May 9, 2013 - Bonanza Creek Energy, Inc. (NYSE: BCEI) today reported its first quarter 2013 operating and financial results.

Key highlights for first quarter 2013, as compared to first quarter 2012, include:

• 76% increase in sales volumes to 12,307 Boe/d; 72% crude oil and liquids 

• 64% increase in revenue to $78.3 million 

• 32% increase in net income to $11.3 million, or $0.28 per share 

• 47% increase in adjusted net income (non-GAAP) to $16.2 million, or $0.40 per share 

• 66% increase in adjusted EBITDAX (non-GAAP) to $52.3 million 

At the end of this release, reconciliations of all stated non-GAAP financial measures are made to the most directly comparable GAAP financial measures.

Operational highlights include:

• Drilled our second extended reach lateral in the Niobrara B Bench to 9,449 feet of lateral length and successfully completed it with a 40-stage fracture stimulation 

• Drilled and completed two 40-acre spaced test wells in the Niobrara B Bench; currently drilling the third of the planned six wells to test 40-acre spacing  

• Drilled the first of four Codell horizontal wells planned for 2013 

• Completed three 5-acre infill wells in the Dorcheat-Macedonia Field; production in the first 60 days exceeded expectations 

Michael Starzer, Bonanza Creek's President and Chief Executive Officer, commented, "The first quarter results were as expected and we reiterate our full year guidance of approximately 60% year over year production growth. The driver for the positive results this quarter was again the strong oily production achieved in the Wattenberg Field and Mid-Continent region. Our crude oil and liquids volumes accounted for approximately 72% of production and 89% of revenues. We are looking forward to continued execution of our 2013 development plan, having increased to four horizontal rigs in March and targeting to achieve approximately eight completions per month in the Wattenberg Field by the end of second quarter. I am pleased with the Company's progress drilling our exciting catalyst wells and look forward to sharing more detailed results in subsequent operations updates. Finally, in April, we closed on our inaugural debt offering, upsizing to $300 million of senior unsecured notes at 6.75%, a record low rate for a first time single B E&P issuer. We believe we are well capitalized with substantial liquidity for continued growth."

First Quarter 2013 Financial Results

Bonanza Creek began the divestiture process of its California properties in the second quarter 2012, with one property remaining to be sold as of March 31, 2013. Under generally accepted accounting principles, the results of operations for this California property are presented for first quarter 2013 and recast for the prior-year as "discontinued operations." Consequently, production, revenue and expenses associated with the California properties have been removed from continuing operations and reported separately as discontinued operations in our accompanying condensed financial statements.

Average realized prices for first quarter 2013, before the effect of commodity derivatives, were $90.56 per Bbl of oil, $4.65 per Mcf of natural gas and $53.40 per Bbl of NGLs, compared to $99.37 per Bbl of oil, $3.46 per Mcf of natural gas and $64.07 per Bbl of NGLs for first quarter 2012.

Net revenue for first quarter 2013 was $78.3 million, compared to $47.8 million for first quarter 2012. Crude oil and liquids revenue accounted for approximately 89% of total revenue.

Lease operating expense ("LOE") for first quarter 2013 was $11.1 million, or $10.05 per Boe, compared to $7.1 million, or $11.28 per Boe, for first quarter 2012. The decrease in per unit LOE is primarily attributable to increased sales volumes and growing production from lower per unit operating cost horizontal wells.

General and administrative expense ("G&A") for first quarter 2013 was $13.2 million, or $11.89 per Boe, compared to $6.0 million, or $9.47 per Boe, for first quarter 2012. Cash G&A was $8.8 million, or $7.93 per Boe, compared to $5.3 million, or $8.40 per Boe, for the first quarter of 2012. Stock-based compensation expense was $4.4 million during the quarter. Included in our stock-based compensation expense is $2.5 million related to the distribution of 73,197 fully-vested shares issued in December of 2010 and previously held in the BCEC Investment Trust pending resolution of a previously disclosed arbitration.

Net income for first quarter 2013 was $11.3 million, or $0.28 per diluted share, compared to net income of $8.5 million, or $0.22 per diluted share, for first quarter 2012. Adjusted net income for first quarter 2013 was $16.2 million, or $0.40 per diluted share, compared to adjusted net income of $11.0 million for first quarter 2012.

Operations Update

During first quarter 2013, the Company achieved an average production rate of 12,307 Boe/d from continuing operations, comprised of 65% crude oil, 7% NGLs, and 28% natural gas, increasing total production by 76% over first quarter 2012.

Rocky Mountain Region - Wattenberg Horizontal Development

During first quarter 2013, the Rocky Mountain region contributed 7,164 Boe/d, or 58% of total company net sales volumes for the quarter with 5,532 Boe/d coming from horizontal wells. These volumes represent a 9% increase in total Rocky Mountain production and a 50% increase in sales volumes from horizontal wells over the previous quarter.

The Company spud 18 gross (17.1 net) wells and tied 7 gross (6.5 net) horizontal Niobrara B Bench wells into sales during the quarter. Two wells, including our first extended reach lateral, were put on production in January, one well in February and four wells were placed into sales in the second half of March. The 4,000 foot laterals had an average total well cost of approximately $4.2 million. The Company completed six wells in April and expects to average eight completions per month by the end of the second quarter.

The following table presents the average 30-day, 60-day and 90-day peak initial production rates for the Niobrara B Bench, Niobrara C Bench, Codell and Extended Reach Lateral wells:

The Company recently drilled its second extended reach lateral into the Niobrara B Bench to 15,958 feet and successfully ran the production liner to total depth with an in-zone lateral length of 9,449 feet. A 40-stage fracture stimulation has been completed and operations are in progress to put the well on production. In addition, the first 40-acre Niobrara B Bench test well and second Codell test well were completed, both of which are currently flowing up tubing with gas lift valves installed.

Mid-Continent Cotton Valley Program

The Mid-Continent region contributed 5,143 Boe/d, or 42% of total company net sales volumes for first quarter 2013, comprised of 57% crude oil, 16% natural gas liquids and 27% natural gas. Sales volumes increased by approximately 19% over first quarter 2012.

Bonanza Creek spud 9 gross (8.1 net) 10-acre spaced Cotton Valley wells at Dorcheat-Macedonia and 3 gross (2.8 net) Cotton Valley wells at the McKamie-Patton Field during first quarter 2013 and performed 26 recompletions. We tied 13 gross (12.2 net) wells into sales during the quarter, including one well in January, five wells in February and seven wells in March. The Company also continued testing 5-acre spacing with three pilot wells completed and producing above expectations, achieving a 30-day average production rate of 67 Boe/d per well and a 60-day average production rate of 62 Boe/d per well. Three additional 5-acre test wells are scheduled to be completed during the second quarter.

Also during the quarter, the Company began processing gas through the new expansion of our Dorcheat gas plant. The additional 12.5 MMcf/d of processing capacity is expected to allow the Company to efficiently develop the Dorcheat-Macedonia Field at 10-acre spacing.

Financial Update

On February 6, 2013, Bonanza Creek closed an upsized underwritten public offering of 13,000,000 shares of its common stock at a price of $29.50 per share on behalf of one of our original private equity sponsors, West Face Capital Inc., the manager of Project Black Bear LP, the selling stockholder. The Company received no proceeds from the sale.

Subsequent to the first quarter, on April 9, 2013, Bonanza Creek issued $300 million of senior unsecured notes due 2021. The offering was upsized from $250 million and priced at par with a coupon of 6.75%. The Company used $191.5 million of the proceeds of the offering to repay all outstanding borrowings under its revolving credit facility, with the remainder available to fund future capital expenditures.

Liquidity

As of March 31, 2013, Bonanza Creek had a $600 million revolving credit facility with a borrowing base of $325 million. The Company had $191.5 million drawn on the credit facility and letters of credit totaling $48 million resulting in total liquidity of $88.7 million. Following our $300 million senior notes offering completed on April 9, 2013, the Company's liquidity on a pro forma basis improved to $306.9 million as of March 31, 2013. Schedule 7 provides a calculation of total liquidity.

Commodity Derivatives Positions

The following table summarizes the Company's crude oil and natural gas commodity derivative positions as of March 31, 2013 and settling quarterly thereafter:

Conference Call Information

Bonanza Creek will host a conference call on Friday, May 10, 2013 at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time). To access the live interactive call, please dial (877) 546-5021 or (857) 244-7553 and use the passcode 23937368. This call is being webcast and can be accessed at Bonanza Creek's website www.bonanzacrk.com for one year after the event.

About Bonanza Creek Energy, Inc.

Bonanza Creek Energy, Inc. is an independent oil and natural gas Company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company's assets and operations are concentrated primarily in the Rocky Mountains in the Wattenberg Field, focused on the Niobrara oil shale, and in southern Arkansas, focused on the oily Cotton Valley sands. The Company's common shares are listed for trading on the NYSE under the symbol: "BCEI." For more information about the Company, please visit www.bonanzacrk.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management's experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words "will," "potential," "believe," "estimate," "intend," "expect," "may," "should," "anticipate," "could," "plan," "predict," "project," "profile," "model" or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding forecasted production, forecasted completions, liquidity, processing capacity and development places. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; and access to adequate gathering systems and pipeline take-away capacity. Further information on such assumptions, risks and uncertainties is available in the Company's SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2012 and other filings submitted by us to the Securities Exchange Commission. The Company's SEC filings are available on the Company's website at www.bonanzacrk.com and on the SEC's website at www.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, including guidance, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

For further information, please contact:

Mr. Ryan Zorn
Vice President - Finance
720-440-6172

Mr. James Masters
Investor Relations Manager
720-440-6121

Schedule 1: Condensed Statement of Operations
(in thousands, expect for per share data, unaudited)

(1)        Financial statements for the quarter ended March 31, 2012, have been recast to present the results of operations and financial position of the Company related to certain properties in California sold in 2012 or held for sale as of March 31, 2013, as discontinued operations.

Schedule 2: Condensed Statement of Cash Flows
(in thousands, unaudited)

Schedule 3: Condensed Balance Sheet
(in thousands, unaudited)

Schedule 4: Volumes and Realized Prices
(unaudited)

Schedule 5: Adjusted Net Income
(in thousands, except per share amounts, unaudited)

This release contains the non-GAAP financial measures adjusted net income and adjusted net income per diluted share, which exclude (1) unrealized gain or loss in fair value of commodity derivatives and (2) stock-based compensation expense. The amounts included in the calculation of adjusted net income and adjusted net income per diluted share, below, were computed in accordance with GAAP. We believe adjusted net income and adjusted net income per diluted share are useful to investors because they provide readers with a more meaningful measure of our profitability before recording certain items the timing or amount of which cannot be reasonably determined. However, these measures are provided in addition to, not as an alternative for and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes in our SEC filings and posted on our website. The following tables provide a reconciliation of adjusted net income for the three months ended March 31, 2013 and 2012, respectively.

Schedule 6: Adjusted EBITDAX
(in thousands, except per share amounts, unaudited)

We define adjusted EBITDAX as net income, plus (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) stock-based compensation expense, (4) interest expense, (5) unrealized gain or loss in fair value of commodity derivatives, and (6) income taxes or benefit. Adjusted EBITDAX is not a measure of net income or cash flow as determined by GAAP. Adjusted EBITDAX is presented herein and reconciled to the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a Company's ability to internally fund development and exploration activities. This measure is provided in addition to, not as an alternative for and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes) in our SEC filings and posted on our website. The following table provides a reconciliation of adjusted EBITDAX to net income for the three months ended March 31, 2013 and 2012, respectively.

Schedule 7: Liquidity
(in thousands, unaudited)

Liquidity is calculated by adding the net funds available under our revolving credit facility and cash and cash equivalents. We use liquidity as an indicator of the Company's ability to fund development and exploration activities. However, this measurement has limitations. This measurement can vary from year-to-year for the Company and can vary among companies based on what is or is not included in the measurement on a company's financial statements. This measurement is provided in addition to, not as an alternative for and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes) in our SEC filings and posted on our website. The table below summarizes our liquidity as of March 31, 2013 as reported and pro forma for the issuance of $300 million of senior notes completed on April 9, 2013.