Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
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 | |
Class A Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 22,901,449 | |
Class B Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 36,070,828 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 16,671 | $ 10,200 |
Accounts receivable: | ||
Oil, natural gas, and natural gas liquids revenues | 16,078 | 13,998 |
Joint interest billings and other, net of allowance of $163 at both June 30, 2017 and December 31, 2016 | 9,681 | 2,698 |
Derivative asset | 1,870 | |
Prepaid expenses and other current assets | 1,366 | 446 |
Total current assets | 45,666 | 27,342 |
Oil and gas properties, successful efforts method: | ||
Proved properties | 626,481 | 363,072 |
Unproved properties | 290,290 | 51,723 |
Land | 4,547 | |
Total oil and gas properties | 921,318 | 414,795 |
Accumulated depreciation, depletion and amortization | (163,043) | (145,393) |
Net oil and gas properties | 758,275 | 269,402 |
Other noncurrent assets: | ||
Goodwill | 17,620 | 17,620 |
Office and other equipment, net of accumulated depreciation of $2,340 and $1,600 at June 30, 2017 and December 31 2016, respectively | 1,321 | 1,479 |
Derivative asset | 190 | |
Other noncurrent assets | 1,039 | 669 |
TOTAL ASSETS | 824,111 | 316,512 |
Current liabilities: | ||
Accounts payable | 23,837 | 11,927 |
Revenues and royalties payable | 11,343 | 10,769 |
Accrued expenses | 13,940 | 5,392 |
Derivative liability | 150 | 4,595 |
Advances | 4,007 | 4,542 |
Current portion of long-term debt | 1,665 | 1,604 |
Total current liabilities | 54,942 | 38,829 |
Noncurrent liabilities: | ||
Long-term debt | 71,840 | 12,693 |
Asset retirement obligation | 6,692 | 6,013 |
Derivative liability | 12 | 1,575 |
Deferred tax liability | 16,311 | 15,776 |
Other noncurrent liabilities | 156 | 169 |
Total noncurrent liabilities | 95,011 | 36,226 |
Commitments and Contingencies (Note 13) | ||
Equity: | ||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; none issued or outstanding | ||
Common stock | 23 | |
Additional paid-in capital | 462,098 | 454,202 |
Accumulated deficit | (228,702) | (212,308) |
Treasury stock, 15,357 shares at both June 30, 2017 and December 31, 2016 | (460) | (460) |
Total Earthstone Energy, Inc. equity | 232,995 | 241,457 |
Noncontrolling interest | 441,163 | |
Total equity | 674,158 | 241,457 |
TOTAL LIABILITIES AND EQUITY | 824,111 | $ 316,512 |
Class A Common Stock [Member] | ||
Equity: | ||
Common stock | 23 | |
Class B Common Stock [Member] | ||
Equity: | ||
Common stock | $ 36 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Joint interest billings and other, allowance | $ 163 | $ 163 |
Office and other equipment, accumulated depreciation | $ 2,340 | $ 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 | 0 | 100,000,000 |
Common stock, shares issued | 0 | 22,289,177 |
Common stock, shares outstanding | 0 | 22,273,820 |
Treasury stock, shares | 15,357 | 15,357 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 22,906,806 | 0 |
Common stock, shares outstanding | 22,891,449 | 0 |
Treasury stock, shares | 15,357 | |
Class B Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 36,070,828 | 0 |
Common stock, shares outstanding | 36,070,828 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
REVENUES | ||||
Oil | $ 21,563,000 | $ 8,097,000 | $ 34,082,000 | $ 13,636,000 |
Natural gas | 2,131,000 | 1,016,000 | 3,825,000 | 1,959,000 |
Natural gas liquids | 2,083,000 | 664,000 | 3,213,000 | 992,000 |
Total revenues | 25,777,000 | 9,777,000 | 41,120,000 | 16,587,000 |
OPERATING COSTS AND EXPENSES | ||||
Lease operating expense | 5,243,000 | 3,341,000 | 9,582,000 | 6,500,000 |
Severance taxes | 1,327,000 | 514,000 | 2,117,000 | 896,000 |
Rig idle and termination expense | 3,790,000 | 5,059,000 | ||
Impairment expense | 66,648,000 | 0 | 66,648,000 | 0 |
Depreciation, depletion and amortization | 10,039,000 | 5,598,000 | 17,928,000 | 11,103,000 |
General and administrative expense | 5,738,000 | 1,990,000 | 9,230,000 | 4,676,000 |
Stock-based compensation | 1,647,000 | 561,000 | 2,958,000 | 561,000 |
Transaction costs | 3,764,000 | 283,000 | 4,567,000 | 795,000 |
Accretion of asset retirement obligation | 154,000 | 133,000 | 306,000 | 261,000 |
Exploration expense | 1,000 | 1,000 | 5,000 | |
Total operating costs and expenses | 94,561,000 | 16,210,000 | 113,337,000 | 29,856,000 |
Gain on sale of oil and gas properties | 1,691,000 | 1,691,000 | ||
Loss from operations | (67,093,000) | (6,433,000) | (70,526,000) | (13,269,000) |
OTHER INCOME (EXPENSE) | ||||
Interest expense, net | (633,000) | (370,000) | (970,000) | (593,000) |
Write-off of deferred financing costs | (526,000) | (526,000) | ||
Gain (loss) on derivative contracts, net | 3,340,000 | (4,228,000) | 7,800,000 | (3,463,000) |
Other income (expense), net | 31,000 | 45,000 | 32,000 | (82,000) |
Total other income (expense) | 2,212,000 | (4,553,000) | 6,336,000 | (4,138,000) |
Loss before income taxes | (64,881,000) | (10,986,000) | (64,190,000) | (17,407,000) |
Income tax benefit (expense) | 9,914,000 | (186,000) | 9,952,000 | (186,000) |
Net loss | (54,967,000) | (11,172,000) | (54,238,000) | (17,593,000) |
Less: Net loss attributable to noncontrolling interest | (37,844,000) | (37,844,000) | ||
Net loss attributable to Earthstone Energy, Inc. | $ (17,123,000) | $ (11,172,000) | $ (16,394,000) | $ (17,593,000) |
Net loss per common share attributable to Earthstone Energy, Inc.: | ||||
Basic and diluted | $ (0.75) | $ (0.69) | $ (0.73) | $ (1.17) |
Weighted average common shares outstanding: | ||||
Basic and diluted | 22,728,011 | 16,121,568 | 22,503,750 | 14,978,348 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Bold Contribution Agreement [Member] | Restricted Stock Units [Member] | Class B Common Stock [Member]Bold Contribution Agreement [Member] | Common Stock [Member] | Common Stock [Member]Bold Contribution Agreement [Member] | Common Stock [Member]Restricted Stock Units [Member] | Common Stock [Member]Class A Common Stock [Member] | Common Stock [Member]Class A Common Stock [Member]Bold Contribution Agreement [Member] | Common Stock [Member]Class A Common Stock [Member]Restricted Stock Units [Member]Bold Contribution Agreement [Member] | Common Stock [Member]Class B Common Stock [Member] | Common Stock [Member]Class B Common Stock [Member]Bold Contribution Agreement [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Bold Contribution Agreement [Member] | Additional Paid-in Capital [Member]Restricted Stock Units [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total Earthstone Energy, Inc. Stockholders' Equity [Member] | Total Earthstone Energy, Inc. Stockholders' Equity [Member]Bold Contribution Agreement [Member] | Total Earthstone Energy, Inc. Stockholders' Equity [Member]Restricted Stock Units [Member] | Total Earthstone Energy, Inc. Stockholders' Equity [Member]Class B Common Stock [Member]Bold Contribution Agreement [Member] | Noncontrolling Interest [Member] | Noncontrolling Interest [Member]Bold Contribution Agreement [Member] |
Beginning Balance, amount at Dec. 31, 2016 | $ 241,457 | $ 23 | $ 454,202 | $ (212,308) | $ (460) | $ 241,457 | |||||||||||||||||
Beginning Balance, shares at Dec. 31, 2016 | 22,289,177 | ||||||||||||||||||||||
Stock-based compensation expense | 2,958 | 2,958 | 2,958 | ||||||||||||||||||||
Vesting of restricted stock units | $ (1) | $ (1) | $ (1) | ||||||||||||||||||||
Vesting of restricted stock units, shares | 382,804 | 84,825 | |||||||||||||||||||||
Common stock exchanged in connection with Bold Contribution Agreement | $ (23) | $ 23 | |||||||||||||||||||||
Common stock exchanged in connection with Bold Contribution Agreement, shares | (22,656,624) | 22,656,624 | |||||||||||||||||||||
Treasury shares converted to Common Stock, shares | (15,357) | 15,357 | |||||||||||||||||||||
Closing of Bold Contribution Agreement | $ 491,879 | $ 12,872 | $ 12,872 | $ 479,007 | |||||||||||||||||||
Closing of Bold Contribution Agreement, shares | 150,000 | ||||||||||||||||||||||
Class B Shares sold in connection with Bold Contribution Agreement | $ 36 | $ 36 | $ 36 | ||||||||||||||||||||
Class B Shares sold in connection with Bold Contribution Agreement, shares | 36,070,828 | ||||||||||||||||||||||
Deferred tax consequences of Bold Contribution Agreement | $ (7,933) | $ (7,933) | $ (7,933) | ||||||||||||||||||||
Net loss | (54,238) | (16,394) | (16,394) | $ (37,844) | |||||||||||||||||||
Ending Balance, amount at Jun. 30, 2017 | $ 674,158 | $ 23 | $ 36 | $ 462,098 | $ (228,702) | $ (460) | $ 232,995 | $ 441,163 | |||||||||||||||
Ending Balance, shares at Jun. 30, 2017 | 22,906,806 | 36,070,828 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (54,967,000) | $ (54,238,000) | $ (17,593,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Impairment of proved and unproved oil and gas properties | 66,648,000 | 66,648,000 | 0 |
Depreciation, depletion and amortization | 10,039,000 | 17,928,000 | 11,103,000 |
Accretion of asset retirement obligations | 154,000 | 306,000 | 261,000 |
Gain on sale of oil and gas properties | (1,691,000) | (1,691,000) | |
Rig idle and termination expense | 5,059,000 | ||
Total (gain) loss on derivative contracts, net | (3,340,000) | (7,800,000) | 3,463,000 |
Operating portion of net cash (paid) received in settlement of derivative contracts | (267,000) | 2,797,000 | |
Stock-based compensation | 1,647,000 | 2,958,000 | 561,000 |
Deferred income taxes | (9,952,000) | ||
Write-off of deferred financing costs | 526,000 | 526,000 | |
Amortization of deferred financing costs | 137,000 | 142,000 | |
Changes in assets and liabilities: | |||
Decrease in accounts receivable | 3,233,000 | 4,414,000 | |
Increase in prepaid expenses and other current assets | (522,000) | (132,000) | |
Decrease in accounts payable and accrued expenses | (3,148,000) | (6,634,000) | |
Decrease in revenues and royalties payable | (1,905,000) | (780,000) | |
Decrease in advances | (535,000) | (14,792,000) | |
Net cash provided by (used in) operating activities | 11,678,000 | (12,131,000) | |
Cash flows from investing activities: | |||
Additions to oil and gas properties | (10,048,000) | (6,749,000) | |
Additions to office and other equipment | (103,000) | (44,000) | |
Proceeds from sales of oil and gas properties | 2,416,000 | ||
Net cash used in investing activities | (63,344,000) | (38,127,000) | |
Cash flows from financing activities: | |||
Proceeds from borrowings | 70,000,000 | 36,597,000 | |
Repayments of borrowings | (10,792,000) | (37,788,000) | |
Issuance of common stock, net of offering costs of $2.7 million | 47,125,000 | ||
Deferred financing costs | (1,071,000) | (70,000) | |
Net cash provided by financing activities | 58,137,000 | 45,864,000 | |
Net increase (decrease) in cash and cash equivalents | 6,471,000 | (4,394,000) | |
Cash at beginning of period | 10,200,000 | 23,264,000 | |
Cash at end of period | $ 16,671,000 | 16,671,000 | 18,870,000 |
Cash paid for: | |||
Interest | 740,000 | 416,000 | |
Non-cash investing and financing activities: | |||
Accrued capital expenditures | 27,054,000 | 5,111,000 | |
Asset retirement obligations | 21,000 | 94,000 | |
Promissory Note | 5,059,000 | ||
Bold Contribution Agreement [Member] | |||
Cash flows from investing activities: | |||
Business acquisition, net of cash acquired | (55,609,000) | ||
Bold Contribution Agreement [Member] | Class B Common Stock [Member] | |||
Non-cash investing and financing activities: | |||
Common stock issued | 489,842,000 | ||
Bold Contribution Agreement [Member] | Class A Common Stock [Member] | |||
Non-cash investing and financing activities: | |||
Common stock issued | 2,037,000 | ||
Lynden Arrangement [Member] | |||
Cash flows from investing activities: | |||
Business acquisition, net of cash acquired | (31,334,000) | ||
Non-cash investing and financing activities: | |||
Common stock issued | $ 45,699,000 | ||
Proved And Unproved Property [Member] | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Impairment of proved and unproved oil and gas properties | $ 66,648,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Statement Of Cash Flows [Abstract] | |
Issuance of common stock, offering costs | $ 2.7 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 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. (“Earthstone”) is the sole managing member of Earthstone Energy Holdings, LLC, a Delaware limited liability company (together with its wholly-owned consolidated subsidiaries, “EEH”), with a controlling interest in EEH. Earthstone, together with its wholly-owned subsidiary, Lynden Energy Corp., a corporation organized under the laws of British Columbia (“Lynden Corp”), and Lynden Corp’s wholly-owned consolidated subsidiary, Lynden USA Inc., a Utah corporation (“Lynden US”) and also a member of EEH, consolidates the financial results of EEH and records a noncontrolling interest in the Condensed Consolidated Financial Statements representing the economic interests of EEH's members other than Earthstone and Lynden US (collectively, the “Company” “our,” “we,” “us,” or similar terms). We are 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 upstream 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 thereto of the Company, 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. Certain prior period amounts have been reclassified to conform to current period presentation within the Condensed Consolidated Financial Statements. Included in these reclassifications are amounts within the adjustments to reconcile net loss to net cash provided by (used in) operating activities on the Condensed Consolidated Statements of Cash Flows. Specifically, the non-cash changes in fair value of the Company’s commodity swaps have been reclassified from the changes in the Unrealized (gain) loss on derivative contracts caption (which resulted in the caption being eliminated) with offsetting reclassifications to the captions, Total (gain) loss on derivative contracts, net and Operating portion of net cash (paid) received in settlement of derivative contracts. Prior period Re-engineering and workovers in the Condensed Consolidated Statements of Operations have also been reclassified from its own line item and included in Lease operating expenses, within Operating Costs and Expenses, to conform to current period presentation. These reclassifications had no effect on Net cash provided by (used in) operating activities or Loss from operations or any other subtotal in the Condensed Consolidated Statements of Cash Flows or the Condensed Consolidated Statements of Operations. Bold Contribution Agreement On May 9, 2017, Earthstone completed a contribution agreement dated as of November 7, 2016 and as amended on March 21, 2017 (the “Bold Contribution Agreement”), The Bold Transaction was structured in a manner commonly known as an “Up-C.” Under this structure and the Bold Contribution Agreement, (i) Earthstone recapitalized its common stock into two classes – Class A common stock, $0.001 par value per share (the “Class A Common Stock”), and Class B common stock, $0.001 par value per share (the “Class B Common Stock”), and all of Earthstone’s existing outstanding common stock, $0.001 par value per share (the “Common Stock”), was recapitalized on a one-for-one basis for Class A Common Stock (the “Recapitalization”); (ii) Earthstone transferred all of its membership interests in Earthstone Operating, LLC, Sabine River Energy, LLC, EF Non-Op, LLC and Earthstone Legacy Properties, LLC (formerly Earthstone GP, LLC) and $36,071 in cash from the sale of Class B Common Stock to Bold Holdings (collectively, the “Earthstone Assets”) to EEH, in exchange for 16,791,296 membership units of EEH (the “EEH Units”); (iii) Lynden US transferred all of its membership interests in Lynden Op to EEH in exchange for 5,865,328 EEH Units; (iv) Bold Holdings transferred all of its membership interests in Bold to EEH in exchange for 36,070,828 EEH Units and purchased 36,070,828 shares of Class B Common Stock issued by Earthstone for $36,071; and (v) Earthstone granted an aggregate of 150,000 fully vested shares of Class A Common Stock under Earthstone’s 2014 Long-Term Incentive Plan, as amended (the “2014 Plan”), to certain employees of Bold. Each EEH Unit, together with one share of Class B Common Stock, are convertible into one share of Class A Common Stock. Upon closing of the Bold Transaction on May 9, 2017, Bold Holdings owned approximately 61.4% of the outstanding shares of Class A Common Stock, on a fully diluted, as converted basis. The EEH Units and the shares of Class B Common Stock issued to Bold Holdings were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but were issued by EEH and Earthstone in reliance on the exemption provided under Section 4(a)(2) of the Securities Act. On May 9, 2017, the closing sale price of the Class A Common Stock was $13.58 per share. On May 10, 2017, the Class A Common Stock was uplisted from the NYSE MKT, LLC (the “NYSE MKT”) to the New York Stock Exchange (the “NYSE”) where it is listed under the symbol “ESTE.” On May 9, 2017, in connection with the closing of the Bold Transaction, Earthstone, EnCap Investments L.P. (“EnCap”), Oak Valley Resources, LLC (“Oak Valley”), and Bold Holdings entered into a voting agreement (the “Voting Agreement”), pursuant to which EnCap, Oak Valley, and Bold Holdings agreed not to vote any shares of Class A Common Stock or Class B Common Stock held by them in favor of any action, or take any action that would in any way alter the composition of the board of directors of Earthstone (the “Board”) from its composition immediately following the closing of the Bold Transaction as long as the Voting Agreement is in effect. The Bold Transaction was recorded in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, and is consolidated in these financial statements in accordance with FASB ASC Topic 810, Consolidation, which requires the recording of a noncontrolling interest component of net income (loss), as well as a noncontrolling interest component within equity, including changes to additional paid-in capital to reflect the noncontrolling interest within equity in the Condensed Consolidated Balance Sheet as of June 30, 2017 at the noncontrolling interest’s respective membership interest in EEH. New significant accounting policy Noncontrolling Interest – represents third-party equity ownership of EEH and is presented as a component of equity in the Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Equity as of and for the six months ended June 30, 2017, as well as an adjustment to Net loss in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017. As of June 30, 2017, Earthstone and Lynden US owned a 38.8% membership interest in EEH while Bold Holdings owned the remaining 61.2%. See further discussion in . 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 evaluating the impact of this guidance on its consolidated financial statements. This evaluation includes the review of contracts for each revenue stream identified within the Company's business. The Company will conduct its contract review process throughout the remainder of 2017. Based on the continuing evaluation of its revenue streams, this guidance is not expected to have a material impact to the Company's net income. The Company is still in the process of determining whether or not it will use the retrospective method or the modified retrospective approach to implementation and does not plan to early adopt this guidance. 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. Compensation – Stock Compensation – In May 2017, the FASB issued updated guidance that provides clarity about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The update is effective for annual periods beginning after December 15, 2017, and early adoption is permitted, including adoption in any interim period. The Company is currently evaluating the impact, if any, of this update, but does not expect the adoption to have a material impact on its Condensed Consolidated Financial Statements. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 2. Acquisitions and Divestitures The Company accounts for its acquisitions that qualify as business combinations, under the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combinations Bold Transaction On May 9, 2017, Earthstone completed the Bold Transaction described in Note 1. Basis of Presentation and Summary of Significant Accounting Policies . An allocation of the purchase price was prepared using, among other things, a reserve report prepared by qualified reserve engineers and priced as of the acquisition date. The following allocation is still preliminary with respect to final tax amounts and certain accruals and includes the use of estimates based on information that was available to management at the time these Condensed Consolidated Financial Statements were prepared. The following table summarizes the consideration transferred, fair value of assets acquired and liabilities assumed ( in thousands, except share and share price amounts Consideration: Shares of Class A Common Stock issued pursuant to the Bold Contribution Agreement to certain employees of Bold 150,000 EEH Units issued to Bold Holdings 36,070,828 Total equity interest issued in the Bold Transaction 36,220,828 Closing per share price of Class A Common Stock as of May 9, 2017 $ 13.58 Total consideration transferred (1)(2) $ 491,879 Fair value of assets acquired: Cash and cash equivalents $ 2,355 Other current assets 10,075 Oil and gas properties (3) 555,860 Amount attributable to assets acquired $ 568,290 Fair value of liabilities assumed: Long-term debt (4) $ 58,000 Current liabilities 15,497 Deferred tax liability 2,555 Noncurrent asset retirement obligations 359 Amount attributable to liabilities assumed $ 76,411 (1) Consideration included 150,000 shares of Class A Common Stock recorded above based upon its fair value which was determined using its closing price of $13.58 per share on May 9, 2017. (2) Consideration was 36,070,828 EEH Units. Additionally, Bold Holdings purchased 36,070,828 shares of Class B Common Stock for $36,071. Each EEH Unit, together with one share of Class B Common Stock, is convertible into one share of Class A Common Stock. The fair value of the consideration was determined using the closing price of the Company’s Class A Common Stock of $13.58 per share on May 9, 2017. 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 the closing of the Bold Transaction, EEH assumed Bold’s outstanding borrowings of $58 million under its credit agreement. The following unaudited supplemental pro forma condensed results of operations present consolidated information as though the Bold Transaction had been completed as of January 1, 2016. The unaudited supplemental pro forma financial information was derived from the historical consolidated and combined statements of operations for Bold and Earthstone and adjusted to include: (i) depletion expense applied to the adjusted basis of the properties acquired and (ii) to eliminate non-recurring transaction costs directly related to the Bold Transaction that do not have a continuing impact on the Company’s operating results. These unaudited supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. Future results may vary significantly from the results reflected in this unaudited pro forma financial information ( in thousands, except per share amounts Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Revenue $ 34,648 $ 12,741 $ 67,910 $ 22,300 Loss before taxes $ (56,248 ) $ (19,512 ) $ (45,335 ) $ (26,862 ) Net loss $ (46,334 ) $ (19,698 ) $ (35,384 ) $ (27,048 ) Less: Net loss available to noncontrolling interest $ (28,424 ) $ (13,614 ) $ (21,790 ) $ (19,112 ) Net loss attributable to Earthstone Energy, Inc. $ (17,910 ) $ (6,084 ) $ (13,594 ) $ (7,936 ) Pro forma net loss per common share attributable to Earthstone Energy, Inc.: Basic and diluted $ (0.79 ) $ (0.38 ) $ (0.60 ) $ (0.53 ) The Company has included in its Condensed Consolidated Statements of Operations, revenues of $10.9 million and direct operating expenses of $6.2 million for the period May 9, 2017 to June 30, 2017 related to the Bold Transaction. Lynden Arrangement On May 18, 2016, Earthstone acquired Lynden Corp in an all-stock transaction (the “Lynden Arrangement”). Earthstone acquired all outstanding shares of Lynden’s Corp’s common stock, through a newly formed subsidiary, with Lynden Corp surviving as a wholly-owned subsidiary of Earthstone, issuing 3,700,279 shares of its Common Stock, to the holders of the common stock of Lynden Corp. 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 Common Stock issued in the Lynden Arrangement 3,700,279 Closing per share price of Common Stock as of May 18, 2016 $ 12.35 Total consideration to Lynden Corp 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, Earthstone paid off the outstanding borrowings of $36.6 million under the Lynden Corp 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 Corp on May 18, 2016. The goodwill resulted from the expected synergies of the management team and balance sheet of Earthstone combined with the key assets acquired in the Midland Basin area. The goodwill recognized will not be deductible for tax purposes. 2017 Divestitures In May 2017, the Company sold a property located primarily in Atascosa County, Texas, for cash consideration of $0.27 million and non-cash consideration of $0.08 million. Earthstone recorded a gain of $0.35 million on the sale. The effective date of this transaction was May 1, 2017. In June 2017, the Company sold properties located primarily in McKenzie County, North Dakota, for cash consideration of $2.1 million. The Company recorded a gain of $1.3 million on the sale. The effective date of the sale was April 1, 2017. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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 Condensed 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) June 30, 2017 Level 1 Level 2 Level 3 Total Financial assets Derivative asset - current $ — $ 1,870 $ — $ 1,870 Derivative asset - noncurrent — 190 — 190 Total financial assets $ — $ 2,060 $ — $ 2,060 Financial liabilities Derivative liability - current $ — $ 150 $ — $ 150 Derivative liability - noncurrent — 12 — 12 Total financial liabilities $ — $ 162 $ — $ 162 December 31, 2016 Financial liabilities Derivative liability - current $ — $ 4,595 $ — $ 4,595 Derivative liability - noncurrent — 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. Unproved Oil and Natural Gas Properties 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, the Company’s geologists' evaluation of the property, and the remaining months in the lease term for the property. 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 fair value of goodwill may be less than its carrying amount. 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 and Divestitures 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 11. Asset Retirement Obligations |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 4. Derivative Financial Instruments In connection with the closing of the Bold Transaction on May 9 2017, all oil and natural gas derivative contracts were novated to EEH. The Company’s 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 its hedging policy, the Company has entered into a series of derivative instruments to hedge a significant portion of its expected oil and natural gas production for the remainder of 2017 through December 31, 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, the Company believes these instruments reduce its exposure to oil and natural gas price fluctuations and, thereby, allow the Company to achieve a more predictable cash flow. The Company’s derivative instruments are cash flow hedge transactions in which it is hedging the variability of cash flow related to a forecasted transaction. The Company does not enter into derivative instruments for trading or other speculative purposes. These transactions are recorded in the Condensed Consolidated Financial Statements in accordance with FASB ASC Topic 815. The Company has accounted for these transactions using the mark-to-market accounting method. Generally, the Company incurs accounting losses on derivatives during periods where prices are rising and gains during periods where prices are falling which may cause significant fluctuations in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations. 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 June 30, 2017: Price Swaps Period Commodity Volume (Bbl s Weighted Average Price ($/Bbl / $/MMBtu) Q3 - Q4 2017 Crude Oil 315,000 $ 50.66 Q1 - Q4 2018 Crude Oil 330,000 $ 50.45 Q3 - Q4 2017 Natural Gas 1,290,000 $ 3.167 Q1 - Q4 2018 Natural Gas 810,000 $ 3.066 Additionally, on July 31, 2017, the Company entered additional fixed price oil swap agreements, hedging an additional 219,000 Bbls of 2018 oil production at a price of $50.00/Bbl 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) June 30, 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 - current $ 1,900 $ (30 ) $ 1,870 $ — $ — $ — Commodity contracts Derivative asset - noncurrent $ 203 $ (13 ) $ 190 Commodity contracts Derivative liability - current $ 180 $ (30 ) $ 150 $ 4,595 $ — $ 4,595 Commodity contracts Derivative liability - noncurrent $ 25 $ (13 ) $ 12 $ 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 June 30, Six Months Ended June 30, 2017 2016 2017 2016 Derivatives not designated as hedging contracts under ASC Topic 815 Statement of Operations Location Total gain (loss) on commodity contracts Gain (loss) on derivative contracts, net $ 3,021 $ (5,034 ) $ 8,067 $ (6,260 ) Cash received (paid) in settlements on commodity contracts Gain (loss) on derivative contracts, net 319 806 (267 ) 2,797 Gain (loss) on commodity contracts, net $ 3,340 $ (4,228 ) $ 7,800 $ (3,463 ) |
Oil and Natural Gas Properties
Oil and Natural Gas Properties | 6 Months Ended |
Jun. 30, 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 Loss from operations in the Condensed 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 $9.9 million and $5.5 million, for the three months ended June 30, 2017 and 2016, respectively. For the six months ended June 30, 2017 and 2016, depletion expense for oil and gas producing property and related equipment was $17.7 million and $10.9 million, respectively. Proved 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. 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, the Company’s geologists' evaluation of the property, and the remaining months in the lease term for the property. Impairments to Oil and Natural Gas Properties As a result of forward commodity price declines, the Company recorded impairments consisting of $63.0 million to its proved oil and natural gas properties and $3.6 million to its unproved oil and natural gas properties, primarily to its properties located in the Eagle Ford shale trend of south Texas. The Company did not record any impairments to its oil and natural gas properties for the three and six months ended June 30, 2016. |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Note 6. Noncontrolling Interest As a result of the Bold Transaction, Earthstone became the sole managing member of, and had a controlling interest in, EEH. As the sole managing member of EEH, Earthstone operates and controls all of the business and affairs of EEH and its subsidiaries. Immediately following the Bold Transaction, Earthstone and Lynden US owned a 38.6% membership interest in EEH while Bold Holdings owned the remaining 61.4%. The Bold Transaction was recorded in accordance with FASB ASC Topic 805, Business Combinations, and is consolidated in these financial statements in accordance with FASB ASC Topic 810, Consolidation, which requires the recording of a noncontrolling interest component of net income (loss), as well as a noncontrolling interest component within equity, including changes to Additional paid-in capital to reflect the noncontrolling interest within equity in the Condensed Consolidated Balance Sheet as of June 30, 2017 at the noncontrolling interest’s respective membership interest in EEH. A reconciliation of the equity attributable to the noncontrolling interest as of May 9, 2017 is as follows ( in thousands Total consideration transferred (1) $ 491,879 Change to Additional paid-in capital to reflect the noncontrolling interest within equity at their membership interest (12,872 ) Portion of equity attributable to noncontrolling interest (2) $ 479,007 (1) See Note 2. Acquisitions and Divestitures (2) Represents 61.4% of total equity attributable to EEH as of May 9, 2017. Earthstone consolidates the financial results of EEH and its subsidiaries, and records a noncontrolling interest for the economic interest in Earthstone held by the members of EEH other than Earthstone and Lynden US. Net loss attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 represents the portion of net income or loss attributable to the economic interest in the Company held by the members of EEH other than Earthstone and Lynden US. Noncontrolling interest in the Condensed Consolidated Balance Sheet as of June 30, 2017 represents the portion of net assets of the Company attributable to the members of EEH other than Earthstone and Lynden US. The following table presents the changes in noncontrolling interest for the six months ended June 30, 2017: EEH Units Held By Earthstone and Lynden US % EEH Units Held By Others % Total EEH Units Outstanding As of December 31, 2016 — — — — — May 9, 2017 - Bold Transaction 22,656,624 38.6 % 36,070,828 61.4 % 58,727,452 EEH Units issued in connection with Class A Common Stock issued in connection with Bold Transaction 150,000 — 150,000 EEH Units issued in connection with the vesting of restricted stock units 84,825 — 84,825 As of June 30, 2017 22,891,449 38.8 % 36,070,828 61.2 % 58,962,277 The following table summarizes the activity for the equity attributable to the noncontrolling interest for the six months ended June 30, 2017 ( in thousands 2017 As of December 31, 2016 $ — Noncontrolling interest recorded within equity in connection with the closing of the Bold Transaction 479,007 Net loss attributable to noncontrolling interest (37,844 ) As of June 30, 2017 $ 441,163 |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Note 7. Net Loss Per Common Share Net loss per common share—basic is calculated by dividing Net loss Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2017 2016 2017 2016 Net loss attributable to Earthstone Energy, Inc. $ (17,123 ) $ (11,172 ) $ (16,394 ) $ (17,593 ) Net loss per common share attributable to Earthstone Energy, Inc.: Basic $ (0.75 ) $ (0.69 ) $ (0.73 ) $ (1.17 ) Diluted $ (0.75 ) $ (0.69 ) $ (0.73 ) $ (1.17 ) Weighted average common shares outstanding Basic 22,728,011 16,121,568 22,503,750 14,978,348 Add potentially dilutive securities: Unvested restricted stock units — — — — Diluted weighted average common shares outstanding 22,728,011 16,121,568 22,503,750 14,978,348 Class B Common Stock has been excluded, as its conversion would eliminate noncontrolling interest and Net loss attributable to noncontrolling interest of $37.8 million would be added back to Net loss attributable to Earthstone Energy, Inc., having no dilutive effect on Net loss per common share attributable to Earthstone Energy, Inc. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Common Stock | Note 8. Common Stock On May 9, 2017, and in connection with the completion of the Bold Transaction, Earthstone recapitalized its Common Stock into two classes, as described in Note 1. – Basis of Presentation and Summary of Significant Accounting Policies Class A Common Stock At June 30, 2017, there were 22,906,806 shares of Class A Common Stock issued, including 15,357 shares of treasury stock held by Earthstone. On July 1, 2017, Earthstone retired and returned the 15,357 shares of treasury stock to authorized but unissued shares of Class A Common Stock. During the period January 1, 2017 through May 8, 2017, the Company issued 382,804 shares of Common Stock as a result of the vesting and settlement of restricted stock units under the 2014 Plan. During the period May 9, 2017 through June 30, 2017, the Company issued 84,825 shares of Class A Common Stock as a result of the vesting and settlement of restricted stock units under the 2014 Plan. Additionally, on May 9, 2017, under the Bold Contribution Agreement, Earthstone issued 150,000 shares of Class A Common Stock valued at approximately $2.0 million on that date. For additional information, see Note 2. Acquisitions and Divestitures Class B Common Stock At June 30, 2017, there were 36,070,828 shares of Class B Common Stock issued and outstanding. Earthstone did not have any Class B Common Stock issued at December 31, 2016. On May 9, 2017, in connection with Earthstone’s completion of the Bold Transaction, Earthstone issued 36,070,828 shares of Class B Common Stock in exchange for $36 thousand. Each share of Class B Common Stock, together with one EEH Unit, is convertible into one share of Class A Common Stock. For additional information, see Note 2. Acquisitions and Divestitures On May 9, 2017, in connection with the closing of the Bold Transaction, Earthstone, EnCap, Oak Valley, and Bold Holdings entered into the Voting Agreement, pursuant to which EnCap, Oak Valley, and Bold Holdings agreed not to vote any shares of Class A Common Stock or Class B Common Stock held by them in favor of any action, or take any action that would in any way alter the composition of the Board from its composition immediately following the closing of the Bold Transaction as long as the Voting Agreement is in effect. The Voting Agreement terminates on the earlier of (i) the fifth anniversary of the closing date of the Bold Contribution Agreement and (ii) the date upon which EnCap, Oak Valley, and Bold Holdings collectively own, of record and beneficially, less than 20% of Earthstone’s outstanding voting stock. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 9. Stock-Based Compensation The 2014 Plan, as amended, allows, among other things, for the grant of RSUs. On May 9, 2017, and in connection with the completion of the Bold Contribution Agreement, and upon approval by the stockholders of Earthstone, the 2014 Plan was amended to increase the number of shares of Class A Common Stock authorized to be issued under the 2014 Plan by 4.3 million shares, to a total of 5.8 million shares. Each RSU represents the contingent right to receive one share of Class A Common Stock. The holders of outstanding RSUs do not receive dividends or have voting rights prior to vesting and settlement Compensation expense for granted RSUs is recognized on a straight-line basis over the vesting and is net of forfeitures, as incurred. The table below summarizes unvested RSU award activity for the six months ended June 30, 2017: Shares Weighted-Average Grant Date Fair Value Unvested RSUs at December 31, 2016 781,500 $ 12.53 Granted 214,500 $ 12.22 Vested (467,629 ) $ 12.44 Forfeited (36,000 ) $ 13.30 Unvested RSUs at June 30, 2017 492,371 $ 12.42 The unrecognized compensation expense related to the RSU awards at June 30, 2017 was $5.7 million which will be amortized over the remaining vesting period. The weighted average remaining vesting period of the unrecognized compensation expense is 0.77 years. Stock-based compensation expense for the three and six months ended June 30, 2017 was $1.6 million and $3.0 million, respectively. For both the three and six months ended June 30, 2016, stock-based compensation expense was $0.6 million. Stock-based compensation expense is recorded in the Condensed Consolidated Statements of Operations with a corresponding increase in Additional paid-in capital in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statement of Equity. During the six months ended June 30, 2016, the Company granted 772,500 RSUs with a weighted average grant date fair value of $12.55. As of June 30, 2016, all 772,500 RSUs were unvested. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 10. Long Credit Agreement On May 9, 2017, in connection with the closing of the Bold Transaction, the Company exited its credit agreement dated December 19, 2014, by and among Earthstone, Oak Valley Operating, LLC, EF Non-OP, LLC, Sabine River Energy, LLC, Basic Petroleum Services, Inc., BOKF, NA dba Bank of Texas, and the Lenders party thereto (as amended, modified or restated from time to time, the “ESTE Credit Agreement”). At that time, all outstanding borrowings of $10.0 million under the ESTE Credit Agreement were repaid and $0.5 million of remaining unamortized deferred financing costs were expensed and included in Write-off of deferred financing costs in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017. On May 9, 2017, EEH (the “Borrower”), Earthstone Operating, LLC, EF Non-Op, LLC, Sabine River Energy, LLC, Earthstone Legacy Properties, LLC, Lynden Op, Bold, Bold Operating, LLC (the “Guarantors”), BOKF, NA dba Bank Of Texas, as Agent and Lead Arranger, Wells Fargo Bank, National Association as Syndication Agent and the Lenders party thereto (the “Lenders”), entered into a credit agreement (the “EEH Credit Agreement”). The borrowing base under the EEH Credit Agreement is $150.0 million, and is subject to redetermination on or about November 1st and May 1st of each year. The amounts borrowed under the EEH Credit Agreement bear annual interest rates at either (a) the London Interbank Offered Rate (“LIBOR”) plus 2.25% to 3.25% or (b) the prime lending rate of Bank of Texas plus 1.25% to 2.25%, depending on the amounts borrowed under the EEH Credit Agreement. Principal amounts outstanding under the EEH Credit Agreement are due and payable in full at maturity on May 9, 2022. All of the obligations under the EEH Credit Agreement, and the guarantees of those obligations, are secured by substantially all of EEH’s assets. Additional payments due under the EEH Credit Agreement include paying a commitment fee of 0.50% per year to the Lenders in respect of the unutilized commitments thereunder, as well as certain other customary fees. The EEH Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, EEH’s ability to incur additional indebtedness, create liens on assets, make investments, enter into sale and leaseback transactions, pay dividends and make distributions or repurchase its limited liability interests, engage in mergers or consolidations, sell certain assets, sell or discount any notes receivable or accounts receivable and engage in certain transactions with affiliates. In addition, the EEH Credit Agreement requires EEH to maintain the following financial covenants: a current ratio of not less than 1.0 to 1.0 and a leverage ratio of not greater than 4.0 to 1.0. Leverage ratio means the ratio of (i) the aggregate debt of EEH and its consolidated subsidiaries as at the last day of the fiscal quarter (excluding any debt from obligations relating to non-cash losses under FASB ASC 815 as a result of changes in the fair market value of derivatives) to (ii) the product of EBITDAX for such fiscal quarter multiplied by four. The term “EBITDAX” means, for any period, the sum of consolidated net income for such period plus (a) the following expenses or charges to the extent deducted from consolidated net income in such period: (i) interest, (ii) taxes, (iii) depreciation, (iv) depletion, (v) amortization, (vi) non-cash losses under FASB ASC 815 as a result of changes in the fair market value of derivatives, (vii) exploration expenses, (viii) impairment expenses, and (ix) non-cash compensation expenses and minus (b) to the extent included in consolidated net income in such period, non-cash gains under FASB ASC 815 as a result of changes in the fair market value of derivatives. The EEH Credit Agreement contains customary affirmative covenants and defines events of default to include failure to pay principal or interest, breach of covenants, breach of representations and warranties, insolvency, judgment default, and if Frank A. Lodzinski ceases to serve and function as Chief Executive Officer of EEH and the majority of the Lenders do not approve of Mr. Lodzinski’s successor. Upon the occurrence and continuance of an event of default, the Lenders have the right to accelerate repayment of the loans and exercise their remedies with respect to the collateral. As of June 30, 2017, EEH was in compliance with these covenants under the EEH Credit Agreement. As of June 30, 2017, the Company had a $150 million borrowing base under the EEH Credit Agreement, of which $70 million was outstanding, bearing annual interest of 3.5842%, resulting in an additional $80 million of borrowing base availability under the EEH Credit Agreement. Promissory Note In July 2016, Earthstone issued a $5.1 million unsecured promissory note (the “Note”) to a drilling rig contractor in settlement of rig idle charges and the termination amount of the contract. These expenses which were incurred from late January 2016 through June 30, 2016 were recorded in Rig idle and contract termination expense in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016. The Note was assigned to EEH in connection with the closing of the Bold Transaction. 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 June 30, 2017, the Company had $3.5 million outstanding under the Note with $1.7 million included in the current portion of long-term debt. Total Long-Term Debt The following table below summarizes long term debt ( in thousands June 30, December 31, 2017 2016 Borrowings under Credit Agreement $ 70,000 $ 10,000 Promissory note 3,505 4,297 Total debt 73,505 14,297 Less: Current portion of long-term debt (1,665 ) (1,604 ) Long-term debt $ 71,840 $ 12,693 For the six months ended June 30, 2017, the Company had borrowings of $70.0 million and $10.8 million in repayments of borrowings. The borrowings included $58.0 million related to the repayment of all outstanding borrowings under Bold’s credit agreement which were assumed by EEH in connection with the closing of the Bold Transaction. For the three and six months ended June 30, 2017, interest on borrowings averaged 4.32% and 4.45% per annum, respectively, of which both excluded commitment fees of $0.1 million and amortization of deferred financing costs of $0.1 million. For the three and six months ended June 30, 2016, interest on borrowings averaged 3.39% and 3.23% per annum, respectively, of which both excluded commitment fees of $0.1 million and amortization of deferred financing costs of $0.1 million. The Company capitalized $1.1 million of costs associated with the ESTE Credit Agreement for both the three and six months ended June 30, 2017. The Company capitalized $0.1 million of costs associated with its borrowings for both the three and six months ended June 30, 2016. These capitalized costs are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. The Company’s policy is to capitalize the financing costs associated with its debt and amortize those costs on a straight-line basis over the term of the associated debt. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 11. 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 six months ended June 30, (in thousands) 2017 2016 Beginning asset retirement obligations $ 6,013 $ 5,075 Liabilities incurred 2 106 Acquisitions (1) 359 167 Accretion expense 306 261 Divestitures (7 ) — Revision of estimates 19 (12 ) Ending asset retirement obligations $ 6,692 $ 5,597 (1) The 2017 amount is related to the Bold Transaction. The 2016 amount is related to the Lynden Arrangement. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12. Related Party Transactions FASB ASC Topic 850 , Related Party Disclosures Flatonia Energy, LLC (“Flatonia”), which owns approximately 12.9% of the outstanding Class A 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, the Company made payments to Flatonia of $7.2 million and $14.4 million and received payments from Flatonia of $0.8 million and $2.4 million for the three and six months ended June 30, 2017, respectively. For the three and six months ended June 30, 2016, the Company made payments to Flatonia of $4.0 million and $16.2 million and received payments from Flatonia of $0.1 million and $2.8 million, respectively. At June 30, 2017, amounts receivable from Flatonia in connection with the Operating Agreement were $0.8 million. At December 31, 2016, Earthstone had $1.5 million of outstanding receivables due from Flatonia. Amounts payable to Flatonia in connection with the Operating Agreement were $3.1 million at December 31, 2016. There were no payables outstanding and due to Flatonia as of June 30, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. 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 Earthstone, filed suit in the 125 th EF Non-Op, LLC vs. BHP Billiton Petroleum Properties (N.A.), LP (F/K/A Petrohawk Properties, LP), Olenik v. Lodzinski et al. : On June 2, 2017, Nicholas Olenik filed a purported shareholder class and derivative action in the Delaware Court of Chancery against the Company’s Chief Executive Officer, along with other members of the Board, EnCap, Bold, Bold Holdings and Oak Valley. The complaint alleges that the Company’s directors breached their fiduciary duties in connection with the Bold Contribution Agreement. The Plaintiff asserts that the directors negotiated the Bold Transaction to benefit EnCap and its affiliates, failed to obtain adequate consideration for the Earthstone shareholders who were not affiliated with EnCap or Earthstone management, did not follow an adequate process in negotiating and approving the Bold Transaction, and made materially misleading or incomplete proxy disclosures in connection with the Bold Transaction. The suit seeks unspecified damages and purports to assert claims derivatively on behalf of the Company and as a class action on behalf of all persons who held Common Stock up to March 13, 2017, excluding defendants and their affiliates. The Company and each of the other defendants believe the claims are entirely without merit and they intend to mount a vigorous defense. Environmental and Regulatory As of June 30, 2017, there were no known environmental or other regulatory matters related to the Company’s operations that are reasonably expected to result in a material liability to the Company. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes Following the closing of the Bold Transaction, the Company continues to record an income tax provision consistent with its status as a corporation. The Company’s 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 US, Earthstone, and Lynden Corp. 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. Following the Bold Transaction, Earthstone and Lynden US record a tax provision, respectively, for their share of the book income or loss of EEH, net of the non-controlling interest, as well as any standalone income or loss generated by each company. As EEH is treated as a partnership for U.S. Federal income tax purposes, it is not subject to income tax at the federal level and only recognizes the Texas Margin Tax. During the six months ended June 30, 2017, the Company recorded an income tax benefit for Lynden US of $2.9 million as a result of its standalone pre-tax loss incurred before the Bold Transaction and its share of the distributable loss from EEH after the Bold Transaction. During the six months ended June 30, 2017, the Company did not record an income tax benefit for Earthstone as a result of its standalone pre-tax loss incurred before the Bold Transaction and its share of the distributable loss from EEH after the Bold Transaction, because the future realization of such loss cannot be reasonably assured and is subject to a full valuation allowance. Earthstone recorded a $7.5 million benefit as a discrete item during the current reporting period, which resulted from a change in assessment of the realization of its net deferred tax assets due to the deferred tax liability that was recorded with respect to its investment in EEH as part of the Bold Transaction as an adjustment to Additional paid-in capital in the Condensed Consolidated Statement of Equity. Lynden Corp incurred no material net income (loss), or related income tax expense (benefit), for the three and six months ended June 30, 2017. Due to the intricacies of the Texas Margin Tax regime, EEH recorded deferred tax expense during the three and six months ended June 30, 2017 of $0.5 million related to the Texas Margin Tax as the deficit margin generated during the period cannot be carried forward to offset future taxable margin related to state basis differences in EEH’s oil and gas properties. |
Basis of Presentation and Sum22
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest – represents third-party equity ownership of EEH and is presented as a component of equity in the Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Equity as of and for the six months ended June 30, 2017, as well as an adjustment to Net loss in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017. As of June 30, 2017, Earthstone and Lynden US owned a 38.8% membership interest in EEH while Bold Holdings owned the remaining 61.2%. See further discussion in . |
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 evaluating the impact of this guidance on its consolidated financial statements. This evaluation includes the review of contracts for each revenue stream identified within the Company's business. The Company will conduct its contract review process throughout the remainder of 2017. Based on the continuing evaluation of its revenue streams, this guidance is not expected to have a material impact to the Company's net income. The Company is still in the process of determining whether or not it will use the retrospective method or the modified retrospective approach to implementation and does not plan to early adopt this guidance. 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. Compensation – Stock Compensation – In May 2017, the FASB issued updated guidance that provides clarity about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The update is effective for annual periods beginning after December 15, 2017, and early adoption is permitted, including adoption in any interim period. The Company is currently evaluating the impact, if any, of this update, but does not expect the adoption to have a material impact on its Condensed Consolidated Financial Statements. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Lynden Arrangement [Member] | |
Business Acquisition [Line Items] | |
Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed | 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 Common Stock issued in the Lynden Arrangement 3,700,279 Closing per share price of Common Stock as of May 18, 2016 $ 12.35 Total consideration to Lynden Corp 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, Earthstone paid off the outstanding borrowings of $36.6 million under the Lynden Corp 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 Corp on May 18, 2016. The goodwill resulted from the expected synergies of the management team and balance sheet of Earthstone combined with the key assets acquired in the Midland Basin area. The goodwill recognized will not be deductible for tax purposes. |
Bold Contribution Agreement [Member] | |
Business Acquisition [Line Items] | |
Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the consideration transferred, fair value of assets acquired and liabilities assumed ( in thousands, except share and share price amounts Consideration: Shares of Class A Common Stock issued pursuant to the Bold Contribution Agreement to certain employees of Bold 150,000 EEH Units issued to Bold Holdings 36,070,828 Total equity interest issued in the Bold Transaction 36,220,828 Closing per share price of Class A Common Stock as of May 9, 2017 $ 13.58 Total consideration transferred (1)(2) $ 491,879 Fair value of assets acquired: Cash and cash equivalents $ 2,355 Other current assets 10,075 Oil and gas properties (3) 555,860 Amount attributable to assets acquired $ 568,290 Fair value of liabilities assumed: Long-term debt (4) $ 58,000 Current liabilities 15,497 Deferred tax liability 2,555 Noncurrent asset retirement obligations 359 Amount attributable to liabilities assumed $ 76,411 (1) Consideration included 150,000 shares of Class A Common Stock recorded above based upon its fair value which was determined using its closing price of $13.58 per share on May 9, 2017. (2) Consideration was 36,070,828 EEH Units. Additionally, Bold Holdings purchased 36,070,828 shares of Class B Common Stock for $36,071. Each EEH Unit, together with one share of Class B Common Stock, is convertible into one share of Class A Common Stock. The fair value of the consideration was determined using the closing price of the Company’s Class A Common Stock of $13.58 per share on May 9, 2017. 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 the closing of the Bold Transaction, EEH assumed Bold’s outstanding borrowings of $58 million under its credit agreement. |
Schedule of Unaudited Pro forma Revenues and Expenses of Assets Acquired and Liabilities Assumed | The following unaudited supplemental pro forma condensed results of operations present consolidated information as though the Bold Transaction had been completed as of January 1, 2016. The unaudited supplemental pro forma financial information was derived from the historical consolidated and combined statements of operations for Bold and Earthstone and adjusted to include: (i) depletion expense applied to the adjusted basis of the properties acquired and (ii) to eliminate non-recurring transaction costs directly related to the Bold Transaction that do not have a continuing impact on the Company’s operating results. These unaudited supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. Future results may vary significantly from the results reflected in this unaudited pro forma financial information ( in thousands, except per share amounts Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Revenue $ 34,648 $ 12,741 $ 67,910 $ 22,300 Loss before taxes $ (56,248 ) $ (19,512 ) $ (45,335 ) $ (26,862 ) Net loss $ (46,334 ) $ (19,698 ) $ (35,384 ) $ (27,048 ) Less: Net loss available to noncontrolling interest $ (28,424 ) $ (13,614 ) $ (21,790 ) $ (19,112 ) Net loss attributable to Earthstone Energy, Inc. $ (17,910 ) $ (6,084 ) $ (13,594 ) $ (7,936 ) Pro forma net loss per common share attributable to Earthstone Energy, Inc.: Basic and diluted $ (0.79 ) $ (0.38 ) $ (0.60 ) $ (0.53 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 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) June 30, 2017 Level 1 Level 2 Level 3 Total Financial assets Derivative asset - current $ — $ 1,870 $ — $ 1,870 Derivative asset - noncurrent — 190 — 190 Total financial assets $ — $ 2,060 $ — $ 2,060 Financial liabilities Derivative liability - current $ — $ 150 $ — $ 150 Derivative liability - noncurrent — 12 — 12 Total financial liabilities $ — $ 162 $ — $ 162 December 31, 2016 Financial liabilities Derivative liability - current $ — $ 4,595 $ — $ 4,595 Derivative liability - noncurrent — 1,575 — 1,575 Total financial assets $ — $ 6,170 $ — $ 6,170 |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2017: Price Swaps Period Commodity Volume (Bbl s Weighted Average Price ($/Bbl / $/MMBtu) Q3 - Q4 2017 Crude Oil 315,000 $ 50.66 Q1 - Q4 2018 Crude Oil 330,000 $ 50.45 Q3 - Q4 2017 Natural Gas 1,290,000 $ 3.167 Q1 - Q4 2018 Natural Gas 810,000 $ 3.066 |
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) June 30, 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 - current $ 1,900 $ (30 ) $ 1,870 $ — $ — $ — Commodity contracts Derivative asset - noncurrent $ 203 $ (13 ) $ 190 Commodity contracts Derivative liability - current $ 180 $ (30 ) $ 150 $ 4,595 $ — $ 4,595 Commodity contracts Derivative liability - noncurrent $ 25 $ (13 ) $ 12 $ 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 June 30, Six Months Ended June 30, 2017 2016 2017 2016 Derivatives not designated as hedging contracts under ASC Topic 815 Statement of Operations Location Total gain (loss) on commodity contracts Gain (loss) on derivative contracts, net $ 3,021 $ (5,034 ) $ 8,067 $ (6,260 ) Cash received (paid) in settlements on commodity contracts Gain (loss) on derivative contracts, net 319 806 (267 ) 2,797 Gain (loss) on commodity contracts, net $ 3,340 $ (4,228 ) $ 7,800 $ (3,463 ) |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Reconciliation of Equity Attributable to Noncontrolling Interest | A reconciliation of the equity attributable to the noncontrolling interest as of May 9, 2017 is as follows ( in thousands Total consideration transferred (1) $ 491,879 Change to Additional paid-in capital to reflect the noncontrolling interest within equity at their membership interest (12,872 ) Portion of equity attributable to noncontrolling interest (2) $ 479,007 (1) See Note 2. Acquisitions and Divestitures (2) Represents 61.4% of total equity attributable to EEH as of May 9, 2017. |
Summary of Changes in Noncontrolling Interest | The following table presents the changes in noncontrolling interest for the six months ended June 30, 2017: EEH Units Held By Earthstone and Lynden US % EEH Units Held By Others % Total EEH Units Outstanding As of December 31, 2016 — — — — — May 9, 2017 - Bold Transaction 22,656,624 38.6 % 36,070,828 61.4 % 58,727,452 EEH Units issued in connection with Class A Common Stock issued in connection with Bold Transaction 150,000 — 150,000 EEH Units issued in connection with the vesting of restricted stock units 84,825 — 84,825 As of June 30, 2017 22,891,449 38.8 % 36,070,828 61.2 % 58,962,277 |
Summary of Activity for Equity Attributable to Noncontrolling Interest | The following table summarizes the activity for the equity attributable to the noncontrolling interest for the six months ended June 30, 2017 ( in thousands 2017 As of December 31, 2016 $ — Noncontrolling interest recorded within equity in connection with the closing of the Bold Transaction 479,007 Net loss attributable to noncontrolling interest (37,844 ) As of June 30, 2017 $ 441,163 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Net Loss Per Common Share | A reconciliation of Net loss per common share is as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2017 2016 2017 2016 Net loss attributable to Earthstone Energy, Inc. $ (17,123 ) $ (11,172 ) $ (16,394 ) $ (17,593 ) Net loss per common share attributable to Earthstone Energy, Inc.: Basic $ (0.75 ) $ (0.69 ) $ (0.73 ) $ (1.17 ) Diluted $ (0.75 ) $ (0.69 ) $ (0.73 ) $ (1.17 ) Weighted average common shares outstanding Basic 22,728,011 16,121,568 22,503,750 14,978,348 Add potentially dilutive securities: Unvested restricted stock units — — — — Diluted weighted average common shares outstanding 22,728,011 16,121,568 22,503,750 14,978,348 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Unvested RSU Award Activity | The table below summarizes unvested RSU award activity for the six months ended June 30, 2017: Shares Weighted-Average Grant Date Fair Value Unvested RSUs at December 31, 2016 781,500 $ 12.53 Granted 214,500 $ 12.22 Vested (467,629 ) $ 12.44 Forfeited (36,000 ) $ 13.30 Unvested RSUs at June 30, 2017 492,371 $ 12.42 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Long Term Debt | The following table below summarizes long term debt ( in thousands June 30, December 31, 2017 2016 Borrowings under Credit Agreement $ 70,000 $ 10,000 Promissory note 3,505 4,297 Total debt 73,505 14,297 Less: Current portion of long-term debt (1,665 ) (1,604 ) Long-term debt $ 71,840 $ 12,693 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, (in thousands) 2017 2016 Beginning asset retirement obligations $ 6,013 $ 5,075 Liabilities incurred 2 106 Acquisitions (1) 359 167 Accretion expense 306 261 Divestitures (7 ) — Revision of estimates 19 (12 ) Ending asset retirement obligations $ 6,692 $ 5,597 (1) The 2017 amount is related to the Bold Transaction. The 2016 amount is related to the Lynden Arrangement. |
Basis of Presentation and Sum31
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands | May 09, 2017USD ($)ClassOfStock$ / sharesshares | Jun. 30, 2017$ / shares | Jun. 30, 2016USD ($) | Dec. 31, 2016$ / shares |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Common stock par value per share | $ / shares | $ 0.001 | $ 0.001 | ||
Cash from sale of stock | $ | $ 47,125 | |||
Class A Common Stock [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Common stock par value per share | $ / shares | 0.001 | 0.001 | ||
Class B Common Stock [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Common stock par value per share | $ / shares | $ 0.0001 | $ 0.0001 | ||
Bold Contribution Agreement [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of classes of common stock | ClassOfStock | 2 | |||
Stock conversion features | Each EEH Unit, together with one share of Class B Common Stock, are convertible into one share of Class A Common Stock. | |||
Bold Contribution Agreement [Member] | Earthstone Energy Holdings, LLC [Member] | Bold Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Membership units issued in exchange | shares | 36,070,828 | |||
Bold Contribution Agreement [Member] | Bold Energy Holdings, LLC [Member] | Earthstone Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of ownership interest | 61.20% | |||
Bold Contribution Agreement [Member] | Earthstone Energy Holdings Limited Liability Company And Lynden United States Incorporation | Earthstone Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of ownership interest held by Earthstone Energy, Inc. and Lynden US Inc. | 38.80% | |||
Bold Contribution Agreement [Member] | Common Stock [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Common stock par value per share | $ / shares | $ 0.001 | |||
Bold Contribution Agreement [Member] | Lynden Energy Corporation | Earthstone Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Membership units issued in exchange | shares | 5,865,328 | |||
Bold Contribution Agreement [Member] | Class A Common Stock [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Common stock par value per share | $ / shares | $ 0.001 | |||
Shares of common stock issued in arrangement | shares | 150,000 | |||
Closing sale price of common stock | $ / shares | $ 13.58 | |||
Bold Contribution Agreement [Member] | Class A Common Stock [Member] | 2014 Long Term Incentive Plan [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Shares of common stock issued in arrangement | shares | 150,000 | |||
Bold Contribution Agreement [Member] | Class A Common Stock [Member] | Earthstone Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Stock conversion basis | one-for-one basis | |||
Bold Contribution Agreement [Member] | Class A Common Stock [Member] | Bold Energy Holdings, LLC [Member] | Earthstone Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of ownership interest | 61.40% | |||
Bold Contribution Agreement [Member] | Class B Common Stock [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Common stock par value per share | $ / shares | $ 0.001 | |||
Cash from sale of stock | $ | $ 36 | |||
Shares of common stock issued in arrangement | shares | 36,070,828 | |||
Stock conversion features | Each share of Class B Common Stock, together with one EEH Unit, is convertible into one share of Class A Common Stock | |||
Bold Contribution Agreement [Member] | Class B Common Stock [Member] | Bold Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Cash from sale of stock | $ | $ 36,071 | |||
Shares of common stock issued in arrangement | shares | 36,070,828 | |||
Bold Contribution Agreement [Member] | Class B Common Stock [Member] | Earthstone Energy Holdings, LLC [Member] | Bold Energy Holdings, LLC [Member] | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Cash from sale of stock | $ | $ 36,071 | |||
Membership units issued in exchange | shares | 16,791,296 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ / shares in Units, $ in Thousands | May 09, 2017 | May 18, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 |
Fair value of liabilities assumed: | |||||
Goodwill | $ 17,620 | $ 17,620 | |||
Lynden Arrangement [Member] | |||||
Business Acquisition [Line Items] | |||||
Shares of common stock issued in arrangement | 3,700,279 | ||||
Closing per share price of common stock | $ 12.35 | ||||
Total consideration transferred | $ 45,699 | $ 45,699 | |||
Fair value of assets acquired: | |||||
Cash and cash equivalents | 5,263 | ||||
Amount attributable to assets acquired | 82,081 | ||||
Current assets | 2,019 | ||||
Fair value of liabilities assumed: | |||||
Long-term debt and Credit facility | 36,597 | ||||
Current liabilities | 1,915 | ||||
Deferred tax liability | 15,240 | ||||
Asset retirement obligations | 250 | ||||
Total consideration plus liabilities assumed | 99,701 | ||||
Goodwill | 17,620 | ||||
Total consideration plus liabilities assumed | 99,701 | ||||
Lynden Arrangement [Member] | Proved Oil and Gas Properties [Member] | |||||
Fair value of assets acquired: | |||||
Oil and gas properties | 48,199 | ||||
Lynden Arrangement [Member] | Unproved Oil and Gas Properties [Member] | |||||
Fair value of assets acquired: | |||||
Oil and gas properties | $ 26,600 | ||||
Bold Transaction [Member] | |||||
Business Acquisition [Line Items] | |||||
Shares of common stock issued in arrangement | 36,220,828 | ||||
Closing per share price of common stock | $ 13.58 | ||||
Total consideration transferred | $ 491,879 | ||||
Fair value of assets acquired: | |||||
Cash and cash equivalents | 2,355 | ||||
Other current assets | 10,075 | ||||
Oil and gas properties | 555,860 | ||||
Amount attributable to assets acquired | 568,290 | ||||
Fair value of liabilities assumed: | |||||
Long-term debt and Credit facility | 58,000 | ||||
Current liabilities | 15,497 | ||||
Deferred tax liability | 2,555 | ||||
Noncurrent asset retirement obligations | 359 | ||||
Amount attributable to liabilities assumed | $ 76,411 | ||||
Bold Transaction [Member] | Class A Common Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Shares of common stock issued in arrangement | 150,000 | ||||
Closing per share price of common stock | $ 13.58 | ||||
Bold Transaction [Member] | Bold Energy III LLC [Member] | Certain Employees [Member] | Class A Common Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Shares of common stock issued in arrangement | 150,000 | ||||
Bold Transaction [Member] | Bold Energy Holdings, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Shares of common stock issued in arrangement | 36,070,828 |
Acquisitions and Divestitures33
Acquisitions and Divestitures - Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed (Parenthetical) (Details) $ / shares in Units, $ in Thousands | May 18, 2016USD ($)$ / shares$ / bbl$ / Mcf$ / Boeshares | Jun. 30, 2017 | May 09, 2017USD ($)$ / sharesshares |
Lynden Arrangement [Member] | |||
Business Acquisition [Line Items] | |||
Shares of common stock issued in arrangement | 3,700,279 | ||
Closing per share price of common stock | $ / shares | $ 12.35 | ||
Outstanding borrowings under credit agreement/facility | $ | $ 36,597 | ||
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 | ||
Repayment of outstanding borrowings | $ | $ 31,300 | ||
Bold Transaction [Member] | |||
Business Acquisition [Line Items] | |||
Shares of common stock issued in arrangement | 36,220,828 | ||
Closing per share price of common stock | $ / shares | $ 13.58 | ||
Stock conversion features | Each EEH Unit, together with one share of Class B Common Stock, is convertible into one share of Class A Common Stock. | ||
Outstanding borrowings under credit agreement/facility | $ | $ 58,000 | ||
Bold Transaction [Member] | Bold Energy Holdings, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Shares of common stock issued in arrangement | 36,070,828 | ||
Bold Transaction [Member] | Bold Energy Holdings, LLC [Member] | Earthstone Energy Holdings, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Membership units issued in exchange | 36,070,828 | ||
Bold Transaction [Member] | Class A Common Stock [Member] | |||
Business Acquisition [Line Items] | |||
Shares of common stock issued in arrangement | 150,000 | ||
Closing per share price of common stock | $ / shares | $ 13.58 | ||
Bold Transaction [Member] | Class B Common Stock [Member] | |||
Business Acquisition [Line Items] | |||
Closing per share price of common stock | $ / shares | $ 13.58 | ||
Bold Transaction [Member] | Class B Common Stock [Member] | Bold Energy Holdings, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Shares of common stock issued in arrangement | 36,070,828 |
Acquisitions and Divestitures34
Acquisitions and Divestitures - Schedule of Unaudited Pro forma Revenues and Expenses of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Net loss | $ (54,967) | $ (11,172) | $ (54,238) | $ (17,593) |
Bold Transaction [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenue | 34,648 | 12,741 | 67,910 | 22,300 |
Loss before taxes | (56,248) | (19,512) | (45,335) | (26,862) |
Net loss | (46,334) | (19,698) | (35,384) | (27,048) |
Less: Net loss available to noncontrolling interest | (28,424) | (13,614) | (21,790) | (19,112) |
Net loss attributable to Earthstone Energy, Inc. | $ (17,910) | $ (6,084) | $ (13,594) | $ (7,936) |
Pro forma net loss per common share attributable to Earthstone Energy, Inc.: | ||||
Basic and diluted | $ (0.79) | $ (0.38) | $ (0.60) | $ (0.53) |
Acquisitions and Divestitures35
Acquisitions and Divestitures - Additional Information (Details) - USD ($) | May 18, 2016 | Jun. 30, 2017 | May 31, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2017 |
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 2,100 | $ 270,000 | $ 2,100 | $ 2,100 | $ 2,100 | |
Non-cash consideration | 80,000 | |||||
Gain on sale of oil and gas properties | $ 1,300 | $ 350,000 | $ 1,691,000 | $ 1,691,000 | ||
Effective date of transaction | Apr. 1, 2017 | May 1, 2017 | ||||
Lynden Arrangement [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Common stock issued, net of offering costs and contributions, shares | 3,700,279 | |||||
Bold Transaction [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Revenues | 10,900,000 | |||||
Direct operating expenses | $ 6,200,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Jun. 30, 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 | Jun. 30, 2017 | Dec. 31, 2016 |
Financial assets | ||
Derivative asset - current | $ 1,870 | |
Derivative asset - noncurrent | 190 | |
Financial liabilities | ||
Derivative liability - current | 150 | $ 4,595 |
Derivative liability - noncurrent | 12 | 1,575 |
Fair Value on a Recurring Basis [Member] | ||
Financial assets | ||
Derivative asset - current | 1,870 | |
Derivative asset - noncurrent | 190 | |
Total financial assets | 2,060 | |
Financial liabilities | ||
Derivative liability - current | 150 | 4,595 |
Derivative liability - noncurrent | 12 | 1,575 |
Total financial liabilities | 162 | 6,170 |
Level 2 [Member] | Fair Value on a Recurring Basis [Member] | ||
Financial assets | ||
Derivative asset - current | 1,870 | |
Derivative asset - noncurrent | 190 | |
Total financial assets | 2,060 | |
Financial liabilities | ||
Derivative liability - current | 150 | 4,595 |
Derivative liability - noncurrent | 12 | 1,575 |
Total financial liabilities | $ 162 | $ 6,170 |
Derivative Financial Instrume38
Derivative Financial Instruments - Schedule of Open Crude Oil and Natural Gas Derivative Contracts (Details) | 6 Months Ended |
Jun. 30, 2017MMBTU$ / bbl$ / MMBTUbbl | |
Price Swaps Q3 - Q4 2017 [Member] | Natural Gas [Member] | |
Derivative [Line Items] | |
Volume | MMBTU | 1,290,000 |
Weighted Average Price | $ / MMBTU | 3.167 |
Price Swaps Q3 - Q4 2017 [Member] | Crude Oil [Member] | |
Derivative [Line Items] | |
Volume | bbl | 315,000 |
Weighted Average Price | $ / bbl | 50.66 |
Price Swaps Q1 - Q4 2018 [Member] | Natural Gas [Member] | |
Derivative [Line Items] | |
Volume | MMBTU | 810,000 |
Weighted Average Price | $ / MMBTU | 3.066 |
Price Swaps Q1 - Q4 2018 [Member] | Crude Oil [Member] | |
Derivative [Line Items] | |
Volume | bbl | 330,000 |
Weighted Average Price | $ / bbl | 50.45 |
Derivative Financial Instrume39
Derivative Financial Instruments - Additional Information (Details) - Subsequent Event [Member] | 1 Months Ended |
Jul. 31, 2017$ / bblbbl | |
Derivative [Line Items] | |
Volume | bbl | 219,000 |
Weighted Average Price | $ / bbl | 50 |
Derivative Financial Instrume40
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 | Jun. 30, 2017 | Dec. 31, 2016 |
Derivative Asset - Current [Member] | ||
Derivatives Fair Value [Line Items] | ||
Gross Recognized Assets | $ 1,900 | |
Gross Amounts Offset, Assets | (30) | |
Total financial assets | 1,870 | |
Derivative Asset - Noncurrent [Member] | ||
Derivatives Fair Value [Line Items] | ||
Gross Recognized Assets | 203 | |
Gross Amounts Offset, Assets | (13) | |
Total financial assets | 190 | |
Derivative Liability - Current [Member] | ||
Derivatives Fair Value [Line Items] | ||
Gross Recognized Liabilities | 180 | $ 4,595 |
Gross Amounts Offset, Liabilities | (30) | |
Total financial liabilities | 150 | 4,595 |
Derivative Liability - Noncurrent [Member] | ||
Derivatives Fair Value [Line Items] | ||
Gross Recognized Liabilities | 25 | 1,575 |
Gross Amounts Offset, Liabilities | (13) | |
Total financial liabilities | $ 12 | $ 1,575 |
Derivative Financial Instrume41
Derivative Financial Instruments - Summary of Realized and Unrealized Gains and Losses on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Cash received (paid) in settlements on commodity contracts | $ 267 | $ (2,797) | ||
Gain (loss) on commodity contracts, net | $ 3,340 | $ (4,228) | 7,800 | (3,463) |
Derivatives Not Designated as Hedging Contracts [Member] | Gain (Loss) On Derivative Contracts, Net [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Total gain (loss) on commodity contracts | 3,021 | (5,034) | 8,067 | (6,260) |
Cash received (paid) in settlements on commodity contracts | $ 319 | $ 806 | $ (267) | $ 2,797 |
Oil and Natural Gas Properties
Oil and Natural Gas Properties - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Oil And Natural Gas Properties [Line Items] | ||||
Impairment of proved and unproved oil and gas properties | $ 66,648,000 | $ 0 | $ 66,648,000 | $ 0 |
Proved Oil and Natural Gas Properties [Member] | ||||
Oil And Natural Gas Properties [Line Items] | ||||
Depletion expenses | $ 9,900,000 | $ 5,500,000 | 17,700,000 | $ 10,900,000 |
Unproved Oil and Gas Properties [Member] | ||||
Oil And Natural Gas Properties [Line Items] | ||||
Asset impairments | $ 3,600,000 | |||
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 | |||
Proved Oil and Gas Properties [Member] | ||||
Oil And Natural Gas Properties [Line Items] | ||||
Asset impairments | $ 63,000,000 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) - Bold Transaction [Member] - Earthstone Energy Holdings, LLC [Member] | May 09, 2017 |
Noncontrolling Interest [Line Items] | |
Percentage of ownership interest | 61.40% |
Earthstone Energy Holdings Limited Liability Company And Lynden United States Incorporation | |
Noncontrolling Interest [Line Items] | |
Percentage of ownership interest held by Earthstone Energy, Inc. and Lynden US Inc. | 38.60% |
Bold Holdings [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of ownership interest | 61.40% |
Noncontrolling Interest - Recon
Noncontrolling Interest - Reconciliation of Equity Attributable to Noncontrolling Interest (Details) - USD ($) $ in Thousands | May 09, 2017 | Jun. 30, 2017 |
Noncontrolling Interest [Line Items] | ||
Portion of equity attributable to noncontrolling interest | $ 441,163 | |
Bold Transaction [Member] | ||
Noncontrolling Interest [Line Items] | ||
Total consideration transferred | $ 491,879 | |
Change to Additional paid-in capital to reflect the noncontrolling interest within equity at their membership interest | (12,872) | |
Portion of equity attributable to noncontrolling interest | $ 479,007 | $ 441,163 |
Noncontrolling Interest - Rec45
Noncontrolling Interest - Reconciliation of Equity Attributable to Noncontrolling Interest (Parenthetical) (Details) | May 09, 2017 |
Bold Transaction [Member] | Earthstone Energy Holdings, LLC [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of ownership interest | 61.40% |
Noncontrolling Interest - Summa
Noncontrolling Interest - Summary of Changes in Noncontrolling Interest (Details) - shares | May 09, 2017 | Jun. 30, 2017 |
Noncontrolling Interest [Line Items] | ||
As of December 31, 2016 | 22,273,820 | |
As of June 30, 2017 | 0 | |
Class A Common Stock [Member] | ||
Noncontrolling Interest [Line Items] | ||
As of December 31, 2016 | 0 | |
As of June 30, 2017 | 22,891,449 | |
Earthstone Energy Holdings, LLC [Member] | ||
Noncontrolling Interest [Line Items] | ||
As of June 30, 2017 | 58,962,277 | |
Earthstone Energy Holdings, LLC [Member] | Restricted Stock Units [Member] | ||
Noncontrolling Interest [Line Items] | ||
EEH Units issued in connection with the vesting of restricted stock units | 84,825 | |
Earthstone Energy Holdings, LLC [Member] | Bold Transaction [Member] | ||
Noncontrolling Interest [Line Items] | ||
Stock issued in connection with Bold Transaction | 58,727,452 | |
Earthstone Energy Holdings, LLC [Member] | Bold Transaction [Member] | Class A Common Stock [Member] | ||
Noncontrolling Interest [Line Items] | ||
Stock issued in connection with Bold Transaction | 150,000 | |
Earthstone Energy Holdings, LLC [Member] | EEH Units Held By Earthstone and Lynden US [Member] | ||
Noncontrolling Interest [Line Items] | ||
As of June 30, 2017 | 22,891,449 | |
Percentage of EEH Units Held By Earthstone and Lynden | 38.60% | 38.80% |
Earthstone Energy Holdings, LLC [Member] | EEH Units Held By Earthstone and Lynden US [Member] | Restricted Stock Units [Member] | ||
Noncontrolling Interest [Line Items] | ||
EEH Units issued in connection with the vesting of restricted stock units | 84,825 | |
Earthstone Energy Holdings, LLC [Member] | EEH Units Held By Earthstone and Lynden US [Member] | Bold Transaction [Member] | ||
Noncontrolling Interest [Line Items] | ||
Stock issued in connection with Bold Transaction | 22,656,624 | |
Earthstone Energy Holdings, LLC [Member] | EEH Units Held By Earthstone and Lynden US [Member] | Bold Transaction [Member] | Class A Common Stock [Member] | ||
Noncontrolling Interest [Line Items] | ||
Stock issued in connection with Bold Transaction | 150,000 | |
Earthstone Energy Holdings, LLC [Member] | EEH Units Held By Others [Member] | ||
Noncontrolling Interest [Line Items] | ||
As of June 30, 2017 | 36,070,828 | |
Percentage of EEH Units Held By Others | 61.40% | 61.20% |
Earthstone Energy Holdings, LLC [Member] | EEH Units Held By Others [Member] | Bold Transaction [Member] | ||
Noncontrolling Interest [Line Items] | ||
Stock issued in connection with Bold Transaction | 36,070,828 |
Noncontrolling Interest - Sum47
Noncontrolling Interest - Summary of Activity for Equity Attributable to Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Noncontrolling Interest [Line Items] | ||
Less: Net loss attributable to noncontrolling interest | $ (37,844) | $ (37,844) |
As of June 30, 2017 | 441,163 | 441,163 |
Bold Transaction [Member] | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest recorded within equity in connection with the closing of the Bold Transaction | 479,007 | |
Less: Net loss attributable to noncontrolling interest | (37,844) | |
As of June 30, 2017 | $ 441,163 | $ 441,163 |
Net Loss Per Common Share - Rec
Net Loss Per Common Share - Reconciliation of Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to Earthstone Energy, Inc. | $ (17,123) | $ (11,172) | $ (16,394) | $ (17,593) |
Net loss per common share attributable to Earthstone Energy, Inc.: | ||||
Basic | $ (0.75) | $ (0.69) | $ (0.73) | $ (1.17) |
Diluted | $ (0.75) | $ (0.69) | $ (0.73) | $ (1.17) |
Weighted average common shares outstanding | ||||
Basic | 22,728,011 | 16,121,568 | 22,503,750 | 14,978,348 |
Add potentially dilutive securities: | ||||
Diluted weighted average common shares outstanding | 22,728,011 | 16,121,568 | 22,503,750 | 14,978,348 |
Net Loss Per Common Share - Add
Net Loss Per Common Share - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Net loss attributable to noncontrolling interest | $ (37,844,000) | $ (37,844,000) | ||
Dilutive effect on Net loss per common share attributable to Earthstone Energy, Inc | $ 0 | |||
Restricted Stock Units [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Dilutive effect of restricted stock units excluded from calculating diluted earnings per share | 71,805 | 37,334 | 208,883 | 18,480 |
Earthstone Energy, Inc [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Net loss attributable to noncontrolling interest | $ (37,800,000) |
Common Stock - Additional Infor
Common Stock - Additional Information (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | May 09, 2017 | Jun. 30, 2017 | May 08, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Capital Unit [Line Items] | |||||||
Common stock, shares issued | 0 | 0 | 22,289,177 | ||||
Treasury stock, shares | 15,357 | 15,357 | 15,357 | ||||
Common stock, shares outstanding | 0 | 0 | 22,273,820 | ||||
Cash from sale of stock | $ 47,125 | ||||||
EnCap, Oak Valley and Bold Holdings [Member] | Maximum [Member] | |||||||
Capital Unit [Line Items] | |||||||
Percentage of outstanding voting stock | 20.00% | ||||||
Bold Contribution Agreement [Member] | |||||||
Capital Unit [Line Items] | |||||||
Stock conversion features | Each EEH Unit, together with one share of Class B Common Stock, are convertible into one share of Class A Common Stock. | ||||||
Class A Common Stock [Member] | |||||||
Capital Unit [Line Items] | |||||||
Common stock, shares issued | 22,906,806 | 22,906,806 | 0 | ||||
Treasury stock, shares | 15,357 | 15,357 | |||||
Treasury stock, shares, retired | 15,357 | ||||||
Common stock, shares outstanding | 22,891,449 | 22,891,449 | 0 | ||||
Class A Common Stock [Member] | Bold Contribution Agreement [Member] | |||||||
Capital Unit [Line Items] | |||||||
Shares of common stock issued in arrangement | 150,000 | ||||||
Common stock issued | $ 2,000 | $ 2,037 | |||||
Class A Common Stock [Member] | 2014 Plan [Member] | Bold Contribution Agreement [Member] | |||||||
Capital Unit [Line Items] | |||||||
Shares of common stock issued in arrangement | 150,000 | ||||||
Class A Common Stock [Member] | Restricted Stock Units [Member] | 2014 Plan [Member] | |||||||
Capital Unit [Line Items] | |||||||
Common stock shares issued upon vesting and settlement | 84,825 | 382,804 | |||||
Class B Common Stock [Member] | |||||||
Capital Unit [Line Items] | |||||||
Common stock, shares issued | 36,070,828 | 36,070,828 | 0 | ||||
Common stock, shares outstanding | 36,070,828 | 36,070,828 | 0 | ||||
Class B Common Stock [Member] | Bold Contribution Agreement [Member] | |||||||
Capital Unit [Line Items] | |||||||
Shares of common stock issued in arrangement | 36,070,828 | ||||||
Common stock issued | $ 489,842 | ||||||
Cash from sale of stock | $ 36 | ||||||
Stock conversion features | Each share of Class B Common Stock, together with one EEH Unit, is convertible into one share of Class A Common Stock | ||||||
Bold Transaction [Member] | |||||||
Capital Unit [Line Items] | |||||||
Common stock issued | $ 491,879 | ||||||
Bold Transaction [Member] | Class A Common Stock [Member] | |||||||
Capital Unit [Line Items] | |||||||
Stock conversion basis | one-for-one basis |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) - Restricted Stock Units [Member] - USD ($) $ / shares in Units, $ in Millions | May 09, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares granted | 214,500 | |||||
Shares granted, Weighted average grant date fair value | $ 12.22 | |||||
Unvested shares | 492,371 | 492,371 | 781,500 | |||
2014 Plan [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Unrecognized compensation expense related to unvested stock | $ 5.7 | $ 5.7 | ||||
Weighted average remaining vesting period of unrecognized compensation expense | 9 months 8 days | |||||
Stock-based compensation expense | $ 1.6 | $ 0.6 | $ 3 | $ 0.6 | ||
Shares granted | 772,500 | |||||
Shares granted, Weighted average grant date fair value | $ 12.55 | |||||
Unvested shares | 772,500 | 772,500 | ||||
2014 Plan [Member] | Bold Contribution Agreement [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares authorized to be issued under the plan | 5,800,000 | |||||
2014 Plan [Member] | Bold Contribution Agreement [Member] | Class A Common Stock [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Increase in number of shares authorized to be issued under the plan | 4,300,000 | |||||
Number of shares of common stock that each holder has contingent right to receive | 1 |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Unvested RSU Award Activity (Details) - Restricted Stock Units [Member] | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unvested RSUs at beginning period, share | shares | 781,500 |
Granted, Shares | shares | 214,500 |
Vested, Shares | shares | (467,629) |
Forfeited, Shares | shares | (36,000) |
Unvested RSUs at end period, share | shares | 492,371 |
Unvested RSUs at beginning of period, Weighted-Average Grant Date Fair Value | $ / shares | $ 12.53 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 12.22 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 12.44 |
Forfeited, Weighted-Average Grant Date Fair Value | $ / shares | 13.30 |
Unvested RSUs at end of period, Weighted-Average Grant Date Fair Value | $ / shares | $ 12.42 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | May 09, 2017 | Jul. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 71,840,000 | $ 71,840,000 | $ 12,693,000 | ||||
Current portion of long-term debt | 1,665,000 | 1,665,000 | $ 1,604,000 | ||||
Amount of Borrowings | 70,000,000 | 70,000,000 | |||||
Repayments of borrowings | 10,792,000 | $ 37,788,000 | |||||
Amortization of deferred financing costs | 137,000 | 142,000 | |||||
Unsecured Promissory Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | 3,500,000 | $ 3,500,000 | |||||
Debt instrument, principal amount | $ 5,100,000 | ||||||
Debt Instrument, frequency of periodic payment | monthly | ||||||
Line of credit, maturity period | 3 years | ||||||
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 | 1,700,000 | $ 1,700,000 | |||||
Pre-payment penalty | $ 0 | ||||||
Debt instrument, effective interest rate percentage | 9.10% | ||||||
Bold Transaction [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of borrowings | 58,000,000 | ||||||
Bold Transaction [Member] | Four Year Senior Secured Revolving Credit Facility [member] | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of borrowings | $ 10,000,000 | ||||||
EEH Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Current borrowing base under EEH credit agreement | $ 150,000,000 | 150,000,000 | $ 150,000,000 | ||||
Commitment fee percentage | 0.50% | ||||||
Debt outstanding maturity | May 9, 2022 | ||||||
Line of credit facility, covenant terms | In addition, the EEH Credit Agreement requires EEH to maintain the following financial covenants: a current ratio of not less than 1.0 to 1.0 and a leverage ratio of not greater than 4.0 to 1.0. Leverage ratio means the ratio of (i) the aggregate debt of EEH and its consolidated subsidiaries as at the last day of the fiscal quarter (excluding any debt from obligations relating to non-cash losses under FASB ASC 815 as a result of changes in the fair market value of derivatives) to (ii) the product of EBITDAX for such fiscal quarter multiplied by four. The term “EBITDAX” means, for any period, the sum of consolidated net income for such period plus (a) the following expenses or charges to the extent deducted from consolidated net income in such period: (i) interest, (ii) taxes, (iii) depreciation, (iv) depletion, (v) amortization, (vi) non-cash losses under FASB ASC 815 as a result of changes in the fair market value of derivatives, (vii) exploration expenses, (viii) impairment expenses, and (ix) non-cash compensation expenses and minus (b) to the extent included in consolidated net income in such period, non-cash gains under FASB ASC 815 as a result of changes in the fair market value of derivatives. | ||||||
Long-term debt | $ 70,000,000 | $ 70,000,000 | |||||
Long-term debt, percentage bearing annual interest rate | 3.5842% | 3.5842% | |||||
Additional borrowing base available under credit agreement | $ 80,000,000 | $ 80,000,000 | |||||
Commitment fees on borrowings | 100,000 | $ 100,000 | 100,000 | 100,000 | |||
Amortization of deferred financing costs | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | |||
EEH Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin percentage | 2.25% | ||||||
EEH Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin percentage | 3.25% | ||||||
EEH Credit Agreement [Member] | Prime Rate [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin percentage | 1.25% | ||||||
EEH Credit Agreement [Member] | Prime Rate [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin percentage | 2.25% | ||||||
Earthstone Energy Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate on borrowings | 4.32% | 3.39% | 4.45% | 3.23% | |||
Earthstone Energy Credit Agreement [Member] | Other Noncurrent Assets [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Costs associated with borrowings | $ 1,100,000 | $ 100,000 | $ 1,100,000 | $ 100,000 | |||
Write-off of Deferred Financing Costs [Member] | Bold Transaction [Member] | Four Year Senior Secured Revolving Credit Facility [member] | |||||||
Debt Instrument [Line Items] | |||||||
Remaining unamortized deferred financing costs | $ 500,000 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total debt | $ 73,505 | $ 14,297 |
Less: Current portion of long-term debt | (1,665) | (1,604) |
Long-term debt | 71,840 | 12,693 |
Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 3,505 | 4,297 |
Less: Current portion of long-term debt | (1,700) | |
Long-term debt | 3,500 | |
Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 70,000 | $ 10,000 |
Asset Retirement Obligations -
Asset Retirement Obligations - Summary of Asset Retirement Obligation Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | ||||
Beginning asset retirement obligations | $ 6,013 | $ 5,075 | ||
Liabilities incurred | 2 | 106 | ||
Acquisitions | 359 | 167 | ||
Accretion expense | $ 154 | $ 133 | 306 | 261 |
Divestitures | (7) | |||
Revision of estimates | 19 | (12) | ||
Ending asset retirement obligations | $ 6,692 | $ 5,597 | $ 6,692 | $ 5,597 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - Flatonia Energy, LLC [Member] - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Payments made to related party | $ 7,200,000 | $ 4,000,000 | $ 14,400,000 | $ 16,200,000 | |
Payments received from related party | 800,000 | $ 100,000 | 2,400,000 | $ 2,800,000 | |
Amounts receivable from related party | 800,000 | 800,000 | $ 1,500,000 | ||
Amounts payable to related party | $ 0 | $ 0 | $ 3,100,000 | ||
Class A Common Stock [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of common stock acquired | 12.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Income Tax Disclosure [Line Items] | ||
Income tax benefit | $ 0 | |
Deferred tax expense | (9,952,000) | |
Earthstone Energy Holdings, LLC [Member] | ||
Income Tax Disclosure [Line Items] | ||
Income tax benefit | 7,500,000 | |
Deferred tax expense | $ 500,000 | 500,000 |
Lynden US [Member] | ||
Income Tax Disclosure [Line Items] | ||
Income tax benefit | $ 2,900,000 |