| Item 1.01. | Entry Into a Material Definitive Agreement. |
Hibernia Acquisition Agreement
On June 19, 2023, Civitas Resources, Inc.
(the “Company”) entered into a membership interest purchase agreement (the “Hibernia Acquisition Agreement”) with
Hibernia Energy III Holdings, LLC, a Delaware limited liability company ( “HE3 Holdings”), and Hibernia Energy III-B Holdings,
LLC, a Delaware limited liability company (“HE3-B Holdings” and, collectively with HE3 Holdings, the “Hibernia Sellers”),
pursuant to which the Company agreed to purchase all of the issued and outstanding equity ownership interests of Hibernia Energy III,
LLC and Hibernia Energy III-B, LLC (collectively, the “Hibernia Interests”).
Upon closing under the Hibernia Acquisition Agreement,
the Hibernia Sellers will receive aggregate consideration of $2,250,000,000 in cash, subject to certain customary purchase price adjustments
set forth in the Hibernia Acquisition Agreement (as adjusted, the “Hibernia Purchase Price”).
The obligations of the parties to complete the
transactions contemplated by the Hibernia Acquisition Agreement (collectively, the “Hibernia Acquisition”) are subject to
the satisfaction or waiver of customary closing conditions set forth in the Hibernia Acquisition Agreement. In connection with and upon
execution of the Hibernia Acquisition Agreement, the Company deposited with an escrow agent a cash deposit equal to 7.5% of the unadjusted
Hibernia Purchase Price to assure the Company’s and Hibernia Sellers’ performance of their respective obligations thereunder
and therein, pursuant to an escrow agreement among the Company, the Hibernia Sellers and the escrow agent.
The foregoing description of the Hibernia Acquisition
Agreement and the transactions contemplated thereby is not complete and is qualified in its entirety by reference to the full text of
the Hibernia Acquisition Agreement, a copy of which is filed herewith as Exhibit 10.1, and is incorporated herein by reference.
The Hibernia Acquisition Agreement has been included
with this Current Report on Form 8-K (this “Report”) to provide investors and security holders with information regarding
the terms of the transactions contemplated therein. It is not intended to provide any other factual information about the Company, the
Hibernia Sellers or the Hibernia Interests. The representations, warranties, covenants and agreements contained in the Hibernia Acquisition
Agreement, which are made only for purposes of the Hibernia Acquisition Agreement and as of specific dates, are solely for the benefit
of the parties to the Hibernia Acquisition Agreement, may be subject to limitations agreed upon by the parties (including being qualified
by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Hibernia Acquisition Agreement
instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that
differ from those applicable to investors and security holders. Company security holders should not rely on the representations, warranties,
covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, the
Hibernia Sellers or the Hibernia Interests. Moreover, information concerning the subject matter of the representations and warranties
may change after the date of the Hibernia Acquisition Agreement, which subsequent information may or may not be fully reflected in the
Company’s public disclosures.
Tap Rock Acquisition Agreement
On
June 19, 2023, the Company entered into a membership interest purchase agreement (the “Tap Rock Acquisition
Agreement”) with Tap Rock Resources Legacy, LLC, a Delaware limited liability company (“Tap Rock I Legacy”), Tap
Rock Resources Intermediate, LLC, a Delaware limited liability company (“Tap Rock I Intermediate” and, together with Tap
Rock I Legacy, the “Tap Rock I Sellers”), Tap Rock Resources II Legacy, LLC, a Delaware limited liability company
(“Tap Rock II Legacy”), Tap Rock Resources II Intermediate, LLC, a Delaware limited liability company (“Tap Rock
II Intermediate” and, together with Tap Rock II Legacy, the “Tap Rock II Sellers”), Tap Rock NM10 Legacy Holdings,
LLC, a Delaware limited liability company (“NM10 Legacy”), and Tap Rock NM10 Holdings Intermediate, LLC, a Delaware
limited liability company (“NM10 Intermediate” and together with NM10 Legacy, the “NM10 Sellers”, and the
NM10 Sellers, together with the Tap Rock I Sellers and Tap Rock II Sellers, the “Tap Rock Sellers”), solely in its
capacity as “Sellers’ Representative” (as defined therein), Tap Rock I Legacy (the “Tap Rock Sellers’
Representative”), and solely for the limited purposes set forth therein, Tap Rock Resources, LLC, a Delaware limited liability
company, pursuant to which the Company agreed to purchase all of the issued and outstanding equity ownership interests of a Delaware limited liability company to be formed by the Tap Rock I Sellers,
Tap Rock Resources II, LLC, a Delaware limited liability company, and Tap Rock NM10 Holdings, LLC, a Delaware limited liability
company (collectively, the “Tap Rock Interests”) from the Tap Rock I Sellers, the Tap Rock II Sellers and the NM10
Sellers, respectively.
Upon closing under the Tap Rock Acquisition Agreement,
the Tap Rock Sellers will receive aggregate consideration of (i) $1,500,000,000 in cash, subject to certain customary purchase price
adjustments set forth in the Tap Rock Acquisition Agreement (as adjusted, the “Tap Rock Cash Consideration”) and (ii) 13,538,472
shares of common stock, par value $0.01 per share, of the Company (the “Shares”) valued at approximately $950,000,000, subject
to certain customary anti-dilution and purchase price adjustments (as adjusted, the “Tap Rock Stock Consideration” and, together
with the Tap Rock Cash Consideration, the “Tap Rock Purchase Price”).
The obligations of the parties to complete
the transactions contemplated by the Tap Rock Acquisition Agreement (collectively, the “Tap Rock Acquisition” and,
together with the Hibernia Acquisition, the “Acquisitions”) are subject to the satisfaction or waiver of customary
closing conditions set forth in the Tap Rock Acquisition Agreement. In connection with and upon execution of the Tap Rock
Acquisition Agreement, the Company deposited with an escrow agent a cash deposit equal to 7.5% of the unadjusted Tap Rock Purchase
Price, to assure the Company’s and the Tap Rock Sellers’ performance of their respective obligations thereunder and
therein, pursuant to an escrow agreement among the Company, the Tap Rock Sellers’ Representative and the escrow agent.
In accordance with the terms of the Tap Rock Acquisition
Agreement, at the closing of the Tap Rock Acquisition, the Company will enter into a registration rights agreement (the “Registration
Rights Agreement”) with the Tap Rock Sellers pursuant to which the Company will agree to, on the terms set forth therein and among
other things, file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement registering for resale
the Shares comprising the Tap Rock Stock Consideration issued in the Tap Rock Acquisition.
The foregoing description of the Tap Rock Acquisition
Agreement and the transactions contemplated thereby is not complete and is qualified in its entirety by reference to the full text of
the Tap Rock Acquisition Agreement, a copy of which is filed herewith as Exhibit 10.2, and is incorporated herein by reference. The
foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference
to the full text of the form of Registration Rights Agreement, which is included as Exhibit J to the Tap Rock Acquisition Agreement
and is incorporated herein by reference.
The Tap Rock Acquisition Agreement has been included
with this Report to provide investors and security holders with information regarding the terms of the transactions contemplated therein.
It is not intended to provide any other factual information about the Company, the Tap Rock Sellers or the Tap Rock Interests. The representations,
warranties, covenants and agreements contained in the Tap Rock Acquisition Agreement, which are made only for purposes of the Tap Rock
Acquisition Agreement and as of specific dates, are solely for the benefit of the parties to the Tap Rock Acquisition Agreement, may be
subject to limitations agreed upon by the parties (including being qualified by confidential disclosures made for the purposes of allocating
contractual risk between the parties to the Tap Rock Acquisition Agreement instead of establishing these matters as facts) and may be
subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and security
holders. Company security holders should not rely on the representations, warranties, covenants and agreements or any descriptions thereof
as characterizations of the actual state of facts or condition of the Company, the Tap Rock Sellers or the Tap Rock Interests. Moreover,
information concerning the subject matter of the representations and warranties may change after the date of the Tap Rock Acquisition
Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
