Sweet 16 Update - Dec 30

[dan_s]

Earthstone Energy was officially added to our Sweet 16 Growth Portfolio on Tuesday, December 29 at it's December 28th closing price of $5.22. My updated profile and forecast/valuation model for
the Company that supports my current valuation of $9.00 have been posted to the EPG website under the Sweet 16 tab.

If all goes according to plan and their acquisition of Independence Resources Management, LLC ("IRM") closes in the first quarter, my valuation will be going up. Earthstone's business plan is to build through accretive acquisitions and I believe the IRM transaction is just the start of several more sizeable transactions that will add production, proven reserves and Tier One development drilling inventory in the Permian Basin. Earthstone has a strong balance sheet and strong financial backers eager to fund accretive transactions.

Many of you know Frank Lodzinski, the founder and Executive Chairman of Earthstone. His team has built and sold several upstream companies (including GeoResources) for significant profits. From the day Earthstone was formed, the goal was to build and sell the company within five to seven years. The pandemic has slowed down progress on their goal, but it has also created some asset buying opportunities in West Texas.

Since the IRM Transaction was announced on December 18th, TipRanks shows that five energy sector analysts have updated their forecasts and price targets for ESTE. They all rate it a BUY with price targets of $6.00 to $9.00. The $9.00 price target is from Neal Dingmann at Truist Financial. Neal is a highly respected energy sector analyst.