ESTE Q4/YE report

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ESTE Q4/YE report

Post by cmm3rd »

THE WOODLANDS, Texas, March 08, 2023 (GLOBE NEWSWIRE) -- Earthstone Energy, Inc. (NYSE: ESTE) (“Earthstone”, the “Company”, “we” or “us”), today announced financial and operating results for the quarter and year ended December 31, 2022.

Fourth Quarter 2022 Highlights

Repurchased 3 million shares of Class A Common Stock for $43.7 million
Net income(1) of $185.2 million and Adjusted net income(2) of $147.2 million
Adjusted EBITDAX(2) of $338.0 million, up 296% compared to Q4 2021
Net cash provided by operating activities of $315.7 million
Free Cash Flow(2) of $134.5 million, up 372% compared to Q4 2021
Reduced debt under our revolving credit facility by $121.6 million
Average daily production of 104,766 Boepd(3), up 246% compared to Q4 2021
Capital expenditures of $181.9 million

Full Year 2022 Highlights

Closed the Titus, Bighorn and Chisholm acquisitions
Net income(1) of $650.6 million and Adjusted net income(2) of $586.0 million
Adjusted EBITDAX(2) of $1.1 billion, up 347% year over year
Net cash provided by operating activities of $1.0 billion
Free Cash Flow(2) of $508.5 million, up 377% year over year
Average daily production of 78,167 Boepd(3), up 215% year over year
Capital expenditures of $530.6 million

(1) Net income (GAAP) represents the consolidated earnings of Net Income attributable to Earthstone Energy, Inc, and Net income attributable to noncontrolling interest. The related consolidated weighted average shares outstanding of Class A Common Stock and Class B Common Stock are 142.1 million and 130.6 million, on an as-converted basis, for the three months and year ended December 31, 2022 (“Adjusted Diluted Shares”, as reconciled in “Non-GAAP Financial Measures” section below), respectively. All shares of our Class B Common Stock issued and outstanding are held by the noncontrolling interest group.
(2) See “Non-GAAP Financial Measures” section below.
(3) Represents reported sales volumes.

Management Comments

Robert J. Anderson, President and Chief Executive Officer of Earthstone stated, “During the fourth quarter and throughout the year, our team has performed exceptionally well and set new Company records. For the full year, we delivered record production levels, Adjusted EBITDAX, and generated over $500 million of Free Cash Flow. We are also focused on debt-adjusted per share growth in production and reserve value and are pleased to be delivering strong growth on these key measures, as outlined in our investor presentation. As previously released, our team delivered very strong operating results in the fourth quarter with daily production approaching 105,000 Boepd, and with oil production exceeding the mid-point of our guidance range by nine percent.”

“We also advanced our Permian Basin consolidation strategy in 2022, completing three significant accretive acquisitions totaling $2 billion while still managing to reduce leverage, ending 2022 with a last quarter annualized leverage ratio of 0.8x. These material transactions increased our scale, lowered our per unit cost structure, and deepened our high-quality inventory, which now stands at over ten years.”

“As we move into 2023, we remain focused on generating substantial free cash flow, reducing debt to improve our already strong balance sheet, and looking for accretive acquisitions. We have built a sizable and resilient Company and believe our intrinsic value per share significantly exceeds our current share price, offering a compelling value proposition for our current and future shareholders.”


Liquidity Update

As of December 31, 2022, we had $520.1 million of long-term debt outstanding under our senior secured credit facility (“Credit Facility”), including the term loan tranche of $250 million, with elected commitments of $1.2 billion, resulting in available borrowings of approximately $679.9 million. As of December 31, 2022, our borrowing base was $1.85 billion.

2023 Guidance

The Company reaffirms its guidance released on February 16, 2023 as presented below.

The Company’s 2023 capital budget of $725-$775 million assumes a continuous five-rig program consisting of three rigs in the Delaware Basin and two rigs in the Midland Basin. This program is expected to result in the drilling of 82 gross / 62.7 net operated wells and participation in 1.4 net non-operated wells. The Company estimates production for 2023 to average 96,000 - 104,000 Boepd (~44% oil).


Capital Expenditures

During 2022, we incurred capital expenditures of approximately $530.6 million, on an accrual basis, primarily consisting of drilling and completion costs. The Company’s 2023 capital budget of $725-775 million assumes a five-rig program consisting of two rigs operating in the Midland Basin and three rigs operating in the Delaware Basin. This program is expected to result in the spudding of 82 gross / 62.7 net operated wells and bringing 79 gross / 59.7 net operated wells online and spudding 1.4 net non-operated wells and bringing 2.3 net non-operated wells online in 2023.

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Re: ESTE Q4/YE report

Post by dan_s »

Since Earthstone pre-released Q4 production and lot of operations updates, Q4 results are very close to my updated forecast.

The Company has a history of "Under-Promising and then Over-Delivering" on production guidance. 2023 should be another very profitable year for Earthstone. Free cash flow should be at least $400 million.

I will update and tweak my forecast tomorrow after I listen to their conference call.

Earthstone is hosting a conference call on Thursday, March 9, 2023 at 11:00 a.m. Eastern (10:00 a.m. Central) to discuss the Company’s operations and financial results for the fourth quarter and full year 2022 and its outlook for 2023. Prepared remarks by Robert J. Anderson, President and Chief Executive Officer, Mark Lumpkin, Jr., Executive Vice President and Chief Financial Officer and Steven C. Collins, Executive Vice President and Chief Operating Officer, will be followed by a question-and-answer session.

Investors and analysts are invited to participate in the call by dialing 877-407-6184 for domestic calls or 201-389-0877 for international calls, in both cases asking for the Earthstone conference call. A webcast will also be available through the Company's website ( Please select "Events & Presentations" under the "Investors" section of the Company's website and log on at least 10 minutes in advance to register.

A replay of the call will be available on the Company’s website and by telephone until 11:00 a.m. Eastern (10:00 a.m. Central), Thursday, March 23, 2023. The number for the replay is 877-660-6853 for domestic calls or 201-612-7415 for international calls, using Replay ID: 13735904.
Dan Steffens
Energy Prospectus Group
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