Earthstone Energy, Inc. (NYSE: ESTE) (“Earthstone”, the “Company”, “we”, “our” or “us”) today announced that it has completed the previously announced acquisition of privately held operated assets located in the Midland Basin from Foreland Investments LP (“Foreland”) and from BCC-Foreland LLC, which held well-bore interests in certain of the producing wells operated by Foreland (collectively, the “Foreland Acquisition”).

The aggregate purchase price of the Foreland Acquisition was approximately $73.2 million at signing of the purchase and sale agreements, consisting of $49.2 million in cash and 2.6 million shares of Earthstone’s Class A common stock valued at $24.0 million based on a closing share price of $9.20 on September 30, 2021.  Total cash consideration paid was $39.3 million, reflecting the preliminary purchase price adjustment estimated prior to closing and including the deposit paid upon signing of the purchase and sale agreement.

Earthstone estimates the acquired assets to have $116.0 million of PDP PV-10 as of July 1, 2021, with associated reserves of approximately 13.3 MMBoe (11% oil, 31% NGL, 58% natural gas) (1) based on NYMEX strip pricing as of September 30, 2021.  The low-decline, high-margin producing assets acquired in the Foreland Acquisition are expected to add approximately 4,000 Boepd (17% oil, 47% liquids) to Earthstone’s daily production from the closing date through year-end 2021.

Management Comments

Mr. Robert J. Anderson, President and CEO of Earthstone, commented, “We are pleased to have closed the Foreland Acquisition, which is our fourth acquisition this year, as we continue our efforts to advance our consolidation strategy, having approximately doubled our daily production rate this year.  The acquisition of these producing assets at an attractive valuation in a rising commodity price environment is a nice addition to our production and cash flow base.  We expect to create value from operational synergies with our nearby existing assets and look forward to applying our operating approach in order to reduce costs and maximize production and cash flows.”