Earthstone Investment Highlights Midland Basin Must Own Growth Story Track record for creating shareholder value Proven Management Four prior successful public entities and Technical Team Long-term demonstrated operational…
Proven Leadership and Track Record of Value Creation Operating team has extensive experience running multi-rig development programs across various basins Years Years of Experience Title Working Together Frank Lodzinski 46 29…
Earthstone Energy Overview The Woodlands, Texas based E&P company is focused on Midland Basin Asset Overview development and production of oil and natural gas with current operations in the Midland Basin (50,800 core net acres)(1) and…
Transformational Acquisition Accelerates Earthstones Midland Basin Evolution Sabalo Acquisition Key Highlights Combined Midland Basin Map 20,800 acre highly contiguous operated position in the core of the Midland Basin (85% operated)…
Increased Size, Scale and Core Inventory in the Midland Basin Pro Forma Midland Basin Net Acres(1) 30,000 20,800 50,800 Proved Reserves 84 91 174 (MMBoe)(2) (5) 1P PV-10 (MM)(2) (5) 965 1,228 2,193 Current Net Production…
Deep Inventory of Identified Highly Economic Locations Pro forma portfolio provides for decades of drilling inventory 990 Midland Basin gross operated Midland Basin Gross Operated Locations Midland Basin Net Acres locations ESTE…
Sabalo Acquisition 11
Sabalo and Offset Operator Well Results Recent Well Results Howard County Activity Map Normalized IP-30 / Well Name Operator LL (Ft.) 1000' (Boe/d) (1) % Oil 1 Sledge Unit 06-07 2SH Surge 7,035 161 88% 2 Newton Unit 06-43 2SH Surge…
Stacked Pay Opportunity Derisked by Delineated Benches Purchase price supported by Wolfcamp A and Lower Spraberry, which are completely delineated Four proven targets across Sabalo acreage Midland Basin Spacing Assumptions Lower…
Sabalo Acquisition: Wolfcamp A Performance Geologic data and extensive delineation confirms Sabalos position is Wolfcamp A Performance Profile within the core development window Primary development zone in Howard County with 200 of…
Sabalo Acquisition: Lower Spraberry Performance Thick Lower Spraberry resource across the entire Sabalo position Lower Spraberry Performance Profile ideally positions the asset for extended lateral development Improvements in…
Midstream Agreements Provide Oil Flow Assurance Sabalo Multi-year dedications to support long-term crude oil and Current ESTE 100% Trucked natural gas production growth Oil Production 7-Yr (with 3-Yr option) oil gathering and…
Takeaway Optionality Across the Midland Basin Earthstone has access to multiple delivery points across the Midland Basin Ample capacity for legacy Southern Midland Basin volume via various trucking points Proximity to Midland and…
Owned Water Infrastructure on Sabalo Acreage Supports Low Cost Development Water Infrastructure Overview Sabalo Water Infrastructure Map 30 miles of owned produced water gathering lines Produced water recycling facility in process…
ESTE: Consistent Growth and Margin Expansion While Maintaining the Balance Sheet Average Daily Production (Boe/d)(1) (2) Unhedged Debt-Adjusted CFPS(1) 12,000 10,766 2.40 3.0x 9,762 2Q'16-3Q'18 CAGR 82.6% Maintained leverage below…
Recent Southern Midland Basin Results Recent Well Results Southern Midland Basin Activity Map Well Name Operator IPW2 (Boe/d) % Oil 1 SRH North 1526HU Apache 1,403 85% 2 SRH North 1527HA Apache 1,266 75% 3 University 3-310 PU 9H…
ESTE Legacy Midland Basin Type Curve Overview Outperforming initial expectations and generating attractive returns at strip prices with cost inflations Improved internal rate of return (IRR) due to initial production outperforming…
Acreage Trade Central Reagan County Acreage Trade Highlights Pre-Trade Post-Trade In October 2018, ESTE traded non-operated working interests in Glasscock County and paid 27.8 million in cash for operated working interests in Reagan…
Eagle Ford Asset Overview Karnes, Gonzales, and Fayette Counties, Texas Operated Karnes, Gonzales, and Fayette Travis Lee Washington Counties Hays Bastrop Austin 33,600 gross / 14,300 net leasehold acres Caldwell…
Recent Eagle Ford Activity 11 gross wells drilled in southwestern Gonzales County and completed in late 2017 and early 2018 Recent Eagle Ford Activity Map 2 wells in Davis Unit (5,300 foot lateral); 17% working interest 3 wells in…
Earthstone is Uniquely Positioned to Create Shareholder Value 50,800 net acres primed for years of low-cost growth Creation of Must Own Entire Midland Basin portfolio offers attractive economics creating Midland Basin Growth Right…
Financial Overview 28
Capital Budget, Guidance and Liquidity ESTE 2018 Capital Budget(1) FY Guidance(2) FY 2018E (1)(3) FY 2019E (3) ( in millions) Gross / Net Well Count Average Production (Boe/d) 10,500 - 11,000 25,000 - 29,000 Wells Spudded On-Line…
Hedging Summary Earthstone will continue to opportunistically add to its hedge position Oil Production Hedged Gas Production Hedged Period Volume (Bbls) Volume (Bbls/d) /Bbl Period Volume (MMBtu) Volume (MMBtu/d) /MMBtu Q4 2018…
Appendix 31
Pro Forma Capitalization for Sabalo Acquisition Assumptions ESTE Pro Forma Capitalization 500MM senior notes offering ( in millio ns) 225MM preferred equity placement As Filed Sabalo Acquisition Pro Forma 3Q'2018 Adjustments…
Analyst Coverage Firm Analyst Contact Info Baird Joseph Allman / 646-557-3209 / jdallmanrwbaird.com Coker Palmer David Beard / 631-725-8810 / beardcokerpalmer.com Alliance Global Partners Joel Musante / 203-349-4782 /…
Contact Information Mark Lumpkin, Jr. EVP, Chief Financial Officer Scott Thelander Director of Finance Corporate Offices Houston 1400 Woodloch Forest Drive Suite 300 The Woodlands, TX 77380 (281) 298-4246 Midland 600 N.…
Reconciliation of Non-GAAP Financial Measure The following table provides a reconciliation of Net income to Adjusted EBITDAX for ESTE and the computation of Operating Cash Flow for Sabalo for the periods indicated: ESTE 3Q18…
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