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Track Drilling (Rigs by operator) | Completions (Frac Spreads)

  Economics : Rates of Return/ IRR

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MIDLAND BASIN FOCUSED ON EXECUTION, WELL PERFORMANCE AND CAPITAL EFFICIENCY 2 0 2 1 O P E R AT I N G P L A N 2021 PLAN DETAILS HOWARD 1Q21: 14 net wells were completed and 13 net wells were drilled 11,300 expected average lateral feet per well RockStar 45% Boe PDP decline expected (YE20 - YE21) ANDREWS BEST IN CLASS WELL PERFORMANCE MARTIN 2021-2022 drilling program expected breakeven flat pricing of 12 - 31/Bbl NYMEX(1) LEADING EDGE CAPITAL COSTS Expected DC&E costs: 520/lateral foot ECTOR GLASSCOCK (2) O P E R AT I N G D E TA I L S Sweetie Peck Rigs Completion Running: Crews: MIDLAND (1) (2) Breakeven 10% IRR assumes natural gas at 2.50/Mcf and 43% NGL to WTI pricing. As of April 29, 2021. 82,000 NET ACRES UPTON REAGAN 8
SM Energy Company
April 2021

A BALANCED APPROACH TO 2021 DEVELOPMENT 2021 KEY PROGRAM ELEMENTS 2021 CAPITAL ALLOCATION1 5 wells / Average Project Size / 8,800 Net Lateral Feet per Well 3 Operated Rigs 1-2 Operated Completion Crews 55 - 65 / Gross Wells Drilled / Completed 90 - 100 (WI: 80 95%) Operational Capital Budget of HIGHLIGHTS up to Relatively equal deployment of capital across quarters with consistent pace of activity 430 MM Balanced profile of project cash conversion cycles with diversified capital deployment Average project level IRRs2 (including central facilities) of over 45% at flat 45/Bbl WTI oil Program modified from previous guidance to provide improved operational activity flexibility into 2022 Delaware Midland Eagle Ford Other 3 1. 430 million operational capital budget includes all DC&E activity plus leasehold, seismic, and other. It does not account for capitalized interest and capitalized G&A costs which are provided as separate guidance items. Please see guidance slide for additional information. 2. Assumes flat 45/Bbl and 2.50/MMBtu. 10 3. Other category includes primarily cost associated with central field facilities and capitalized workovers.
Callon Petroleum Co.
February 2021

IRM Acquisition Meets Key Earthstone Criteria Earthstone IRM Commentary Objectives Acquisition Increases ESTE size and scale by 50% with minimal impact to leverage and Increase Scale at shares outstanding Favorable Valuations Purchase price of 182.0 million underwritten on PDP value Complementary Midland Basin acreage position includes 4,900 core net acres High Quality Basin & (100% HBP, 93% operated) in Midland and Ector counties Acreage Position High quality inventory addition with 70 gross locations with an average 45% IRR(1) Increase Free Cash Substantially increases cash flow with minimal incremental G&A Flow Capacity Added scale enhances pro forma development options within free cash flow Pro forma net leverage of 1.1x at 9/30/20 Maintain Balance Pro forma liquidity of 115 million(2) at 12/31/20 (cash + undrawn credit Sheet Strength facility availability) Maintain Leading Maintains low cost, high margin operating metrics, while reducing go forward Cost Structure & per unit Cash G&A costs by 25% Margins (1) ESTE estimate of Middle Spraberry, Lower Spraberry and Wolfcamp A locations assuming 880 well spacing. IRRs based on NYMEX strip pricing as of 11/30/20 (2) Liquidity based on cash + undrawn availability on borrowing base based on 12/31/20 ESTE debt and cash balance with pro forma adjustments for acquisition of IRM 14
Earthstone Energy Inc.
February 2021

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