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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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BONANZA CREEK ENERGY, INC.
410 17^th Street
Suite 1400
Denver, Colorado 80202

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Bonanza Creek Energy, Inc.:

        Notice is hereby given that the Annual Meeting of Stockholders of Bonanza Creek Energy, Inc. (the "Company") will be held at the Sheraton Denver Downtown Hotel, 1550 Court Place, Denver, Colorado 80202, on Tuesday,Thursday, June 12, 2012,6, 2013, 9:00 a.m. local time (the "Annual"2013 Annual Meeting"). The 2013 Annual Meeting is being held for the following purposes:

1)

To elect and classify aClass I directors to our board of seven directors;



2)

To ratify the selection of Hein & Associates, LLP as the Company's independent registered public accountantsaccountant for 2012;



2013;

3)

To approve, on an advisory basis, the compensation of our executive officers as described in the "Executive Compensation and Other Information—Compensation Discussion and Analysis" ("CD&A") section of the accompanying proxy statement and the selection of the frequency of stockholder votes on executive compensation as separate voting items:



(a)

the stockholders approve the compensation philosophy, policies and procedures described in the CD&A, and the compensation of Bonanza Creek Energy, Inc.'s named executive officers as disclosed pursuant to the Securitiesofficers; and Exchange Commission's compensation disclosure rules, including the compensation tables; and



(b)

the stockholders of the Company be provided an opportunity to approve the compensation philosophy, policies and procedures described in the CD&A, and the compensation of Bonanza Creek Energy, Inc.'s named executive officers as disclosed pursuant to the Securities and Exchange Commission's compensation disclosure rules, including the compensation tables every:


One year;

Two years; or

Three years; and

4)

To transact such other business as may properly come before the 2013 Annual Meeting.

        These proposals are described in the accompanying proxy materials. You will be able to vote at the 2013 Annual Meeting only if you were a stockholder of record at the close of business on April 23, 2012.29, 2013.

		By Order of the Board of Directors,
		Christopher I. Humber Senior Vice President, General Counsel & Secretary

Denver, Colorado
April 30, 20122013

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BONANZA CREEK ENERGY, INC.
410 17^th Street
Suite 1400
Denver, Colorado 80202

PROXY STATEMENT
20122013 ANNUAL MEETING OF STOCKHOLDERS

        The Board of Directors (the "Board") of Bonanza Creek Energy, Inc. ("we," "us," "our," "Bonanza Creek" or the "Company") requests your proxy for the 2013 Annual Meeting of Stockholders that(the "2013 Annual Meeting"), which will be held on Tuesday,Thursday, June 12, 2012,6, 2013, 9:00 a.m. local time, at the Sheraton Denver Downtown Hotel, 1550 Court Place, Denver, Colorado 80202. Distribution of these proxy solicitation materials is scheduled to begin on or about May 3, 2013. By granting the proxy, you authorize the persons named in the proxy to represent you and vote your shares at the 2013 Annual Meeting. Those persons will also be authorized to vote your shares to adjourn the 2013 Annual Meeting from time to time and to vote your shares at any adjournments or postponements of the 2013 Annual Meeting.

GENERAL INFORMATION

        If you attend the 2013 Annual Meeting, you may vote in person. If you are not present at the 2013 Annual Meeting, your shares may be voted only by a person to whom you have given a proper proxy. You may revoke the proxy in writing at any time before it is exercised at the 2013 Annual Meeting by delivering to the Secretary of the Company a written notice of the revocation, by submitting your vote electronically through the internet or by phone after the grant of the proxy or by signing and delivering to the Secretary of the Company a proxy with a later date. Your attendance at the 2013 Annual Meeting will not revoke the proxy unless you give written notice of revocation to the Secretary of the Company before the proxy is exercised or unless you vote your shares in person at the 2013 Annual Meeting.

Stockholders of Record and Beneficial Owners

        Most of the Company's stockholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

        Stockholders of Record.    If your shares are registered directly in your name with the Company's transfer agent, you are considered the stockholder of record with respect to those shares, and proxy materials are being sent directly to you by our agent. As a stockholder of record, you have the right to vote by proxy or to vote in person at the 2013 Annual Meeting. The proxy materials include a proxy card or a voting instruction card for the 2013 Annual Meeting.

        Beneficial Owners.    If your shares are held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name," and proxy materials will be forwarded to you by your broker or nominee. The broker or nominee is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker how to vote. The proxy materials should include a proxy card or a voting instruction card for the 2013 Annual Meeting.

QUORUM AND VOTINGQuorum and Voting

        Voting Stock.    The Company's common stock, par value $0.001 per share, is the only class of securities that entitles holders to vote generally at meetings of the Company's stockholders. Each share of common stock outstanding on the record date is entitled to one vote.

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        Record Date.    The record date for stockholders entitled to notice of and to vote at the 2013 Annual Meeting was the close of business on April 23, 2012.29, 2013. As of the record date, 39,477,58440,263,316 shares of common stock were outstanding and entitled to be voted at the 2013 Annual Meeting.

        Quorum and Adjournments.    The presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote at the 2013 Annual Meeting is necessary to constitute a quorum at the 2013 Annual Meeting.

        If a quorum is not present, the chair of the meeting or a majority of the stockholders entitled to vote who are present in person or by proxy at the 2013 Annual Meeting have the power to adjourn the 2013 Annual Meeting from time to time, without notice other than an announcement at the 2013 Annual Meeting, until a quorum is present. At any adjourned 2013 Annual Meeting at which a quorum is present, any business may be transacted that might have been transacted at the 2013 Annual Meeting as originally notified.

        Vote Required.    Directors will be elected by the affirmative vote of the holders of a plurality of the shares present, in person or by proxy, and entitled to be voted atvote on the Annual Meeting.election of directors. Ratification of the selection of the Company's auditorsindependent registered public accountant (Item Two) and approval of the compensation of the Company's named executive officers (Item Three) will require the affirmative vote of the holders of a majority of the shares present and entitled to be voted atvote with respect to the Annual Meeting. Approval of Items 3(a) and (b) require the affirmative vote of the holders of a majority of the shares present and entitled to be voted at the Annual Meeting.matter. An automated system will tabulate the votes. Brokers who hold shares in street name for customers are required to vote shares in accordance with instructions received from the beneficial owners. Brokers are permitted to vote on discretionary items if they have not received instructions from the beneficial owners, but they are not permitted to vote (a "broker non-vote") on non-discretionary items absent instructions from the beneficial owner. Brokers do not have discretionary voting authority with respect to the election of directors.directors or approval of the compensation of the Company's named executive officers. For ratification of the selection of the Company's auditors,independent registered public accountant, brokers will have discretionary authority in the absence of timely instructions from their customers. For approval of Items 3(a) and (b), brokers will not have discretionary authority in the absence of timely instructions from their customers. Abstentions and broker non-votes will count in determining whether a quorum is present at the 2013 Annual Meeting. Neither abstentions nor brokerBroker non-votes will not have any effect on the outcome of voting on director elections or on Items 3(a) or (b).the compensation of our named executive officers. For purposes of voting on the ratification of the selection of auditors,the Company's independent registered public accountant, abstentions will be included in the number of shares voting and will have the effect of a vote against the proposal.

        Default Voting.    A proxy that is properly completed and submitted will be voted at the 2013 Annual Meeting in accordance with the instructions on the proxy. If you properly complete and submit a proxy, but do not indicate any contrary voting instructions, your shares will be voted as follows:

•

FOR the nominees for director named in this proxy statement and their classification as Class I Directors, Class II Directors and Class III Directors, as indicated in this proxy statement;



•

FOR the ratification of the selection of Hein & Associates, LLP as the Company's auditorsindependent registered public accountant for 2012;2013; and



•

(a) FOR the approval (on an advisory basis) of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC and (b) FOR a frequency of "ONE (1) YEAR" for future non-binding "Say on Pay" stockholder votes on compensation of our named executed officers.SEC.

        If any other business properly comes before the stockholders for a vote at the meeting, your shares will be voted in accordance with the discretion of the holders of the proxy. The Board of Directors knows of no matters, other than those previously stated, to be presented for consideration at the 2013 Annual Meeting.

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ITEM ONE

ELECTION OF DIRECTORS

        Commencing with the Annual Meeting, the Company's certificate of incorporation provides for the division of the Company's Board of Directors into three approximately equal classes. At the Annual Meeting, the persons named below will be nominated on behalf of the Board of Directors for election to each of the three classes. The Board of Directors has established the classes as follows: two directors in each of Class I and Class II and three directors in Class III. The term of office for Class I directors will expire at the Annual Meeting of Stockholders to be held in 2013, the term of office of Class II directors will expire at the Annual Meeting of Stockholders to be held in 2014, and the term of office of Class III directors will expire at the Annual Meeting of Stockholders to be held in 2015. Each director elected at the Annual Meeting will serve for the term described above or until his or her successor is duly elected and qualified. At each succeeding annual meeting, directors elected to succeed those directors whose terms then expire will be elected for a full term of office to expire at the third succeeding annual meeting of stockholders after their election.

        The Board of Directors has nominated the following individuals for election as Class I Directors of the Company to serve for a one year term to expire in 2013 and until either they are re-elected or their successors are elected and qualified:

Todd A. Overbergen
Gregory P. Raih

        The Board of Directors has nominated the following individuals for election as Class II Directors of the Company to serve for a two year term to expire in 2014 and until either they are re-elected or their successors are elected and qualified:

Gary A. Grove
Kevin A. Neveu

        The Board of Directors has nominated the following individuals for election as Class III Directors of the Company to serve for a three year term to expire in 2015 and until either they are re-elected or their successors are elected and qualified:

Richard J. Carty
Marvin M. Chronister
Michael R. Starzer

        Messrs. Carty, Chronister, Grove, Neveu, Overbergen, Raih and Starzer are all currently serving as Directors of the Company. Their biographical information is contained in the "Directors and Executive Officers" section below.

        The Board of Directors has no reason to believe that any of its nominees will be unable or unwilling to serve if elected. If a nominee becomes unable or unwilling to accept nomination or election, either the number of the Company's Directors will be reduced or the persons acting under the proxy will vote for the election of a substitute nominee that the Board of Directors recommends.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends that for Item 1 stockholders vote "FOR" the election of each of the nominees.

DIRECTORS AND EXECUTIVE OFFICERS

        After the 2013 Annual Meeting, assuming the stockholders elect the nominees of the Board of Directors as set forth in "Item One—Election of Directors" above,directors" below, the Board of Directors of the Company will be, and the executive officers of the Company are:

        The Company's Board of Directors currently consists of seven members. Commencing with the Annual Meeting, theThe Company's certificate of incorporation provides for the division of the Company's Board of Directors into three approximately equal classes. The Board of Directors has established the classes as follows: two directors in each of Class I and Class II and three directors in Class III. The current Class I directors are James A. Watt and Gregory P. Raih; the current Class II directors are Gary A. Grove and Kevin A. Neveu; and the current Class III directors are Richard J. Carty, Marvin M. Chronister and Michael R. Starzer. The term of office for Class I directors will expire at the 2013 Annual Meeting of Stockholders to be held in 2013,Meeting; the term of office of Class II directors will expire at the Annual Meeting of Stockholders to be held in 2014,2014; and the term of office of Class III directors will expire at the Annual Meeting of Stockholders to be held in 2015. Each Class I director elected at the 2013 Annual Meeting will serve for thea three-year term described above orand until such director's successor is duly elected and qualified. At each succeeding annual meeting, directors elected to succeed those directors whose terms then expire will be elected for a full term of office to expire at the third succeeding annual meeting of stockholders after their election.

        Set forth below is biographical information about each of the Company's Directors,directors, nominees for Directordirector and executive officers.

        Richard J. Carty was elected to our Board of Directors in December 2010. Since 2009, Mr. Carty has been President of West Face Capital (USA) Corp, an affiliate of West Face Capital Inc. ("West Face Capital"), a Toronto-based investment management firm, and has served on the board of directors of portfolio companies on behalf of West Face Capital. Prior to that time, Mr. Carty was a Managing

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Director of Morgan Stanley Principal Strategies in New York where he led the Special Situations, Strategic Investments and Global Quantitative Equity investment teams. Mr. Carty was at Morgan Stanley & Co. for 14 years in New York and prior to that time was a partner at Gordon Capital Corp, a private Toronto-based investment bank, for five years. We believe Mr. Carty's extensive asset management, capital markets, investment banking and private equity experience bring important and valuable skills to our Board of Directors.Board.

        Marvin M. Chronister was elected to our Board of Directors in March, 2011. Mr. Chronister has over 3035 years of experience in the oil and gas industry. Since 2006, Mr. Chronisterhe has been an independent investor, and energy finance and operations consultant forand owner and CEO of Enfield Companies. Prior to that, he held numerous positions in the oilHe was previously a Practice Director with Jefferson Wells and gas industry and investment banking.served as a Managing Director with Deloitte & Touche. Mr. Chronister also servesheld prior investment banking positions with Merrill Lynch and Kidder Peabody. His industry experience includes President and CEO of Transwestern, and senior management positions with the Kidde Energy Group and NL Industries. Mr. Chronister most recently served on the boardBoard of directorsDirectors of Sonde Resources Corporation.Corp. from 2009 to 2012, where he held the position of Chairman and Interim CEO from 2009 until 2011. He has also served on several public and private company boards and held leadership positions with numerous industry organizations. Mr. Chronister holds a Bachelor of Business AdministrationBBA degree from Stephen F. Austin State University.University and has attended multiple executive development programs. We believe Mr. Chronister's extensive operations and strategy experience in the oil and gas industry, as well as his financialfinance and accounting experience, brings important and valuable skills to our Board of Directors.Board.

        Kevin A. Neveu was elected to our Board of Directors in March 2011. Mr. Neveu has over 30 years of experience in the oil and gas industry. Currently, Mr. Neveu serves as a director, President and Chief Executive Officer of Precision Drilling Corporation, where he has served as a director and CEO since 2007 and was additionally elected President in 2009.August 2007. Mr. Neveu was previously President of the Rig Solutions Group of National Oilwell Varco where he was responsible for the company's drilling equipment business. Beginning in 1982, Mr. Neveu held senior management positions with National Oilwell Varco and its predecessor companies in London, Moscow, Houston, Edmonton and Calgary.Houston. Mr. Neveu holds a Bachelor of Science degree and is a graduate of the Faculty of Engineering at the University of Alberta. Mr. Neveu is a Professional Engineer, as designated by the Association of Professional Engineers, Geologists and Geophysicists of Alberta and has attendedAlberta. In 2002, Mr. Neveu completed the Advanced Management Program at the Harvard Business School. Mr. Neveu serves on the boardsboard of RigNet Inc., the Heart and Stroke Foundation of Alberta and the International Association of Drilling Contractors. We believe Mr. Neveu's extensive experience in the oil and gas industry as well as his experience on the boards of directors of public energy companies bring substantial leadership and experience to our Board of Directors.Board.

        ToddJames A. OverbergenWatt was appointed to our Board in August 2012. Mr. Watt has served onas director, President and Chief Executive Officer of Dune Energy, Inc. since 2007. Mr. Watt served as the boardChief Executive Officer of managersRemington Oil and Gas Corporation ("Remington") from February 1998 and the Chairman of our predecessor, Bonanza CreekRemington from May 2003, until Helix Energy Company, LLCSolutions Group, Inc. ("BCEC"Helix"), from 2008 until 2011 acquired Remington in July 2006. From August 2006 through March 2007, he served as the Chairman and became a directorChief Executive Officer of the Company upon its inception. Since 2012,Maverick Oil & Gas, Inc. Mr. Overbergen has been a founding partner of Stellus Capital Management, an energy focused private equity firm, and head of its Energy Private Equity strategy. Mr. Overbergen joined the D. E. Shaw Group in February 2004 and was Head of Energy and a Director in the Direct Capital Unit of the D. E. Shaw Group until January 2012 when he left to co-found Stellus. From December 2000 to April 2003, Mr. Overbergen was a principal at Duke Capital Partners LLC, a merchant banking subsidiary of Duke Energy Corporation that provided mezzanine, equity, and senior debt capital to the energy industry. From 1998 to December 2000, Mr. Overbergen was a director in Arthur Andersen LLP's Global Corporate Finance group, where he co-led the national business services practice and provided investment banking services on mergers, acquisitions, and private market capital raising of debt and equity. Mr. OverbergenWatt currently serves on the boardBoard of directors of numerous existing D. E. Shaw Group portfolio companies and has served on the board of directors of several previous portfolio companies of the D. E. Shaw Group and Duke Capital Partners LLC. Mr. Overbergen isHelix. He received a member of the Houston Producers Forum and Independent Petroleum Association of America. Mr. Overbergen holds two Bachelor of Business Administration degreesB.S. in finance and accountingPhysics from Texas A&M University.Rensselaer Polytechnic Institute. We believe that Mr. Overbergen's extensive financial, accounting, merchant banking and private equity experience, as well as hisWatt's extensive experience in the energy sector,oil and gas industry and leadership positions at other oil and gas companies bring important experience and valuable skillsindustry expertise to our board of directors.Board.

        Gregory P. Raih was elected as a member of our Board of Directors in November 2011. Mr. Raih has nearly 40 years of experience in finance and accounting in the public and private sectors and extensive experience with the oil and gas industry. Since 2010, Mr. Raih has served on the boardBoard of directorsDirectors of General Moly, Inc. (AMEX: GMO), a U.S.-based mineral company engaged in the exploration, development and mining of molybdenum. Mr. Raih served as partner at KPMG LLP from 2002 until his retirement in 2008 and held a variety of roles as partner at Arthur Andersen LLP from 1981 to 2002. He served in the energy practice of both firms as the engagement partner on a number

of clients in the oil and gas industry. Mr. Raih ishas a graduate ofdegree in Accounting from the University of Notre Dame. He is also a member of the American Institute of Certified Public Accountants and the Colorado

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Society of Certified Public Accountants. We believe that Mr. Raih's financial and accounting experience, as well as his broad experience withwithin the oil and gas industry, brings important and valuable skills to our Board of Directors.Board.

        Michael R. Starzer is a member of our Board of Directors and is our President and Chief Executive Officer. Mr. Starzer served as a member of the board of managers and President and Chief Executive Officer of our predecessor, BCECBonanza Creek Energy, LLC ("BCEC"), since BCEC's formation in 2006. Mr. Starzer has over 2829 years of experience in the oil and gas industry. Mr. Starzer has served in numerous positions in the oil and gas industry evaluating and developing oil, gas, electricity and geothermal resources. From 1983 to 1991, Mr. Starzer was employed by Unocal Corporation in various engineering and supervisory positions. From 1991 until 1993, Mr. Starzer served with the California State Lands Commission as Statewide Petroleum Reservoir Engineer and worked as a private consultant to the energy industry supervising operations and appraisals of oil, gas and geothermal resources on properties throughout the United States. In 1993, Mr. Starzer returned to Unocal Corporation as an Asset Manager, assisting them with the sale and management of certain assets. Starting in 1995, Mr. Starzer served as an Officer, Manager and Vice President of Berry Petroleum Corporation until co-founding Bonanza Creek Oil Company, LLC ("BCOC"), a predecessor, in 1999. Mr. Starzer holds a degree in Petroleum Engineering from the Colorado School of Mines and a Master of Science degree in Engineering Management from the University of Alaska and is a registered professional engineer in petroleum engineering. We believe Mr. Starzer's extensive experience in the oil and gas industry, his leadership positions at other oil and gas companies and his knowledge regarding our business and operations bring important experience and leadership to our company and our Board of Directors.Board.

        Gary A. Grove is a member of our Board of Directors and is our Executive Vice President—Engineering and Planning and Interim Chief Operating Officer. Mr. Grove joined BCOC in March 2003 and served as a member of the board of managers and as Executive Vice President and Chief Operating Officer of BCEC. Mr. Grove has over 2930 years of experience in the oil and gas industry serving in reservoir engineering and management positions with Unocal Corporation and Nuevo Energy prior to joining us. Mr. Grove graduated from Marietta College in 1982 with a Bachelor of Science degree in Petroleum Engineering. Mr. Grove is an active member with the Society of Petroleum Engineers and has served in various capacities for student and local chapters since 1979. We believe Mr. Grove's extensive experience in the oil and gas industry and his knowledge regarding our business and operations brings important experience and leadership to our Board of Directors.

James R. Casperson was appointed Executive Vice President and Chief Financial Officer effective as of October 31, 2011. He previously served on our Board of Directors, Chairman of our Audit Committee and a member of our Reserve Committee beginning in March of 2011. Mr. Casperson has over 30 years of experience in the oil and gas industry and finance and accounting in the public and private sectors. Prior to joining us, Mr. Casperson was a private consultant to the energy industry in finance and accounting matters since 2009. From 2005 until 2008, he was the Chief Financial Officer of Ellora Energy and, from 2000 until 2005, the Chief Financial Officer of Whiting Petroleum Corporation. Before joining Whiting, Mr. Casperson spent 15 years as President of Casperson Incorporated, a private consulting firm specializing in the energy industry. Mr. Casperson holds a BBA in Accounting from Texas Tech University.Board.

        Patrick A. Graham joined BCOC in November 2001, served as a Senior Vice President of BCEC and currently serves as our Executive Vice President—Corporate Development. From 1995 to 2001, Mr. Graham was employed by Berry Petroleum Company where he evaluated acquisition opportunities in California, the Rocky Mountain region and Canada. Mr. Graham gained experience working with major and independent oil companies while employed with Dowell Schlumberger from 1986 to 1995. Mr. Graham received his Bachelors of Science degree in Petroleum Engineering from Texas A&M University and has held various technical positions in Utah, Colorado, New Mexico, California and Alaska.

        Christopher I. Humber has served as Senior Vice President, General Counsel and Secretary of the Company since January 1, 2012. Before joining us, Mr. Humber was a practicing attorney focusing on mergers and acquisitions and corporate finance matters for public and private companies, most recently as a partner with the law firm Kendall, Koenig & Oelsner PC in Denver, Colorado, where he served as our outside counsel since 2006. Prior to that, he was an associate with the law firm Hogan & Hartson LLP (now Hogan Lovells) in Denver, Colorado and with the law firm Arnold & Porter LLP in Washington, D.C. and McLean, Virginia. Mr. Humber graduated with high honors from Emory University School of Law where he was Editor-in-Chief of the Emory Law Journal and holds a B.A. in Biology from the University of Colorado at Boulder.

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Lynn E. Boone joined us as Senior Vice President—Reservoir Engineering in July 2012. Ms. Boone has worked in the oil and gas industry for 28 years and has significant experience and accomplishments in reserves determination and reporting, compliance, acquisitions and divestitures and corporate planning and reservoir engineering management. Ms. Boone supervises our reservoir engineering activities as it relates to the development and evaluation of oil and gas reserves and resources and is responsible for reserves estimating, reporting and compliance with federal securities regulation. Ms. Boone holds a BS in Chemical and Petroleum Refining Engineering from the Colorado School of Mines and a M.S. in Petroleum Engineering from the University of Oklahoma. Ms. Boone began her career at Unocal Corporation and has worked in lead engineering and reservoir engineering roles with the U.S. Geological Survey, HS Resources and Cody Energy. Most recently, she served as Senior Vice President—Planning and Reserves at Bill Barrett Corporation from 2003 to 2011. Ms. Boone is a co-founder of the Denver Reserves Roundtable Group established for the purpose of sharing "best practices" for reserves estimating and SEC reporting.

Wade E. Jaques serves as the Company's Vice President, Chief Accounting Officer, Controller and Treasurer and performs the duties of principal financial officer. Mr. Jaques joined Bonanza Creek in 2010 as its Controller, was promoted to Chief Accounting Officer in September 2011 and was elected Treasurer in March 2012. Prior to joining Bonanza Creek, Mr. Jaques was the Controller and Assistant Corporate Secretary for Ellora Energy Inc., a Colorado based independent oil and gas company, from October 2005 until shortly after its merger with Exxon Mobil Corporation in August 2010. Prior to joining Ellora Energy, Mr. Jaques was an audit manager at Deloitte & Touche's Denver office serving oil and gas clients. Mr. Jaques holds both a Bachelor's and Master's degree in Accountancy from Utah State University and is a certified public accountant in Texas and Colorado.

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MEETINGS AND COMMITTEES OF DIRECTORSCORPORATE GOVERNANCE

Our Company

        Bonanza Creek Energy, Inc. is an independent energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. Our oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado (Rocky Mountain region) and the Dorcheat Macedonia Field in southern Arkansas (Mid-Continent region). Our management team has extensive experience acquiring and operating oil and gas properties and significant expertise in horizontal drilling and fracture stimulation, which we believe contributes significantly to the development of our sizable inventory of projects.

Corporate Governance Guidelines

        The Board believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duty to stockholders. The Company's Corporate Governance Guidelines cover the following principal subjects:

•

Qualifications and Responsibilities of DirectorsDirectors;



•

Committees of the Board;



•

Director Access to Management and Independent Advisors;



•

Director Compensation;



•

Director Orientation and Continuing Education;



•

Chief Executive Officer Evaluation and Management Succession;



•

Annual Performance Evaluations;



•

The Company's Code of Ethics (a copy of the current "Code of Business Conduct and Ethics" is posted on the Company's website at www.bonanzacrk.com);



•

Term Limits for Directors; and



•

Changed Circumstances.

        Our Corporate Governance Guidelines are posted on our website at www.bonanzacrk.com. Our Corporate Governance Guidelines are reviewed periodically and as necessary by our Nominating and Corporate Governance Committee, and any proposed additions to or amendments of the Corporate Governance Guidelines will be presented to the Board for its approval.

        The NYSE has adopted rules that require listed companies to adopt governance guidelines covering certain matters. The Company held 10 meetings during 2011,believes that the Corporate Governance Guidelines comply with the NYSE rules.

Board Leadership

        Our Board has separated the chairman and its non-executive Directors met inchief executive session two times during 2011. During 2011, each Director attended at least 75%officer roles. This leadership structure permits the chief executive officer to focus his attention on managing our business and allows the chairman to function as an important liaison between management and the Board, enhancing the ability of the Board to provide oversight of the Company's management and affairs. Our chairman provides input to the chief executive officer and is responsible for presiding over the meetings of the Board and executive sessions of Directorsthe non-employee directors. In 2013, we expect that an executive session will be held at every regularly scheduled Board meeting. Our chief executive officer is responsible for setting the Company's strategic direction and all committeesfor the day-to-day leadership performance of the Company. Based on the current circumstances and direction of the Company and the

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experienced membership of our Board, our Board believes that separate roles for our chairman and our chief executive officer, coupled with a majority of independent directors and strong corporate governance guidelines, is the most appropriate leadership structure for our Company and its stockholders at this time.

Communications with the Board

        Stockholders or other interested parties can contact any director (including Mr. Carty, the Chairman of the Board), any committee of the Board, or our non-employee directors as a group, by writing to them at 410 17^th Street, Suite 1400, Denver, Colorado 80202, Attention: Secretary. All such communications will be forwarded to the appropriate member(s) of Directorsthe Board. Comments or concerns relating to the Company's accounting, internal accounting controls or auditing matters will also be referred to members of the Audit Committee.

Director Independence

        The Company's standards for determining director independence require the assessment of our directors' independence each year. A director cannot be considered independent unless the Board affirmatively determines that he or she does not have any relationship with management or the Company that may interfere with the exercise of his or her independent judgment, including any of the relationships that would disqualify the director from being independent under the rules of the NYSE. The Board assesses the independence of each non-employee director and each non-employee nominee for director under the Company's guidelines and the independence standards of the NYSE. During 2012, the Board determined that Messrs. Chronister, Neveu and Raih were independent, but that Mr. Carty was not independent based on such standards. Upon his election to our Board in August 2012, the Board determined that Mr. Watt was independent.

        The NYSE rules require that all members of our Audit Committee be independent within one year following the completion of our IPO. Under the applicable NYSE and SEC phase-in requirements, Mr. Carty served as a member of the Audit Committee until December 14, 2012. Effective December 14, 2012, Mr. Carty was replaced on the Audit Committee by Mr. Watt, who met the independence standards of the NYSE and SEC.

        During 2012, West Face Capital, Inc. beneficially owned approximately 53% of our company stock and, therefore, we were a "controlled company" under the listing standards of the NYSE and exempt from the NYSE's corporate governance requirements that all members of our Compensation Committee and Nominating and Corporate Governance Committee be independent.

        In January 2013, West Face Capital, Inc. sold 13,000,000 shares of our common stock and reduced its beneficial ownership from approximately 53% to approximately 20%. As a result, we are no longer a controlled company. In April 2013, our Nominating and Corporate Governance Committee and the Board determined that Mr. Carty was independent. Therefore, as of April 2013, all members of our Compensation Committee and Nominating and Corporate Governance Committee are independent, and we satisfy the NYSE listing standards.

Independent Director Share Ownership Requirements

        Our Board has adopted stock ownership guidelines for our independent directors to further align the interests of our independent directors with the interests of our stockholders. Independent directors are required to hold shares of our common stock with a value equal to five times the amount of the annual cash retainer paid to such director for service on our Board. Independent directors are required to achieve the applicable level of ownership within five years of the date on which that Director served, held after such Director's appointment.independent director was appointed or elected and began participating in our Long-Term Incentive Plan (the "LTIP").

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Financial Literacy of Audit Committee and Designation of Financial Experts

        The Board evaluated the members of the Audit Committee for financial literacy and the attributes of a financial expert. The Board determined that each of the Audit Committee members is financially literate and that Mr. Raih is an audit committee financial expert under the standards of the NYSE and SEC regulations.

Oversight of Risk Management

        Except as discussed below, the Board as a whole oversees the Company's assessment of major risks and the measures taken to manage such risks. For example:

•

the Board provides governance and oversight for the financial and commodity risks assumed by the Company and approves the policies and periodically reviews and discusses with the members of management the procedures and systems in place to identify, review and mitigate the Company's exposure to such risks;



•

the Board reviews the Company's commodity price risk and hedging strategy with executive management at least quarterly and provides oversight of the Company's hedging policy; and



•

the Board reviews management's capital spending plans, approves the Company's capital budget and requires that management present for Board review significant departures from those plans.

        The Company's Audit Committee is responsible for overseeing the Company's assessment and management of financial reporting and internal control risks, as well as other financial risks, such as the credit risks associated with counterparty exposure. Management and the Company's independent registered public accountants report regularly to the Audit Committee on those subjects.

Meetings and Committees of Directors

        The Board held 12 meetings during 2012, and its non-employee directors met in executive session nine times during 2012. The Board has five standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, the Reserve Committee and the Environmental Safety and Regulatory Compliance Committee. Each Committeestanding committee has adopted a formal charter detailing such Committee'scommittee's duties, functions and responsibilities. The charters for the Audit Committee, Compensation Committee and the Nominating &and Corporate Governance Committee are posted on the Company's website, www.bonanzacrk.com, and such charters are drafted in a manner consistent with the regulations of the SEC and standards of the New York Stock Exchange ("NYSE").NYSE.

        In addition to the five standing committees, the Board formed a Special Litigation Committee in July 2011 to conduct an investigation of allegations made by Frank H. Bennett, a co-manager of BCOC, against our President and CEO, Michael Starzer. The Board has also established a Key Employee Search Committee on anad hoc basis, which meets periodically as necessary, to assist management with searches for key members of our management team.

        During 2012, each director attended at least 90% of the meetings of the Board held after such director's appointment. All directors attended all meetings of each committee on which such director




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served held after such director's appointment. The table below provides information regarding 2012 meetings of the Board and its committees.

2012		Board			Audit			Compensation			Nominating and Corporate Governance			Reserve			Environmental Safety and Regulatory Compliance			Special Litigation			Key Employee Search
Meetings			12			13			9			4			2			2			0			4
Attendance			>90	%		100	%		100	%		100	%		100	%		100	%		—			100	%


Audit Committee

        The members of our Audit Committee are Messrs. Raih (Chairman), CartyChronister and Chronister, each of whom ourWatt. Our Board of Directors has determined all three to be financially literate. Our Board of Directors has determined that Mr. Raihliterate and Mr. Chronister both qualify as audit committee financial experts and are both independent under the standards of the New York Stock ExchangeNYSE and SEC regulations.regulations and that Mr. Raih qualifies as an audit committee financial expert. The Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to our Board, of Directors, including: the selection of our independent registered public accountants, the scope of our annual audits, fees to be paid to our independent accountants, the performance of our independent accountants and our accounting and reporting practices and processes. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements. The Audit Committee held four meetings during 2011.requirements and the Company's assessment and management of financial reporting and internal control risks. Additional information regarding the functions performed by the Audit Committee is set forth in the "Audit Committee Report" included herein.

        Mr. Raih also attends all meetings of the Company's Disclosure Committee, which is comprised of Company employees, in order to assist our principal executive officer and principal financial officer in ensuring that all disclosures made by the Company are (i) accurate, complete and fairly present the Company's financial condition and results of operations in all material respects and (ii) made on a timely basis as required by applicable laws and stock exchange requirements.


Compensation Committee

        The members of our Compensation Committee are Messrs. CartyWatt (Chairman), NeveuCarty and Overbergen.Neveu. Mr. Watt replaced Mr. Carty as Chairman of the Compensation Committee effective April 19, 2013. The Board of Directors has determined that Messrs. Neveu and Overbergenall current members of our Compensation Committee are independent under SEC regulations and the standards of the NYSE.

        The Compensation Committee establishes salaries, incentivesreviews and approves the goals and objectives relevant to the Company's chief executive officer's compensation, and, based on the Compensation Committee's own evaluation of the chief executive officer's performance in light of approved goals and objectives, recommends to the independent directors of the Board for their approval the total compensation of the chief executive officer. In addition, the Compensation Committee annually reviews the chief executive officer's recommendations regarding the compensation of all other forms of compensation for ourexecutive officers and other employees.recommends the compensation, including salary and annual cash and equity incentive compensation, of such officers to the Board for its approval. The Compensation Committee also administersoversees our incentive compensation and benefit plans. The Board of Directors has delegated to the Compensation Committee all authority of the Board of Directors as may be required or advisable to fulfill the purposes of the Compensation Committee as set forth in the Compensation Committee's charter. The Compensation Committee may form and delegate authority to subcommittees comprised of members of the Compensation Committee. The Compensation Committee has sole authority to retain and dismiss compensation consultants and other advisors that provide objective advice, information and analysis regarding executive and director compensation. These consultants report directly to and may meet separately with the Compensation Committee and may consult with the Compensation Committee Chairman between meetings. Meetings may, at the discretion of the Compensation Committee, include members of the Company's management, other

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members of the Board, of Directors, consultants or advisors, and such other persons as the Compensation Committee or its Chairman may determine. Additional information regarding the

functions performed by the Compensation Committee is set forth in the "Compensation Discussion and Analysis" section and the "Compensation Committee Report" included herein. The Compensation Committee held five meetings during 2011.

Nominating and Corporate Governance Committee

        The members of our Nominating and Corporate Governance Committee are Messrs. CartyNeveu (Chairman), RaihCarty and Chronister.Raih. Effective April 19, 2013, Mr. Chronister stepped off the Nominating and Corporate Governance Committee and Mr. Neveu joined the Nominating and Corporate Governance Committee and replaced Mr. Carty as its chairman. Our Board of Directors has determined that Messrs. Chronisterall current members of the Nominating and RaihCorporate Governance Committee are independent under SEC regulations and the standards of the NYSE.

        The Nominating and Corporate Governance Committee identifies, evaluates and recommends qualified nominees to serve on our Board, of Directors, develops and oversees our internal corporate governance processes and maintains a management succession plan. Our Board, through its Nominating and Corporate Governance Committee, evaluates itself annually. The Nominating and Corporate Governance Committee endeavors to achieve an overall balance of diversity of experiences, skills, attributes and viewpoints among our directors. It does not discriminate based upon race, religion, sex, national origin, age, disability, citizenship or any other legally protected status. Additional information regarding the functions performed by the Nominating and Corporate Governance Committee is set forth in the "Stockholder"Other Matters—Stockholder Proposals; Identification of Director Candidates" section included herein. The Nominating and Governance Committee was formed in connection with the initial public offering of our common stock on December 15, 2011 (our "IPO") and did not hold any meetings during 2011.

Reserve Committee

        The members of the reserve committeeReserve Committee are Messrs. Chronister (Chairman), Carty and Overbergen.Watt. Our Reserve Committee oversees, reviews, acts on and reports to the Board of Directors on matters regarding our reserve engineering reports and reserve engineers. Our Reserve Committee is responsible for (i) the integrity of our reserve reports, (ii) determinations regarding the qualifications and independence of our independent reserve engineers, (iii) the performance of our independent reserve engineers and (iv) our compliance with certain legal and regulatory requirements. The Reserve Committee met once in 2011.

Environmental Safety and Regulatory Compliance Committee

        The members of the environmental safetyEnvironmental Safety & regulatory complianceRegulatory Compliance ("ES&RC") Committee are Messrs. Chronister (Chairman), NeveuGrove and Grove.Neveu. Our ES&RC Committee's primary purpose is to assist our Board of Directors in fulfilling our responsibilities to provide global oversight and support of the Company's environmental safety, regulatory and compliance policies, programs and initiatives. In carrying out its responsibilities, the ES&RC Committee reviews the status of our health, safety and environmental performance, including processes monitoring and reporting on compliance with internal policies and goals and applicable laws and regulations. The ES&RC Committee met twice in 2011.

EXECUTIVE COMPENSATION AND OTHER INFORMATIONSpecial Litigation Committee

        In July 2011, our Board formed a Special Litigation Committee comprised of three non-employee directors—Messrs. Carty (Chairman), Chronister and Neveu—to conduct an investigation of the allegations of Frank H. Bennett, a co-manager of BCOC, against Michael R. Starzer, our President and Chief Executive Officer. During 2011, the Special Litigation Committee concluded that the allegations against Mr. Starzer were unsubstantiated and lacked merit. This matter was sent to arbitration in July 2011, and in November 2012, an arbitration panel found in favor of Mr. Starzer on all of Mr. Bennett's claims.

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Compensation DiscussionKey Employee Search Committee

        The members of the Key Employee Search Committee are Messrs. Carty (Chairman), Chronister and AnalysisNeveu. Our Key Employee Search Committee's primary purpose is to assist management in identifying and recruiting candidates for key management positions, including the chief operating officer and chief financial officer positions.

Attendance at Annual Meetings

        The Board encourages all directors to attend all annual meetings of stockholders, if practicable. All of our directors attended last year's annual meeting of stockholders. We anticipate that all of our directors will attend the 2013 Annual Meeting.

Stockholder Rights

        We do not have a "poison pill" or stockholder rights plan. If we were to adopt a stockholder rights plan, the Board would seek prior stockholder approval of the plan unless, due to timing constraints or other reasons, a majority of independent directors of the Board determines that it would be in the best interests of stockholders to adopt a plan before obtaining stockholder approval.

        Any stockholder of the Company who desires to submit a proposal for action at the 2014 annual meeting of stockholders and wishes to have such proposal included in the Company's proxy materials, must submit such proposal to the Company at its principal executive offices no later than January 3, 2014, unless the Company notifies the stockholders otherwise.

        The vote of stockholders required to amend our certificate of incorporation and bylaws is a simple majority vote.

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COMPENSATION DISCUSSION AND ANALYSIS

        This compensation discussion and analysis or ("CD&A,&A") provides a general description of our executive compensation program and information about our compensation objectives and policies for our principal executive officer, our principal financial officer and our other three most highly compensated executive officers at the end of the last completed fiscal year, andits various components. This CD&A is intended to place in perspective the information contained in the executive compensation tables that follow this discussion. This CD&A provides a general description of our compensation program and information about its various components.

Executive Summary

        Throughout this discussion, the following individuals are referred to as the "named executive officers" and are included in the Summary Compensation Table:

•

Michael R. Starzer, President and Chief Executive Officer;



•

James R. Casperson, Executive Vice President and Chief Financial Officer;

•

Gary A. Grove, Executive Vice President—Engineering and Planning and Interim Chief Operating Officer;



•

Patrick A. Graham, Executive Vice President—Corporate Development;



•

StevenChristopher I. Humber, Senior Vice President, General Counsel and Secretary;



•

Wade E. Jaques, Vice President, Chief Accounting Officer, Controller and Treasurer; and



•

James R. Enger, ourCasperson, former Executive Vice President and Chief Financial Officer;



•

Steven B. Wilson, our former Vice President and Chief Accounting Officer; and



•

C. Stephen Black, our former Executive Vice President and Chief Operating Officer.

        Although the information presented in this CD&A focuses on our fiscal year 2011,2012, we also describe compensation actions taken before or after fiscal year 20112012 to the extent such discussion enhances the understanding of our executive compensation disclosure.

        Strong Operating and Financial Results.    Despite the uncertainty surrounding the global economy and continued volatility in commodity prices, our Company achieved strong operating and financial results for 2012, including the following:

•

Increased net income to $46.5 million (including approximately $44.6 million from continuing operations), as compared with $12.7 million (including approximately $14.6 million from continuing operations) for 2011;



•

Increased cash flows provided by operating activities to $156.9 million in 2012 from $57.6 million in 2011;



•

Incurred capital expenditures of $340.9 million, as compared with $165.5 million in 2011;



•

Increased production by 121% to 3,387.9 MBoe in 2012, with oil and NGL production representing 73% of total production;



•

Decreased average production costs per Boe by 24% to $9.06 per Boe in 2012 from $11.90 per Boe in 2011;



•

Increased proved reserves 21% to 53 MMBoe as of December 31, 2012;



•

Drilled our first horizontal Codell, Niobrara "C" Bench and extended reach Niobrara "B" Bench wells in the Wattenberg Field;



•

Increased the amount of our credit facility from $300 million to $600 million and our borrowing base from $245 million to $325 million;



•

Completed a bolt-on acquisition in the Wattenburg Field for $57 million, payable over four years, to enhance our existing operations and capitalize on our technical advantage in the field;



•

Sold non-core properties in California to focus on the Wattenburg Field in the Rocky Mountains and the Dorcheat-Madeconia field in Arkansas;

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•

Completed an expansion of our gas processing facilities in Arkansas, expanding our total processing capacity to approximately 40 MMcf per day;



•

Recruited key finance and other corporate staff and built the necessary infrastructure to focus on safe, reliable and efficient business operations;



•

Generated total shareholder returns (based on share price appreciation during 2012) of 122%;



•

Amended certain marketing contracts resulting in better wellhead realizations;



•

Improved completion techniques and reduced cycle times from spud to spud horizontal wells; and



•

Became Sarbanes Oxley compliant during our first year as a public company, successfully establishing, implementing and testing internal controls and documenting numerous processes during 2012.

        Features of Our Compensation Program.    We strive to create a compensation program that encourages long-term value creation by tying individual compensation to the attainment of our annual performance targets while acknowledging and fostering the unique qualifications, skills, experience and responsibilities of each individual.

        The following table summarizes the key features of our executive compensation program.

Best Practices in Our Executive Compensation Program

ü

Pay for Performance—Our executives' total compensation is substantially weighted on performance-based pay. Our annual cash incentive awards are based on performance against key financial, operational and strategic metrics and individual performance against pre-set objectives.



ü

Robust Stock Ownership—We have adopted robust stock ownership guidelines for our executives and directors.



ü

External Benchmarking—Our Compensation Committee reviews competitive compensation data based on an appropriate group of exploration and production peer companies prior to making annual compensation decisions.



ü

Double-Trigger Equity Acceleration upon a Change in Control—Under our new Executive Change in Control and Severance Plan, vesting acceleration of equity incentives following a change in control only occurs if the employee is terminated within 18 months following a change in control.



ü

Independent Compensation Consultant—We have engaged an independent executive compensation advisor who reports directly to the Compensation Committee and provides no other services to the Company.



ü

Review of Total Compensation—Our Compensation Committee reviews spreadsheets of total compensation prior to making annual executive compensation decisions.



ü

Mitigation of Undue Risk—We conduct a risk assessment annually to carefully consider the degree to which compensation plans and decisions affect risk taking. We do not believe that any of the compensation arrangements in place are reasonably likely to have a material adverse impact on the Company.

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Practices that We Do Not Engage in or Allow

×

No Excise Tax Gross-Ups—Neither our new Executive Change in Control and Severance Plan nor our employment agreements provide for excise tax gross-ups.



×

No Hedging or Derivative Transactions in Company Stock—We prohibit our executives from engaging in any short-term trading, short sales, option trading and hedging transactions related to our common stock. We also prohibit our executives from purchasing our common stock on margin.

        Compensation Committee Consideration of 2012 Stockholder Advisory Votes on Our Compensation Program.    Our Compensation Committee is continuously mindful of our stockholders' views on executive compensation. We believe our stockholders' strong support of our executive compensation program at our 2012 Annual Meeting of Stockholders reaffirmed our compensation program. At our 2012 Annual Meeting, ninety-nine percent (99%) of the advisory votes cast on the question of whether to approve our executive compensation voted in favor of approving it, and (94%) of the advisory votes cast on the question of the frequency with which we should include advisory proposals regarding executive compensation voted to have such advisory votes every year. In light of these voting results, the Company determined that it will hold an advisory vote on executive compensation every year until the next required advisory vote with respect to the frequency of advisory votes on executive compensation, which will occur no later than the Company's annual meeting of stockholders in 2018.

        Recent Changes to our Compensation Program.    Our Compensation Committee remains focused on structuring our compensation program to ensure proper alignment of pay with performance. During 2012 and the first quarter of 2013, we made a number of changes to our executive compensation program, including the adoption of the following:

•

stock ownership guidelines for our independent directors and executive officers, to further align their interests with the interests of our stockholders;



•

a short-term incentive program based on key one-year financial and operational metrics and achievement of strategic goals that drive long-term stockholder value;



•

an Executive Change in Control and Severance Plan and a related new form of employment agreement, with a double-trigger severance payment on a change in control; and



•

a Performance Share Agreement, which provides vesting of performance shares only upon the achievement of certain specified performance goals and under which 25% of our executives' 2013 LTIP grants were granted.

Compensation Program Philosophy and Objectives

        At Bonanza Creek, we view our employees as an investment for the future. We invest in our people for the future opportunity to continue to grow our business and deliver more value to our stockholders. The objectiveobjectives of our compensation program is are:

•

to attract, retain and motivate the most qualified individuals in the oil and gas industry whom we can identify and recruit.recruit;



•

to provide total compensation that is flexible enough to respond to changing market conditions and that also aligns compensation levels with performance; and



•

to align the interests of our executives with our stockholders' interests.

        We design our compensation program to reward employees for performance that creates long-term stockholder value by successfully implementing our long-term strategy and achieving our short-term

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goals. We strive to create a compensation program that encourages long-term value creation by tying individual compensation to the attainment of our annualrewards performance targets while acknowledging and fostering the unique qualifications, skills, experience and responsibilities of each individual.

        Prior
Executive Compensation Risk

        The Compensation Committee has designed our short- and long-term compensation programs with features that reduce the likelihood of excessive risk-taking, including a balanced mix of cash and equity and short- and long-term incentives, an appropriate balance of fixed and at-risk compensation components, an appropriate balance of operating and financial performance measures, significant stock ownership requirements for officers, extended vesting schedules on equity grants, caps on incentive awards and prohibitions on engaging in derivative transactions in our common stock. We have determined that risks arising from our compensation policies and practices are not reasonably likely to 2011, as a private company, we did not have a material adverse effect on us. We do not believe that our current or proposed compensation committee, compensation consultantpolicies and practices encourage excessive or formally set peer group, however,unnecessary risk-taking.

Setting Executive Officer Compensation

        Role of Our Compensation Committee.    Our Compensation Committee (i) oversees our compensation was set basedprograms on behalf of our Board; (ii) is responsible for proposing programs for approval by our Board that attract, retain and motivate qualified executive-level talent; (iii) monitors our compensation programs and strives to ensure that the total compensation paid to our executive officers is fair, reasonable and competitive with that provided to executive officers serving in similar roles and with similar responsibilities in other U.S. publicly traded energy companies; and (iv) makes proposals to our independent directors regarding the compensation of Directors' and management's assessment of a variety of factors. In 2011, in connection with the establishment ofour chief executive officer. Our chief executive officer makes proposals to our Compensation Committee regarding the Compensation Committee engaged the servicescompensation of Longnecker & Associates (the "Compensation Consultant").our other executive officers. The Compensation Committee has the sole authority to retain, amend the engagement with and terminate any compensation consultant to be used to assist in the evaluation of director or executive officer compensation. The Compensation Committee has sole authority to approve the Compensation Consultant's fees and other retention terms and has authority to cause the Company to pay the fees and expenses of the Compensation Consultant. Among the services the Compensation Consultant was asked to perform was providing the Compensation Committee with an analysis of our executive compensation programs, including total direct compensation comprised of base salary, annual incentive and long-term incentive compensation, in order to assess the competitiveness of our programs and to provide conclusions and recommendations. The Compensation Consultant does not provide any other services to the Company or advice on matters unrelated to executive and independent director compensation.

        In 2011, utilizing data obtained from the Compensation Consultant, we established formal compensation standards for our executive officers using compensation levels at or near the market midpoint, or 50^th percentile, as a guideline in establishing our compensation levels, although we may deviate from the 50^th percentile for individual considerations such as experience, performance, tenure and job responsibilities. The Compensation Consultant determines "market" by the average of (i) compensation data for our peer group and (ii) compensation data from published surveys. Consistent with our philosophy of setting compensation levels at or near the market 50^th percentile, we intend to utilize our newly adopted Long-term Incentive Plan, or LTIP, starting in 2012. See "Elements of Compensation and Why We Pay Each Element—Long-term Incentives" below. Under the LTIP, we expect that a significant portion of our named executive officers' overall compensation will be made up of long-term incentives.

        This cash bonus plan will be included as part of our compensation program because we believe this element of compensation willawards help us to:

•

attract and retain executive talent;



•

motivate management to achieve key short-term corporate goals; and



•

align executives' interests with stockholders' interests.

Long-Term Equity-Based Incentives.

        Employee Shares.2012 Awards.    In connection with2012, our Compensation Committee adopted short-term incentive program guidelines (the "2012 STIP Guidelines"), which provided a framework for 2012 annual cash incentive awards to reward our named executive officers for their (i) performance in helping the dissolutionCompany achieve its 2012 operational and financial goals and (ii) achievement of certain individual goals and objectives approved by the Compensation Committee.

        When considering the 2012 short term incentives for the named executive officers, including our predecessor, BCEC, certain shares of our former Class A Common Stock held by BCEC were transferred to Bonanza Creek Employee Holdings, LLCchief executive officer, the Compensation Committee considered specific operational key performance indicators ("BCEH"KPI's"), an entity managed by Mr. Starzerfinancial KPI's, organizational development objectives, investor relations activities, employee development objectives and Mr. Grove. These shares, which we refer to as the "Employee Shares", were intended to be granted to employees but were held by BCEH in order to defer any tax liability resulting from their issuance to employees until a liquid market in our shares of common stock existed. Messrs. Blackcertain process development and Wilson were issued Employee Shares in connection with their resignations and, priorimplementation objectives relevant to the closing of the IPO, the remaining shares were issued to certain employees of the Company. Immediately prior to the closing of the IPO, all Employee Shares were convertedtransition from Class A Common Stock to common stock of the Company.

        Class B Common Stock.    In 2010, we adopted a Management Incentive Plan, which we refer to as the MIP. Under the MIP, 10,000 shares of our former Class B Common Stock were reserved for issuance in connection with restricted stock awards to our management and employees. On December 23, 2010, restricted shares of our former Class B Common Stock were granted to Messrs. Starzer, Graham and Grove. Mr. Casperson received a grant of our former Class B Common Stock in connection with the commencement of his employment. Grants of our former Class B Common Stock to Messrs. Black and Enger were forfeited upon their respective separation from the Company. As a result of our IPO, Class B Common Stock converted into our former Class A Common Stock and was exchanged for our common stock. These shares are subjectprivately held company to a three-year vesting period commencing upon the closing of our IPO, whereby such shares vests in one-third incrementspublicly traded corporation. The operational KPI's included oil and gas production growth, lease operating expenses and reserve growth. Financial KPI's included revenue growth, Adjusted EBITDAX growth and total capital spending and efficiency.

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        The following table summarizes the Company's 2012 performance in the areas considered by our Compensation Committee.

        In March 2013, based on the Company's achievement of certain operational and financial KPI's, strong performance in other key areas and each named executive officer's individual performance during the year, the Compensation Committee approved discretionary awards for each of our named executive officers, other than our president and chief executive officer, as follows:

        For Mr. Starzer, our President and Chief Executive Officer, the Compensation Committee considered operational and financial KPI's, individual performance, achievement of certain individual goals and effective interfacing with the investment community and our public stockholders. The Compensation Committee also considered Mr. Starzer's progress and challenges in stewarding the transition from a private company to a public company, implementing the controls and processes necessary for a public company and developing the organizational and employee competencies required for corporate success. Based on Mr. Starzer's performance across these criteria, the Compensation Committee approved a discretionary award of $196,000 for Mr. Starzer.

        2013 STIP.    Our LTIP (discussed below) contemplates the award of annual cash incentive bonuses to certain of our employees, including our named executive officers, to reward employees for their performance in helping the Company achieve its short term goals. In March 2013, our Board reviewed the 2012 STIP Guidelines and approved a short term incentive program for fiscal years beginning with 2013 (the "STIP"), pursuant to the terms of our LTIP.

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        The STIP provides that suchthe aggregate pay-out of awards, as well as each individual remains employedaward, must be approved by the Company. We feel thatCompensation Committee prior to the vesting provisionspayment. The Compensation Committee has the authority to adjust awards upward or downward in its discretion, but may not make upward adjustments for named executive officers and other "covered" employees. Target payouts are sufficient100% of base salary for our president and chief executive officer and 75% of base salary for all other named executive officers. Under the STIP, an employee's annual cash incentive is determined by the Company achieving certain key performance indicators ("KPIs"), divided into Company-wide KPIs and regional KPIs, and the employee achieving certain goals and objectives, set and communicated to encourage our senior managementeach employee prior to produce long-term stockholder value.or at the beginning of each performance period, although payouts to the named executive officers are based solely on Company-wide KPIs. The MIP was terminated in connection with our IPO such that no further grants will be mademaximum payout under the MIP.STIP for named executive officers is 200% of base salary for our president and chief executive officer and 150% of base salary for the other named executive officers.

        Long-Term Equity-Based Incentives.    Our long-term incentives are designed to reward the achievement of our Company's long-term strategic objectives and to provide our named executive officers with a significant incentive to maximize stockholder value.

        Long Term Incentive Plan.    Our Board of Directors and stockholders have approved a Long Term Incentive Plan, or LTIP.the LTIP in November 2011. The LTIP is intended to replace the MIPprovides for future grants of equity incentives. The purpose of our LTIP isincentives to attract, motivate and retain the best available personnel for positions of substantial responsibility,responsibility; to provide additional incentives to our employees, directors and consultants,consultants; and to promote the success and growth of our business. TheEquity-incentives that may be granted under our LTIP provides for grants ofinclude: (i) incentive stock options qualified as such under U.S. federal income tax laws,laws; (ii) stock options that do not qualify as incentive stock options,options; (iii) stock appreciation rights ("SARs"), (iv) restricted stock awards,awards; (v) restricted stock units,units; (vi) unrestricted stock awards,awards; (vii) dividend equivalent rights, (h)rights; (viii) performance awardsawards; and (i)(ix) annual incentive awards.

        Our Compensation Committee believes long-term incentive-based equity compensation is an important component of our overall compensation program because it:

•

rewards the achievement of our long-term goals;



•

aligns our executives'named executive officers' interests with the long-term interests of our stockholders;



•

aligns compensation with sustained long-term value creation;



•

encourages executive retention;retention with vesting of awards over multiple years; and



•

conserves our cash resources.

        In determining awards made under our LTIP, our Compensation Committee reviews the CEO's recommendations for executive officers other than our CEO and, with respect to the CEO, the Compensation Committee's own determination, compared against the Compensation Consultant's market analysis to determine the appropriate amount of equity to grant to such executive officers based on market data while also taking into consideration the Company's performance and individual performance and retention concerns. Participation in our LTIP is subject to certain restrictions. Our compensation philosophy is to use the market 50^th percentile as a guideline in terms of setting long-term incentive compensation, subject to appropriate adjustment for retention and performance factors, in order to attract, motivate and retain high caliber executive talent, while aligning executives' interests with those of our stockholders.

        Our LTIP is administered by our Compensation Committee, subject to the ultimate authority of our Board, of Directors, which has full power and authority to take all actions and to make all determinations required or provided for under the LTIP, including designation of grantees, determination of types of awards, determination of the number of shares of common stock subject an award and establishment of the terms and conditions of awards. Our Board of Directors may amend, modify or supplement any award, provided that the grantee of such award must consent to any such amendment, modification or supplement that impairs the grantee's rights under the award. Awards under our LTIP may be made to (i) any employees, officers, directors or certain consultants of us or our affiliates, as our Board of Directors or Compensation Committee may designate; (ii) any director who is not an officer or employee of the Company; and (iii) any other individual whose participation in our LTIP is determined by our Board of Directors or Compensation Committee to be in our best interests. An eligible person may receive more than one award.

        Under our LTIP, which was established in 2011, 2,500,000 shares of our common stock arewere originally available for issuance under our LTIP.issuance. As of December 31, 2012, 1,824,770 shares were available for issuance. The number of shares issued or reserved pursuant to our LTIP is subject to adjustment as a result of

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certain mergers, exchanges or other changes in our common stock. For so long as we are a reporting company and after the reliance period under Section 162(m) of the Code has expired, we may award per calendar year up to (i) 250,000 shares of common stock subject to stock options or SARs and (ii) 250,000 shares of common stock other than pursuant to stock options or SARs to any single grantee. We may award to any single grantee up to $2.5 million per calendar year as an annual incentive award and up to $2.5 million per performance period as a performance award or other cash award.

        Other Employee Benefits:    We expect that        In determining 2012 awards under our LTIP, our Compensation Committee reviewed Mr. Starzer's recommendations for executive officers other than himself and made its own determination with respect to Mr. Starzer. The Compensation Committee compared such recommendations against the Compensation Consultant's market analysis to determine the appropriate amount of equity to grant to each named executive officer based on market data, while also taking into consideration the Company's performance as well as individual performance and retention concerns. The Compensation Committee also considered the successful efforts of our named executive officers will continue to be eligible for the same health, welfare and other employee benefits available toin completing our employees generally, including medical and dental insurance, short and long-term disability benefits and a 401(k) plan that includes Company matching of an employee's contributions of up to 6% of each employee's cash earnings.

Employment Agreement and Severance and Changeinitial public offering in Control AgreementsDecember 2011.

        In June 2012, the Compensation Committee made restricted stock grants as set forth in the table below. These restricted stock grants will vest, subject to continued employment, over a three-year period commencing February 15, 2012, with one-third vesting on each anniversary of February 15, 2012.

        Employment Agreements in Effect as of December 31, 2012.    In December 2010, we amended and restated the Company entered into employment agreements with Messrs. Starzer, Grove Graham and Black to provideGraham. The employment agreements were for an initial term of three years, expiring December 21, 2013. Mr. Casperson entered into an employment agreement in November 2011, which terminated in 2012 upon his resignation. The Company entered into an employment agreement with Mr. Humber, effective January 1, 2012. These agreements provided for a base salary, participation in the MIP. Mr. Caspersonformer MIP (which has been replaced by the LTIP), participation in our bonus plan, participation in our benefit plans, paid vacation and Mr. Enger entered into a similar employment agreement in connection with their respective employment.reimbursement of reasonable business expenses. Upon termination of employment by us without cause, by the named executive officer for good reason, due to permanent disability of the named executive officer or upon resignation in connection with a change in control of our company,Company, such officer isexecutive was entitled to (i) an immediate cash payment equal to 12 months base salary; (ii) a cash payment made within 70 days of termination, equal to 12 months base salary plus 200% of the two-year average annual bonuses paid to such officer;executive; and (iii) for 18 months following termination, monthly reimbursement of the difference between such officer'sexecutive's COBRA premiums and the amount our active senior executive employees pay for the same or similar coverage under our group health plan. Such named executive officers areThe executives were entitled to receive these severance benefits only upon executing a general release. These employment agreements include 2also included two year post-termination non-competition and non-solicitation clauses.

        New Employment Agreements.    In April 2013, the Company entered into new employment agreements (the "New Employment Agreements") with Messrs. Starzer, Grove, Graham and Humber (who each terminated their existing employment agreements described above). Mr. Wilson'sJaques does not currently have an employment agreement provided for base salary, participation in our benefit plans, paid vacation and reimbursement of reasonable business expenses as well as 12 months base salary in a lump sum as severanceagreement. The New Employment Agreements entitle the executives to participate in the eventSeverance Plan (described below), which provides for a double-trigger equity

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acceleration and a double-trigger termination of his employment by us without cause, by himpayment equal to one to three times salary and bonus for good reason, due to permanent disability or upon resignation in connection with a change of control of our company.

        We believe that the employment agreements we have with our named executive officers upon a change in control. The New Employment Agreements prohibit the executives while they are appropriate because weemployed by the Company from being involved in oil and gas exploration and development activities and other activities that directly compete with the Company's business. The New Employment Agreements, where enforceable, also prohibit the executives from any business engaged in oil and gas exploration and development activities within a twenty-five mile radius of any mineral property interest of the Company or its affiliates (with exceptions in both cases for preexisting business activities and opportunities first offered to and declined by the Company) for a period of one to three years (based on the executive's position) after employment has ended with the Company.

        We believe that the interests of our stockholders are best served if we provide separation benefits to eliminate, or at least reduce, the reluctance of executive officers and other key employees to pursue potential corporate transactions that may be in the best interests of our stockholders, but that may have resultingresult in adverse consequences to the employment situations of our executive officers and other key employees.officers. Further, these agreements ensure an understanding of what benefits are to be paid in the event of termination of employment in certain specified circumstances, including in connection with a change in control.

        Severance Plan.    On March 26, 2013, the Compensation Committee recommended and the Board approved a new Executive Change in Control and Severance Plan (the "Severance Plan") to be effective March 28, 2013. The Severance Plan is applicable to all executive officers who have executed a New Employment Agreement. Under the Severance Plan, the executive officer receives certain severance benefits upon his resignation or termination within 18 months following a change in control if such termination is initiated by our Company for any reason other than for Cause (as defined in the Severance Plan), or by the executive for Good Reason (as defined in the Severance Plan). The Severance Plan provides similar benefits outside the context of a change in control for termination without Cause, resignation for Good Reason, death or disability. Assuming the executive executes and

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continues to comply with a general release of liability against the Company within 60 days after such termination or resignation, the executive is entitled to the following benefits, based on his job title:

        Other Employee Benefits.    We expect that the named executive officers will continue to be eligible for the same health, welfare and other employee benefits available to our employees generally, including medical and dental insurance, short and long-term disability benefits, parking and a 401(k) plan that includes Company matching of an employee's contributions of up to 6% of each employee's cash earnings. We believe that offering a comprehensive employee benefits package helps us attract and retain executive talent and remain competitive in our industry.

Executive Officer Stock Ownership Guidelines

        StockDuring 2012, we established stock ownership guidelines have not been implementedfor executive officers with the goal of promoting ownership of our common stock and aligning the interests of our executive officers with those of our stockholders. The ownership guidelines for our named executive officers or directors. We will continueare currently established at the following minimum levels:

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        The Compensation Committee monitors stock ownership levels on an annual basis. If an executive is promoted to a position with respecta higher salary multiple, such executive will have two years from the date of the change in position to reach the higher expected stock ownership level, but still must meet the prior expected ownership level within the original five-year period. Shares that count towards satisfaction of the guidelines in the future.do not include unvested restricted stock.

Accounting and Tax Considerations

        Our Compensation Committee considers tax and accounting rules and regulations when structuring the executive compensation paid to our named executive officers, including the following:

Section 162(m) of the CodeCode.

    Under Section 162(m) of the Internal Revenue Code of 1986, as amended or the Code,(the "Code"), a limitation was placed on tax deductions of any publicly-heldpublicly held corporation for individual compensation to certain executives of such corporation exceeding $1,000,000 in any taxable year, unless the compensation is performance-based. Certain exceptions to the deductibility limitation apply for a limited period of time in the case of companies that become publicly-tradedpublicly traded through an initial public offering, assuming certain conditions are satisfied. We expect that compensation payable with respect to awards granted under the LTIP during this limited period will fit within that exception. With respect to our other compensation arrangements, to the extent such arrangements are not eligible tofor the foregoing

exception, we reserve the right to use our judgment to authorize compensation payments that do not comply with the performance-based compensation exemption in Section 162(m) of the Code when we believe that such payments are appropriate and in the best interest of our stockholders, after taking into consideration changing business conditions and/or the executive's individual performance and/or changes in specific job duties and responsibilities. During 2011, none of our executive officers received salary, bonus, vesting of restricted stock or other compensation that, in the aggregate, exceeded the tax deductible limitations under Section 162(m).

Section 409A of the CodeCode.

    Section 409A of the Code requires that "nonqualified deferred compensation" be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities and penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A of the Code.

Section 280G of the CodeCode.

    Section 280G of the Code disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax on the individual with respect to the excess parachute payment. Parachute payments are compensation linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits and payments and acceleration of vesting from long-term incentive plans including stock options and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G of the Code based on the executive's prior compensation. In approving the compensation arrangements for our named executive officers, in the future, our Compensation Committee willand Board consider all elements of the cost to the company of providing such compensation, including the potential impact of Section 280G of the Code. However, our Compensation Committee may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility under Section 280G of the Code and the imposition of excise taxes under Section 4999 of the Code when it believes that such arrangements are appropriate to attract and retain executive talent.

        Our arrangements with our executive officers do not provide a "gross-up" or other reimbursement payment for any tax liability that such officer might owe as a result of the application of Sections 280G,

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4999, or 409A of the Code, and we have not agreed and are not otherwise obligated to provide any named executive officers with such a "gross-up" or other reimbursement. Our arrangements generally provide that if any payments constitute "parachute payments" (as defined under Section 280G of the Code), then such payment may be reduced so that such payment is less than the limitation under Section 280G or paid in full, whichever produces the better after tax result for the executive officer.

Accounting Standards        ASC Topic 718 regarding Stock Compensation.

    Financial Accounting Standards Board (FASB) Accounting Standards Codification, Topic 718, "Compensation—Stock Compensation" (ASC("ASC Topic 718)718") requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, restricted stock and other equity-based awards are accounted for under ASC Topic 718. Our Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards

change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

Summary Compensation Table

        The following table shows information concerning the annual compensation for services provided to us by our named executive officers during the fiscal years ended December 31, 2012, 2011 2010 and 2009.2010.

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Mr. Casperson was appointed Executive Vice President and Chief Financial Officer effective as of October 31, 2011. Prior to joining us as Chief Financial Officer,2011 and resigned from both of these positions effective November 1, 2012. Full year salary for 2012 would have been $260,000. On November 2, 2012, the Company entered into a consulting agreement with Mr. Casperson wasand agreed to pay him a memberretainer of $7,500 per month and $175 per hour (for services in excess of 43 hours per month) for consulting services for a period of six months. The amount for 2012 includes $15,000 of consulting fees paid pursuant to such consulting agreement.