All mergers and acquisitions disclosed were accounted for under the acquisition method of accounting for business combinations. Accordingly, we conducted assessments of the net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. Associated transaction and integration costs were expensed as incurred. The fair value measurements of assets acquired and liabilities assumed were based on inputs that are not observable in the market, and therefore represent Level 3 inputs. Please refer to Note 8 - Fair Value Measurements for additional discussion regarding the various levels within the fair value hierarchy. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of proved properties include estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows, and a market-based weighted-average cost of capital. These inputs required significant judgments and estimates by management at the time of the valuation.

On April 1, 2021, Civitas acquired HighPoint Resources Corporation (“HighPoint”), pursuant to the terms of HighPoint’s prepackaged plan of reorganization under Chapter 11 of the United States Bankruptcy Code (the “Prepackaged Plan”) (the “HighPoint Merger”). Pursuant to the Prepackaged Plan, each share of common stock of HighPoint issued and outstanding was converted into 0.11464 shares of common stock of Civitas (“Civitas Common Stock”). As a result, Civitas issued 488.0 thousand shares of Civitas Common Stock to former HighPoint stockholders.

Concurrently with the HighPoint Merger and pursuant to the Prepackaged Plan, in exchange for the aggregate principal amount outstanding of HighPoint’s senior notes, Civitas issued an aggregate of (i) 9.3 million shares of Civitas Common Stock and (ii) $100.0 million aggregate principal amount of 7.5% Senior Notes due 2026 (“7.5% Senior Notes”). Please refer to Note 5 - Long-Term Debt for further discussion of the 7.5% Senior Notes, which have since been redeemed in full.


Merger Consideration (in thousands, except per share amount)
Shares of Civitas Common Stock issued to existing holders of HighPoint common stock (1)	488
Shares of Civitas Common Stock issued to existing holders of HighPoint senior notes	9,314
Total additional shares of Civitas Common Stock issued as merger consideration	9,802

Closing price per share of Civitas Common Stock (2)	$	38.25

Merger consideration paid in shares of Civitas Common Stock	$	374,933
Aggregate principal amount of the 7.5% Senior Notes	100,000
Total merger consideration	$	474,933


Purchase Price Allocation (in thousands)
Assets Acquired
Cash and cash equivalents	$	49,827
Accounts receivable - oil, natural gas sales, and NGL sales	26,343
Accounts receivable - joint interest and other	9,161
Prepaid expenses and other	3,608
Inventory of oilfield equipment	4,688
Proved properties	539,820
Other property and equipment	2,769
Right-of-use assets	4,010
Deferred income tax assets	110,513
Other noncurrent assets	797
Total assets acquired	$	751,536

Liabilities Assumed
Accounts payable and accrued expenses	$	51,088
Oil and natural gas revenue distribution payable	20,786
Lease liability	4,010
Derivative liability	18,500
Current portion of long-term debt	154,000
Ad valorem taxes	3,746
Asset retirement obligations	24,473
Total liabilities assumed	276,603
Net assets acquired	$	474,933

On November 1, 2021, Civitas completed its merger with Extraction Oil & Gas, Inc. (“Extraction”), pursuant to the terms of the related Agreement and Plan of Merger (the “Extraction Merger Agreement”) (the “Extraction Merger”). Pursuant to the Extraction Merger Agreement, each share of common stock of Extraction issued and outstanding was converted into 1.1711 shares of Civitas Common Stock (the “Extraction Exchange Ratio”). As a result, Civitas issued 31.1 million shares of Civitas Common Stock to former Extraction stockholders.

Additionally, each unvested award of restricted stock units issued pursuant to Extraction’s 2021 Long Term Incentive Plan (the “Extraction Equity Plan”) was assumed by Civitas and converted into a number of restricted stock units with respect to shares of Civitas Common Stock (such restricted stock unit, a “Converted RSU”) using the Extraction Exchange Ratio. Each Converted RSU continued to be governed by the same terms and conditions that were applicable immediately prior to the Extraction Merger closing date.

Further, Civitas executed warrant agreements to replace the warrants previously issued by Extraction consisting of (i) 3.4 million Tranche A warrants to purchase Civitas Common Stock at an exercise price of $91.91 in whole or in part, at any time or from time to time on or before January 20, 2025, issued pursuant to a warrant agreement by and between Civitas and Broadridge Corporate Issuer Solutions, Inc., as warrant agent (“Broadridge”), dated as of November 1, 2021 (the “Tranche A Warrants”), and (ii) 1.7 million Tranche B warrants to purchase Civitas Common Stock at an exercise price of $104.45 in whole or in part, at any time or from time to time on or before (i) January 20, 2026, issued pursuant to a warrant agreement by and between Civitas and Broadridge, as warrant agent, dated as of November 1, 2021 (the “Tranche B Warrants,” and, together with the Tranche A Warrants, the “Warrants”). A holder of a warrant, in its capacity as such, is not entitled to any rights whatsoever as a stockholder of Civitas, except to the extent expressly provided in the applicable warrant agreement. Please refer to Note 8 - Fair Value Measurements for further discussion.

The purchase price allocation was finalized as of the fourth quarter of 2022. The following tables present the merger consideration and final purchase price allocation of the assets acquired and the liabilities assumed in the Extraction Merger:


Merger Consideration (in thousands, except per share amount)
Shares of Civitas Common Stock issued as merger consideration (1)	31,095
Closing price per share of Civitas Common Stock (2)	$	56.10
Merger consideration paid in shares of Civitas Common Stock	$	1,744,431

Unvested restricted stock compensation expense allocated as merger consideration	$	19,338
Unvested performance restricted stock compensation expense allocated as merger consideration	2,897
Total stock compensation expense allocated as merger consideration	$	22,235

Tranche A warrants issued as merger consideration	$	52,164
Tranche B warrants issued as merger consideration	25,299
Total warrants issued as merger consideration	$	77,463

Total merger consideration	$	1,844,129


Purchase Price Allocation (in thousands)
Assets Acquired
Cash and cash equivalents	$	106,360
Accounts receivable - oil, natural gas, and NGL sales	119,585
Accounts receivable - joint interest and other	33,054
Prepaid expenses and other	3,044
Inventory of oilfield equipment	9,291
Derivative assets	5,834
Proved properties	1,878,887
Unproved properties	193,400
Other property and equipment	40,068
Right-of-use assets	6,883
Deferred income tax assets	49,194
Other noncurrent assets	4,248
Total assets acquired	$	2,449,848

Liabilities Assumed
Accounts payable and accrued expenses	$	90,353
Production taxes payable	63,572
Oil and natural gas revenue distribution payable	183,875
Income tax payable	14,000
Lease liability	6,883
Derivative liability	100,474
Ad valorem taxes	76,071
Asset retirement obligations	68,741
Other noncurrent liabilities	1,750
Total liabilities assumed	605,719
Net assets acquired	$	1,844,129

On November 1, 2021, Civitas completed its merger with CPPIB Crestone Peak Resources America Inc. (“Crestone Peak”), pursuant to the terms of the related Agreement and Plan of Merger (the “Crestone Merger Agreement”) (the “Crestone Peak Merger”). Pursuant to the Crestone Merger Agreement, the shares of Crestone Peak common stock were converted into 22.5 million shares of Civitas Common Stock.


Merger Consideration (in thousands, except per share amount)
Shares of Civitas Common Stock issued as merger consideration	22,500
Closing price per share of Civitas Common Stock (1)	$	56.10
Merger consideration paid in shares of Civitas Common Stock	$	1,262,250

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Purchase Price Allocation (in thousands)
Assets Acquired
Cash and cash equivalents	$	67,505
Accounts receivable - oil, natural gas, and NGL sales	81,340
Accounts receivable - joint interest and other	9,917
Prepaid expenses and other	2,929
Inventory of oilfield equipment	11,951
Proved properties	1,797,814
Unproved properties	453,321
Other property and equipment	7,980
Right-of-use assets	7,934
Total assets acquired	$	2,440,691

Liabilities Assumed
Accounts payable and accrued expenses	$	134,791
Production taxes payable	52,435
Oil and natural gas revenue distribution payable	83,950
Lease liability	7,934
Derivative liability	338,383
Credit facility	280,000
Ad valorem taxes	66,913
Deferred income tax liabilities	125,086
Asset retirement obligations	88,949
Total liabilities assumed	1,178,441
Net assets acquired	$	1,262,250

The amount of revenue of HighPoint, Extraction, and Crestone Peak included in our statement of operations during the year ended December 31, 2021 was approximately $244.7 million, $172.3 million, and $114.8 million, respectively. We determined that disclosing the amount of HighPoint, Extraction, and Crestone Peak related earnings included in the statements of operation is impracticable, as the operations from these mergers were integrated into the operations of the Company from the dates of each acquisition.

The following unaudited pro forma financial information (in thousands, except per share amounts) represents a summary of the consolidated results of operations for the year ended December 31, 2021 and 2020, assuming the HighPoint, Extraction, and Crestone Peak mergers had been completed as of January 1, 2020. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the mergers had been effective as of this date, or of future results, and includes certain non-recurring pro forma adjustments that were directly attributable to the business combinations (in thousands, except per share amounts).


	Year Ended December 31, 2021
	As reported		HighPoint(1)		Extraction(2)		Crestone Peak(2)		Civitas Pro Forma Combined
Total revenue	$	930,614	$	72,019	$	882,255	$	508,038	$	2,392,926
Net income (loss)	178,921		(46,434)		1,140,653		(227,083)		1,046,057
Net income per common share - basic	$	4.82							$	12.61
Net income per common share - diluted	$	4.74							$	12.52
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(1)Based on a closing date of April 1, 2021.
(2)Based on a closing date of November 1, 2021.
	Year Ended December 31, 2020
	As reported		HighPoint		Extraction		Crestone Peak		Civitas Pro Forma Combined
Total revenue	$	218,090	$	250,347	$	557,904	$	285,426	$	1,311,767
Net income (loss)	103,528		(1,081,347)		(1,335,406)		(268,057)		(2,581,282)
Net income (loss) per common share - basic	$	4.98							$	(28.83)
Net income (loss) per common share - diluted	$	4.95							$	(28.83)

On March 1, 2022, the Company acquired the privately held DJ Basin operator Bison Oil & Gas II, LLC (“Bison”) for merger consideration of approximately $280.4 million (the “Bison Acquisition”). Net assets acquired under the purchase price allocation were $294.0 million and consequently resulted in a bargain purchase gain of $13.6 million. Because of the immateriality of the Bison Acquisition, the related revenue and earnings, supplemental pro forma financial information, and detailed purchase price allocation are not disclosed.

Merger transaction costs related to the aforementioned mergers and acquisitions are accounted for separately from the assets acquired and liabilities assumed and are included in merger transaction costs in the statements of operations. The Company incurred merger transaction costs of $24.7 million, $43.6 million, and $6.7 million during the years ended December 31, 2022, 2021, and 2020, respectively.