EARTHSTONE ENERGY, INC. (NYSE MKT: ESTE) reported today
that, on December 21, 2012, it established a new bank credit facility
with The Bank of Oklahoma, located in Denver, Colorado. This facility
replaces the Company's previous line-of-credit with American National
Bank that expired on December 31, 2010. Under the terms of its new loan
agreement the Company has a twenty five million dollar ($25,000,000)
line of credit with an initial borrowing base of six million dollars
($6,000,000). The loan facility is collateralized by some of the
Company's producing properties. The loan agreement is set to expire on
December 20, 2017.
"We are pleased to now have $25 million in new funding with which to
grow our Company," commented Ray Singleton, President of
Earthstone. "While we have prided ourselves on a debt-free balance sheet
and funding our capital expenditures from internal cash flow, we have
reached the point, as predicted, where debt and external funding are
necessary. This necessity has come about quickly as North Dakota
operators, primarily Statoil, have moved to a multi-well location
strategy. While this has increased the efficiency of drilling and
completion operations from a cost perspective, it has also increased the
'carrying period,' or time from spud to initial production,
approximately six-fold. We are fortunate to have maintained a good
relationship over the years with the Denver banking community which has
helped facilitate putting this new bank credit facility in place."
Earthstone intends to use funds available under the new credit facility
to continue paying its share of horizontal Bakken drilling and
completion costs incurred on wells drilled and completed in the
Williston Basin. In addition, Earthstone may utilize this credit
facility to reduce payables, fund property acquisitions, finance
recompletion or drilling efforts in other areas, or pursue other
opportunities which the Company cannot contemplate at this time but
which may arise from time to time in the future.
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 the current and future
funding obligations. Factors that could cause actual results to differ
materially include, contract terms and compensation in addition to
economic and political events affecting supply and demand for oil and
gas 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.
