Bonanza Creek has entered into an agreement to acquire HighPoint with equity and debt to be issued to HighPoint shareholders and debtholders. Bonanza will issue 9.8 million common shares and up to $100 million in senior unsecured notes in the transaction. Both boards of directors have unanimously approved the deal. This materially increases Bonanza's position in Weld County with a rural leasehold position of 206,000 net acres. The company expects to realize $15 million in near-term capital expenditure savings and $31 million in 2021 cost savings.
Under the terms of the agreement, a minimum of 97.5% of senior unsecured noteholders must participate in the exchange offer and consent solicitation. If this condition is not met, HighPoint will filed for a prepackaged Chapter 11 to pursue court approval of the transaction. Fifth Creek Energy, which owns 46.5% of HighPoint, has entered into a support agreement to vote in favor of the merger. The deal is expected to close in the first or second quarter of 2021, depending on whether HighPoint declares for bankruptcy. Eric Greager will serve as CEO of the combined company with Brian Steck serving as chairman. Evercore advised Bonanza Creek, and Tudor Pickering Holt advised HighPoint.