SilverBow Resources, Inc. (SBOW) to acquire oil and gas assets in the Eagle Ford

SilverBow Resources, Inc. (NYSE: SBOW) (“SilverBow” or “the Company”) announced today it has entered into a definitive agreement to acquire oil and gas assets in the Eagle Ford from two sellers.

Acquisition Highlights:

• Total purchase price of approximately $75 million, consisting of $45 million in cash and approximately $30 million in equity
• Expected to be accretive on all key financial metrics
• 17,000 total net acres in the oil-window of La Salle, McMullen, DeWitt and Lavaca counties
• May 2021 net production of approximately 2,500 barrels of oil equivalent per day, 71% liquids / 46% oil from 111 PDP wells
• Acquired oil production represents a 30% increase to SilverBow’s current full year 2021 oil production guidance
• 2021E Adjusted EBITDA of approximately $28 million(1)
• Over 100 net drilling locations, adding approximately three years of inventory at SilverBow’s current 1 rig drilling pace

MANAGEMENT COMMENTS

Sean Woolverton, SilverBow’s Chief Executive Officer, commented, “This acquisition meaningfully increases SilverBow’s oil production and furthers our Eagle Ford and Austin Chalk consolidation efforts while maintaining a balanced oil and gas portfolio. This represents our third acquisition since the beginning of August and the largest to date for SilverBow. This transaction bolsters our inventory with high rate of return locations and provides us with development optionality as we plan for 2022 and beyond. The acquisition is accretive to Adjusted EBITDA and further reduces our pro forma leverage ratio(2) given the incremental cash flow. As we have shown over time, we expect to continue driving our peer-leading capital efficiency and cost structure as these assets are combined with our existing portfolio.”

Mr. Woolverton commented further, “Today’s announcement is a testament to the extensive work we have done evaluating opportunities and executing our in-basin consolidation plan. Furthermore, SilverBow once again utilized a mix of both cash and stock to fund the purchase price. The use of equity has allowed us to access a larger opportunity set for strategic growth while aligning our interests with surrounding peer companies and other key stakeholders for accretive, long-term value creation. Including the pro forma contribution of our recent acquisitions, SilverBow is targeting a leverage ratio of 1.25x at year-end 2021. We plan to share additional details as part of our third quarter 2021 reporting in November.”

TRANSACTION DETAILS

The acquisition has an effective date of August 1, 2021 and is expected to close before year-end, subject to customary closing conditions. The total purchase price is approximately $75 million, consisting of $45 million in cash and the greater of (i) approximately 1.35 million shares of SilverBow common stock based on its 30-day volume weighted average price as of October 4, 2021 and (ii) the number of shares equal to $25 million divided by the 30-day volume weighted average price as of the first trading day preceding the closing date. SilverBow intends to fund the cash component and fees and expenses with cash on hand and borrowings under its revolving credit facility.

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