| Item 1.01 | Entry into a Material Definitive Agreement. |
In connection with the Company’s entry into
the Acquisition Agreements (as defined below), on June 23, 2023, Civitas Resources, Inc., a Delaware corporation (the “Company”)
entered into a Third Amendment to Amended and Restated Credit Agreement (the “Third Amendment”), among the Company, the guarantors
party thereto (the “Guarantors”), the lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent (the
“Administrative Agent”), which Third Amendment amends the terms of that certain Amended and Restated Credit Agreement, dated
as of November 1, 2021 (the “Credit Agreement”) among the Company, the Guarantors, each lender from time to time party thereto,
and the Administrative Agent. “Acquisition Agreements” means, collectively, (i) the
Membership Interest Purchase Agreement, dated June 19, 2023, by and among the Company, Hibernia Energy III Holdings, LLC, and Hibernia
Energy III-B Holdings, LLC and (ii) the Membership Interest Purchase Agreement, dated June 19, 2023, by and among the Company, Tap Rock
Resources Legacy, LLC, Tap Rock Resources Intermediate, LLC, Tap Rock Resources II Legacy, LLC, Tap Rock Resources II Intermediate, LLC,
Tap Rock NM10 Legacy Holdings, LLC, and Tap Rock NM10 Holdings Intermediate, LLC, solely in its capacity as the sellers’ representative,
Tap Rock I Legacy, and solely for the limited purposes set forth therein, Tap Rock Resources, LLC (the transactions contemplated by the
“Acquisition Agreements,” the “Acquisitions”).
Pursuant to the Third Amendment, the Company may,
among other things, (i) issue and offer Notes (as defined below), the net proceeds of which, together with cash on hand and borrowings
under the Company’s existing credit facility will be used to fund a portion of the consideration of the Acquisitions, (ii) incur
indebtedness pursuant to those certain debt commitment letters by and among the Company, Bank of America N.A., BofA Securities, Inc.,
and JPMorgan Chase Bank, N.A. (together with Bank of America N.A. and BofA Securities, Inc., the “Commitment Parties”) providing
for two separate 364-day bridge loan facilities in an aggregate principal amount of up to $2.7 billion (such facilities, the “Bridge
Facilities” and the loans made thereunder, the “Bridge Loans”), the proceeds of which will, if drawn, be used to partially
fund the Acquisitions, (iii) incur the debt described in the immediately preceding clauses (i) and (ii) without any corresponding reduction
in the Borrowing Base (as defined in the Credit Agreement), and (iv) incur pari passu term loan indebtedness subject to a total secured
leverage test of 2.00 to 1.00 and certain other customary terms and conditions. As previously announced, the Company priced
an offering of $1,350 million in aggregate principal amount of new 8.375% senior unsecured notes due 2028 and $1,350 million in aggregate
principal amount of new 8.750% senior unsecured notes due 2031 (collectively, the “Notes”) in a private offering to eligible
purchasers that is exempt from registration under the Securities Act of 1933, as amended. The offering of the Notes is expected to close
on June 29, 2023, subject to the satisfaction of customary closing conditions. Assuming the offering of the Notes closes, the Company
does not expect to draw on the Bridge Loans.
The foregoing description of the Third Amendment
is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Third Amendment,
which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.
