Earthstone Energy (ESTE) Q4 Results - Mar 11

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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, 2019.

Fourth Quarter 2019 Highlights

Average daily production of 17,571 Boepd < Compares to my forecast of 17,380 Boepd.
Adjusted EBITDAX of $49.9 million ($30.86 per Boe)
All-in cash costs of $12.12 per Boe
Capital expenditures of $58.0 million
Net loss of $5.6 million or $0.09 per Adjusted Diluted Share
Adjusted net income of $18.2 million or $0.28 per Adjusted Diluted Share < Compares to my forecast of $18.975 million net income or $0.29/share.
Full Year 2019 Highlights

Average daily production of 13,429 Boepd
Adjusted EBITDAX of $146.3 million ($29.84 per Boe)
All-in cash costs of $13.48 per Boe
Capital expenditures of $210.4 million
Net income of $1.6 million or $0.02 per Adjusted Diluted Share
Adjusted net income of $59.3 million or $0.92 per Adjusted Diluted Share
Estimated Proved Developed reserves increased 33% over year-end 2018

Management Comments

Mr. Robert J. Anderson, President of Earthstone, commented, “Our team performed exceptionally well in 2019 culminating in record levels of production and Adjusted EBITDAX for both the fourth quarter and full year 2019. Our focus on cost control and operational execution throughout our organization demonstrates our ability to drive peer-leading margins and improved capital efficiency thereby extracting value from our assets. By diligently focusing on efficiency in 2019, we reduced drilling and completion costs by approximately 16% and cash G&A and LOE costs per Boe by 11% while increasing production 35% and Adjusted EBITDAX 51% compared to 2018.”

Mr. Anderson commented further, “We are facing a challenging commodity price environment given the recent rapid and steep decline in oil prices. Our conservative approach to the use of leverage, strong hedge book and sharp focus on being a low-cost producer positions us well to manage the current environment. We also have no long-term service contracts and minimal obligation drilling which gives us the flexibility to significantly curtail our capital program, which we are and will continue to evaluate in the near term. Based on our production profile, cost structure and hedge position, should we significantly curtail our capital program, we expect to generate free cash flow and would utilize free cash flow to reduce debt. With our financial discipline and strong foundation, we have managed through difficult commodity price cycles in the past and we are well positioned to do so in the future.”

Capital Program Update

With recent price volatility, we are evaluating our capital program and have significant flexibility with these plans. Should we curtail capital spending considerably, we would expect to generate free cash flow in the second half of 2020.