Strategic Combination Capital One Securities, Inc. 9th Annual Energy Conference New Orleans, LA December 11, 2014
Transaction Overview Earthstone Energy Inc. Oak Valley Resources, LLC Eagle Ford Asset Acquisition NYSE MKT: ESTE (from Flatonia Energy, LLC) 100mm+ in Cash 3.2 MMBoe 11.4 MMBoe 4.2 MMBoe 82% Liquids / 60% PD 65% Liquids / 32% PD…
Strategic Rationale Creating a growth-oriented company with significant upside for shareholders The combination Strengths: creates: Strengths: - Stable production and - Critical mass - Significant production and reserves cash…
Investment Highlights Management team with proven ability to Well-capitalized to pursue drill-bit growth create shareholder value and acquisitions Initial investors of GeoResources Liquidity of 174.3mm, consisting of achieved an IRR of…
Combined Company Overview Proven, growth-oriented management team Pro Forma Asset Location Oil-weighted with strong cash margins Initially focused on the Eagle Ford and Bakken Robust liquidity with clean balance sheet - 104.3mm in…
Earthstone Combined Financials First Six Months of 2014 Historical 2014 Eagle Ford Exchange Related Pro Forma (000s) Earthstone Oak Valley Acquistion Transactions Combined Revenues Oil sales 8,373 16,376 8,555 -- 33,304 Natural gas and…
Earthstone Combined Reserves and Production Proved Reserves (MMBoe)(1) CQ2 14 Production (Boepd) 20.0 4.2 18.8 4,000 589 3,572 3,500 11.4 2,325 15.0 3,000 2,500 10.0 2,000 1,500 5.0 3.1 1,000 658 500 0.0 0 ESTE OVR Flatonia…
Pro Forma Liquidity Pro forma liquidity of 174.3mm Combined Pro Forma Liquidity - Pro forma cash and equivalents of (mm) Earthstone Oak Valley Transaction 104.3mm 6/30/2014 6/30/2014 Adjustments1 Pro Forma - At closing, all debt…
Earthstone Combined Organizational Structure Public Oak Valley Resources, LLC Flatonia Energy, LLC Shareholders 21% 66% Earthstone Energy, Inc. 13% (NYSE MKT: ESTE) 100% 100% 100% 100% Oak Valley Operating, LLC EF Non-Op,…
Oak Valley is Backed by Top Tier, Repeat Equity Investors Oak Valley Management EnCap Investments L.P. Management team recently led GeoResources prior to Leading provider of private equity to the independent sale to Halcn Resources in…
Oak Valley Management Track Record Oak Valley management team has repeatedly created significant value for 2005 2007 Southern Bay Energy, LLC Gulf Coast, Permian Basin shareholders Initial investors 40% IRR - Success with multiple…
GeoResources Performance Summary (Oak Valley managements most recent public company) Stock Performance (%) Reserves Growth (MMBoe)(1) Merger with Southern Bay to Sale to Halcn 40.0 35.9 40 CAGR = 57% Initial Investors: 29.2 IRR = 35%…
Go-Forward Strategy Managements strategy is similar to that used in prior entities which delivered significant returns to shareholders Asset Strategy Corporate Strategy Optimize Existing Properties Align shareholders and management -…
Management Strong management and technical team with demonstrated ability and prior success Many underlying professional and support staff are also investors and have been involved in prior successful entities Years Years of…
Asset Overview
Operated Eagle Ford and Austin Chalk 47,200 gross leasehold acres controlled by Oak Valley in Gonzales and Fayette counties (oil window)(1) - 23,600 net leasehold acres(1) - Working interests range from 42% to 50%(1) 60 gross…
Operated Eagle Ford and Austin Chalk (Contd) 2 rigs currently drilling Eagle Ford locations; multi- well pads - 500 foot spacing between laterals - Offset by Sanchez, Penn Virginia, and Argent Eagle Ford - 12 gross wells brought…
Unit Comparison Average Drilling Days vs Depth Average number of days to drill Oak Valleys three most recent units have totaled 19 days (Kolar Labatt), 18 days (Newtonville North), and 15 days (Flatonia Southwest) per well 0…
Eagle Ford Drilling and Completion Summary Unit of Wells 30-Day IP % Oil Avg. Lateral Avg. Pounds Avg. Avg. Pounds (Boepd) Length of Proppant Number of of Proppant (Feet) Per Lateral Stages Per Stage Foot Kolar-Labatt 5 699 93 4,567…
Non-Operated Eagle Ford Non-operated position with BHP; 60 gross producing wells - 13 gross wells to be drilled in 2014 Two areas totaling 3,130 net acres - White Kitchen 15% working interest Held by production Gas and liquids…
Non-Operated Bakken Summary Near-Term Plans 88 gross / 7 net wells producing Expand acreage 10,919 net acres in North Dakota and Acquire production Montana (3,813 in ND / 7,106 net acres in MT) Establish operating presence…
Other Areas Milam County, Texas Webb County, Texas 18,925 net acres prospective for multiple 2,500 net acres liquids-rich plays (Austin Chalk, Buda, South Texas shallow oilfield under waterflood Georgetown, Eagle Ford, Woodbine)…
Property Overview Oak Valley Portfolio of conventional LeFlore County: 13,900 net acres with 34 PDP and unconventional wells in Red Oak Field assets located in: South Texas (Eagle Ford) Oklahoma Grayson County: 1,300 net acres…
CY 2015 Capital Expenditure Budget Two Eagle Ford Rig Program(1) With Flatonia Budget OVR+ESTE Acquisition Drilling and Completion (mm) (mm) Operated Eagle Ford 80.0 130.0(2) (Fayette / Gonzales Counties) Non-Operated Bakken 7.5…
Combined Reserve Summary SEC Pricing(1) Proved Reserves by Category Proved Reserves by Commodity 18.8 MMBoe 18.8 MMBoe PDNP 3% Gas PUD Oil 25% PDP 66% 66% 31% NGL 9% PV-10 by Category 249.1mm PDNP 4% PDP PUD 54%…
Contact Information Earthstone Energy, Inc. Oak Valley Resources, LLC Ray Singleton Frank Lodzinski Robert Anderson Neil Cohen Director, CEO, Director, CEO, EVP, Corporate VP, Finance and President and President Development and…
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