EARTHSTONE ENERGY, INC. (NYSE MKT: ESTE) reported net income
of $486,000, or $0.28 per diluted share, on revenue of $2,809,000 for
the second quarter of fiscal 2013, ended September 30, 2012 (2012). This
compares to net income of $728,000, or $0.43 per diluted share, on
revenue of $2,545,000 for the quarter ended September 30, 2011
(2011). For the first half of fiscal year 2013, the Company reported net
income of $756,000, or $0.44 per share, on revenue of $5,156,000,
compared to net income of $1,393,000, or $0.81 per share, on revenue of
$5,070,000 for the six months ended September 30, 2011. For the quarter,
total revenue increased and net income decreased $264,000 (10%) and
$242,000 (33%), respectively, from the comparable prior year period. The
increase in total revenue was due primarily to higher oil production,
which was nearly offset by lower oil and gas prices. Net income
decreased due to higher depletion and general & administrative expenses,
in addition to higher production taxes in 2012 relative to 2011. Other
factors which contributed to our quarterly results are disclosed in the
Company's most recent Form 10-Q.
"We are pleased to see the results of our recent drilling efforts as
this quarter we posted solid gains in oil production and reserves;
nearly 25% and 22%, respectively," commented Ray Singleton, President of
Earthstone. "We expect this trend to continue, as our increased
exploration efforts lead the way to higher reserves and production
rates. Year-to-date, our capital deployment increased on an accrual
basis 82% over the same period last year. Based on this, by year-end, we
expect to easily double last year's capital expenditures. This continues
a trend, as last year's capex doubled the previous year's
expenditures. Our general and administrative expenses continue to
increase, but are directly attributable to significant additions to the
operational capability of our staff. The Company continues to pursue its
strategy of drilling non-operated, horizontal Bakken wells along with
the acquisition of producing properties in the Montana and North Dakota
portions of the Williston Basin. The next few months should be
exciting. With a number of efforts both underway and in the planning
process, we eagerly anticipate increasing the Company's production and
reserves the remainder of this year."
Operations Update
Banks
Field, McKenzie County, North Dakota
There continues to be excellent potential for reserve growth in the
Banks area, where we placed nine new wells on production this
year. These wells, the Garmann 19-18 #1H, Sax 25-36 1H, Skarston 1-12
1H, Knight 35-26 1H, Jay 24-13 1H and, Maston 34-27 1H, operated by
Brigham, the Chameleon State 153-97-16-21-1H and the Chameleon State
153-97-16-21-2H, operated by Oasis and ZI Nelson 11-2H, operated by
Zenergy, have an average of 3.14% working interest.
Rush Mountain Field, Sheridan County, Montana
The Federal #1-5H, a horizontal Ratcliffe formation well, has finally
been placed on production, where progress by the operator, Vess
Corporation, has been painfully slow on federal lands. At this time the
well has not been released from confidential status, and as such,
production information is not available.
ABOUT EARTHSTONE ENERGY:
Earthstone Energy, Inc. is a growth-oriented independent oil and gas
exploration and production company with primary operations in the
Williston Basin and southern Texas. Earthstone is currently traded on
NYSE MKT under the symbol ESTE. Information on Earthstone can be found
at its web site: www.earthstoneenergy.com.
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Some statements
contained in this release are forward-looking, and therefore involve
uncertainties or risks that could cause actual results to differ
materially. Forward-looking statements can be identified by words such
as "should," "may," "will," "anticipate," "expect," "estimate," "intend"
or "continue," or comparable words or phrases. In addition, all
statements other than statements of historical facts that address
activities that Earthstone intends, expects or anticipates will or may
occur in the future are forward-looking statements. Forward-looking
statements also include comments regarding assumptions regarding
production rates and growth, operating costs, reduction of operation
costs, commodity prices, industry outlook, future drilling activities,
acquisitions and industry opportunities. Factors that could cause actual
results to differ materially include availability of rigs and services,
price volatility of oil and gas, estimated production rates and
adjustments to ownership percentages in addition to economic and
political events affecting supply and demand for oil and gas, loss of
customers for oil and gas production and government regulations. These
and other factors are discussed in more detail in Earthstone Energy's
filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K filed for March 31, 2012 and
Quarterly Reports on Form 10-Q for the three and six months ended June
30, 2012 and September 30, 2012, respectively. The Company disclaims any
obligation to update forward-looking statements.
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FINANCIAL & OPERATING HIGHLIGHTS
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Three Months Ended
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Six Months Ended
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September 30,
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September 30,
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2012
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2011
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2012
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2011
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Revenue
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$
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2,809,000
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$
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2,545,000
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$
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5,156,000
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$
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5,070,000
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Net income
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$
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486,000
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$
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728,000
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$
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756,000
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$
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1,393,000
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Basic and diluted per share income
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$
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0.28
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$
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0.43
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$
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0.44
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$
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0.81
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Oil Sales, Bbls.
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31,169
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25,056
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58,168
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47,618
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