Earthstone Energy - This is good news

[dan_s]

THE WOODLANDS, Texas--(BUSINESS WIRE)--Earthstone Energy, Inc. (NYSE: ESTE) (“Earthstone” or the “Company”), today announced that the borrowing base under its senior secured revolving credit facility (“Credit Facility”) has been increased from $150 million to $185 million in connection with its regularly scheduled fall redetermination. The Company also entered into an amendment to its Credit Facility which provides for increased flexibility. The $185 million borrowing base will not be reduced upon closing of the Company’s previously announced agreement to sell its Bakken assets.

[dan_s]

John White at Roth Capital sent out a note about ESTE this morning. His target price is $15.50, which compares to my valuation of $16.00.

[dan_s]

Wells Fargo Equity Research:

We are initiating coverage of Earthstone Energy (ESTE) with an Outperform rating.

We believe that ESTE offers discounted exposure to attractive Midland Basin economics, trading 3.2x below the Permian average based on 2018E and 2019E EV/EBITDAX multiples. As a relatively new entrant into the Permian, we see this asset driving best-in-class margin growth over the coming years, fueled by strong production growth rates over this time. In addition, a relatively clean balance sheet and ability to fund growth plans with current liquidity sources lowers risk, in our view.

At 6.4x/4.5x 2018E/2019E EV/EBITDAX, we view ESTE as inexpensive versus Permian and small-cap peers and an attractive way to obtain discounted Permian exposure; as such, we initiate at Outperform.

[wilmawatts]

I'm in.

Frank L. is a guy I would be on.