EARTHSTONE ENERGY INC

Transcription

1 SECURITIES & EXCHANGE COMMISSION EDGAR FILING EARTHSTONE ENERGY INC Form: 8-K Date Filed: Corporate Issuer CIK: Copyright 2016, Issuer Direct Corporation. All Right Reserved. Distribution of this document is strictly prohibited, subject to the terms of use.

2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: June 20, 2016 (Date of earliest event reported) (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 1400 Woodloch Forest Drive, Suite 300 The Woodlands, Texas (Address of principal executive offices) (Zip Code) (281) (Registrant s telephone number, including area code) (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

3 Item Regulation FD Disclosure. On June 20, 2016, Earthstone Energy, Inc. ( Earthstone ) posted to its website a company presentation (the Presentation Materials ) that management intends to use from time to time about Earthstone s operations and performance. Earthstone may use the Presentation Materials, possibly with modifications, in presentations to current and potential investors, lenders, creditors, vendors, customers and others with an interest in Earthstone and its business. The information contained in the Presentation Materials is summary information that should be considered in the context of Earthstone s filings with the Securities and Exchange Commission and other public announcements that Earthstone may make by press release or otherwise from time to time. The Presentation Materials speak as of the date of this Current Report on Form 8-K. While Earthstone may elect to update the Presentation Materials in the future or reflect events and circumstances occurring or existing after the date of this Current Report on Form 8-K, Earthstone specifically disclaims any obligation to do so. The Presentation Materials are furnished as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference. Some of the matters discussed in the Presentation Materials contain forward-looking statements that involve uncertainties and risks related to, intense competition in the oil and gas industry, Earthstone s dependence on its management, volatile oil and gas prices, uncertainties associated with oil and gas reserve estimates, operating and capital costs and Earthstone s need to replace production and acquire or develop additional oil and gas reserves, among other matters. Actual results could differ materially from those projected and Earthstone cautions readers not to place undue reliance on the forward-looking statements contained in, or made in connection with, the Presentation Materials. The information in this Current Report on Form 8-K furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), or otherwise subject to liability under that section, and they shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. By filing this Current Report on Form 8-K and furnishing this information pursuant to Item 7.01, Earthstone makes no admission as to the materiality of any information in this Current Report on Form 8-K, including Exhibit 99.1, that is required to be disclosed solely by Regulation FD. Item Financial Statements and Exhibits. (d) Exhibits: The following exhibit is furnished with this Current Report on Form 8-K: Exhibit No. Description 99.1 Slideshow Presentation dated June 2016.

4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EARTHSTONE ENERGY, INC. Date: June 24, 2016 By: /s/ Frank A. Lodzinski Frank A. Lodzinski President and Chief Executive Officer

5 EXHIBIT INDEX Exhibit No. Description 99.1 Slideshow Presentation dated June 2016.

6 Investor Presentation June 2016 Exhibit 99.1

7 Disclaimer for, developing Forward-Looking and producing Statements crude oil and This natural presentation gas, risks contains and uncertainties forward-looking involving statements geology within of oil the and meaning gas deposits); of Section the uncertainty 27A of the Securities of reserve Act estimates; of 1933, the as uncertainty amended (the of estimates Securities and Act ), projections and Section relating 21E to of future the Securities production, Exchange costs and Act expenses; of 1934, as potential amended. delays Statements or changes that in are plans not with strictly respect historical exploration statements or constitute development forward-looking projects capital statements expenditures; and may health, often, but safety not and always, environmental be identified risks by the and use risks of related such words to weather; such as inability expects, of management believes, intends, to execute anticipates, its plans to plans, meet its estimates, goals; shortages potential, of drilling possible, equipment, or probable oil field personnel or statements and services; that certain unavailability actions, events of gathering or results systems, may, pipelines will, should, and processing or could facilities; be taken, the occur possibility or be achieved. that government The forward-looking policies may statements change; and include that foreign statements production about rates oil and may gas change. pricing Earthstone s assumptions, Annual future operations, Report on Form estimates 10-K of for reserve the year and ended production December volumes, 31, 2015 estimates and other of capital Securities expenditures, and Exchange expansion Commission of production ( SEC ) and filings reserves, discuss future some growth of the potential, important possible risk factors acquisitions, identified and that the may ability affect to Earthstone s raise future capital. business, Forward-looking results of operations, statements and financial are based condition. expectations Earthstone and undertakes assumptions no and obligation analyses to revise made or by update Earthstone publicly Energy, any forward-looking Inc. ( Earthstone ) statements in light of except experience as required and perception by law. See of historical Appendix trends, A Assumptions current conditions and Disclosures and expected for further future PV-10, developments, net production, as well and as other reserve factors disclosure appropriate information. under the circumstances. However, whether actual results and developments will conform with expectations is subject to a number of risks and uncertainties, including adverse changes in oil and gas prices or protracted periods of low oil and gas prices; problems that may arise in the integration of businesses or assets; the risks of the oil and gas industry (for example, operational risks in exploring

8 Frank A. Lodzinski Chairman, President and CEO Formed Oak Valley Resources, LLC in December 2012 and led its strategic combination with Earthstone in December 2014 Former Chairman, President and CEO of GeoResources, Inc. from April 2007 until its merger with Halcón Resources Corporation in August 2012 Over 44 years of oil and gas industry experience Robert J. Anderson Executive Vice President, Corporate Development and Engineering Joined Oak Valley Resources, LLC management team in March 2013 until the closing of its strategic combination with Earthstone in December 2014 Former Executive Vice President and Chief Operating Officer at Halcón Resources Corporation upon acquisition of GeoResources, Inc. where he was Director, EVP and COO Northern Region Worked with core management team since 2004 Petroleum engineer with over 29 years of diversified domestic and international experience Management Since 1992, the Earthstone team has completed 5 successful corporate exit transactions which includes selling GeoResources in 2012 for approximately $1 billion for a 35% IRR and 4.8x ROIC Through prior companies, management has extensive experience in the Eagle Ford, Permian and Bakken / Three Forks, among other basins The core of the management team has been together through multiple former companies

9 Investment Highlights Prudently Managed Balance Sheet Adequate cash flow and liquidity on hand to fund initial 2016 capital plans Simple and unburdened capital structure no term debt outstanding Traditional reserve-based credit facility with standard covenants Managing through downturn with net leverage below 1.5x Proven Management Team Four prior successful public entities Operational excellence Repeat institutional and high net worth investors Market recognition from investors and sellside research analysts Diversified Shale Play Exposure with Growing Inventory Presence in the most prolific, domestic oil-bearing shale plays Eagle Ford, Midland Basin and Bakken / Three Forks Growth through drill bit and significant acquisitions ~560 total gross drilling locations across core plays Upside from down-spacing and other formations Visible Production Growth & Drilling Program with Substantial Optionality Eagle Ford DUC inventory provides ability to ramp up production quickly Majority of acreage in key areas is HBP Non-consent option provides capital outflow flexibility

10 Note: Please see Appendix A Assumptions and Disclosures Company Overview Asset Location The Woodlands, Texas based E&P company focused on domestic exploration and production of oil and natural gas with current operations primarily in the Eagle Ford trend, Midland Basin and Bakken / Three Forks In May 2016, Earthstone expanded its acreage position to include Midland Basin through its acquisition of Lynden Energy Pro Forma the Lynden Energy acquisition, production and reserves are as follows: Q1 16 Net Production of 4,905 Boepd YE 2015 Proved Reserves of 17.9 MMBoe with PV-10 of $145.9mm 68% Oil / 71% Developed Strategy of growing through the drill bit, organic leasing and attractive corporate and asset acquisitions Market Statistics (as of 6/8/2016) Shares Outstanding:17.5mm Market Cap:$229.5mm TEV:$264.1mm Share Price: $ Week Range: $ $21.04 Daily Avg. Volume (Last 5 Days)85.7K Bakken / Three Forks Eagle Ford Midland Basin 2015 Proved Reserves: 17.9 MMBoe Operational Summary Q1 16 Net Production: 4,905 Boepd

11 Key Areas Total 1P Reserves (MMBoe)17.9 % PD71% % Oil68% PV-10 ($mm)145.9 Net Production (Boepd)4,905 Gross Producing Wells402 Core Net Acres30,383 Core Gross Drilling Locations560 Bakken / Three Forks 1P Reserves (MMBoe)3.1 % PD78% % Oil71% PV-10 ($mm)25.5 Net Production (Boepd)816 Gross Producing Wells144 Core Net Acres5,900 Core Gross Drilling Locations140 Eagle Ford 1P Reserves (MMBoe)9.5 % PD66% % Oil76% PV-10 ($mm)78.9 Net Production (Boepd)2,760 Gross Producing Wells128 Core Net Acres18,600 Core Gross Drilling Locations220 Midland Basin 1P Reserves (MMBoe)5.3 % PD79% % Oil54% PV-10 ($mm)41.5 Net Production (Boepd)1,329 Gross Producing Wells130 Core Net Acres5,883 Core Gross Drilling Locations200 Note: Please see Appendix A Assumptions and Disclosures

12 Project Well Count Average Well 30-day IP Net Capex IRR Gross Net % Oil (Gross Boepd) ($mm) (%) Timing Eagle Ford Activity (Karnes/Gonzales/Fayette, TX) % D&C - 29% Compl. Only - 112% Q3 16 H1 17 Midland Basin Activity (Howard County, TX) % Q3 16 Bakken / Three Forks Activity (McKenzie County, ND) % D&C - 28% Compl. Only - 83% Ongoing Total % Earthstone has identified three primary areas of capital deployment over the next 12 months requiring $42.0mm Capital Allocation by Type ($mm) Capital Allocation by Basin ($mm) Note: Please see Appendix A Assumptions and Disclosures Capital Plans Next 12 Months Summary (June 2016 May 2017)

13 2016 Exit Rate is expected to be over 6,000 Boepd Fully executed plans should result in a 40% increase in production Capital Plans Next 12 Months Impact on Production Frac 12 Gross Wells D&C 5-Well Pad Accelerate drilling and completion of an Eagle Ford 5-well pad to Q and run one rig thereafter Additional Midland Basin activity expected but not forecasted (To be determined)

14 Capital Plans Next 12 Months Eagle Ford Activity 1 Complete 12 Gross Well Eagle Ford DUC Inventory 8 Gross Wells in Fayette County, Texas Previously drilled in Q / Q Hope Unit (3), Rumley (3) Flatonia Townsite (2) Total anticipated completion capex of $14.0mm net ($1.750mm net per well) Gross 30-day IP = 700 Boepd 50% working interest IRR = 98% (completion capital only) 4 Gross Wells in Karnes County, Texas Previously drilled in December 2015 Boggs Unit Total anticipated completion capex of $4.5mm net ($1.125mm net per well) Gross 30-day IP = 730 Boepd 33% working interest IRR = 141% (completion capital only) Drill and Complete 5 Gross Eagle Ford Wells Southwest Gonzales County, Texas Crosby Unit, offsets the Boggs Unit in Karnes County, Texas Total anticipated D&C capex of $13.0mm net ($2.6mm net per well) Gross 30-day IP = 710 Boepd 50% working interest IRR = 29% Earthstone Sanchez Penn Virginia Note: Please see Appendix A Assumptions and Disclosures Offset operators include EOG, Encana and Marathon

15 Capital Plans Next 12 Months Midland Basin & Bakken / Three Forks Activity 2 Drill and Complete 1 Gross Horizontal Wolfcamp Well Howard County, Texas Midland Basin Tubb A #1HA permitted and planned for Q Recent successful offset drilling by Encana and Oxy Anticipated D&C plus facilities capex of $3.5mm net Gross 30-day IP = 825 Boepd 40% working interest Drill and/or Complete 27 Gross Bakken / Three Forks Wells McKenzie County, North Dakota Units located in the Banks Field 27 gross wells in various stages of being drilled or completed Total anticipated D&C capex of $7.0mm net 5% working interest Gross 30-day IP = 825 Boepd IRR = 28% (D&C) IRR = 83% (completion capital only) Company Acreage Peak Month (Boepd) ,092 1, Non-Op Leasehold Operated Leasehold Note: Please see Appendix A Assumptions and Disclosures

16 Overview of Assets

17 Eagle Ford Asset Overview Operated Fayette, Gonzales, and Karnes Counties 38,000 gross / 18,600 net leasehold acres Working interests range from 33% to 50% 60% held-by-production 64 gross producing wells (62 operated / 2 non-op) Approximately 220 identified gross Eagle Ford drilling locations Majority of acreage covered by 173 square mile 3-D seismic shoot Avoid faulting for steering Eagle Ford wells Indicate natural fractures Delineate other prospective opportunities Other Potential: Upper Eagle Ford, Austin Chalk, Buda, Wilcox, and Edwards Non-operated La Salle County 64 gross producing wells 25,400 gross / 2,900 net leasehold acres Working interests range from 10% to 15% Near-Term Strategy Production growth through operated capital program Expand through acquisitions of operated acreage and production Gonzales, Fayette and Karnes Counties, Texas Earthstone Sanchez Penn Virginia Offset operators include EOG, Encana and Marathon

18 Eagle Ford Drilling Cost Improvements Since September 2014, drilling costs have decreased over 50% from $606 per foot of lateral to $287 per foot Normalized for drilling a 7,000 foot lateral: In 2014, the Company incurred ~$4.2mm of drilling costs Currently, the Company incurs ~$2.0mm of drilling costs

19 Eagle Ford Drilling Performance Days vs Depth Boggs Matthews North Matthews South

20 Eagle Ford Completion Cost Improvements Since November 2014, completion costs have decreased ~40% from $162,500 per stage to $97,300 per stage In late 2014, the Company incurred ~$3.9mm to frac 24 stages Currently, the Company would expect to incur ~$4.0mm to frac 42 stages

21 Midland Basin Asset Overview Strong offsetting operator results in Lower Spraberry, Wolfcamp A, B and D (Cline) Additional upside in 4+ separate horizons Horizontal activity on the Company s acreage 2 producing horizontal Wolfcamp wells in Glasscock County 1 permitted horizontal Wolfcamp well in Howard County Near-Term Strategy Establish operating presence through acquisition of operated production Grow production organically and through acquisitions Expand acreage and location inventory Glasscock, Howard, Martin and Midland Counties, Texas County Gross Acres Net Interest (%) Net Acres Martin 1, , Midland Glasscock 4, ,960 Howard 6, , Total: 14,765 5, Planned Horizontal Drilling Company Acreage

22 6,761 gross / 2,649 net acres prospective for the Wolfcamp Leasehold interest of 25% to 41% First horizontal well planned for August 2016 Increasing horizontal well activity by other operators in Howard County Offset by Encana and Oxy Contiguous acreage block allows for efficient layout of long laterals Midland Basin Howard County Company Acreage Operator Well Name First Production Date Peak Month (Boepd) Cumulative Production (MBoe) % Oil Lateral Length (Feet) Oxy Morris Grantham 2602WA 1/ % 7,200 Oxy Patterson 2707WA 8/ % 9,150 Oxy Patterson 2702WA 7/ % 9,375 Oxy May A 1108WA 11/ % 9,377 Oxy May 1105WA 10/ % 8,777 Oxy May WA 4/2015 1, % 7,575 Encana Tubb 39 5H 7/2014 1, % 6,705 CrownQuest Tubb A 1HA Permitted on 1/27/ Note: Production data through March 2016 per Drilling Info

23 Midland Basin Glasscock County 4,480 gross / 1,960 net acres prospective for the Wolfcamp Leasehold interest of ~44% Earthstone s first two horizontal Wolfcamp wells in Glasscock County were drilled during June and July 2015 Mallard 23 #1H well Lateral length of 6,953 feet, 35 frac stages Gross production for the first 60 days averaged 505 Boepd (91% oil) McDaniel 2413 #1H Lateral length of 9,703 feet, 48 frac stages Gross production for the first 60 days averaged 600 Boepd (91% oil) Contiguous acreage block allows for efficient layout of long laterals Operator Well Name First Production Date Peak Month (Boepd) Cumulative Production (MBoe) % Oil Lateral Length (Feet) Diamondback Riley C WB 2/2016 1, % 7,756 Encana Clark H 9/ % 9,747 Encana Clark H 9/ % 9,668 Energen Cole Ranch H 8/ % 9,407 Energen Cole Ranch H 8/ % 9,668 CrownQuest Mallard 23 1H 8/ % 6,953 CrownQuest McDaniel H 9/ % 9,703 Energen Daniel SN H 11/ % 9,896 Note: Production data through March 2016 per Drilling Info Company Acreage

24 Bakken / Three Forks Asset Overview 5,900 net core acres predominantly in McKenzie and Dunn Counties of North Dakota that are prospective for the Bakken / Three Forks formation 144 gross wells producing Average working interest of ~4% 27 gross wells currently being drilled or completed ~140 potential gross drilling locations Primary operators include: Statoil, Oasis, ConocoPhillips/Burlington, Continental, ExxonMobil/XTO, Marathon, SM Energy Majority of units in McKenzie County, ND Banks Field Largest development area Interest in 22 spacing units Operators down-spacing to 6-7 wells per unit in the Bakken / Three Forks Indian Hill Field Near-Term Strategy Expand acreage Acquire production Establish operating presence Note: Please see Appendix A Assumptions and Disclosures Non-Op Leasehold Operated Leasehold Billings, Dunn, McKenzie and Williams Counties, North Dakota

25 Appendix

26 Track Record AROC, Inc. (Private) Gulf Coast, Permian Basin, Mid-Con. Preferred investors 17% IRR Initial investors 4x return Southern Bay Energy, LLC (Private) Gulf Coast, Permian Basin Initial investors 40% IRR Texoil, Inc. ( TXLI ) Gulf Coast, Permian Basin Preferred investors 2.5x return Follow-on investors 3x return Initial investors 10x return Hampton Resources Corp. ( HPTR ) Gulf Coast Preferred investors 30% IRR Initial investors 7x return Management team has consistently created shareholder value Repeated success with multiple entities over 20+ years Results have created long-term and recurring shareholders Extensive industry and financial relationships Technical and operational excellence Multi-basin experience Resource & conventional expertise Complex Gulf Coast drilling & horizontal resource proficiency Efficient and low-cost operator Proven acquisition and exploitation results GeoResources, Inc. ( GEOI ) Eagle Ford, Bakken / Three Forks, Gulf Coast Initial investors 35% IRR Initial investors 4.8x return Initial Southern Bay investors achieved a combined 7.4x ROI upon the merger with GeoResources and subsequent sale in 2012 Note: Initial investors refers to (i) in the case of private entities, investors that participated in the initial capitalization or recapitalization of the entity at the time a change in management occurred, or (ii) in the case of public entities, public shareholders existing at the date the transaction was announced to the public. Past performance is not necessarily indicative of future results.

27 Earthstone A Platform for Steady Growth December 2014 Eagle Ford Asset Acquisition December 2014 Strategic Combination Eagle Ford Operator Q2/Q Eagle Ford Acreage Acquisitions 3,100 Gross Acres Karnes and Gonzales Counties, TX Q Midland Basin 1,329 Boepd1 Since December 2014, Earthstone has evolved from a micro cap, non-op Bakken / Three Forks company to a small cap, multi-basin operator with additional exposure to the Eagle Ford and Midland Basin Acquisitions November 2014 Bakken / Three Forks 622 Boepd1 Q Eagle Ford Midland Basin Bakken / Three Forks 4,905 Boepd2 Notes: 1Total Earthstone production for the three month period ended September 30, Daily production for the three month period ended March 31, 2016

28 Earthstone Acquires Lynden Closed on May 18, mm ESTE shares issued to Lynden Energy Corp. ( LVL ) stockholders Existing ESTE stockholders to own 79% and LVL stockholders to own 21% mm total shares of common stock outstanding upon closing the transaction Transaction Summary NYSE MKT: ESTE 12.6 MMBoe 82% Liquids / 68% PD 79% Ownership in Combined Company TSX Ventures: LVL.V / OTC Pink: LVLEF 5.3 MMBoe 78% Liquids / 79% PD 21% Ownership in Combined Company Entry into Midland Basin, diversifying and expanding its existing exposure to the Eagle Ford and Bakken / Three Forks Working interests in 122 gross / 49.2 net vertical wells targeting the Wolfberry play Working interests in 2 gross / 0.9 net horizontal Wolfcamp wells in Glasscock County and 2 gross / 0.4 net horizontal wells in Martin County (1 Lower Spraberry well, 1 Wolfcamp well) Significant, de-risked upside with over 150 proved vertical Wolfberry locations on 20 to 40 acre spacing, with potential for over 50 horizontal Wolfcamp A and B gross wells and additional upside in other horizontal targets Additional float and trading volume and potentially greater access to capital Benefits to ESTE Stockholders Proved management team with operational expertise Stock consideration enables further upside to be captured Greater market recognition with enhanced financial scale and flexibility Platform to fully develop existing Midland Basin asset base Diversification to the Eagle Ford and Bakken / Three Forks Benefits to LVL Stockholders Note: Please see Appendix A Assumptions and Disclosures

29 Combined Asset Summary 12/31/15 SEC Pricing Proved Reserves by Commodity Proved Reserves by Category Net Production by Commodity PV-10 by Category 17.9 MMBoe 4,905 Boepd $145.9mm 17.9 MMBoe Note: Please see Appendix A Assumptions and Disclosures

30 Oil Production Hedged (Bbls) Gas Production Hedged (MMBtu) Swap Positions Period Oil / Gas Quantity Oil BBls/mo Gas MMBtu/mo Fixed Price Q Oil 36,667 $52.15 Q Oil 45,000 $49.35 Q Oil 45,000 $49.35 FY 2017 Oil 22,500 $47.87 FY 2018 Oil 10,000 $50.78 Q Gas 76,667 $2.517 Q Gas 80,000 $2.511 Q Gas 80,000 $2.511 FY 2017 Gas 60,000 $2.810 Hedging Summary 380, , , Q2-Q Full Year 2018 Full Year 560, , Q2-Q Full Year 2018 Full Year

31 Notes: 1 Pro forma for Lynden acquisition Capital Structure and Liquidity Capitalization Liquidity

32 Equity Ownership Earthstone is Backed By Top-Tier Investors Notes: 1Shares are held by Oak Valley Resources, LLC 2Prior Lynden shareholder; share count pro forma 5/18/16 Oak Valley Resources owns 52% of Earthstone. Investors in Oak Valley include Earthstone management, EnCap, Vlasic Group, Wells Fargo Energy Capital and Friends and Family

33 Management residual 2000 lease to records, February assets Team title of 2004, AROC, and Frank division he Inc., A. was Lodzinski and orders. employed he served In Chairman, addition, by Anadarko as President he was Petroleum actively of and Southern CEO Corporation involved Mr. Bay Lodzinski Energy, due as a diligence petroleum LLC has since served associated engineer. its formation. President with In addition, business The and Southern Chief development has Executive Bay worked entities Officer matters. with were major of He Earthstone merged oil has companies, held into Energy, previous GeoResources including Inc. roles since at ARCO in AROC, December April International/Vastar Texoil, Mr. Williams Lodzinski Previously, Exploration, Resources, has he served Ashland as as a independent President director Exploration, and oil member Chief companies, American Executive of the Exploration, including audit Officer committee Hunt Belco of Oak Oil, Energy, of Valley Hugoton Yuma Resources, and Energy, Citation Inc. and LLC Oil since Pacific & from Gas. September its Enterprises Mr. formation Cottrell in Oil graduated December He Company. holds with a 2012 His BSBA a B.B.A. professional until degree the degree closing experience Accounting of Petroleum its strategic includes and Land Finance combination acquisition Management from Wayne with evaluation, from the State the Company reservoir University in December and of in Texas. Detroit, production Michigan. engineering, Prior Robert to his service field J. Anderson development, with Oak Executive Valley, project Vice Mr. economics, Lodzinski President was budgeting Corporate Chairman, and Development planning, President and and capital Chief Engineering Executive markets. Mr. His Officer Anderson domestic of GeoResources, acquisition a petroleum and Inc. engineer divestiture from April with experience 2007 over 29 until years includes its merger of diversified Texas with Halcón and domestic Louisiana Resources and (offshore international Corporation and onshore), experience. in August Mid-Continent, He has He served has and over as the Executive 43 Rocky years Mountain of Vice oil President, and states, gas industry Corporate and international experience. Development experience In 1984, and he Engineering includes formed Energy Canada, of Earthstone Resource South America, Energy, Associates, and Inc. Russia. since Inc., which December Mr. acquired Anderson management has Previously, a B.S. degree and he served controlling Petroleum a similar interests Engineering capacity oil and with from gas Oak the limited Valley University partnerships, Resources, of Wyoming joint LLC ventures from and an March MBA and 2013 from producing until the University the properties. closing of of Denver. Certain its strategic partnerships Christopher combination E. were Cottrell with exchanged Earthstone Executive for common Vice in December President shares of Land Hampton Prior and Marketing Oak Resources Valley, Mr. he Corporation Cottrell served has from in been 1992, August employed which 2012 Mr. to in February Lodzinski various aspects 2013 joined as of as Executive land a director management Vice and President. and commodity and Hampton Chief marketing Operating was sold in activities Officer 1995 at to since Halcón Bellwether Resources He Exploration has served Corporation. Company. as Executive Mr. In Anderson 1996, Vice he President, formed was employed Cliffwood Land and by Oil GeoResources, Marketing & Gas Corp. of Earthstone and Inc. in from 1997, Energy, April Cliffwood 2007 Inc. until since shareholders its merger December with acquired Halcón Previously, a controlling Resources he interest served August in in Texoil, 2012, a similar ultimately Inc., capacity where serving Mr. with Lodzinski Oak as a Valley director served Resources, and as Executive CEO LLC and from Vice President. its President, formation In 2001, Chief in December Mr. Operating Lodzinski 2012 Officer was until appointed Northern closing CEO Region. of and its strategic President He was combination involved of AROC, the Inc., with formation to Earthstone direct of the Southern restructuring December Bay Energy and ultimate Prior in September to liquidation employment 2004 of that by as Oak Vice company. Valley, President, In he 2003, was Acquisitions AROC employed completed until by GeoResources its merger a monetization with GeoResources from of April oil and 2007 gas in until April assets its merger with From an with institutional March Halcón 2004 Resources investor August and in August 2004, began Mr. a 2012, plan Anderson ultimately of liquidation was serving employed as Vice by In 2004, AROC, President Mr. a predecessor Lodzinski of Land and formed company Marketing, Southern to responsible Southern Bay Energy, Bay for Energy, LLC, land and the as general operating Vice President, partner contract of Acquisitions Southern matters including Bay and Oil Divestitures. & oil Gas, and L.P., gas From marketing, which September acquired land and the

34 Management closing and experience production of its and strategic Team operations, has (Cont d) an combination intimate petroleum Steven knowledge with C. economics, Collins Earthstone of the Executive Company s geology, in December Vice geophysics, legacy President Rocky Prior land, Completions Mountain to and employment joint and operations. and south by Operations Oak Texas Geographical Valley, properties. Mr. he Collins served areas Mr. is a from Singleton of petroleum experience August received engineer 2012 include to a November B.S. with Texas over degree and Louisiana in years Petroleum as a of consultant operations (offshore Engineering to and Halcón onshore), related from Resources Texas experience. North A&M Dakota, upon University He its has Montana, merger served in 1973 with Mid-Continent, as GeoResources and Executive received Vice Florida, an in President, MBA August New from Mexico, Completions Colorado From Oklahoma, State April and 2007 University s Operations Wyoming, to August Executive of Pennsylvania, Earthstone 2012, Mr. MBA Merrifield Energy, and Program Michigan. Inc. led in all since geology Mr. December Mury and graduated geophysics Previously, from efforts Nicholls at he GeoResources. State served University in a similar He with has capacity a degree held with previous in Computer Oak roles Valley at Science. Resources, AROC, Ray Force LLC Singleton Energy, from its Executive Great formation Western Vice in December President Resources Northern and until other the Region independents. closing Mr. of Singleton its His strategic domestic is a combination petroleum experience engineer with includes Earthstone with Texas, over in 37 December Louisiana years of experience (onshore Prior and to He offshore), employment has been North a by director Oak Dakota, Valley, of Earthstone Montana, he served New Energy, from Mexico, Inc. August since Rocky 2012 July Mountain to 1989 November and states, served 2012 and as the its a Mid-Continent. consultant President and to Halcón In Chief addition, Executive Resources. he has Officer Mr. international Collins from March was experience employed 1993 until in by Peru December GeoResources and the East from Mr. Irish Singleton April Sea Mr. joined Merrifield until Earthstone its merger attended with in Texas 1988 Halcón as Tech a Resources Production University. in Manager/Petroleum August Francis 2012 M. Mury and Executive directed Engineer. field Vice From operations, President 1983 until including Drilling 1988 and well prior Development completion, to joining production, Mr. Earthstone, Mury has and Mr. over workover Singleton 41 years operations. was of oil the and principal Prior gas to industry of employment Singleton experience. & by Associates, GeoResources, He has served an engineering he as served Executive consulting as Vice President, company of serving Drilling Operations and the operational Development for Southern and Bay, of engineering Earthstone AROC, and Energy, needs Texoil, of Inc. approximately and since as a December petroleum 40 small and oil operations Previously, and gas clients. engineer he served During at Hunt in this a similar Oil period, Company capacity he was and with engaged Pacific Oak Valley Enterprises by the Resources, Company Oil Company. on LLC various from His its projects experience formation in south includes December Texas Texas, and 2012 the Louisiana Rocky until the Mountain (onshore closing of region. and its strategic offshore), Mr. Singleton combination North began Dakota, with his Montana, Earthstone career with and in Amoco the December Mid-Continent. Production Prior Company Mr. Collins to employment graduated 1973 as by a with production Oak a Valley, B.S. degree engineer he was employed in Petroleum Texas. He by Engineering GeoResources was subsequently from from the employed University April 2007 by of until the Texas. predecessor its merger Timothy with of D. Union Merrifield Halcón Pacific Resources Executive Resources in Vice August as President a 2012, drilling, ultimately Geology completion serving and and Geophysics production as an Executive Mr. engineer Merrifield Vice from President, has 1980 over to Chief years Operating From of oil 1974 and Officer Southern to gas 1980, industry Mr. Singleton experience. Region. served He He has has in held the served prior U.S as Air roles Executive Force, at AROC, where Vice Texoil, he President, was Hampton a combat Geology Resources, qualified and Geophysics fighter Wainoco pilot of Oil in Earthstone the & Gas F-4 Company, Phantom Energy, with Diasu Inc. both since Exploration nuclear December and Company, conventional Previously, and Texaco, delivery he Inc. responsibilities. served His experience in a similar He extends capacity attained to with the all rank Oak facets of Valley of captain. petroleum Resources, In addition, engineering, LLC he from possesses including its formation over reservoir in 20 December years engineering, of executive 2012 drilling until th

35 Management Accounting Officer Team of (Cont d) Earthstone Neil Energy, K. Cohen Inc. Vice since President December Finance, Previously, Treasurer Mr. he served Cohen in has a similar over 12 capacity years of with professional Oak Valley experience. Resources, He LLC has from served February as Vice 2013 President, until the Finance, closing and of its Treasurer strategic combination of Earthstone with Energy, the Earthstone Inc. since in December Previously, Prior to Oak he served Valley, in he a served similar from capacity August with 2012 Oak to Valley February Resources, 2013 as LLC Assistant from its Controller formation at in Halcón December Resources 2012 until upon the its closing merger of with its strategic GeoResources, combination Inc. in with August Earthstone From in December February He to August is primarily 2012 responsible and from April for all 2008 corporate to November finance, 2010, capital Mr. markets, Wonson and was investor Corporate relations Controller activities. and Controller Prior to joining of GeoResources, Oak Valley, he respectively. served from From September December to December to January , as he a consultant was Assistant to Texoil Controller Energy, Inc. at Valerus From February Compression to He October has held 2011, previous Mr. Cohen roles at was Arthur employed Andersen, by UBS Grant Investment Thornton, Bank and BP. as a Mr. member Wonson of the holds Global a bachelor s Energy Group, degree with in Accounting exposure to from all Mississippi energy subsectors State University and a particular and a master s focus on degree mergers in and Accounting acquisitions from and the University equity and of debt Alabama. financings Mr. Wonson behalf is of a exploration Certified Public and production Accountant clients, in the State and as of a Texas. member of UBS Debt Capital Markets Group, with a particular focus on investment grade bond offerings on behalf of energy, utility, and real estate clients. He has been involved in ~$43 billion of bookrun equity and debt capital markets offerings and ~$15 billion of announced mergers and acquisitions. He has held previous roles at Merrill Lynch (Debt Capital Markets and Debt Derivatives Finance) and Hess Corporation (Finance). Mr. Cohen graduated with a B.S. degree in Finance from the University of Maryland. G. Bret Wonson Vice President Chief Accounting Officer Mr. Wonson has over 14 years of professional experience. He has served as Vice President, Principal

36 Analyst Coverage Firm ANALYST(S) Daniel Katzenberg / (646) dkatzenberg@rwbaird.com Steve Berman / (212) sberman@canaccordgenuity.com Brad Carpenter / (303) bcarpenter@cantor.com Joel Musante, CFA / (800) ext: 144 jmusante@europac.net Chad Mabry / (832) cmabry@fbr.com James Magee / (832) magee@gmpsecurities.com Kim Pacanovsky / (212) kpacanovsky@imperialcapital.com Welles Fitzpatrick / (504) welles@jrco.com Jeff Grampp / (714) jgrampp@northlandcapitalmarkets.com John M. White / (949) jwhite@roth.com Mike Kelly, CFA / (713) mkelly@seaportglobal.com John Aschenbeck / (713) jaschenbeck@seaportglobal.com Ben Wyatt / (817) ben.wyatt@stephens.com Neal Dingmann / (713) neal.dingmann@suntrust.com Jason Wangler / (713) jwangler@wundernet.com Robert W. Baird & Co. Cantor Fitzgerald FBR Capital Markets GMP Securities Canaccord Genuity Euro Pacific Capital Imperial Capital Johnson Rice & Co. Seaport Global Securities Wunderlich Securities Stephens Northland Capital Markets Roth Capital Partners SunTrust Robinson Humphrey

37 Appendix attributable A to Assumptions our estimated and proved Disclosures reserves Track independent Record of / Past our Performance income tax attributes, is not necessarily thereby isolating indicative the of intrinsic future results. value of Proved the estimated reserves future determined cash flows utilizing attributable SEC price to our methodology reserves. Because effective many December factors 31, that are Proved unique reserves to each individual associated company with Bakken impact / Three the amount Forks of and future Eagle income Ford properties taxes to be as paid, estimated Earthstone by Cawley, believes Gillespie the use & of Associates, a pre-tax measure Inc. Proved provides reserves greater associated comparability with Midland of assets Basin when properties evaluating as companies. estimated by PV-10 Earthstone does not management. necessarily No represent proved the reserves fair market assigned value to of horizontal oil and natural drilling gas locations properties. in the PV-10 Midland is not Basin. a measure Eagle Ford of financial includes or other operational Southern performance region assets. under Bakken GAAP, / Three nor should Forks it includes be considered other Northern in isolation region or as assets. a substitute Producing for the well standardized counts measure core acreage of discounted / drilling locations future net only cash include flows as specified defined reservoirs under GAAP. / areas PV-10s and not as other of December wells located 31, 2015 in the utilized region. SEC Midland price Basin methodology acreage and excludes were based Eastern on Shelf $ Mitchell per barrel Ranch of oil acreage. and $2.590 Estimated per MMBTU number for of natural locations gas. include IRRs include proved wells undeveloped waiting on as completion well as management s and therefore estimates only include of additional completion potential. capital Actual expenditures locations for drilled those and wells; quantities IRRs for that areas may are be well ultimately count weighted recovered average. from Earthstone s IRRs based interests on NYMEX could Strip differ pricing substantially as of 5/25/16. from management s estimates. Net production for the three month period ended March 31, Present Value Discounted at 10% ( PV-10 ) is a non-gaap financial measure that differs from the GAAP measure standardized measure of discounted future net cash flows in that PV-10 is calculated without regard to future income taxes. Earthstone management believes that the presentation of the PV-10 value is relevant and useful to investors because it presents the estimated discounted future net cash flows

38 Frank Lodzinski President and CEO Robert Anderson EVP, Corporate Development and Engineering Neil Cohen VP, Finance, and Treasurer Corporate Headquarters Houston 1400 Woodloch Forest Drive Suite 300 The Woodlands, TX (281) Denver th Street Suite 2320 Denver, CO (303) Website Contact Information