Earthstone Energy (ESTE) 10-Q 8 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 28, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	ESTE
Entity Registrant Name	EARTHSTONE ENERGY INC
Entity Central Index Key	10,254
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		22,559,695

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash	$ 10,006	$ 10,200
Accounts receivable:
Oil, natural gas, and natural gas liquids revenues	8,479	13,998
Joint interest billings and other, net of allowance of $163 at both March 31, 2017 and December 31, 2016	2,346	2,698
Prepaid expenses and other current assets	659	446
Total current assets	21,490	27,342
Oil and gas properties, successful efforts method:
Proved properties	364,758	363,072
Unproved properties	51,887	51,723
Total oil and gas properties	416,645	414,795
Accumulated depreciation, depletion and amortization	(153,152)	(145,393)
Net oil and gas properties	263,493	269,402
Other noncurrent assets:
Goodwill	17,620	17,620
Office and other equipment, net of accumulated depreciation of $2,221 and $1,600 at March 31, 2017 and December 31 2016, respectively	1,337	1,479
Derivative asset	1
Other noncurrent assets	553	669
TOTAL ASSETS	304,494	316,512
Current liabilities:
Accounts payable	6,131	11,927
Revenues and royalties payable	5,608	10,769
Accrued expenses	7,139	5,392
Derivative liability	799	4,595
Advances	4,997	4,542
Current portion of long-term debt	1,634	1,604
Total current liabilities	26,308	38,829
Noncurrent liabilities:
Long-term debt	12,272	12,693
Asset retirement obligation	6,186	6,013
Derivative liability	326	1,575
Deferred tax liability	15,738	15,776
Other noncurrent liabilities	167	169
Total noncurrent liabilities	34,689	36,226
Commitments and Contingencies (Note 12)
Equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized; none issued or outstanding
Common stock, $0.001 par value, 100,000,000 shares authorized; 22,575,052 issued and 22,559,695 outstanding at March 31, 2017 and 22,289,177 issued and 22,273,820 outstanding at December 31, 2016	23	23
Additional paid-in capital	455,513	454,202
Accumulated deficit	(211,579)	(212,308)
Treasury stock, 15,357 shares at March 31, 2017 and December 31, 2016, respectively	(460)	(460)
Total equity	243,497	241,457
TOTAL LIABILITIES AND EQUITY	$ 304,494	$ 316,512

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Joint interest billings and other, allowance	$ 163	$ 163
Office and other equipment, accumulated depreciation	$ 2,221	$ 1,600
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	22,575,052	22,289,177
Common stock, shares outstanding	22,559,695	22,273,820
Treasury stock, shares	15,357	15,357

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
REVENUES
Oil	$ 12,519	$ 5,539
Natural gas	1,694	943
Natural gas liquids	1,130	328
Total revenues	15,343	6,810
OPERATING COSTS AND EXPENSES
Lease operating expense	4,339	3,159
Severance taxes	790	382
Rig idle expense		1,269
Depreciation, depletion and amortization	7,889	5,505
General and administrative expense	3,492	2,686
Stock-based compensation	1,311
Transaction costs	803	512
Accretion of asset retirement obligation	152	128
Exploration expense		5
Total operating costs and expenses	18,776	13,646
Loss from operations	(3,433)	(6,836)
OTHER INCOME (EXPENSE)
Interest expense, net	(337)	(223)
Gain on derivative contracts, net	4,460	765
Other income (expense), net	1	(127)
Total other income (expense)	4,124	415
Income (loss) before income taxes	691	(6,421)
Income tax benefit	38
Net income (loss)	$ 729	$ (6,421)
Net income (loss) per common share:
Basic	$ 0.03	$ (0.46)
Diluted	$ 0.03	$ (0.46)
Weighted average common shares outstanding:
Basic	22,276,996	13,820,128
Diluted	22,585,474	13,820,128

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ 729	$ (6,421)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization	7,889	5,505
Total gain on derivative contracts, net	(4,460)	(765)
Operating portion of net cash (paid) received in settlement of derivative contracts	(586)	1,991
Stock-based compensation	1,311
Accretion of asset retirement obligations	152	128
Deferred income taxes	(38)
Amortization of deferred financing costs	79	70
Changes in assets and liabilities:
Decrease in accounts receivable	5,920	3,258
Increase in prepaid expenses and other current assets	(214)	(244)
Decrease in accounts payable and accrued expenses	(1,710)	(4,576)
Decrease in revenues and royalties payable	(5,161)	(2,904)
Increase (decrease) in advances	455	(11,234)
Net cash provided by (used in) operating activities	4,366	(15,192)
Cash flows from investing activities:
Additions to oil and gas properties	(4,168)	(2,365)
Additions to office and other equipment		(20)
Net cash used in investing activities	(4,168)	(2,385)
Cash flows from financing activities:
Repayments of borrowings	(392)
Deferred financing costs		(3)
Net cash used in financing activities	(392)	(3)
Net decrease in cash and cash equivalents	(194)	(17,580)
Cash at beginning of period	10,200	23,264
Cash at end of period	10,006	5,684
Cash paid for:
Interest	147	142
Non-cash investing and financing activities:
Asset retirement obligations	21	(8)
Accrued capital expenditures	$ 1,575	$ 5,876

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	Note 1. – Basis of Presentation and Summary of Significant Accounting Policies Earthstone Energy, Inc. (together with its wholly-owned consolidated subsidiaries, the “Company,” “our,” “we,” “us,” “Earthstone” or similar terms), a Delaware corporation, is a growth-oriented independent oil and natural gas development and production company. In addition, the Company is active in corporate mergers and the acquisition of oil and natural gas properties that have production and future development opportunities. Our operations are all in the up-stream segment of the oil and natural gas industry and all our properties are onshore in the United States. The accompanying unaudited Condensed Consolidated Financial Statements and notes of Earthstone, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. The accompanying unaudited Condensed Consolidated Financial Statements and notes should be read in conjunction with the financial statements and notes included in Earthstone’s 2016 Annual Report on Form 10-K. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for the fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. The Company’s Condensed Consolidated Balance Sheet at December 31, 2016 is derived from the audited Consolidated Financial Statements at that date. Prior-period Re-engineering and workovers in the Condensed Consolidated Statements of Operations have been reclassified from its own line item and included in Lease operating expenses, within Operating Costs and Expenses, to conform to current-period presentation. This reclassification had no effect on Loss from operations, Income (loss) before income taxes, or Net income (loss) for the three months ended March 31, 2017 and 2016. Recently Issued Accounting Standards Standards not yet adopted Revenue Recognition - In May 2014, the FASB issued updated guidance for recognizing revenue from contracts with customers. The objective of this guidance is to establish principles for reporting information about the nature, timing, and uncertainty of revenue and cash flows arising from an entity’s contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and change in judgments, and assets recognized from the costs to obtain or fulfill a contract. In August 2015, the FASB issued guidance deferring the effective date of this standards update for one year, to be effective for interim and annual periods beginning after December 15, 2017. In March 2016, the FASB issued guidance which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued further guidance on identifying performance obligations and clarification of the licensing implementation guidance. Early adoption of this updated guidance is permitted as of the original effective date of December 31, 2016. The Company expects to adopt this standards update, as required, beginning with the first quarter of 2018. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Leases – In February 2016, the FASB issued updated guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods beginning after December 15, 2018 with early adoption permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The Company expects to adopt this standards update, as required, beginning with the first quarter of 2019. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Statement of Cash Flows – In August 2016, the FASB issued updated guidance that clarifies how certain cash receipts and cash payments are presented in the statement of cash flows. This update provides guidance on eight specific cash flow issues. The standards update is effective for interim and annual periods beginning after December 15, 2017, and should be applied retrospectively to all periods presented. Early adoption is permitted. The Company expects to adopt this standards update, as required, beginning with the first quarter of 2018. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Business Combinations – In January 2017, the FASB issued updated guidance that clarifies the definition of a business, which amends the guidance used in evaluating whether a set of acquired assets and activities represents a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not considered a business. As a result, acquisition fees and expenses will be capitalized to the cost basis of the property acquired, and the tangible and intangible components acquired will be recorded based on their relative fair values as of the acquisition date. The standard is effective for all public business entities for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted for periods for which financial statements have not yet been issued. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Intangibles - Goodwill and Other In January 2017, the FASB issued updated guidance simplifying the test for goodwill impairment. The update eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company is in the process of evaluating the impact, if any, on its Condensed Consolidated Financial Statements.

Acquisitions

Acquisitions	3 Months Ended
	Mar. 31, 2017
Business Combinations [Abstract]
Acquisitions	Note 2. Acquisitions Lynden Arrangement On May 18, 2016, the Company acquired Lynden Energy Corp. (“Lynden”) in an all-stock transaction (the “Lynden Arrangement”). The Company acquired all outstanding shares of Lynden’s common stock, through a newly formed subsidiary, with Lynden surviving as a wholly-owned subsidiary of the Company, issuing 3,700,279 shares of its common stock, $0.001 par value per share (the “Common Stock”), to the holders of the common stock of Lynden. The Lynden Arrangement was accounted for as a business combination in accordance with FASB ASC Topic 805, Business Combinations The following table summarizes the consideration transferred, fair value of assets acquired and liabilities assumed and resulting goodwill ( in thousands, except share and share price amount Consideration: Shares of Earthstone common stock issued in the Arrangement 3,700,279 Closing per share price of Earthstone common stock as of May 18, 2016 $ 12.35 Total consideration to Lynden shareholders $ 45,699 Fair Value of Liabilities Assumed: Credit facility (4) $ 36,597 Current liabilities 1,915 Deferred tax liability (1) 15,240 Asset retirement obligations 250 Total consideration plus liabilities assumed $ 99,701 Fair Value of Assets Acquired: Cash and cash equivalents (4) $ 5,263 Current assets 2,019 Proved oil and gas properties (2)(3) 48,199 Unproved oil and gas properties 26,600 Amount attributable to assets acquired $ 82,081 Goodwill (5) $ 17,620 (1) This amount represents the difference between the recorded book value and the tax basis of the oil and natural gas properties as of the date of the closing of the Lynden Arrangement, tax-effected using a tax rate of approximately 34.5%. (2) The weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties was $64.73 per barrel of oil, $3.68 per Mcf of natural gas and $19.34 per barrel of oil equivalent for natural gas liquids, after adjustments for transportation fees and regional price differentials. (3) The market assumptions as to the future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of the future development and operating costs, projecting of future rates of production, expected recovery rate and risk adjusted discount rates used by the Company to estimate the fair value of the oil and natural gas properties represent Level 3 inputs; see Note 3. Fair Value Measurements, (4) Concurrent with closing the Lynden Arrangement, the Company paid off the outstanding balance of $36.6 million on the Lynden credit facility. The settlement of the debt and the cash acquired is equal to the $31.3 million net cash outflow associated with the Lynden Arrangement. (5) Goodwill was determined to be the excess consideration exchanged over the fair value of the net assets of Lynden on May 18, 2016. The goodwill resulted from the expected synergies of the management team and balance sheet of the Company combined with the key assets acquired in the Midland Basin area. The goodwill recognized will not be deductible for tax purposes.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	Note 3. Fair Value Measurements FASB ASC Topic 820, The three-level fair value hierarchy for disclosure of fair value measurements defined by ASC 820 is as follows: Level 1 – Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 – Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity. The Company reflects transfers between the three levels at the beginning of the reporting period in which the availability of observable inputs no longer justifies classification in the original level. There were no transfers between fair value hierarchy levels for the three months ended March 31, 2017. Fair Value on a Recurring Basis Derivative financial instruments are carried at fair value and measured on a recurring basis. The derivative financial instruments consist of swaps for crude oil and natural gas. The Company’s swaps are valued based on a discounted future cash flow model. The primary input for the model is published forward commodity price curves. The swaps are also designated as Level 2 within the valuation hierarchy. The fair values of commodity derivative instruments in an asset position include a measure of counterparty nonperformance risk, and the fair values of commodity derivative instruments in a liability position include a measure of the Company’s nonperformance risk. These measurements were not material to the consolidated financial statements. The following table summarizes the fair value of the Company’s financial assets and liabilities, by level within the fair-value hierarchy (in thousands) March 31, 2017 Level 1 Level 2 Level 3 Total Financial assets Derivative asset $ — $ 1 $ — $ 1 Total financial assets $ — $ 1 $ — $ 1 Financial liabilities Derivative liability $ — $ 799 $ — $ 799 Derivative liability — 326 — 326 Total financial liabilities $ — $ 1,125 $ — $ 1,125 December 31, 2016 Financial liabilities Derivative liability $ — $ 4,595 $ — $ 4,595 Derivative liability — 1,575 — 1,575 Total financial assets $ — $ 6,170 $ — $ 6,170 Other financial instruments include cash, accounts receivable and payable, and revenue royalties. The carrying amount of these instruments approximates fair value because of their short-term nature. The Company’s long-term debt obligation bears interest at floating market rates, therefore carrying amounts and fair value are approximately equal. Fair Value on a Nonrecurring Basis The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its non-financial assets and liabilities, including oil and gas properties and goodwill. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Proved Oil and Natural Gas Properties Proved oil and natural gas properties are measured at fair value on a nonrecurring basis in order to review for impairment. The impairment charge reduces the carrying values to their estimated fair values. These fair value measurements are classified as Level 3 measurements and include many unobservable inputs. Fair value is calculated as the estimated discounted future net cash flows attributable to the assets. The Company’s primary assumptions in preparing the estimated discounted future net cash flows to be recovered from oil and gas properties are based on (i) proved reserves, (ii) forward commodity prices and assumptions as to costs and expenses, and (iii) the estimated discount rate that would be used by potential purchasers to determine the fair value of the assets. Goodwill Goodwill represents the excess of the purchase price of assets acquired over the fair value of those assets and is tested for impairment annually, or more frequently if events or changes in circumstances dictate that the carrying value of goodwill may not be recoverable. Such test includes an assessment of qualitative and quantitative factors. Business Combinations The Company records the identifiable assets acquired and liabilities assumed at fair value at the date of acquisition on a nonrecurring basis. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and gas production, commodity prices based on NYMEX commodity futures price strips as of the date of the estimate, operating and development costs, and a risk-adjusted discount rate. The future oil and natural gas pricing used in the valuation is a Level 2 assumption. Significant Level 3 assumptions associated with the calculation of discounted cash flows used in the determination of fair value of the acquisition include the Company’s estimate operating and development costs, anticipated production of proved reserves, appropriate risk-adjusted discount rates and other relevant data. The Company’s acquisitions are described in Note 2. Acquisitions Asset Retirement Obligations The asset retirement obligation estimates are derived from historical costs and management’s expectation of future cost environments; and therefore, the Company has designated these liabilities as Level 3. The significant inputs to this fair value measurement include estimates of plugging, abandonment and remediation costs, well life, inflation and credit-adjusted risk free rate. See Note 10. Asset Retirement Obligations

Derivative Financial Instrument

Derivative Financial Instruments	3 Months Ended
	Mar. 31, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Note 4. Derivative Financial Instruments Our hedging activities consist of derivative instruments entered into in order to hedge against changes in oil and natural gas prices through the use of fixed price swap agreements. Swaps exchange floating price risk in the future for a fixed price at the time of the hedge. Consistent with our hedging policy, we have entered into a series of derivative instruments to hedge a significant portion of our expected oil and natural gas production through 2018. Typically, these derivative instruments require payments to (receipts from) counterparties based on specific indices as required by the derivative agreements. Although not risk free, we believe these instruments reduce our exposure to oil and natural gas price fluctuations and, thereby, allow us to achieve a more predictable cash flow. Our derivative instruments are cash flow hedge transactions in which we are hedging the variability of cash flow related to a forecasted transaction. We do not enter into derivative instruments for trading or other speculative purposes. These transactions are recorded in our Condensed Consolidated Financial Statements The Company nets its derivative instrument fair value amounts executed with each counterparty pursuant to an International Swap Dealers Association Master Agreement (“ISDA”), which provides for net settlement over the term of the contract. The ISDA is a standard contract that governs all derivative contracts entered into between the Company and the respective counterparty. The ISDA allows for offsetting of amounts payable or receivable between the Company and the counterparty, at the election of both parties, for transactions that occur on the same date and in the same currency The Company had the following open crude oil and natural gas derivative contracts as of March 31, 2017: Price Swaps Period Commodity Volume (Bbl s Weighted Average Price ($/Bbl / $/MMBtu) Q2 - Q4 2017 Crude Oil 427,500 $ 50.80 Q1 - Q4 2018 Crude Oil 270,000 $ 50.70 Q2 - Q4 2017 Natural Gas 1,305,000 $ 2.997 Q1 - Q4 2018 Natural Gas 600,000 $ 2.907 The following table summarizes the location and fair value amounts of all derivative instruments in the Condensed Consolidated Balance Sheets as well as the gross recognized derivative assets, liabilities, and amounts offset in the Condensed Consolidated Balance Sheets (in thousands) March 31, 2017 December 31, 2016 Derivatives not designated as hedging contracts under ASC Topic 815 Balance Sheet Location Gross Recognized Assets / Liabilities Gross Amounts Offset Net Recognized Assets / Liabilities Gross Recognized Assets / Liabilities Gross Amounts Offset Net Recognized Assets / Liabilities Commodity Derivative asset - noncurrent $ 38 $ 37 $ 1 $ — $ — $ — Commodity contracts Derivative liability - current $ 1,256 $ 457 $ 799 $ 4,595 $ — $ 4,595 Commodity contracts Derivative liability - noncurrent $ 326 $ — $ 326 $ 1,575 $ — $ 1,575 The follow table summarizes the location and amounts of the Company’s realized and unrealized gains and losses on derivatives instruments in the Company’s Condensed Consolidated Statements of Operations (in thousands) Three Months Ended March 31, 2017 2016 Derivatives not designated as hedging contracts under ASC Topic 815 Statement of Operations Location Total gain (loss) on commodity contracts Gain on derivative contracts, net $ 5,046 $ (1,226 ) Cash (paid) received in settlements on commodity contracts Gain on derivative contracts, net (586 ) 1,991 Gain on commodity contracts, net $ 4,460 $ 765

Oil and Natural Gas Properties

Oil and Natural Gas Properties	3 Months Ended
	Mar. 31, 2017
Oil And Gas Exploration And Production Industries Disclosures [Abstract]
Oil and Natural Gas Properties	Note 5. Oil and Natural Gas Properties The Company follows the successful efforts method of accounting for its oil and natural gas properties. Under this method, costs to acquire oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Costs incurred to maintain wells and related equipment, lease and well operating costs, and other exploration costs are charged to expense as incurred. Gains and losses arising from the sale of properties are included in operating income (loss) in the Consolidated Statements of Operations. The Company’s lease acquisition costs and development costs of proved oil and natural gas properties are amortized using the units-of-production method, at the field level, based on total proved reserves and proved developed reserves, respectively. Depletion expense for oil and gas producing property and related equipment was $7.8 million and $5.4 million, for the three months ended March 31, 2017 and 2016, respectively. Proved Properties The Company reviews its proved oil and natural gas properties for impairment on a field basis when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or a significant decrease in future commodity prices. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. Unproved Properties Unproved properties consist of costs incurred to acquire undeveloped leases as well as the cost to acquire unproved reserves. Undeveloped lease costs and unproved reserve acquisition costs are capitalized. Unproved oil and gas leases are generally for a primary term of three to five years. In most cases, the term of the unproved leases can be extended by paying delay rentals, meeting contractual drilling obligations, or by the presence of producing wells on the leases. Unproved costs related to successful exploratory drilling are reclassified to proved properties and depleted on a units-of-production basis. The Company reviews its unproved properties periodically for impairment. In determining whether an unproved property is impaired, the Company considers numerous factors including, but not limited to, current exploration and development plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property. Impairments to Oil and Natural Gas Properties The Company did not record any impairments to its oil and natural gas properties for the three months ended March 31, 2017 and 2016.

Net Income (Loss) Per Common Sh

Net Income (Loss) Per Common Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Net Income (Loss) Per Common Share	Note 6. Net Income (Loss) Per Common Share Net income (loss) per common share—basic is calculated by dividing Net income (loss) Three Months Ended March 31, (In thousands, except per share amounts) 2017 2016 Net income (loss) $ 729 $ (6,421 ) Net income (loss) per common share: Basic $ 0.03 $ (0.46 ) Diluted $ 0.03 $ (0.46 ) Weighted average common shares outstanding Basic 22,276,996 13,820,128 Add potentially dilutive securities: Nonvested restricted stock units 308,478 — Diluted weighted average common shares outstanding 22,585,474 13,820,128 For the three months ended March 31, 2016, there were no restricted stock units issued or outstanding under the Company’s 2014 Long-Term Incentive Plan.

Common Stock

Common Stock	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Common Stock	Note 7. Common Stock At March 31, 2017 and December 31, 2016, there were 22,575,052 and 22,289,177 shares of Common Stock issued, respectively, both including 15,357 shares of treasury stock held by the Company. During the three months ended March 31, 2017, 285,875 shares of Common Stock were issued as a result of the vesting of restricted stock units under the Company’s 2014 Long-Term Incentive Plan. During the three months ended March 31, 2016, there were no changes in Common Stock.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	Note 8. Stock-Based Compensation The Company’s amended 2014 Long-term Incentive Plan (the “2014 Plan”) allows, among other things, for the grant of restricted stock units (“RSUs”). The holders of outstanding RSUs do not receive dividends or have voting rights prior to vesting. The Company determines the fair value of granted RSUs based on the market price of the Common Stock of the Company on the date of the grant. Compensation expense is for granted RSUs is recognized on a straight-line basis over the vesting and is net of forfeitures, as incurred. The table below summarizes nonvested RSU awards activity for the three months ended March 31, 2017: Shares Weighted-Average Grant Date Fair Value Nonvested RSUs at December 31, 2016 781,500 $ 12.53 Granted 48,000 $ 13.38 Forfeited (25,000 ) $ 13.30 Vested (285,875 ) $ 12.24 Nonvested RSUs at March 31, 2017 518,625 $ 12.72 The future compensation cost of the RSU awards at March 31, 2017 is $5.5 million which will be amortized over the remaining vesting period. The weighted average remaining vesting period of the future compensation cost is 0.65 years. Stock-based compensation for the three months ended March 31, 2017 recorded in the Condensed Consolidated Statements of Operations was $1.3 million, with a corresponding increase in Additional paid-in capital in the Condensed Consolidated Balance Sheet. No RSUs were issued prior to May 20, 2016. Therefore, there was no nonvested RSU awards activity, nor any stock-based compensation recognized in the Condensed Consolidated Statements of Operations, for the three months ended March 31, 2016.

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Long-Term Debt	Note 9. Long Credit Agreement In December, 2014, the Company entered into a credit agreement providing for a $500.0 million four-year senior secured revolving credit facility (the “Credit Agreement”). The borrowing base under the Credit Agreement is subject to redetermination on May 1 and November 1 each year, as well as other elective borrowing base redeterminations. As of March 31, 2017, outstanding borrowings under the Credit Agreement bear interest at a rate elected by the Company that is equal to a base rate (which is equal to the greater of the prime rate, the Federal Funds effective rate plus 0.50%, and 1-month LIBOR plus 1.00%) or LIBOR, in each case plus the applicable margin. The applicable margin ranges from 1.25% to 2.25% for base rate loans and from 2.25% to 3.25% for LIBOR loans, in each case depending on the amount of the loan outstanding in relation to the borrowing base. The Company is obligated to pay a quarterly commitment fee of 0.50% per year on the unused portion of the borrowing base, which fee is also dependent on the amount of the loan outstanding in relation to the borrowing base. The Company is also required to pay customary letter of credit fees. Principal amounts outstanding under the Credit Agreement are due and payable in full at maturity on December 19, 2018. All of the obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the Company’s assets. As of March 31, 2017, the Company had an $80.0 million borrowing base, of which $10.0 million of debt was outstanding, bearing an interest rate of 3.084%, as well as a $0.1 million letter of credit outstanding related to our office lease, resulting in $69.9 million of borrowing base availability under the Credit Agreement. The Credit Agreement contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness, create liens on asset, pay dividends, and repurchase its capital stock. In addition, the Company is required to maintain certain financial ratios, including a minimum modified current ratio which includes the available borrowing base of 1.0 to 1.0 and a maximum annualized quarterly leverage ratio of 4.0 to 1.0. The Company is also required to submit an audited annual report 120 days after the end of each fiscal year. As of March 31, 2017, the Company was in compliance with these covenants under the Credit Agreement. Promissory Note In July 2016, the Company issued a $5.1 million unsecured promissory note (the “Note”) to a drilling rig contractor in settlement of rig idle charges and a contract termination fee. These expenses were recorded in the Company’s Condensed Consolidated Statement of Operations during 2016. The Note is payable in monthly installments over a three-year period maturing in July 2019, bearing an annualized interest rate of 8.0% for the first 12 months, 10.0% for the subsequent 12 months, and 12.0% for the last 12 months, with no prepayment penalty. Interest expense is recognized using the effective interest method of approximately 9.1% over the life of the note. As of March 31, 2017, the Company had $3.9 million outstanding under the note with $1.6 million included in the current portion of long-term debt. Total Long-Term Debt The following table below summarizes long term debt ( in thousands March 31, December 31, 2017 2016 Borrowings under Credit Agreement $ 10,000 $ 10,000 Promissory note 3,906 4,297 Total debt 13,906 14,297 Less: Current portion of long-term debt (1,634 ) (1,604 ) Long-term debt $ 12,272 $ 12,693 For the three months ended March 31, 2017, the Company had no borrowings and $0.4 million in repayments of borrowings. For the three months ended March 31, 2017 and 2016, interest on borrowings averaged 4.92% and 2.79% per annum, respectively. Average interest on borrowings for the three months ended March 31, 2017 and 2016, excludes commitment fees of $0.1 million and $0.1 million, respectively. The Company did not capitalized any costs associated with its borrowings for the three months ended March 31, 2017. The Company capitalized $0.003 million of costs associated with its borrowings for the three months ended March 31, 2016. These costs are included in Other noncurrent assets

Asset Retirement Obligations

Asset Retirement Obligations	3 Months Ended
	Mar. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligations	Note 10. Asset Retirement Obligations The Company has asset retirement obligations associated with the future plugging and abandonment of oil and gas properties and related facilities. Revisions to the liability typically occur due to changes in the estimated abandonment costs, well economic lives, and the discount rate. The following table summarizes the Company’s asset retirement obligation transactions recorded during the three months ended March 31, (in thousands) 2017 2016 Beginning asset retirement obligations $ 6,013 $ 5,075 Liabilities incurred 1 4 Accretion expense 152 128 Revision of estimates 20 (12 ) Ending asset retirement obligations $ 6,186 $ 5,195

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Note 11. Related Party Transactions FASB ASC Topic 850 , Related Party Disclosures Flatonia Energy, LLC (“Flatonia”), which owns approximately 13.3% of our Common Stock, is a party to a joint operating agreement (the “Operating Agreement”) with the Company. The Operating Agreement covers certain jointly owned oil and natural gas properties located in the Eagle Ford trend in Texas. In connection with the Operating Agreement, we made payments to Flatonia of $7.2 million and $12.2 million and received $1.5 million and $2.8 million in the three months ended March 31, 2017 and 2016, respectively. Amounts receivable from Flatonia in connection with the Operating Agreement were $1.2 million and $1.6 million at March 31, 2017 and 2016, respectively. Amounts payable to Flatonia in connection with the Operating Agreement were $2.3 million and $4.0 million at March 31, 2017 and 2016, respectively.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 12. Commitments and Contingencies Legal From time to time, the Company and its subsidiaries may be involved in various legal proceedings and claims in the ordinary course of business. In July 2015, EF Non-Op, LLC, a subsidiary of the Company, filed suit in the 125 th EF Non-Op, LLC vs. BHP Billiton Petroleum Properties (N.A.), LP (F/K/A Petrohawk Properties, LP), Environmental and Regulatory As of March 31, 2017, there were no known environmental or other regulatory matters related to our operations that are reasonably expected to result in a material liability to us.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income Taxes	Note 13. Income Taxes Our corporate structure requires the filing of two separate consolidated U.S. Federal income tax returns and one Canadian income tax return resulting from the Lynden Arrangement that includes Lynden USA, Inc. (“Lynden US”), Earthstone Energy, Inc. (“Earthstone US”), and Lynden Energy Corp. (“Lynden Canada”), As such, taxable income of Earthstone cannot be offset by tax attributes, including net operating losses, of Lynden US, nor can taxable income of Lynden US be offset by tax attributes of Earthstone. During the three months ended March 31, 2017, we recorded an income tax benefit for Lynden US of $0.04 million as a result of a pre-tax net loss of $0.13 million. Earthstone US had pre-tax net income of $0.83 million and recorded no income tax expense as a result of a full valuation allowance recorded against the net deferred tax asset, as future realization of the net deferred tax asset cannot be assured. Additionally, Earthstone US incurred non-deductible shortfalls on stock compensation on the RSUs that vested during the period, for which no income tax expense was recorded as a result of the full valuation allowance recorded against the net deferred tax asset.

Basis of Presentation and Sum19

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Recently Issued Accounting Standards	Recently Issued Accounting Standards Standards not yet adopted Revenue Recognition - In May 2014, the FASB issued updated guidance for recognizing revenue from contracts with customers. The objective of this guidance is to establish principles for reporting information about the nature, timing, and uncertainty of revenue and cash flows arising from an entity’s contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and change in judgments, and assets recognized from the costs to obtain or fulfill a contract. In August 2015, the FASB issued guidance deferring the effective date of this standards update for one year, to be effective for interim and annual periods beginning after December 15, 2017. In March 2016, the FASB issued guidance which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued further guidance on identifying performance obligations and clarification of the licensing implementation guidance. Early adoption of this updated guidance is permitted as of the original effective date of December 31, 2016. The Company expects to adopt this standards update, as required, beginning with the first quarter of 2018. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Leases – In February 2016, the FASB issued updated guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods beginning after December 15, 2018 with early adoption permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The Company expects to adopt this standards update, as required, beginning with the first quarter of 2019. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Statement of Cash Flows – In August 2016, the FASB issued updated guidance that clarifies how certain cash receipts and cash payments are presented in the statement of cash flows. This update provides guidance on eight specific cash flow issues. The standards update is effective for interim and annual periods beginning after December 15, 2017, and should be applied retrospectively to all periods presented. Early adoption is permitted. The Company expects to adopt this standards update, as required, beginning with the first quarter of 2018. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Business Combinations – In January 2017, the FASB issued updated guidance that clarifies the definition of a business, which amends the guidance used in evaluating whether a set of acquired assets and activities represents a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not considered a business. As a result, acquisition fees and expenses will be capitalized to the cost basis of the property acquired, and the tangible and intangible components acquired will be recorded based on their relative fair values as of the acquisition date. The standard is effective for all public business entities for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted for periods for which financial statements have not yet been issued. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its Condensed Consolidated Financial Statements. Intangibles - Goodwill and Other In January 2017, the FASB issued updated guidance simplifying the test for goodwill impairment. The update eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company is in the process of evaluating the impact, if any, on its Condensed Consolidated Financial Statements.

Acquisitions (Tables)

Acquisitions (Tables)	3 Months Ended
	Mar. 31, 2017
Lynden Arrangement [Member]
Business Acquisition [Line Items]
Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed and Resulting Goodwill	The following table summarizes the consideration transferred, fair value of assets acquired and liabilities assumed and resulting goodwill ( in thousands, except share and share price amount Consideration: Shares of Earthstone common stock issued in the Arrangement 3,700,279 Closing per share price of Earthstone common stock as of May 18, 2016 $ 12.35 Total consideration to Lynden shareholders $ 45,699 Fair Value of Liabilities Assumed: Credit facility (4) $ 36,597 Current liabilities 1,915 Deferred tax liability (1) 15,240 Asset retirement obligations 250 Total consideration plus liabilities assumed $ 99,701 Fair Value of Assets Acquired: Cash and cash equivalents (4) $ 5,263 Current assets 2,019 Proved oil and gas properties (2)(3) 48,199 Unproved oil and gas properties 26,600 Amount attributable to assets acquired $ 82,081 Goodwill (5) $ 17,620 (1) This amount represents the difference between the recorded book value and the tax basis of the oil and natural gas properties as of the date of the closing of the Lynden Arrangement, tax-effected using a tax rate of approximately 34.5%. (2) The weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties was $64.73 per barrel of oil, $3.68 per Mcf of natural gas and $19.34 per barrel of oil equivalent for natural gas liquids, after adjustments for transportation fees and regional price differentials. (3) The market assumptions as to the future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of the future development and operating costs, projecting of future rates of production, expected recovery rate and risk adjusted discount rates used by the Company to estimate the fair value of the oil and natural gas properties represent Level 3 inputs; see Note 3. Fair Value Measurements, (4) Concurrent with closing the Lynden Arrangement, the Company paid off the outstanding balance of $36.6 million on the Lynden credit facility. The settlement of the debt and the cash acquired is equal to the $31.3 million net cash outflow associated with the Lynden Arrangement. (5) Goodwill was determined to be the excess consideration exchanged over the fair value of the net assets of Lynden on May 18, 2016. The goodwill resulted from the expected synergies of the management team and balance sheet of the Company combined with the key assets acquired in the Midland Basin area. The goodwill recognized will not be deductible for tax purposes.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Summary of Fair Value of Financial Assets and Liabilities	The following table summarizes the fair value of the Company’s financial assets and liabilities, by level within the fair-value hierarchy (in thousands) March 31, 2017 Level 1 Level 2 Level 3 Total Financial assets Derivative asset $ — $ 1 $ — $ 1 Total financial assets $ — $ 1 $ — $ 1 Financial liabilities Derivative liability $ — $ 799 $ — $ 799 Derivative liability — 326 — 326 Total financial liabilities $ — $ 1,125 $ — $ 1,125 December 31, 2016 Financial liabilities Derivative liability $ — $ 4,595 $ — $ 4,595 Derivative liability — 1,575 — 1,575 Total financial assets $ — $ 6,170 $ — $ 6,170

Derivative Financial Instrume22

Derivative Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Schedule of Open Crude Oil and Natural Gas Derivative Contracts	The Company had the following open crude oil and natural gas derivative contracts as of March 31, 2017: Price Swaps Period Commodity Volume (Bbl s Weighted Average Price ($/Bbl / $/MMBtu) Q2 - Q4 2017 Crude Oil 427,500 $ 50.80 Q1 - Q4 2018 Crude Oil 270,000 $ 50.70 Q2 - Q4 2017 Natural Gas 1,305,000 $ 2.997 Q1 - Q4 2018 Natural Gas 600,000 $ 2.907
Schedule of Location and Fair Value Amounts of All Derivative Instruments	The following table summarizes the location and fair value amounts of all derivative instruments in the Condensed Consolidated Balance Sheets as well as the gross recognized derivative assets, liabilities, and amounts offset in the Condensed Consolidated Balance Sheets (in thousands) March 31, 2017 December 31, 2016 Derivatives not designated as hedging contracts under ASC Topic 815 Balance Sheet Location Gross Recognized Assets / Liabilities Gross Amounts Offset Net Recognized Assets / Liabilities Gross Recognized Assets / Liabilities Gross Amounts Offset Net Recognized Assets / Liabilities Commodity Derivative asset - noncurrent $ 38 $ 37 $ 1 $ — $ — $ — Commodity contracts Derivative liability - current $ 1,256 $ 457 $ 799 $ 4,595 $ — $ 4,595 Commodity contracts Derivative liability - noncurrent $ 326 $ — $ 326 $ 1,575 $ — $ 1,575
Summary of Realized and Unrealized Gains and Losses on Derivative Instruments	The follow table summarizes the location and amounts of the Company’s realized and unrealized gains and losses on derivatives instruments in the Company’s Condensed Consolidated Statements of Operations (in thousands) Three Months Ended March 31, 2017 2016 Derivatives not designated as hedging contracts under ASC Topic 815 Statement of Operations Location Total gain (loss) on commodity contracts Gain on derivative contracts, net $ 5,046 $ (1,226 ) Cash (paid) received in settlements on commodity contracts Gain on derivative contracts, net (586 ) 1,991 Gain on commodity contracts, net $ 4,460 $ 765

Net Income (Loss) Per Common 23

Net Income (Loss) Per Common Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Reconciliation of Net Income (Loss) Per Common Share	A reconciliation of Net income (loss) per common share is as follows: Three Months Ended March 31, (In thousands, except per share amounts) 2017 2016 Net income (loss) $ 729 $ (6,421 ) Net income (loss) per common share: Basic $ 0.03 $ (0.46 ) Diluted $ 0.03 $ (0.46 ) Weighted average common shares outstanding Basic 22,276,996 13,820,128 Add potentially dilutive securities: Nonvested restricted stock units 308,478 — Diluted weighted average common shares outstanding 22,585,474 13,820,128

Stock Based Compensation (Table

Stock Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Nonvested RSU Awards Activity	The table below summarizes nonvested RSU awards activity for the three months ended March 31, 2017: Shares Weighted-Average Grant Date Fair Value Nonvested RSUs at December 31, 2016 781,500 $ 12.53 Granted 48,000 $ 13.38 Forfeited (25,000 ) $ 13.30 Vested (285,875 ) $ 12.24 Nonvested RSUs at March 31, 2017 518,625 $ 12.72

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Summary of Long Term Debt	The following table below summarizes long term debt ( in thousands March 31, December 31, 2017 2016 Borrowings under Credit Agreement $ 10,000 $ 10,000 Promissory note 3,906 4,297 Total debt 13,906 14,297 Less: Current portion of long-term debt (1,634 ) (1,604 ) Long-term debt $ 12,272 $ 12,693

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	3 Months Ended
	Mar. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]
Summary of Asset Retirement Obligation Transactions	The following table summarizes the Company’s asset retirement obligation transactions recorded during the three months ended March 31, (in thousands) 2017 2016 Beginning asset retirement obligations $ 6,013 $ 5,075 Liabilities incurred 1 4 Accretion expense 152 128 Revision of estimates 20 (12 ) Ending asset retirement obligations $ 6,186 $ 5,195

Acquisitions - Additional Infor

Acquisitions - Additional Information (Details) - Lynden Arrangement [Member]	May 18, 2016$ / sharesshares
Business Acquisition [Line Items]
Common stock issued, net of offering costs and contributions, shares | shares	3,700,279
Common stock, price per share | $ / shares	$ 0.001

Acquisitions - Schedule of Cons

Acquisitions - Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed and Resulting Goodwill (Details) - USD ($) $ / shares in Units, $ in Thousands	May 18, 2016	Mar. 31, 2017	Dec. 31, 2016
Fair Value of Assets Acquired:
Goodwill		$ 17,620	$ 17,620
Lynden Arrangement [Member]
Business Acquisition [Line Items]
Shares of Earthstone common stock issued in the Arrangement	3,700,279
Closing per share price of Earthstone common stock as of May 18, 2016	$ 12.35
Total consideration to Lynden shareholders	$ 45,699
Fair Value of Liabilities Assumed:
Credit facility	36,597
Current liabilities	1,915
Deferred tax liability	15,240
Asset retirement obligations	250
Total consideration plus liabilities assumed	99,701
Fair Value of Assets Acquired:
Cash and cash equivalents	5,263
Current assets	2,019
Amount attributable to assets acquired	82,081
Goodwill	17,620
Lynden Arrangement [Member] | Proved Oil and Gas Properties [Member]
Fair Value of Assets Acquired:
Oil and natural gas properties	48,199
Lynden Arrangement [Member] | Unproved Oil and Gas Properties [Member]
Fair Value of Assets Acquired:
Oil and natural gas properties	$ 26,600

Acquisitions - Schedule of Co29

Acquisitions - Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed and Resulting Goodwill (Parenthetical) (Details) $ in Thousands	May 18, 2016USD ($)$ / bbl$ / Mcf$ / Boe	Mar. 31, 2017USD ($)
Business Acquisition [Line Items]
Settlement of debt		$ 400
Lynden Arrangement [Member]
Business Acquisition [Line Items]
Tax rate	34.50%
Weighted average commodity prices of oil | $ / bbl	64.73
Weighted average commodity prices of natural gas | $ / Mcf	3.68
Weighted average commodity prices of oil equivalent for natural gas liquids | $ / Boe	19.34
Credit facility, outstanding balance paid off	$ 36,597
Settlement of debt	$ 31,300

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details)	Mar. 31, 2017USD ($)
Fair Value Disclosures [Abstract]
Fair value assets transfer from Level 1 to Level 2	$ 0
Fair value assets transfer from Level 2 to Level 1	0
Fair value liabilities transfer from Level 1 to Level 2	0
Fair value liabilities transfer from Level 2 to Level 1	$ 0

Fair Value Measurements - Summa

Fair Value Measurements - Summary of Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial assets
Derivative asset	$ 1
Financial liabilities
Derivative liability	799	$ 4,595
Derivative liability	326	1,575
Fair Value on a Recurring Basis [Member]
Financial assets
Derivative asset	1
Total financial assets	1
Financial liabilities
Derivative liability	799	4,595
Derivative liability	326	1,575
Total financial liabilities	1,125	6,170
Level 2 [Member] | Fair Value on a Recurring Basis [Member]
Financial assets
Derivative asset	1
Total financial assets	1
Financial liabilities
Derivative liability	799	4,595
Derivative liability	326	1,575
Total financial liabilities	$ 1,125	$ 6,170

Derivative Financial Instrume32

Derivative Financial Instruments - Schedule of Open Crude Oil and Natural Gas Derivative Contracts (Details)	3 Months Ended
	Mar. 31, 2017MMBTU$ / bbl$ / MMBTUbbl
Price Swaps Q2 - Q4 2017 [Member] | Natural Gas [Member]
Derivative [Line Items]
Volume | MMBTU	1,305,000
Weighted Average Price | $ / MMBTU	2.997
Price Swaps Q2 - Q4 2017 [Member] | Crude Oil [Member]
Derivative [Line Items]
Volume | bbl	427,500
Weighted Average Price | $ / bbl	50.80
Price Swaps Q1 - Q4 2018 [Member] | Natural Gas [Member]
Derivative [Line Items]
Volume | MMBTU	600,000
Weighted Average Price | $ / MMBTU	2.907
Price Swaps Q1 - Q4 2018 [Member] | Crude Oil [Member]
Derivative [Line Items]
Volume | bbl	270,000
Weighted Average Price | $ / bbl	50.70

Derivative Financial Instrume33

Derivative Financial Instruments - Schedule of Location and Fair Value Amounts of All Derivative Instruments (Details) - Derivatives Not Designated as Hedging Contracts [Member] - Commodity Contracts [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Derivative Asset - Noncurrent [Member]
Derivatives Fair Value [Line Items]
Gross Recognized Assets	$ 38
Gross Amounts Offset, Assets	37
Total financial assets	1
Derivative Liability - Current [Member]
Derivatives Fair Value [Line Items]
Gross Recognized Liabilities	1,256	$ 4,595
Gross Amounts Offset, Liabilities	457
Total financial liabilities	799	4,595
Derivative Liability - Noncurrent [Member]
Derivatives Fair Value [Line Items]
Gross Recognized Liabilities	326	1,575
Total financial liabilities	$ 326	$ 1,575

Derivative Financial Instrume34

Derivative Financial Instruments - Summary of Realized and Unrealized Gains and Losses on Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative Instruments Gain Loss [Line Items]
Cash (paid) received in settlements on commodity contracts	$ 586	$ (1,991)
Gain on commodity contracts, net	4,460	765
Derivatives Not Designated as Hedging Contracts [Member] | Gain On Derivative Contracts, Net [Member]
Derivative Instruments Gain Loss [Line Items]
Total gain (loss) on commodity contracts	5,046	(1,226)
Cash (paid) received in settlements on commodity contracts	$ (586)	$ 1,991

Oil and Natural Gas Properties

Oil and Natural Gas Properties - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Oil And Natural Gas Properties [Line Items]
Impairments to oil and natural gas properties	$ 0	$ 0
Proved Oil and Natural Gas Properties [Member]
Oil And Natural Gas Properties [Line Items]
Depletion expenses	$ 7,800,000	$ 5,400,000
Unproved Oil and Gas Properties [Member] | Minimum [Member]
Oil And Natural Gas Properties [Line Items]
Unproved oil and gas lease term	3 years
Unproved Oil and Gas Properties [Member] | Maximum [Member]
Oil And Natural Gas Properties [Line Items]
Unproved oil and gas lease term	5 years

Net Income (Loss) Per Common 36

Net Income (Loss) Per Common Share - Reconciliation of Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income (loss)	$ 729	$ (6,421)
Net income (loss) per common share:
Basic	$ 0.03	$ (0.46)
Diluted	$ 0.03	$ (0.46)
Weighted average common shares outstanding
Basic	22,276,996	13,820,128
Add potentially dilutive securities:
Nonvested restricted stock units	308,478
Diluted weighted average common shares outstanding	22,585,474	13,820,128

Net Income (Loss) Per Common 37

Net Income (Loss) Per Common Share - Additional Information (Details) - Restricted Stock Units [Member] - 2014 Long Term Incentive Plan [Member]	3 Months Ended
	Mar. 31, 2016shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Shares issued	0
Shares outstanding	0

Common Stock - Additional Infor

Common Stock - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Capital Unit [Line Items]
Common stock, shares issued	22,575,052	22,289,177
Treasury stock, shares	15,357	15,357
Restricted Stock Units [Member] | 2014 Long Term Incentive Plan [Member] | Common Stock [Member]
Capital Unit [Line Items]
Common stock shares issued upon vesting	285,875

Stock Based Compensation - Summ

Stock Based Compensation - Summary of Nonvested RSU Awards Activity (Details) - Restricted Stock Units [Member]	3 Months Ended
	Mar. 31, 2017$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Nonvested RSUs at beginning of period, Shares | shares	781,500
Granted, Shares | shares	48,000
Forfeited, Shares | shares	(25,000)
Vested, Shares | shares	(285,875)
Nonvested RSUs at end of period, Shares | shares	518,625
Nonvested RSUs at beginning of period, Weighted-Average Grant Date Fair Value | $ / shares	$ 12.53
Granted, Weighted-Average Grant Date Fair Value | $ / shares	13.38
Forfeited, Weighted-Average Grant Date Fair Value | $ / shares	13.30
Vested, Weighted-Average Grant Date Fair Value | $ / shares	12.24
Nonvested RSUs at end of period, Weighted-Average Grant Date Fair Value | $ / shares	$ 12.72

Stock Based Compensation - Addi

Stock Based Compensation - Additional Information (Details) - Restricted Stock Units [Member] - USD ($) $ in Thousands	May 19, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
RSUs issued		48,000
Nonvested RSU awards		518,625		781,500
2014 Long Term Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Future compensation cost		$ 5,500
Weighted average remaining vesting period of future compensation cost		7 months 24 days
Stock-based compensation		$ 1,300	$ 0
RSUs issued	0
Nonvested RSU awards			0

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Details) - USD ($)	1 Months Ended		3 Months Ended
	Jul. 31, 2016	Dec. 31, 2014	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt			$ 12,272,000		$ 12,693,000
Current portion of long-term debt			1,634,000		$ 1,604,000
Amount of Borrowings			0
Repayments of borrowings			400,000
Commitment fees on borrowings			$ 100,000	$ 100,000
Interest rate on borrowings			4.92%	2.79%
Other Noncurrent Assets [Member]
Debt Instrument [Line Items]
Costs associated with borrowings			$ 3,000	$ 0
Unsecured Promissory Note [Member]
Debt Instrument [Line Items]
Line of credit, maturity period	3 years
Long-term debt			$ 3,900,000
Debt instrument, principal amount	$ 5,100,000
Debt Instrument, frequency of periodic payment			monthly
Debt Instrument, maturity date	2019-07
Debt instrument, interest rate payment percentage for first 12 months	8.00%
Debt instrument, interest rate payment percentage for subsequent 12 months	10.00%
Debt instrument, interest rate payment percentage for last 12 months	12.00%
Current portion of long-term debt			$ 1,600,000
Pre-payment penalty	$ 0
Debt instrument, effective interest rate percentage	9.10%
Four Year Senior Secured Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 500,000,000
Line of credit, maturity period		4 years
Current borrowing base under credit agreement			$ 80,000,000
Commitment fee percentage			0.50%
Debt outstanding maturity			Dec. 19, 2018
Long-term debt			$ 10,000,000
Long-term debt, percentage bearing interest rate			3.084%
Letter of credit outstanding amount			$ 100,000
Borrowing base available under credit agreement			$ 69,900,000
Line of credit facility, covenant terms			The Credit Agreement contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness, create liens on asset, pay dividends, and repurchase its capital stock. In addition, the Company is required to maintain certain financial ratios, including a minimum modified current ratio which includes the available borrowing base of 1.0 to 1.0 and a maximum annualized quarterly leverage ratio of 4.0 to 1.0. The Company is also required to submit an audited annual report 120 days after the end of each fiscal year.
Four Year Senior Secured Revolving Credit Facility [Member] | Federal Funds Effective Rate [Member]
Debt Instrument [Line Items]
Applicable margin percentage			0.50%
Four Year Senior Secured Revolving Credit Facility [Member] | LIBOR Adjusted Rate [Member]
Debt Instrument [Line Items]
Applicable margin percentage			1.00%
Four Year Senior Secured Revolving Credit Facility [Member] | LIBOR Adjusted Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Applicable margin percentage			2.25%
Four Year Senior Secured Revolving Credit Facility [Member] | LIBOR Adjusted Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Applicable margin percentage			3.25%
Four Year Senior Secured Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Applicable margin percentage			1.25%
Four Year Senior Secured Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Applicable margin percentage			2.25%

Long-Term Debt - Summary of Lon

Long-Term Debt - Summary of Long Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Total debt	$ 13,906	$ 14,297
Less: Current portion of long-term debt	(1,634)	(1,604)
Long-term debt	12,272	12,693
Promissory Note [Member]
Debt Instrument [Line Items]
Total debt	3,906	4,297
Less: Current portion of long-term debt	(1,600)
Long-term debt	3,900
Credit Agreement [Member]
Debt Instrument [Line Items]
Total debt	10,000	$ 10,000
Long-term debt	$ 10,000

Asset Retirement Obligations -

Asset Retirement Obligations - Summary of Asset Retirement Obligation Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Asset Retirement Obligation Disclosure [Abstract]
Beginning asset retirement obligations	$ 6,013	$ 5,075
Liabilities incurred	1	4
Accretion expense	152	128
Revision of estimates	20	(12)
Ending asset retirement obligations	$ 6,186	$ 5,195

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Details) - Flatonia Energy, LLC [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Related Party Transaction [Line Items]
Percentage of common stock acquired	13.30%
Payments made to related party	$ 7.2	$ 12.2
Proceeds received from related party	1.5	2.8
Amounts receivable from related party	1.2	1.6
Amounts payable to related party	$ 2.3	$ 4

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details)	3 Months Ended
	Mar. 31, 2017USD ($)
Income Tax Disclosure [Line Items]
Pre-tax net income (loss)	$ 830,000
Income tax expense	0
Lynden USA, Inc. [Member]
Income Tax Disclosure [Line Items]
Income tax benefit	(40,000)
Pre-tax net income (loss)	$ (130,000)