Energy Prospectus

Earthstone Energy, Inc. Provides Operations Update and Raises 2016 Capital Budget and Guidance

THE WOODLANDS, TX / ACCESSWIRE / June 15, 2016 / Earthstone Energy, Inc. (NYSE MKT: ESTE) today announced updated guidance for 2016.

Highlights
•Capital budget of $39.1 million
•2016 full year average production guidance of 4,400 Boepd to 4,800 Boepd
•2016 exit rate production guidance of 6,000 Boepd to 6,200 Boepd

Operations Update

Our updated capital budget and guidance includes estimates of operations and activities associated with our recent acquisition of Lynden Energy Corp., which we closed on May 18, 2016. We have 12 gross Eagle Ford locations waiting on completion. With the recent improvement in oil prices, we currently plan to begin our completion program this summer. We intend to initiate this frac program with the completion of four wells in our Boggs Unit in Karnes County, Texas (33% operated working interest). Given continued supportive oil prices and service costs, we expect to begin drilling a five well Eagle Ford pad in southwest Gonzales County, Texas during the fourth quarter of 2016. This pad is directly offsetting the Boggs Unit. In addition, as previously announced, we expect to participate in certain drilling and completion operations in the Midland and Williston Basins.

Our updated capital budget and guidance is provided below, but is potentially subject to significant change that could result from numerous factors including changes in commodity prices and service costs and availability of quality drilling and completion equipment and personnel, among other factors.

Management Comments

Frank A. Lodzinski, President and Chief Executive Officer, commented, "Given the recent improvement in commodity prices, we believe now is the time to ramp up production with our frac inventory while re-establishing drilling activities. We will likely complete our four-well Boggs Unit in Karnes County this summer. The increased capital program has the potential to generate a 2016 exit rate that ranges from 6,000 Boepd to 6,200 Boepd, which is approximately 70% greater than our average production for the first quarter of 2016, and sets us up well for significant growth in 2017. It should be noted that increased volumes will have a positive effect of reducing lease operating and general and administrative costs on a per-unit basis. Finally, we continue to actively pursue acquisitions that might be transformational for the Company and smaller acquisitions which complement our present holdings."

THE WOODLANDS, TX / ACCESSWIRE / June 15, 2016 / Earthstone Energy, Inc. (NYSE MKT: ESTE) announced today that it intends to offer shares of its common stock in an underwritten public offering. The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

The Company intends to use the net proceeds from the offering to repay outstanding indebtedness under its revolving credit facility and thereafter for general corporate purposes, which may include funding the completion of 12 gross (5.3 net) wells that are waiting on completion, drilling and completion activities associated with operated and non-operated properties, leasehold interest, and property acquisitions.

SunTrust Robinson Humphrey, Inc. and Seaport Global Securities LLC are acting as joint book-running managers in the offering.

The offering will be made only by means of a prospectus supplement and accompanying base prospectus to a shelf registration statement previously filed with and declared effective by the Securities and Exchange Commission (the "SEC"). A copy of the preliminary prospectus supplement and accompanying base prospectus for the offering will be filed with the SEC and may be obtained from the SEC's website at http://www.sec.gov. In addition, copies may be obtained, when available, by contacting (i) SunTrust Robinson Humphrey, 3333 Peachtree Road NE, 9th Floor, Atlanta, GA 30326, Attention: Prospectus Department; email: strh.prospectus@suntrust.com; telephone: 404-926-5744; or fax: 404-926-5464 or (ii) Seaport Global Securities LLC, 360 Madison Avenue, 21st Floor, New York, NY 10017; or telephone: 646-264-5601.

THE WOODLANDS, TX / ACCESSWIRE / June 16, 2016 / Earthstone Energy, Inc. (NYSE MKT: ESTE) announced today that it has priced an underwritten public offering of 4,500,000 shares of its common stock to the public at $10.50 per share. The Company expects to close the sale of the shares of common stock on June 21, 2016, subject to customary closing conditions. Net proceeds to the Company from the sale of 4,500,000 shares, are expected to be approximately $44.7 million, after deducting underwriting discounts, commissions and estimated offering expenses. The Company has also granted the underwriters a 30-day option to purchase up to an additional 675,000 shares of common stock from the Company at the offering price (less the underwriting discounts and commissions).

The Company intends to use the net proceeds from the offering to repay outstanding indebtedness under its revolving credit facility and thereafter for general corporate purposes, which may include funding the completion of 12 gross (5.3 net) wells that are waiting on completion, drilling and completion activities associated with operated and non-operated properties, leasehold interest, and property acquisitions.

An updated forecast model for ESTE has been posted to the EPG website.

I am assuming that all of the common stock is sold (5,175,000 shares). Therefore, my valuations comes down by $1.45 to $18.35/share.

There is definitely upside to this one if the company's exit rate is over 6,000 Boepd, which I believe is likely. If so, my assumption of 6,600 Boepd production in 2017 is way too low.

Not very nice to their existing shareholders pricing this so low. I see this happen a lot, but thought this mgmt team was above that.

Most of the time, dips caused by equity offerings are great buying opportunities. It is not the offering, but what they do with the money that is important.

I picked up more shares even though it is a bit bitter. I don't understand why did they priced the offering below their all time low!!!? Looks either desperate which presumably the fundamentals don't justify or rewarding their "friends" at the expense of existing shareholders. Should have made this bargain offering to their existing shareholders first.