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Earthstone Energy Reports 3rd Quarter Results


EARTHSTONE ENERGY, INC. (NYSE MKT: ESTE) reported net income of $933,000, $0.54 per diluted share, on revenue of $4.5 million for the third quarter of fiscal 2014 compared to net income of $370,000, $0.22 per diluted share, on revenue of $2.8 million for the third quarter of fiscal 2013. For the nine months ending December 2013, the Company reported net income of $2,850,000, $1.65 per diluted share, on revenue of $12.7 million compared to net income of $1,126,000, $0.65 per diluted share, on revenue of $8.0 million for the same period ended December 2012. Total revenue and net income increased $1,640,000 (58%) and $563,000 (152%), respectively, from the comparable three month prior year period. These results were due to both increases in oil and gas sales volumes and oil and gas prices in 2013 as compared to 2012. Other factors which contributed to our quarterly results are disclosed in the Company's most recent Form 10-Q.

"We are pleased to see our Bakken strategy continue to positively impact Earthstone's performance," commented Ray Singleton, President of Earthstone. "Our decision to sell Colorado assets two years ago and redeploy capital into North Dakota was a winning formula. This quarter, we posted solid gains across the board; volume sales, revenue and net income. Notably, year-to-date, both BOE (barrels, oil equivalent) sales and EBITDA were up nearly 53% and 135%, respectively, over the same period last year. Compared to the trailing quarter, BOE sales were up nearly 6% and had oil and gas prices not declined from our 2nd quarter, gross revenue would have increased 7% over the trailing quarter gross revenue. While we do not normally highlight our balance sheet, there are two important points to note. First, our internal cash flow during the quarter, along with our cash balance at September 30th, was sufficient to fund this quarter's capital expenditures without the use of additional debt financing. Second, for the first time in over twenty years, the Company's retained earnings 'crossed the zero line' from a deficit, to report positive retained earnings at the end of the quarter. Twenty years ago, the Company's retained earnings indicated an accumulated loss of over $20 million, and just 3 years ago the accumulated deficit was over $8 million."

"Singleton added, the Company continues to pursue its strategy of drilling non-operated, horizontal Bakken wells where we have built the foundation for production growth. We are excited, as the investments we made in growth projects in past years are expected to benefit the Company in the future. Given all this, we expect a great year and anticipate increasing the Company's earnings and cash flow during the remainder of the year."


Earthstone Energy, Inc. is a growth-oriented independent oil and gas exploration and production company with focus and growth primarily in the Williston Basin. Earthstone is traded on the NYSE MKT under the symbol ESTE. Information on Earthstone can be found at its web site:

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 "could," "should," "may," "will," "anticipate," "expect," "estimate," "foresee," "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 for March 31, 2013 and Quarterly Reports on Form 10-Q for the three and six months ended June 30, 2013 and September 30, 2013, respectively. The Company disclaims any obligation to update forward-looking statements.


Nine Months Ended   Three Months Ended
December 31, December 31,
2013   2012 2013   2012
Revenue $ 12,741,000 $ 7,990,000 $ 4,474,000 $ 2,834,000
Net income $ 2,962,000 $ 1,126,000 $ 1,045,000 $ 370,000
Basic net income per share $ 1.71 $ 0.65 $ 0.60 $ 0.22
Diluted net income per share $ 1.71 $ 0.65 $ 0.60 $ 0.22
Weighted avg. number of shares outstanding, basic 1,732,243 1,720,712 1,732,230 1,720,712
Weighted avg. number of shares outstanding, diluted 1,732,243 1,720,712 1,732,230 1,720,712

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