Question from a Novice

[Cliff_N]

Looking at Earthstone (ESTE), what percent of the company is dedicated to crude vs. natural gas?

Is there a calculation to compare these two units?
- MMbbls*
- Bcf

Thanks

Cliff

[Cliff_N]

Sorry, did a little work and found this site that converts:

https://www.kylesconverter.com/volume/b ... els-of-oil

Best

Cliff

[Fraser921]

Number one thing I like to look at at is:

Hedges

- Amount written
- Price
- Mix

How do you feel about future prices?

I'm bullish, therefore, I don't want to see my revenue capped

No hedges means more exposure and risks to commodity prices.

NG rose to 10 recently, some companies pre sold ie hedged at 2,50.

If you have NG to sell, do you want 10.00 or 2.50?

2nd thing I like to look at is FCF "free cash Flow" divided by investment in the business.

Take AR for example. They are guiding 2.0 b FCF for 2023. If they investment in the business is 10 B and they earn 2.0 b in cash then fcf/EV = 20 % ROI. I like 20 % or more..some companies are earning 35 % or more.

The risk is the commodity price , recession, demand.

If you have a more conservative nature, you can buy some of these names with high dividend payouts. 10 % is fairly easy to obtain

Good luck

[Cliff_N]

Hello Fraser, thanks for the very informative reply. Gave me something to study!

Thanks

Cliff

[dan_s]

Cliff: Each company's production mix is shown at the bottom of their forecast/valuation model, which you can view directly from our website.

I will be updating ESTE's forecast tomorrow morning.

[Cliff_N]

Thanks Dan!

Cliff