Earthstone Energy, Inc. announced that it has acquired working interests in assets it operates located in southern Gonzales County, Texas (the “Eagle Ford Acquisitions”) from four separate sellers. The aggregate purchase price of the Eagle Ford Acquisitions was approximately $48 million in cash. Earthstone funded the Eagle Ford Acquisitions with cash on hand and borrowings under its senior secured revolving credit facility. The effective date of the Eagle Ford Acquisitions was April 1, 2021. The largest of the acquisition components, comprised of working interests owned by two affiliates of Titanium Exploration Partners, LLC, constituted the majority of the total consideration.
Impact on Earthstone:
Mr. Robert J. Anderson, President and CEO of Earthstone, commented, “The Eagle Ford Acquisitions, following the announcement of the proposed Tracker acquisition in April 2021 and the closing of the IRM acquisition in January 2021, are yet another step in our ongoing consolidation strategy. We paid an attractive price for these producing assets which we already operate and they will add 1,150 Boepd of production with a lower decline profile compared to our current aggregate corporate decline profile. While not as significant in size as the previously announced acquisitions, the Eagle Ford Acquisitions will increase oil production and positively impact our overall cash margins. We intend to continue seeking other value-enhancing transactions that would increase our operational and corporate cost efficiencies while maintaining financial discipline, ultimately benefitting our shareholders via stock price appreciation.”
The Eagle Ford Acquisitions were unanimously approved by Earthstone’s Board of Directors. Because one of the four sellers is owned by an affiliate of EnCap Investments L.P. (“EnCap”), a significant holder of Earthstone common stock and represented on the Board of Directors, the Audit Committee of the Board of Directors of Earthstone independently reviewed and approved the related-party acquisition. After participating in a competitive sales process, the Company acquired the assets for $8.2 million from that entity.
Tracker Acquisition Update
Earthstone filed a definitive proxy statement on June 9, 2021 for its 2021 annual meeting of stockholders (the “Annual Meeting”) to be held on July 20, 2021, at 9:00 a.m. Central Time. One of the proposals to be voted on at the Annual Meeting relates to the issuance of shares of the Company’s Class A common stock for the acquisition of assets located in the Midland Basin from Tracker Resource Development III, LLC and an affiliate, and from affiliates of Sequel Energy Group LLC (collectively, the “Tracker Acquisition”). The definitive proxy statement related to the Annual Meeting was mailed to stockholders beginning on June 9, 2021. Earthstone has engaged Advantage Proxy, Inc. as its proxy solicitor in connection with the Annual Meeting. Contingent upon receiving stockholder approval of the share issuance related to the Tracker Acquisition at the Annual Meeting, Earthstone expects to close on the Tracker Acquisition shortly thereafter.
Environmental and Safety Data Disclosure Highlights
Consistent with Earthstone’s commitment to environmental stewardship and safety, Earthstone has disclosed key data on its emissions, flaring, land impact and safety for 2019 and 2020, which is available under the “Sustainability” section of the Company’s website. Key highlights include:
About Earthstone Energy, Inc.
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. Earthstone is listed on the New York Stock Exchange under the symbol “ESTE.” For more information, visit the Company’s website at www.earthstoneenergy.com.