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Earthstone Energy (ESTE)

Earthstone Energy, Inc. is a growth-oriented, independent energy company engaged in the development and operation of oil and natural gas properties. Its primary assets are located in the Midland Basin of west Texas and the Eagle Ford Trend of south Texas.

Company profile

Ticker
ESTE
Exchange
CEO
Frank Lodzinski
Employees
Incorporated
Location
Fiscal year end
Former names
BASIC EARTH SCIENCE SYSTEMS INC
SEC CIK
Subsidiaries
Earthstone Operating, LLC • Earthstone Energy Holdings, LLC • Lynden Energy Corp. • Lynden USA Inc. • Earthstone Permian LLC ...
IRS number
840592823

ESTE stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$16.00
Low target
$15.00
High target
$17.00
Stephens & Co.
Initiated
Equal-Weight
$15.00
14 Apr 22
Wells Fargo
Maintains
Underweight
$17.00
14 Mar 22

Calendar

4 May 22
20 May 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 482K 482K 482K 482K 482K 482K
Cash burn (monthly) 1.18M 80.42K (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 1.95M 133.35K n/a n/a n/a n/a
Cash remaining -1.47M 348.65K n/a n/a n/a n/a
Runway (months of cash) -1.2 4.3 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
21 Apr 22 Lumpkin Mark Jr Class A Common Stock Sell Dispose S No Yes 16.47 30,000 494.1K 208,253
14 Apr 22 Encap Energy Capital Fund Vii Class A Common Stock Other Dispose J Yes No 11.1 4,611,808 51.19M 2,303,000
14 Apr 22 Encap Energy Capital Fund Vii Series A Convertible Preferred Stock Class A Common Stock Grant Acquire A Yes No 0 220,000 0 220,000
13F holders Current Prev Q Change
Total holders 145 110 +31.8%
Opened positions 45 26 +73.1%
Closed positions 10 17 -41.2%
Increased positions 58 45 +28.9%
Reduced positions 29 24 +20.8%
13F shares Current Prev Q Change
Total value 696.48M 2.09B -66.7%
Total shares 122.27M 100.94M +21.1%
Total puts 107.8K 46.5K +131.8%
Total calls 164.4K 112.7K +45.9%
Total put/call ratio 0.7 0.4 +58.9%
Largest owners Shares Value Change
Bold Energy 40.87M $0 0.0%
Warburg Pincus Private Equity 26.39M $0 0.0%
Warburg Pincus 23.03M $290.88M +74.0%
Ontario Teachers Pension Plan Board 3.45M $43.57M NEW
EnCap Energy Capital Fund VIII 2.3M $29.09M NEW
BLK Blackrock 1.9M $24.06M +17.6%
Dimensional Fund Advisors 1.7M $21.51M +14.2%
William Blair Investment Management 1.6M $20.18M -1.2%
MCQEF Macquarie 1.55M $19.53M +7.0%
Vanguard 1.27M $16.07M -12.7%
Largest transactions Shares Bought/sold Change
Warburg Pincus 23.03M +9.79M +74.0%
Ontario Teachers Pension Plan Board 3.45M +3.45M NEW
EnCap Energy Capital Fund VIII 2.3M +2.3M NEW
Bain Capital Credit 427.79K -1.13M -72.6%
Ranger Investment Management 1.1M +1.1M +912966.7%
New York State Common Retirement Fund 1.04M +1.02M +5643.2%
Penn Capital Management 840.99K +840.99K NEW
Moody Aldrich Partners 598.83K +598.83K NEW
Rothschild & Co Asset Management Us 676.55K +438.73K +184.5%
American Century Companies 1.17M -380.9K -24.5%

Financial report summary

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Risks
  • Our business and operations have been and will likely continue to be adversely affected by the ongoing COVID-19 pandemic.
  • Oil, natural gas and NGL prices are volatile. Their prices at times since 2014 have adversely affected, and in the future may adversely affect, our business, financial condition and results of operations and our ability to meet our capital expenditure obligations and financial commitments. Volatile and lower prices may also negatively impact our stock price.
  • As a result of previous low prices for oil, natural gas and NGL, we may be required to take significant future write-downs of the financial carrying values of our properties in the future.
  • Any significant reduction in our borrowing base under our Credit Agreement may negatively impact our liquidity and, consequently, our ability to fund our operations, including capital expenditures, and we may not have sufficient funds to repay borrowings under our Credit Agreement or any other obligation if required as a result of a borrowing base redetermination.
  • Unless we replace our reserves, our production and estimated reserves will decline, which may adversely affect our financial condition, results of operations and/or cash flows.
  • Estimates of proved oil and natural gas reserves involve assumptions and any material inaccuracies in these assumptions will materially affect the quantities and the value of those reserves.
  • The standardized measure of discounted future net cash flows from our estimated proved reserves may not be the same as the current market value of our estimated oil and natural gas reserves.
  • Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns.
  • Properties we acquire may not produce as projected and we may be unable to determine reserve potential, identify liabilities associated with the properties that we acquire or obtain protection from sellers against such liabilities.
  • Future drilling and completion activities associated with identified drilling locations may be adversely affected by factors that could materially alter the occurrence or timing of their drilling and completion, which in certain instances could prevent production prior to the expiration date of mineral leases for such locations.
  • Many of our properties are in areas that may have been partially depleted or drained by offset wells and certain of our wells may be adversely affected by actions we or other operators may take when drilling, completing, or operating wells that we or they own.
  • Multi-well pad drilling may result in volatility in our operating results.
  • The unavailability or high cost of equipment, supplies, personnel and oilfield services used to drill and complete wells could adversely affect our ability to execute our development plans within our budget and on a timely basis.
  • Our acquisition, development and exploitation projects require substantial capital expenditures. We may be unable to obtain required capital or financing on satisfactory terms, which could limit growth or lead to a decline in our reserves.
  • A negative shift in stakeholder sentiment towards the oil and gas industry and increased attention to ESG matters and conservation matters could adversely affect our ability to raise equity and debt capital.
  • We have incremental cash inflows and outflows as a result of our hedging activities. To the extent we are unable to obtain future hedges at attractive prices or our derivative activities are not effective, our cash flows and financial condition may be adversely impacted.
  • The oil and natural gas industry is highly competitive, and our size may put us at a disadvantage in competing for resources.
  • Failure to complete additional acquisitions could limit our potential growth.
  • Acquisitions involve a number of risks, including the risk that we will discover unanticipated liabilities or other problems associated with the acquired business or property.
  • Our future results will suffer if we do not effectively manage our expanded operations.
  • We may incur substantial losses and be subject to substantial liability claims as a result of our oil and natural gas operations, including our drilling operations.
  • The nature of our business and assets exposes us to significant compliance costs and liabilities.
  • Federal, state and local legislation and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.
  • Extreme weather conditions, which could become more frequent or severe due to climate change, could adversely affect our ability to conduct drilling, completion and production activities in the areas where we operate.
  • Our operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which we may conduct oil, natural gas and NGL exploration and production activities, and reduce demand for the oil, natural gas and NGL we produce.
  • Restrictions on drilling activities intended to protect certain species of wildlife may adversely affect our ability to conduct drilling activities in some of the areas where we operate.
  • Our oil, natural gas and NGLs are sold in a limited number of geographic markets so an oversupply in any of those areas could have a material negative effect on the price we receive.
  • Potential future legislation or the imposition of new or increased taxes or fees may generally affect the taxation of oil and natural gas exploration and development companies and may adversely affect our operations and cash flows.
  • Our operations are substantially dependent on the availability, use and disposal of water. New legislation and regulatory initiatives or restrictions relating to water disposal wells could have a material adverse effect on our future business, financial condition, operating results and prospects.
  • Any change to government regulation or administrative practices may have a negative impact on our ability to operate and our profitability.
  • The current presidential administration, acting through the executive branch and/or in coordination with Congress, already has ordered or proposed, and could enact additional rules and regulations that restrict our ability to acquire federal leases in the future.
  • The marketability of our production is dependent upon gathering systems, transportation facilities and processing facilities that we do not own or control. If these facilities or systems are unavailable, our oil and natural gas production can be interrupted and our revenues reduced.
  • We operate or participate in oil and natural gas leases with third parties who may not be able to fulfill their commitments to our projects.
  • Use of debt financing may adversely affect our strategy and financial viability.
  • Because we cannot control activities on properties we do not operate, we cannot directly control the timing of exploitation. If we are unable to fund required capital expenditures with respect to non-operated properties, our interests in those properties may be reduced or forfeited.
  • A cyber incident could result in information theft, data corruption, operational disruption and/or financial loss.
  • The loss or unavailability of any of our executive officers or other key employees could have a material adverse effect on our business.
  • Delays in completing the Bighorn Acquisition may substantially reduce the expected benefits of the Bighorn Acquisition.
  • We may be unable to successfully integrate Bighorn’s operations or to realize anticipated cost savings, revenues or other benefits of the Bighorn Acquisition.
  • We will only have limited recourse against Bighorn regarding the properties acquired in the Bighorn Acquisition for losses and liabilities arising or discovered after closing.
  • We have incurred and expect to continue to incur significant transaction and acquisition-related costs in connection with the Bighorn Acquisition.
  • We will be subject to various uncertainties and contractual restrictions while the Bighorn Acquisition is pending that could adversely affect our financial results.
  • We may be the target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Bighorn Acquisition from being completed.
  • We expect to incur substantial indebtedness in connection with the Bighorn Acquisition, which combined with our current debt may limit our financial flexibility and adversely affect our financial results.
  • We are a holding company and the sole manager of EEH. Our only material asset is our equity interest in EEH and, accordingly, we are dependent upon distributions from EEH to cover our corporate and other overhead expenses and pay taxes.
  • Our principal stockholders hold substantial voting power of our Class A Common Stock and Class B Common Stock.
  • Bold Holdings (controlled by EnCap) and its permitted transferees have the right to exchange their EEH Units and shares of Class B Common Stock for our Class A Common Stock pursuant to the terms of the EEH LLC Agreement.
  • Future sales of our Class A Common Stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity may dilute your ownership in us.
  • We have no plans to pay dividends on our Class A Common Stock. Stockholders may not receive funds without selling their shares.
  • Our Board of Directors can, without stockholder approval, cause preferred stock to be issued on terms that could adversely affect our common stockholders.
  • The price of our Class A Common Stock may fluctuate significantly, which could negatively affect us and holders of our Class A Common Stock.
  • Anti-takeover provisions could make a third-party acquisition difficult.
  • Our stockholders may act by unilateral written consent.
Management Discussion
  • Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
  • This discussion and other items in this Annual Report on Form 10-K contain forward-looking statements and information that are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. When used in this document, the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “may,” “will,” “project,” “forecast,” “plan,” and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are subject to numerous risks, uncertainties and assumptions. See Cautionary Statement Concerning Forward-Looking Statements in this report. Certain of these risks are summarized in this report under Item 1A. Risk Factors, which you should read carefully in connection with our forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated. We undertake no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
  • For a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2020 compared to December 31, 2019, see “Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 10, 2021.

Content analysis

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