DFAN14A 1 p24-1178dfan14a.htm SILVERBOW RESOURCES, INC.

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant o

Filed by a Party other than the Registrant þ

Check the appropriate box:

o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o	Definitive Proxy Statement
o	Definitive Additional Materials
þ	Soliciting Material Under Rule 14a-12

SilverBow Resources, Inc.

(Name of Registrant as Specified in Its Charter)

KEF Investments, LP

KEF Fund V Investments, LP

Kimmeridge Energy Management Company, LLC

Benjamin Dell

Alexander Inkster

Neda Jafar

Denis Laloy

Noam Lockshin

Henry Makansi

Neil McMahon

Douglas E. Brooks

Carrie M. Fox

Katherine L. Minyard

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):

þ	No fee required.

o	Fee paid previously with preliminary materials.

o	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

On March 13, 2024, Kimmeridge Energy Management Company, LLC (“KEMC”) issued a press release (the “Press Release”), which included an open letter to shareholders of SilverBow Resources, Inc. (the “Company”), announcing that KEMC had delivered to the Company’s Board of Directors a proposal (the “Offer Letter”) to combine Kimmeridge Texas Gas, LLC, an affiliate of KEMC, and the Company on the terms set forth in the Offer Letter. In connection with the foregoing, KEMC publicly released an investor presentation (the “Investor Presentation”). A copy of the Press Release is filed herewith as Exhibit 1, a copy of the Offer Letter is filed herewith as Exhibit 2, a copy of the Investor Presentation is filed herewith as Exhibit 3 and certain information regarding the Participants (as defined in Exhibit 4) in a solicitation of proxies regarding the Company is filed herewith as Exhibit 4.

Exhibit 1

Kimmeridge Issues Open Letter to SilverBow Shareholders Outlining Proposed Combination with Kimmeridge Texas Gas

Would create preeminent pure-play Eagle Ford shale operator

Proposed combination and additional $500 million equity investment represent a premium of 21% to 30-day volume-weighted average price with significant upside potential

Urges SilverBow Board to engage in good faith negotiations and provide shareholders the opportunity to vote on its value-enhancing proposal

Kimmeridge to host investor conference call to discuss its proposal on March 14 at 11:00 am ET

NEW YORK and DENVER, March 13, 2024 -- Kimmeridge, an alternative asset manager focused on the energy sector, today delivered to the SilverBow Resources (“SilverBow”) Board of Directors (the “Board”) a proposal to combine Kimmeridge Texas Gas (“KTG”) and SilverBow. The KTG assets have an equity value of $1.1 billion and an expected enterprise value of $1.4 billion at closing of the proposed transaction (the “Transaction”).

Under the terms of the proposal, Kimmeridge would contribute the KTG assets to SilverBow in exchange for 32.4 million shares priced at $34 per share. In addition, Kimmeridge will inject $500 million of fresh equity capital at the same price of $34 per share, in exchange for 14.7 million shares. At closing of the Transaction, Kimmeridge and its affiliates would own a majority of the outstanding shares of the combined company (“CombineCo”), with a total of 50.3 million shares of common stock (inclusive of Kimmeridge’s current 3.3 million share position in SilverBow).

The Transaction will be accretive to SilverBow shareholders. The $34 share price represents a premium of 8.5% over SilverBow’s closing share price on March 11, 2024 and 21% over the 30-day volume-weighted average price of $28.12 as of March 11, 2024.

Kimmeridge has sufficient capital to fully finance the equity investment of $500 million and intends to use those funds to pay down SBOW’s existing long-term debt obligations. Kimmeridge has received highly confident letters from Barclays, RBC Capital Markets and other lenders with respect to the debt consideration required to facilitate the Transaction.

Concurrent with delivering its proposal, Kimmeridge published a formal offer letter and investor presentation on its website (https://kimmeridge.com/sbow/) and issued the following open letter to shareholders:

***

Fellow Shareholders,

As the largest investor in SilverBow, holding 12.9% of outstanding shares, we are writing to share a strategic vision that would position SilverBow to drive compelling value creation for all shareholders. We have sought to engage in a constructive dialogue with SilverBow’s Board about a proposal that would create a preeminent pure-play Eagle Ford shale operator, and a partner of choice for future consolidation.

Unfortunately, the company’s Board and management have consistently dismissed our efforts. Following the Board’s March 1 letter to shareholders, which further solidified their position and misled the investment community as to our efforts, we felt it was critical to give all shareholders the opportunity to evaluate the value-enhancing Transaction we have set forth here.

Creating the Largest Pure-Play Operator in South Texas

The proposed Transaction would immediately create the largest public pure-play Eagle Ford shale operator with enhanced scale, a low-cost, high-margin production base, a strong and flexible balance sheet, and a clear path to compelling shareholder returns. We believe all shareholders will benefit from the opportunity to participate in the compelling upside of a larger and more resilient company that is uniquely positioned to drive growth and lead the next phase of consolidation in the Eagle Ford.

The combined company would operate at the front end of the cost curve, with over 14 years of high-quality inventory. With a de-levered balance sheet, the company would target a 65-70% reinvestment rate, creating a clear path to access the high-yield market and be positioned to begin returning cash to shareholders in 2025 through a significant dividend.

Kimmeridge would also leverage its deep experience to empower the combined company to become a sustainability leader in the upstream sector – including a commitment to net-zero GHG emissions in 2025 and obtaining gas certification across the consolidated portfolio. By way of example, Kimmeridge pioneered the founding of Civitas Resources (NYSE: CIVI), which became Colorado’s first carbon-neutral energy producer on day 1 of its operations.

Importantly, under our proposal, the combined company would adopt best-in-class governance practices directly aligned with the interests of shareholders. This new structure would feature: Board and management compensation tied to absolute TSR and higher equity ownership for management, a majority independent, declassified board of directors with vast expertise, a 7-year term limit for directors, and enhanced shareholder rights. The refreshed Board would be comprised of 9 total directors. Kimmeridge would nominate 5 directors, including a Kimmeridge-nominated Chair and 4 independent directors. SilverBow would nominate the remaining 4 directors.

Furthermore, we intend to follow a “best athlete” approach in forming a management team that brings a wealth of experience to benefit the combined company. For continuity, Kimmeridge anticipates retaining key members of the SBOW C-suite while enhancing leadership with additional hires.

Leveraging Our Expertise to Drive Value for All Shareholders

Kimmeridge has a proven history of partnering with management teams across the oil and gas sector to enhance profitability, establish best-in-class sustainability programs, and align with shareholder interests. As part of these efforts, Kimmeridge has developed extensive experience in supporting the consolidation of smaller, disaggregated assets at attractive entry points, as it did with Civitas. For instance, when Kimmeridge first led the formation of Civitas, the $1.2 billion platform had just emerged from bankruptcy proceedings. Approximately 3 years later, its equity valuation now stands at approximately $7 billion with peer-leading capital returns to shareholders.

Kimmeridge would bring its deep operational and financial expertise to bear on behalf of the combined company. We would work collaboratively to position the new company for consolidation and related measures to unlock its significant value potential for all stakeholders.

Giving Shareholders a Voice

Given the combination’s clear strategic and financial merits, and in the interests of full transparency, we are making public our offer letter and supporting deck. Shareholders can assess for themselves the benefits of the proposed merger relative to SilverBow’s current standalone trajectory.

If SilverBow is as committed to hearing the perspectives of shareholders as it purports to be, then it will be open to the following proposed process:

	1.	Engaging in good faith discussions with Kimmeridge;

	2.	Working to reach a definitive agreement by April 26; and

	3.	Ultimately taking the Transaction to a shareholder vote – where the owners of the company will have the final say.

Contrary to what the SilverBow Board would have you believe, Kimmeridge’s focus throughout our engagement has squarely been on putting forward a highly compelling Transaction that paves the way for value creation for all.

Thank you,

Ben Dell, Co-Founder and Managing Partner of Kimmeridge

***

Investor Conference Call Information

Kimmeridge will host an investor conference call to discuss its proposal on March 14^th at 11:00 a.m. ET. To access the conference call, please dial (800) 579-2543 (U.S. toll-free) or (785) 424-1789 (international) and reference conference ID 265573. The conference call will also be available as a listen-only webcast here. As noted above, the slide presentation that accompanies the proposal is available on the Kimmeridge website (https://kimmeridge.com/sbow/).

For more information on this proposal, please see the associated Offer Letter here and Supporting Slides here.

About Kimmeridge

Founded in 2012 by Ben Dell, Dr. Neil McMahon and Henry Makansi, Kimmeridge is an alternative asset manager focused on the energy sector. The firm is differentiated by its direct investment approach, deep technical knowledge, active portfolio management and proprietary research and data gathering.

Media

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Cautionary Statement Regarding Forward-Looking Statements

This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein in any state to any person. The information herein contains “forward-looking statements”. Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “potential,” “targets,” “forecasts,” “seeks,” “could,” “should” or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if Kimmeridge underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Kimmeridge that the future plans, estimates or expectations contemplated will ever be achieved.

Important Information

KEF Investments, LP (“KEF Investments”), KEF Fund V Investments, LP (“KEF Fund V”), Kimmeridge Energy Management Company, LLC (“KEMC”), Benjamin Dell, Alexander Inkster, Neda Jafar, Denis Laloy, Noam Lockshin, Henry Makansi, Neil McMahon, Douglas E. Brooks, Carrie M. Fox and Katherine L. Minyard (all of the foregoing, collectively, the “Participants”) intend to file a definitive proxy statement and accompanying proxy card (the “Proxy Statement”) with the Securities and Exchange Commission (the “SEC”) to be used to solicit proxies in connection with the 2024 annual meeting of shareholders (the “Annual Meeting”) of SilverBow Resources, Inc. (the “Company”). Shareholders of the Company are advised to read the definitive proxy statement and other documents related to the solicitation of proxies with respect to the Company by the Participants as they become available because they will contain important information. They will be made available at no charge on the SEC’s website, https://www.sec.gov/.

KEMC may be deemed to “beneficially own” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) 3,281,356 shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) (including 100 shares held in record name by each of KEF Investments and KEF Fund V). None of the other Participants beneficially own any securities of the Company.

Additionally, on March 13, 2024, KEMC delivered to the Company’s Board a non-binding proposal to merge Kimmeridge Texas Gas, LLC with the Company’s existing assets and inject $500M of fresh equity capital in exchange for shares of the combined public company at a price of $34 per share of Common Stock.

Exhibit 2

March 13, 2024

SilverBow Resources, Inc.

Attention: Sean Woolverton

920 Memorial City Way

Suite 850

Houston, Texas 77024

Confidential Proposal to SilverBow Resources, Inc. (“SBOW”)

Dear Mr. Woolverton:

At the request of SBOW’s Board of Directors, Kimmeridge Energy Management Company, LLC and its applicable affiliates (collectively, “Kimmeridge”, “we”, “our”) are pleased to submit this proposal (“Offer Letter”) outlining the terms of a combination of Kimmeridge Texas Gas, LLC (“KTG”) and SBOW, along with an incremental equity investment of $500 million by Kimmeridge (together, the “Transaction”), each in exchange for additional SBOW shares at $34.00 per share.

As the largest investor in SBOW holding 12.9% of all shares, this Transaction represents our strategic vision for SBOW and is one that would position SBOW to drive compelling value creation for all shareholders. While we have appreciated the opportunity to discuss the Transaction with SBOW prior to sharing this Offer Letter, we are now looking to engage in a constructive dialogue with SBOW’s Board of Directors to combine our respective companies and inject capital to create a preeminent, pure-play Eagle Ford shale operator, and a partner of choice for future consolidation. We believe our proposal reflects an extremely attractive value to SBOW’s shareholders, representing a meaningful 8.5% premium to the closing share price of $31.34 as of March 11, 2024, and a premium of 21% to the 30-day volume-weighted average price of $28.12 as of March 11, 2024.

We believe this Offer Letter presents a compelling opportunity that is in the best interests of, and accretive to, SBOW and its shareholders. Combining our complementary portfolios creates a leading operator in the Eagle Ford shale, with a low-cost, high-margin production base integrated into LNG, with a strong balance sheet. We believe this Transaction paves a clear path to delivering superior shareholder returns as evidenced by our plan to initiate a dividend program in 2025 while maintaining growth. Further, Kimmeridge will continue its history of establishing best-in-class environmental and governance standards with a 2025 net-zero commitment as well as aligning management with shareholders, and a refreshed, majority-independent, 9-person, declassified board of directors. The opportunity to participate in the upside of a new company with enhanced scale, financial flexibility, and operational synergies is one we believe SBOW’s shareholders will support. Kimmeridge has deep experience with value creation in the energy sector across numerous investments, including its leadership role with Civitas Resources (NYSE: CIVI) (“Civitas”).

We welcome the opportunity to meaningfully engage with SBOW in good faith discussions with the best interests of shareholders in mind and a view toward signing mutually agreeable definitive documentation (“Definitive Documentation”) prior to 5:00 P.M. CT on April 26, 2024 (the “Termination Time”).

We are prepared to move quickly to progress to a non-disclosure agreement with SBOW to allow you to review our data and properly diligence our assets, which have not been reviewed to date.

Kimmeridge is an alternative asset manager focused on unconventional oil and gas investments with approximately $5 billion in assets under management. The firm was founded in 2012 by Ben Dell, Neil McMahon and Henry Makansi. Kimmeridge leadership has technical backgrounds and direct industry operating experience. Our investment strategy is driven by identifying the core of a play and focusing solely on high-quality geology. In addition, Kimmeridge has a small decision-making group and can move very quickly. Kimmeridge would also leverage its deep experience to empower the combined company to become a sustainability leader in the upstream sector – including a commitment to net-zero GHG emissions in 2025 and obtaining gas certification across the consolidated portfolio. By way of example, Kimmeridge pioneered the founding of Civitas, which became Colorado’s first carbon-neutral energy producer on day 1 of its operations. Kimmeridge also created pathways for multiple consolidation opportunities consummated by Civitas and other operators in the DJ Basin, ultimately unlocking meaningful value for shareholders and creating a best-in-class E&P company, aligned with shareholders and positioned for long-term success.

Kimmeridge has sufficient capital to fully finance its proposed equity investment of $500 million. We intend to use those funds to pay down SBOW’s existing long-term debt obligations. Kimmeridge has received highly confident letters from Barclays, RBC Capital Markets and other lenders with respect to the debt consideration required to facilitate the Transaction. Kimmeridge expects the pro forma capital structure to be supported by a $750 million high-yield issuance with the remainder of debt outstanding drawn on the RBL.

Conference Call Information

Kimmeridge will host a conference call to discuss its proposal on March 14^th at 11:00 a.m. ET. To access the conference call, please dial (800) 579-2543 (U.S. toll-free) or (785) 424-1789 (international) and reference conference ID 265573. The conference call will also be available as a listen-only webcast here. The slide presentation that accompanies the proposal is available on the Kimmeridge website https://kimmeridge.com/sbow/.

For more information on this proposal, please see the associated Supporting Slides here.

Detailed Proposal Terms

Term

Description

Transaction Structure

Kimmeridge will be issued additional equity in a new publicly-listed company comprised of the combined assets of KTG and SBOW (“CombineCo”) following the closing of the Transaction.

The Transaction values SBOW at $34 per share. Kimmeridge will invest $500 million in cash in CombineCo (the “Equity Investment”) and contribute the KTG assets to CombineCo in exchange for equity consideration. The KTG assets have an equity value of $1.1 billion and an expected enterprise value of $1.42 billion at close.

The proceeds from the Equity Investment and any debt financing raised by Kimmeridge prior to closing will be used to pay down outstanding amounts under the existing funded debt at SBOW, including its revolving credit facility (“RBL”) and second lien term loan facilities.

The Transaction will be structured in a manner allowing for tax-deferred contribution of KTG assets to CombineCo by utilizing a “Double Dummy” structure where SBOW creates a new subsidiary, which in turn creates two merger subsidiaries. Each of those subsidiaries would merge with one of SBOW or KTG, as applicable, with the existing equity holders of SBOW and KTG receiving common stock in CombineCo as the new publicly listed company. CombineCo would wholly own both SBOW and KTG. The Equity Investment would subsequently be made to CombineCo in exchange for CombineCo stock.

SBOW currently has 26.0 million shares of Common Stock outstanding¹. Kimmeridge would contribute KTG in exchange for 32.4 million shares of CombineCo priced at $34.00 per share. In addition, Kimmeridge would inject $500 million cash to CombineCo in exchange for 14.7 million shares of CombineCo. At closing of the Transaction, Kimmeridge and its affiliates would own a majority of the outstanding shares of CombineCo, with a total of 50.3 million shares of Common Stock (inclusive of Kimmeridge’s current 3.3 million share position in SBOW).

____________________

¹ On a fully diluted basis

KTG

KTG has amassed 148,000 net acres in Texas overlaying the core window of the Eagle Ford Shale play within Webb, La Salle, McMullen and Karnes counties. On a net basis the company produces roughly 315 million cubic feet equivalent of natural gas per day (around 85% gas and 15% oil/NGL), selling into the South Texas market with access to Mexican export channels, to LNG terminals for global sales, and into pipelines directly servicing Gulf Coast petrochemical facilities. KTG’s asset inventory across the Lower Eagle Ford, Middle Austin Chalk and Lower Austin Chalk is recognized as one of the lowest-cost sources of natural gas in North America by independent industry research.

KTG’s acreage has proven to be highly prospective for the Lower Eagle Ford Shale, Middle Austin Chalk, Lower Austin Chalk and Olmos formation through extensive drilling, 3D seismic interpretation, core analysis and petrophysical interpretation.

In the near term, KTG is focused on optimizing drilling and completion methodologies to lower finding and development costs and enhancing well performance, ultimately improving well economics. Additionally, KTG is growing its production and leasehold organically and through acquisitions. In the longer term, KTG will continue improving its cost structure by bringing technology to the forefront of operations to fully unlock the potential of Kimmeridge’s South Texas assets. Further, KTG looks forward to integrating into the global gas market having signed midstream contracts and LNG option agreements.

Financing

Kimmeridge has sufficient capital to finance the Equity Investment, and the Transaction will not be subject to financing contingencies.

Kimmeridge has received highly confident letters from Barclays, RBC Capital Markets and other lenders with respect to the debt consideration required to facilitate the Transaction. Kimmeridge expects the pro forma capital structure to be supported by a $750 million high-yield issuance with the remainder of debt outstanding drawn on the RBL. With this strong balance sheet and financial backing, CombineCo is well positioned for success.

Governance

Board of Directors: CombineCo’s board of directors (the “Board”) will consist of nine directors. Kimmeridge will nominate four independent directors and one Kimmeridge director who will chair the Board. SBOW will nominate four directors. The Board will be majority independent, de-classified and subject to shareholder vote each year with 7-year term limits. The Board will also have a sustainability committee and will be compensated primarily through CombineCo equity.

Management: Kimmeridge intends to follow a “best athlete” approach in forming a management team that brings a wealth of experience to benefit the combined company. For continuity, Kimmeridge anticipates retaining key members of the SBOW C-suite while enhancing leadership with additional hires. We expect the majority of other SBOW and KTG employees will remain following consummation of the Transaction and, subject to entry into Definitive Documentation, Kimmeridge will coordinate with senior management to ensure such employees are sufficiently incentivized.

Dividend Policy: CombineCo will adopt a dividend policy by 2025 that reflects its free cash flow profile and growth potential. The dividend policy will be subject to the approval of the Board and compliance with CombineCo’s debt covenants, but if adopted would give shareholders a 5% dividend yield on the issuance price. This would create a standout policy when compared to both the XOP (2.49% on average) and the S&P 500 (1.49% on average).

Other Shareholder Arrangements	Lock-Up: Kimmeridge will agree to a customary lock-up that will prohibit Kimmeridge from selling, transferring, or otherwise disposing of any common stock of CombineCo for a period of 12 months after the closing of the Transaction (the “Lock-Up Period”), subject to customary exceptions. Standstill: Kimmeridge will agree to a customary standstill that will prohibit Kimmeridge (so long as it owns a certain percentage of CombineCo’s common stock) from acquiring any additional shares or voting rights of CombineCo, subject to customary exceptions. Registration Rights: Kimmeridge will have the right to (a) request that CombineCo register the resale of its common stock after the expiration of the Lock-Up Period, and (b) participate in any registration of CombineCo’s common stock initiated by CombineCo or by another shareholder, in each case, subject to customary conditions and limitations and customary assignment rights to affiliates and LPs. Special Meeting: Shareholders owning over 10% in CombineCo will have the ability to call special meetings.
Rights Plan	At the signing of Definitive Documentation, Kimmeridge would be exempted under SBOW’s shareholder rights plan, which plan would be terminated upon the closing of the Transaction.
Other Transaction Terms	The Transaction will generally be structured as a “public company” style transaction with no post-closing recourse and appropriately qualified representations and warranties. KTG and SBOW will agree to customary covenants in the Definitive Documentation, including covenants relating to the conduct of their respective businesses between signing and closing, the cooperation and efforts to obtain the necessary regulatory and shareholder approvals, and a customary non-solicitation covenant by SBOW and corresponding “match rights” for Kimmeridge.
Approvals/Closing Conditions	The following approvals and conditions would be required in connection with the Transaction: · The Transaction would be subject to customary closing conditions, such as the expiration of an HSR waiting period and other necessary regulatory approvals, a customary bring down of representations and warranties, absence of a material adverse effect and performance of covenants, among others. · The Transaction would be approved by the Board of Directors of KTG, approved by SBOW’s Board of Directors and recommended for approval by SBOW’s shareholders. · The closing of the Transaction would be subject to approval by the requisite holders of the outstanding common stock of SBOW.

Key Assumptions	The proposal in this Offer Letter is based on publicly available information, including SBOW’s 2023 proxy statement and related materials, and subject to the following assumptions and satisfactory completion of customary confirmatory due diligence: · SBOW owning all of the assets and having only those liabilities as described in SBOW’s publicly available information, and SBOW using all commercially reasonable efforts to maintain its current and planned level of operations and activities substantially in accordance with the information contained therein. · The outstanding equity securities of SBOW as laid out in its most recent 10-K filing being the only outstanding equity securities of SBOW. · The annual audited financial statements of SBOW fairly presenting the financial position, results of operations and cash flows of SBOW, and there being no material change in the financial position of SBOW since the date of such statements. · Named Executive Officers having no material changes in their respective compensation arrangements.
Timing; Due Diligence	The Offer Letter will remain in effect until the Termination Time and is subject to signing Definitive Documentation and confirmatory due diligence completed by April 26, 2024. In order to enter into Definitive Documentation, we will need to complete customary due diligence on SBOW, including with respect to reserve and environmental reports and material contracts (including marketing agreements and/or minimum volume commitments). We are prepared to commit the time and resources necessary to finalize our due diligence investigation expeditiously, and we have engaged financial and legal advisors to assist. Subject to SBOW promptly providing the requisite information, we intend to complete our due diligence contemporaneously with negotiating Definitive Documentation. Conversely, we are prepared to provide information with respect to KTG to ensure SBOW has the opportunity to conduct sufficient due diligence with respect to the KTG portfolio and operations.
Governing Law	This Offer Letter shall be construed, interpreted and governed pursuant to and in accordance with the laws of the state of Delaware, without regard to any conflicts of laws principles which, if applied, might permit or require the application of the laws of another jurisdiction.
Non-Binding	This Offer Letter is subject to the terms of the Definitive Documentation to be negotiated and entered in connection with the Transaction and the related matters discussed herein. This Offer Letter does not create any legally binding obligations, joint venture or partnership on or of any person (or any of their affiliates) (and shall not be relied upon by any person as the basis of liability), and none of such persons (or their affiliates) will be obligated to proceed with, or have any enforceable obligations with respect to the Transaction, any related transaction or otherwise (or be required to negotiate with respect thereto), unless and until with respect to such matters have been executed and delivered, and then only in accordance with the terms and provisions of such Definitive Documentation.

Kimmeridge is well-positioned to expeditiously negotiate and complete the Transaction. After receipt of this Offer Letter and, if this Offer Letter is acceptable to SBOW and its respective representatives, we are prepared to begin negotiating the Definitive Documentation and any related agreements with SBOW with respect to the Transaction.

Kimmeridge looks forward to receiving SBOW’s response to this Offer Letter and stands prepared to discuss our analysis of the Transaction with the SBOW Board of Directors and its advisors and any other representatives at your convenience.

Please feel free to reach out to me directly at ben.dell@kimmeridge.com or 646-517-7250 with any questions.

Regards,

Ben Dell

Managing Partner

Kimmeridge Energy Management Company, LLC

15 Little West 12^th Street, 4^th Floor

New York, NY 10014

Important Information

KEMC may be deemed to “beneficially own” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), 3,281,356 shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) (including 100 shares held in record name by each of KEF Investments and KEF Fund V). None of the other Participants beneficially own any securities of the Company.

Additionally, on March 13, 2024, KEMC delivered to the Board a non-binding proposal to merge Kimmeridge Texas Gas, LLC with SilverBow’s existing assets and inject $500M of fresh equity capital in exchange for shares of the combined public company at a price of $34 per share of Common Stock.

Exhibit 3

Exhibit 4

Important Information

Additionally, on March 13, 2024, KEMC delivered to the Company’s Board of Directors a non-binding proposal to merge Kimmeridge Texas Gas, LLC with the Company’s existing assets and inject $500M of fresh equity capital in exchange for shares of the combined public company at a price of $34 per share of Common Stock.