SilverBow Resources Announces Fourth Quarter 2017 Results Ahead of Expectations

February 28, 2018

4Q17 Production Increases 13.6% Compared to 3Q17

Reports 2017 Year-End Reserves growth of 38% to 1.0 Tcfe

Increasing Development Through Adding Second Drilling Rig

HOUSTON–(BUSINESS WIRE)–SilverBow Resources, Inc. (NYSE: SBOW) (“SilverBow” or the “Company”)
today announced operating and financial results for the fourth quarter
2017. Highlights include:

Net production averaged 177 million cubic feet of natural gas
equivalent per day (“Mmcfe/d”), exceeding the high end of guidance
Oil and gas revenues of $58.7 million, a 20% increase from third
quarter 2017
Lease operating expenses of $0.34/Mcfe compared to $0.41/Mcfe in the
third quarter 2017
Net Income of $25.1 million, or $2.17 per diluted share compared to
$1.12 in the third quarter 2017
Adjusted EBITDA (a non-GAAP measure) of $42.0 million, a 35% increase
from third quarter 2017
Year-end 2017 reserves of 1.0 Tcfe, up 38% from prior year with PV-10
growth of 82% to $805 million with a Standardized Measure of $732
million. For a reconciliation of PV-10 (non-GAAP) to Standardized
Measure (GAAP), please see table in the back.
Greater than 600% reserve replacement at a finding, development, and
acquisition (FD&A) cost of $0.59/Mcfe
Acquisition of an additional ~10,000 net acres during 4Q17 and ~36,500
net acres for the full year bringing total net acreage to over 100,000
in the Eagle Ford
Sale of AWP Olmos non-core assets for $28.8 million in the first
quarter of 2018
Full year 2018 capital expenditure guidance of $245 to $265 million
with plan to have two drilling rigs active by end of first quarter 2018
Reaffirmed full year 2018 production guidance of 175 to 195 Mmcfe/d,
an increase of 22% to 37% pro forma for divestitures

Management Comments

Sean Woolverton, SilverBow’s Chief Executive Officer, commented, “We
finished 2017 with another strong quarter operationally, with both
production and operating costs comparing favorably to our guidance.
Fourth quarter production levels were driven by strong base production
performance combined with bringing two additional net wells online in
our southern Eagle Ford gas position as well as two net wells in Fasken.
We continue to focus on driving efficiencies with a best-in-class cost
structure in the basin as evidenced by lease operating expenses
declining 17% on a per unit basis compared to third quarter levels. This
strong operational performance generated adjusted EBITDA of $42.0
million, an increase of 35% compared to the third quarter.”

Woolverton commented further, “I’m also pleased to announce we reported
reserve growth of 38% to just over 1.0 trillion cubic feet of natural
gas equivalent compared to year-end 2016 levels. We believe we have
significant potential to grow proved reserves within our existing asset
base as we strategically develop our Eagle Ford acreage. Additionally,
after adding over approximately 36,000 acres to our Eagle Ford position
in 2017, our focus now shifts to execution and demonstrating the
consistency of our results and our full resource potential. We have
taken steps to strengthen our operating team and now have a position of
scale that provides us with substantial drilling inventory. We enter
2018 in a strong position to continue generating production and EBITDA
growth.”

OPERATIONS HIGHLIGHTS

During the fourth quarter 2017, the Company drilled five net wells while
completing four net wells. For the full year, the Company drilled 18 net
wells and completed 22 net wells. The Company drilled in all areas of
its portfolio in 2017 with a focus on demonstrating the commercial
viability of the Company’s extensive drilling inventory. With solid
results across all areas, SilverBow has successfully transferred its
learnings from Fasken to other assets of the Eagle Ford, including a
successful seven well program in the condensate window in Artesia as
well as experiencing encouraging initial results in Oro Grande and Uno
Mas.

SilverBow completed its first well in Uno Mas in the fourth quarter. The
well was drilled with a 7,500-foot lateral and completed with
approximately 2,500 pounds of proppant per foot of lateral. Results to
date are encouraging and the Company will have more to report on this
well on their first quarter 2018 earnings conference call. The Company
plans on drilling three net wells in Uno Mas in 2018. Also during the
quarter, SilverBow completed its second well in Oro Grande, the NMC 2H.
The Company drilled the NMC 2H with a 7,500-foot lateral and completed
with 2,500 pounds of proppant per foot of lateral, compared to 3,500
pounds of proppant per foot of lateral for the NMC 1H. The Company moved
a drilling rig back to Oro Grande in the first quarter of 2018 to drill
a two well pad. The Company plans on drilling five net wells in Oro
Grande during 2018.

SilverBow’s most recent six well pad drilled in Fasken during the fourth
quarter included three wells targeting the Lower Eagle Ford and three
wells targeting the Upper Eagle Ford. This pad was recently completed
and utilized 300 foot frac stage spacing and 1,500 pounds of proppant
per foot of lateral. The average lateral length for this six well pad
was 7,500 feet. Early results from this six well pad are encouraging and
further support multi-zone development and added efficiencies for our
Fasken acreage and other assets. The Company plans to drill
approximately 13 net wells in Fasken in 2018.

PRODUCTION VOLUMES, OPERATING COSTS, AND REALIZED PRICES

SilverBow’s total net production for the fourth quarter averaged
approximately 177 Mmcfe/d, which was above the high end of guidance.
Production mix during the fourth quarter consisted of approximately 79%
natural gas, 13% NGLs, and 8% oil.

Lease operating expenses during the fourth quarter of $0.34/Mcfe came in
better than the Company’s guidance range of $0.38/Mcfe to $0.42/Mcfe
primarily driven by continued cost initiatives enacted throughout the
year.

Transportation and processing expenses came in at $0.32/Mcfe while
production and ad valorem taxes were 3.1% of oil and gas revenues for
the quarter. Production and ad valorem taxes were positively impacted by
certain, non-reoccurring tax refunds in the quarter.

General and administrative costs of $0.45/Mcfe were higher than the
$0.42/Mcfe reported in the third quarter primarily due to one-time
severance costs related to several officer departures.

The Company’s average realized natural gas price, excluding the effect
of hedging, was $2.88/Mcf compared to $3.01/Mcf in the third quarter of
2017. The average realized crude oil selling price, excluding the effect
of hedging, was $57.64/Bbl in the fourth quarter of 2017, up from
$46.93/Bbl in the third quarter of 2017. The average realized NGL
selling price in the fourth quarter of 2017 was $24.37/Bbl versus
$21.67/Bbl in the third quarter of 2017.

YEAR-END 2017 RESERVES

SilverBow reported year-end proved reserves of 1.0 trillion cubic feet
equivalent (Tcfe), an increase of 38% over year-end 2016. Specific
highlights from the Company’s year-end reserve report include:

Finding and development costs of $0.59/Mcfe
All-sources reserve replacement of 609%
Standardized Measure of $732 million
PV-10 value (non-GAAP measure) of $805 million, an increase of 82%
over prior year

The table below reconciles 2016 reserves to 2017 reserves.

Total
(Mmcfe)
Proved reserves as of December 31, 2016	743,741
Extensions, discoveries, and other additions	317,024
Revisions of previous estimates	(8,748	)
Purchases of minerals in place	33,405
Sales of minerals in place	(4,866	)
Production	(56,135	)
Proved reserves as of December 31, 2017	1,024,421

As of December 31, 2017, 82% of SilverBow’s year-end proved reserves
were natural gas and 97% were located in the Eagle Ford Shale.
Approximately 45% of the year-end proved reserves were classified as
proved developed and 55% were classified as proved undeveloped.

Total costs incurred during 2017 were $203 million, which included
approximately $149 million for development costs, $45 million for
leasehold acquisition and prospect costs, and $9 million for property
acquisitions.

The SEC prices used for reporting SilverBow’s year-end 2017 proved
reserves, which have been adjusted for basis and quality differentials,
were $2.95/Mcf for natural gas, $20.32/Bbl for natural gas liquids and
$50.38/Bbl for crude oil compared to $2.43/Mcf, $16.13/Bbl, and
$41.07/Bbl in 2016. Assuming SEC prices, the pre-tax present value of
future net cash flows discounted at 10% (“PV-10”) of the year-end 2017
proved reserves were $805 million with a Standardized Measure of $732
million.

FINANCIAL RESULTS

The Company reported total oil and gas revenues of $58.7 million for the
fourth quarter 2017 which increased 20% compared to third quarter 2017
levels. On a GAAP basis, the Company reported net income of $25.1
million for the fourth quarter, which includes a gain on the value of
the Company's hedge portfolio of $3.4 million.

The Company reported Adjusted EBITDA of $42.0 million. Adjusted EBITDA
is a non-GAAP financial measure. Please see the tables included with
today's news release for a reconciliation of net income to Adjusted
EBITDA.

Capital expenditures incurred during the fourth quarter totaled
approximately $50 million inclusive of $22 million spent on
acquisitions, leasing, and prospect development. In addition, the
Company spent $16.3 million associated with the divestiture of the Bay
De Chene field located in South Louisiana.

Effective December 22, 2017, the Company closed a Purchase and Sale
contract for the Company's wellbores and facilities in Bay De Chene for
$16.3 million, which will be paid by the Company, as seller. The buyer
assumed approximately $20.9 million of plugging and abandonment
liability. Please see the Company’s Form 10-K filing, which the Company
expects to be filed on Thursday, March 1, 2018, for more information
regarding this transaction.

AWP OLMOS SALE UPDATE

On January 24th, 2018, SilverBow Resources executed a
definitive purchase and sale agreement to divest certain wells in its
AWP Olmos area for approximately $28.8 million plus the assumption of
$6.2 million of asset retirement obligations, subject to customary
purchase price adjustments. This transaction is expected to close on or
about March 1, 2018 and has an effective date of January 1, 2018. These
assets are located in McMullen County, Texas and include 491 wells with
total proved reserves of 28 Bcfe at 12/31/17 (100% proved developed).
Full year 2017 production from these properties was approximately 9.5
Mmcfe/d (57% natural gas). Cash proceeds from the sale will be used to
repay outstanding borrowings under the Company’s revolving credit
facility. SilverBow anticipates that its borrowing base will remain
unchanged at $330 million after closing this transaction and will be
reviewed as normal during its regularly scheduled Spring redetermination.

2018 GUIDANCE

The Company recently announced a 2018 capital expenditure budget of $245
to $265 million, which provides for average full year production of 175
to 195 Mmcfe/d. For the first quarter 2018, the Company is guiding for
156 to 162 Mmcfe/d. Additional detail concerning the Company's first
quarter 2018 and full year financial and operational guidance can be
found in the table included with today’s news release and the Corporate
Presentation uploaded to the Investor Relations section of the Company’s
website before the conference call.

The Company recently contracted a second high-spec drilling rig.
SilverBow is currently mobilizing this rig with plans to commence
drilling later in the first quarter with completions from this rig
turning to production early in the third quarter. The Company plans on
testing multiple initiatives in 2018 aimed at further delineating its
acreage position as well as testing stimulation designs and choke
management protocols. The Company is also assessing the viability of
stacked development in certain areas of its portfolio. These multi-zone
development initiatives have the potential to significantly increase the
Company’s drilling inventory and allow for a more robust co-development
pattern across our portfolio.

HEDGING UPDATE

Hedging continues to be an important element of SilverBow’s strategy.
The Company maintains an active hedging program to provide predictable
cash flows while still allowing for flexibility in capturing increases
in prices. SilverBow has approximately 55% of total production volumes
hedged for full year 2018 using the mid-point of production guidance.
The Company continues to layer on additional hedges. Please see the
Company’s Form 10-K filing, which the Company expects to be filed on
Thursday, March 1, 2018, for a detailed summary of derivative contracts.

CAPITAL STRUCTURE AND LIQUIDITY

The Company had liquidity of approximately $260 million as of December
31, 2017, primarily consisting of availability on the Company’s $330
million bank credit facility. The Company closed on $200 million of
Senior Secured Second Lien Notes on December 15, 2017. For more
information regarding the Second Lien Notes, please see the Company’s
Corporate Presentation posted on www.sbow.com.

As of February 28, 2018, the Company had 11.6 million total common
shares outstanding.

CONFERENCE CALL & UPDATED INVESTOR PRESENTATION

SilverBow will host a conference call for investors on Thursday, March
1, 2018, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time).
Interested investors can listen to the call by dialing 1-877-420-2751
(U.S.) or 1-442-275-1680 (International) and requesting SilverBow’s
Fourth Quarter 2017 Earnings Conference Call or by visiting our website.

A simultaneous webcast of the call may be accessed over the internet by
visiting our website at www.sbow.com,
clicking on “Investor Relations” and “Events and Presentations” and then
clicking on the “Fourth Quarter 2017 Earnings Conference Call” link. The
webcast will be archived for replay on the SilverBow website for 14
days. Additionally, an updated Corporate Presentation will be uploaded
to the Investor Relations section of the Company's website before the
conference call.

ABOUT SILVERBOW RESOURCES, INC.

SilverBow Resources (NYSE: SBOW) is a Houston-based energy company
actively engaged in the exploration, development, and production of oil
and gas from the Eagle Ford Shale in South Texas. With almost 30 years
of history operating in South Texas, the Company possesses a significant
understanding of regional reservoirs which we leverage to assemble high
quality drilling inventory while continuously enhancing our operations
to maximize returns on capital invested. For more information, please
visit www.sbow.com.

Forward-Looking Statements

This release includes “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. The opinions,
forecasts, projections, or other statements other than statements of
historical fact, are forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking
statements are reasonable, no assurances can be given that such
expectations will prove to have been correct. Certain risks and
uncertainties inherent in the Company’s business are set forth in the
filings of SilverBow Resources, Inc. with the Securities and Exchange
Commission.

(Financial Highlights to Follow)

Consolidated Balance Sheets SilverBow Resources, Inc. and Subsidiaries (in thousands, except share amounts)
Successor
December 31, 2017	December 31, 2016
ASSETS
Current Assets:
Cash and cash equivalents	$	7,806	$	303
Accounts receivable, net	27,263	17,490
Fair value of commodity derivatives	5,148	458
Other current assets	2,352	3,228
Total Current Assets	42,569	21,479
Property and Equipment:
Property and Equipment, Full Cost Method, including $50,377 and $33,354 of unproved property costs not being amortized	712,166	517,074
Less – Accumulated depreciation, depletion, amortization and impairment	(216,769	)	(169,879	)
Property and Equipment, Net	495,397	347,195
Other Long-Term Assets	13,304	8,625
Total Assets	$	551,270	$	377,299
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	44,437	$	40,434
Fair value of commodity derivatives	5,075	15,823
Accrued capital costs	10,883	11,954
Accrued interest	2,106	1,721
Undistributed oil and gas revenues	12,996	9,192
Total Current Liabilities	75,497	79,124
Long-term debt	265,325	198,000
Asset retirement obligations	8,678	22,291
Other long-term liabilities	8,312	1,829
Commitments and Contingencies	—	—
Stockholders' Equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued	—	—
Common stock, $.01 par value, 40,000,000 shares authorized, 11,621,385 and 10,076,059 shares issued and 11,570,621 and 10,053,574 shares outstanding	116	101
Additional paid-in capital	279,111	232,917
Treasury stock held, at cost, 50,764 and 22,485 shares	(1,452	)	(675	)
Retained earnings (Accumulated deficit)	(84,317	)	(156,288	)
Total Stockholders’ Equity	193,458	76,055
Total Liabilities and Stockholders’ Equity	$	551,270	$	377,299

Consolidated Statements of Operations SilverBow Resources, Inc. and Subsidiaries (in thousands, except per-share amounts)
Successor	Predecessor
Year Ended December 31, 2017	Period from April 23, 2016 through December 31, 2016	Period from January 1, 2016 through April 22, 2016	Year Ended December 31, 2015
Revenues:
Oil and gas sales	$	195,910	$	121,386	$	43,027	$	246,270
Operating Expenses:
General and administrative, net	30,000	22,538	9,245	42,611
Depreciation, depletion, and amortization	46,933	36,436	20,439	177,512
Accretion of asset retirement obligation	2,322	2,878	1,610	5,572
Lease operating expense	21,908	25,777	14,933	70,188
Transportation and gas processing	19,360	13,038	6,090	21,741
Severance and other taxes	8,205	6,713	3,917	17,090
Write-down of oil and gas properties	—	133,496	77,732	1,562,086
Total Operating Expenses	128,728	240,876	133,966	1,896,800
Operating Income (Loss)	67,182	(119,490	)	(90,939	)	(1,650,530	)
Non-Operating Income (Expense)
Net gain (loss) on commodity derivatives	17,913	(19,677	)	—	186
Interest expense, net	(15,070	)	(15,310	)	(13,347	)	(75,870	)
Reorganization items	—	(1,639	)	956,142	(6,565	)
Other income (expense), net	(8	)	(172	)	(245	)	(1,735	)
Income (Loss) Before Income Taxes	70,017	(156,288	)	851,611	(1,734,514	)
Income Taxes	(1,954	)	—	—	(80,543	)
Net Income (Loss)	$	71,971	$	(156,288	)	$	851,611	$	(1,653,971	)
Per Share Amounts-
Basic: Net Income (Loss)	$	6.28	$	(15.61	)	$	19.06	$	(37.20	)
Diluted: Net Income (Loss)	$	6.25	$	(15.61	)	$	18.64	$	(37.20	)
Weighted Average Shares Outstanding – Basic	11,453	10,013	44,692	44,463
Weighted Average Shares Outstanding – Diluted	11,514	10,013	45,697	44,463

Consolidated Statements of Operations SilverBow Resources, Inc. and Subsidiaries (in thousands, except per-share amounts)
Successor
Three Months Ended December 31, 2017	Three Months Ended December 31, 2016
Revenues:
Oil and gas sales	$	58,694	$	42,846
Operating Expenses:
General and administrative, net	7,324	6,619
Depreciation, depletion, and amortization	14,558	9,815
Accretion of asset retirement obligation	600	947
Lease operating expense	5,528	8,515
Transportation and gas processing	5,293	3,969
Severance and other taxes	1,828	2,166
Write-down of oil and gas properties	—	—
Total Operating Expenses	35,131	32,031
Operating Income (Loss)	23,563	10,815
Non-Operating Income (Expense)
Net gain (loss) on commodity derivatives	3,448	(12,553	)
Interest expense, net	(3,953	)	(5,173	)
Reorganization items	—	(170	)
Other income (expense), net	125	—
Income (Loss) Before Income Taxes	23,183	(7,081	)
Income Taxes	(1,954	)	—
Net Income (Loss)	$	25,137	$	(7,081	)
Per Share Amounts-
Basic: Net Income (Loss)	$	2.17	$	(0.71	)
Diluted: Net Income (Loss)	$	2.17	$	(0.71	)
Weighted Average Shares Outstanding – Basic	11,561	10,013
Weighted Average Shares Outstanding – Diluted	11,602	10,013

Consolidated Statements of Cash Flows
Successor	Predecessor
Year Ended December 31, 2017	Period from April 23, 2016 through December 31, 2016	Period from January 1, 2016 through April 22, 2016	Year Ended December 31, 2015
Cash Flows from Operating Activities:
Net income (loss)	$	71,971	$	(156,288	)	$	851,611	$	(1,653,971	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities-
Write-down of oil and gas properties	—	133,496	77,732	1,562,086
Depreciation, depletion, and amortization	46,933	36,436	20,439	177,512
Accretion of asset retirement obligation	2,322	2,878	1,610	5,572
Deferred income tax benefit	—	—	—	(80,133	)
Share-based compensation expense	6,849	3,618	886	4,435
Loss (gain) on derivatives	(17,913	)	19,676	—	(186	)
Cash settlements (paid) received on derivatives	(1,411	)	(1,928	)	—	2,544
Settlements of asset retirement obligations	(2,335	)	(2,993	)	(848	)	—
Write-down of debt issuance cost	2,676	—	—	—
Reorganization items (non-cash)	—	—	(977,696	)	6,565
Other	(559	)	1,351	229	(3,189	)
Change in operating assets and liabilities-
(Increase) decrease in accounts receivable and other assets	(7,169	)	16,812	(5,474	)	26,747
Increase (decrease) in accounts payable and accrued liabilities	6,089	(6,689	)	(9,647	)	(15,003	)
Increase (decrease) in income taxes payable	—	—	—	(435	)
Increase (decrease) in accrued interest	385	1,058	(308	)	9,730
Net Cash Provided by (Used in) Operating Activities	107,838	47,427	(41,466	)	42,274
Cash Flows from Investing Activities:
Additions to property and equipment	(192,982	)	(45,671	)	(24,530	)	(139,688	)
Acquisition of producing properties	(9,426	)	—	—	—
Proceeds from the sale of property and equipment	702	45,985	48,661	1,164
Net Cash Provided by (Used in) Investing Activities	(201,706	)	314	24,131	(138,524	)
Cash Flows from Financing Activities:
Proceeds from long-term debt issuances	198,000	—	—	—
Proceeds from bank borrowings	404,700	84,000	328,000	281,100
Payments of bank borrowings	(529,700	)	(139,000	)	(324,900	)	(153,500	)
Net proceeds from issuances of common stock	39,179	—	—	302
Purchase of treasury shares	(777	)	(675	)	(4	)	(154	)
Payments of debt issuance costs	(10,031	)	(502	)	(6,482	)	(2,444	)
Net Cash Provided by (Used in) Financing Activities	101,371	(56,177	)	(3,386	)	125,304
Net Increase (Decrease) in Cash and Cash Equivalents	7,503	(8,436	)	(20,721	)	29,054
Cash and Cash Equivalents at Beginning of Period	303	8,739	29,460	406
Cash and Cash Equivalents at End of Period	$	7,806	$	303	$	8,739	$	29,460
Supplemental Disclosures of Cash Flows Information:
Cash paid during period for interest, net of amounts capitalized	$	10,428	$	12,517	$	10,367	$	63,132
Cash paid during period for income taxes	$	—	$	—	$	—	$	450
Cash paid for reorganization items	$	—	$	12,929	$	15,643	$	—
Changes in capital accounts payable and capital accruals	$	9,894	$	(6,265	)	$	1,843	$	(27,611	)
Changes in other long-term liabilities for capital expenditures	$	5,000	$	—	$	—	$	—

SilverBow Resources, Inc.

Non-GAAP Financial Measures

Reconciliation of Net Income (GAAP) to Adjusted EBITDA
(Non-GAAP)

and Standardized Measure (GAAP) to PV-10 (Non-GAAP)

(In thousands)

(Unaudited)

We present adjusted EBITDA attributable to common stockholders
(“Adjusted EBITDA”) in addition to our reported net income (loss) in
accordance with U.S. GAAP. Adjusted EBITDA is a non-GAAP financial
measure that is used as a supplemental financial measure by our
management and by external users of our financial statements, such as
investors, commercial banks and others, to assess our operating
performance as compared to that of other companies in our industry,
without regard to financing methods, capital structure or historical
costs basis.

Contacts

SilverBow Resources, Inc.
Doug Atkinson, CFA, (281) 874-2700, (800)
777-2412
Senior Manager – Finance & Investor Relations

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