Subsequent Events

Proposed Merger with Noble Energy

On January 13, 2017, we entered into the Merger Agreement with Noble Energy, Merger Sub and Merger Sub II, pursuant to which Noble Energy will acquire the Company in exchange for a combination of Noble Energy Common Shares and cash. Under the terms of the Merger Agreement, at the Effective Time of the Merger, each share of the Company’s common stock issued and outstanding immediately prior to the Effective Time (other than common stock held in treasury and common stock held by shareholders who properly comply in all respects with the provisions of Section 262 of the DGCL as to appraisal rights) and each unexercised CWEI Warrant issued and outstanding as of the Effective Time will be cancelled and extinguished and automatically converted into the right to receive, at the election of the shareholder or warrant holder, as applicable, and subject to proration as described below, one of the following forms of Merger Consideration:


•	for each share of common stock, one of (i) 3.7222 Noble Energy Common Shares (the “Share Consideration”); (ii) (A) $34.75 in cash (subject to applicable withholding tax), without interest, and (B) 2.7874 Noble Energy Common Shares (the “Mixed Consideration”); or (iii) $138.39 in cash (subject to applicable withholding tax), without interest (the “Cash Consideration”); and

•

for each CWEI Warrant, either (i) the Share Consideration in respect of the number of shares of common stock of the Company that would be issued upon a cashless exercise of such CWEI Warrant immediately prior to the Effective Time (“Warrant Notional Common Shares”); (ii) the Mixed Consideration in respect of the number of Warrant Notional Common Shares represented by such CWEI Warrant; or (iii) the Cash Consideration in respect of the number of Warrant Notional Common Shares represented by such CWEI Warrant.

The Merger Agreement contains certain termination rights for both Noble Energy and the Company, including if the Merger is not consummated by July 17, 2017, and further provides that, upon termination of the Merger Agreement under certain circumstances, the Company may be required to pay Noble Energy a termination fee equal to $87 million. The closing of the Merger is expected to occur in the second quarter of 2017.

Purchase of Net Mineral Acres in Southern Reeves County, Texas

In January 2017, we purchased approximately 1,900 net mineral acres in Southern Reeves County, Texas from a private seller, for cash consideration totaling $44.3 million. The acreage is located in and around our existing contiguous acreage block. Also included in the deal was a non-operated gross working interest of approximately 26% in an existing horizontal well.

We have evaluated events and transactions that occurred after the balance sheet date of December 31, 2016 and have determined that no other events or transactions have occurred that would require recognition in the consolidated financial statements or disclosures in these notes to the consolidated financial statements.