13 Nov 2023listing compliance notice▼ BadMajor
EARTHSTONE ENERGY INC deregistered its securities, ending its obligation to file reports with the SEC.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
3 Nov 2023business combination● NeutralMajor
The Permian Resources merger closed on November 1, 2023. Each Earthstone Class A share was converted into 1.446 Permian Resources Class A shares (cash for fractions), Class B shares into 1.446 Permian Resources Class C shares, and EEH units into 1.446 Permian OpCo units. Earthstone is now a wholly owned subsidiary of Permian Resources renamed Earthstone Energy, LLC, its Class A stock was delisted from the NYSE, all directors and the named executives (Anderson, Lumpkin, Collins, Merrifield, Oviedo) left, and the Wells Fargo credit agreement was terminated with all obligations paid in full. Earthstone intends to file a Form 15 to suspend its reporting. This resolves the merger thread.
1 Nov 2023listing compliance notice● NeutralMajor
EARTHSTONE ENERGY INC's exchange filed to remove a class of its securities from listing.
30 Oct 2023business combination▲ GoodMajor
Earthstone stockholders approved the Permian Resources merger at the October 30, 2023 special meeting: 123,219,765 shares voted for, 63,755 against and 76,933 abstained, out of 140,588,696 Class A and Class B shares outstanding on the record date. The company now expects closing on November 1, 2023, subject to remaining closing conditions. This resolves the open vote thread; the closing itself is still to come.
23 Oct 2023business combination▲ Good
Earthstone's board declared a cash dividend of $0.1446 per Class A share (the press release says Class A and Class B), payable November 6, 2023 to holders of record on October 31, 2023 who hold through the merger closing. This looks like the interim dividend the merger agreement allowed, tied to the June 30, 2023 closing-date equivalent (inference); the merger has not yet closed.
3 Oct 2023business combination▲ Good
Earthstone announced that the antitrust (Hart-Scott-Rodino) waiting period for the Permian Resources merger expired on October 2, 2023, clearing that regulatory step. The filing also says Permian Resources' registration statement became effective September 25, 2023 and proxy mailing began September 26, 2023; stockholder votes and closing are still to come.
26 Sept 2023business combination● NeutralMajor
Earthstone filed its definitive joint proxy statement with Permian Resources, giving the terms the earlier filings lacked: each Earthstone Class A share converts into 1.446 Permian Resources Class A shares (Class B into Class C at the same ratio), and Earthstone holders would own about 27% of the combined company on a fully diluted basis. The ratio is fixed, so value moves with Permian Resources' share price: about $18.64 per share on August 18, 2023 and about $19.00 on September 22, 2023. Both companies' stockholders vote on October 30, 2023, and holders of about 47.8% of Earthstone's voting power have agreed to vote in favour. Approval needs a majority of Earthstone's outstanding common stock, and the merger has not closed.
20 Sept 2023business combination● Neutral
Earthstone set September 22, 2023 as the record date for its special stockholder meeting on October 30, 2023, where holders will vote on the Permian Resources merger agreement of August 21, 2023. Only holders of record on that date can vote; the merger is still pending and this filing adds no new terms.
6 Sept 2023business combination● Neutral
Permian Resources filed its Form S-4 registration statement on September 6, 2023, containing the joint proxy statement and prospectus for the Earthstone merger. It is not yet effective and may change; stockholder votes are still to come. This filing is a procedural step and adds no new terms.
21 Aug 2023business combination● NeutralMajor
Six days after the Novo closing, on August 21, 2023, Earthstone and its operating subsidiary signed a merger agreement under which both become wholly owned subsidiaries of Permian Resources Corporation, with Earthstone holders receiving Permian Resources shares as consideration (the press release is described as an all-stock deal). The filing text shown does not state the exchange ratio. It needs approval by Earthstone and Permian Resources stockholders and an S-4 filing, and Earthstone may pay an interim dividend equivalent to what holders would have received had the merger closed June 30, 2023. This begins the process that would end Earthstone as a separate listed company; it has not closed.
17 Aug 2023asset acquisition disposition▲ GoodMajor
On August 15, 2023 Earthstone closed the Novo acquisition, paying about $1.4 billion in cash (including the $112.5 million escrow deposit), funded from cash on hand and credit facility borrowings. Immediately afterwards it sold an undivided one-third interest in the Novo assets to Northern Oil and Gas for about $468.4 million, subject to post-closing settlement. Novo was owned by EnCap, which held about 39.9% of Earthstone's voting power, and Earthstone's conflicts committee approved the deal. Novo and its subsidiaries were added as guarantors of the credit facility and both note issues, and the press release says the larger credit facility amendment became effective.
11 July 2023debt financing● NeutralMajor
Earthstone signed a ninth amendment to its bank credit agreement that raises the elected commitments from $1.4 billion to $1.75 billion and the borrowing base from $1.65 billion to $2.0 billion, and adds JPMorgan and Citibank as lenders. It only takes effect once the Novo acquisition closes (and no later than September 19, 2023), so it continues the Novo financing.
30 June 2023debt financing● NeutralMajor
Earthstone's operating subsidiary (EEH) sold $500.0 million of 9.875% senior unsecured notes due July 15, 2031, issued at 97.968% of face for net proceeds of about $482.3 million, closing June 30, 2023. The money is meant to fund part of the Novo acquisition announced in June. If Novo does not close by the August 28, 2023 outside date (or any extended date), the notes must be redeemed at the issue price plus accrued interest.
16 June 2023material agreement● NeutralMajor
On June 14, 2023 Earthstone's subsidiary agreed to buy 100% of Novo Oil & Gas Holdings for $1.5 billion in cash, subject to adjustments, and to sell an undivided 1/3 interest in the Novo assets to Northern Oil and Gas for about $500 million right after closing. That would leave Earthstone with 2/3 of the assets for roughly $1 billion. Closing needs HSR clearance, with an outside date of August 28, 2023 (September 12 if only HSR is outstanding). A $112.5 million deposit is in escrow, and Wells Fargo and Truist committed $250 million of additional revolver capacity. Earthstone intends to fund it with cash, revolver borrowings and new debt.
4 Apr 2023debt financing▲ Good
On March 30, 2023 Earthstone amended its credit facility again: elected commitments rose from $1.2 billion to $1.4 billion, the $250 million term loan became an elected revolving commitment, the borrowing base was set at $1.65 billion (down from $1.7 billion set in August 2022), and new banks joined. About $452 million was drawn at March 31, 2023, down from $520 million at December 31, 2022, with maturity still June 2027. This continues the debt paydown thread.
2 Nov 2022asset acquisition disposition▲ GoodMajor
Earthstone reported third quarter 2022 results: revenue of $531.5 million, net income attributable to Earthstone of $211.5 million, and average production of 94,329 Boepd. It repurchased 3 million Class A shares for $43.7 million, confirmed the Titus close on August 10, and raised fourth quarter production guidance to 98,000-102,000 Boepd. Management says it used free cash flow to reduce debt, with a debt-to-annualized quarterly Adjusted EBITDAX ratio of 0.8x, and plans a five-rig program in 2023. This continues the debt paydown the CEO expected earlier in 2022.
11 Aug 2022asset acquisition disposition● NeutralMajor
On August 10, 2022 Earthstone closed the two Titus acquisitions of Delaware Basin, New Mexico leases, paying about $575 million in cash (subject to final settlement) and issuing 3,857,015 Class A shares; $64.5 million of the cash is held in escrow. This completes the pending Titus deal from the open threads. The same filing amends the credit facility, raising the borrowing base from $1.4 billion to $1.7 billion and elected commitments from $800 million to $1.2 billion, including a $250 million term loan at Term SOFR plus 3.25%. Titus sellers' shares carry a registration rights agreement (resale filing within 15 days) and lock-ups (50% for 30 days, the rest for 60 days).
1 Aug 2022material agreement● Neutral
On August 1, 2022, Earthstone, EnCap and the Warburg parties amended the February 2022 voting agreement to eliminate Warburg's right to designate a director to Earthstone's board. This reverses the right Warburg had kept under the earlier agreement.
5 July 2022listing compliance notice▼ Bad
EARTHSTONE ENERGY INC withdrew a registration statement, abandoning the offering it covered.
29 June 2022capital raising announcement● NeutralMajor
On June 27, 2022 Earthstone agreed to buy two sets of Northern Delaware Basin (New Mexico) oil and gas assets from Titus I and Titus II: about $270 million cash plus 1,811,132 Class A shares, and about $305 million cash plus 2,047,811 shares, respectively. Deposits of about $18.8 million and $21.2 million were placed in escrow. Closing is expected in the third quarter of 2022, subject to conditions including NYSE listing of the shares and antitrust waiting period expiry. Lock-ups would free 50% of the shares after 30 days and the rest after 60 days. This is a new acquisition thread following the Bighorn and Chisholm deals.
2 June 2022material agreement▲ GoodMajor
On June 2, 2022, Earthstone's operating subsidiary amended its bank credit agreement (the sixth amendment): maturity extended to June 2027, borrowing base raised from $1.325 billion to $1.4 billion, and the interest rate reduced. Elected commitments stay at $800 million. This continues the credit-facility history and resolves the open question about the borrowing base after the April notes. The CEO says it expects to pay down significant amounts outstanding for the rest of 2022 (a management expectation).
18 Apr 2022asset acquisition disposition● NeutralMajor
Earthstone closed the Bighorn Acquisition on April 14, 2022, buying Midland Basin leases for about $638.9 million in cash (subject to final settlement) plus 5,650,977 new Class A shares, of which 510,638 sit in escrow for Bighorn's indemnity obligations. On the same day it closed the $280 million sale of 280,000 Series A convertible preferred shares to EnCap Fund XI and Cypress (a Post Oak fund), each convertible into about 90.09 Class A shares ($11.10 per share as-converted). This completes the deals announced Jan 30, 2022. The preferred accrues 8% dividends if not converted by Oct 1, 2022, and must be redeemed at $1,000 per share plus unpaid dividends if not converted by Nov 22, 2025. Cypress gets the right to appoint one director, and resale registration is due within 75 days, with lock-ups releasing 25% at 60 days, 25% at 90 and 50% at 120 days. Frost W. Cochran is appointed to the board.
13 Apr 2022debt financing● NeutralMajor
Earthstone's operating subsidiary EEH sold $550 million of 8.000% senior unsecured notes due April 15, 2027 (closed April 12, 2022), with net proceeds of about $540.4 million. The money is meant to repay borrowings under the bank credit facility, with any remainder for general corporate purposes; interest is paid semi-annually starting October 15, 2022. This adds a bond layer that ranks behind the secured bank debt, and follows the credit agreement's December 2021 note-offering provision.
18 Feb 2022asset acquisition disposition● NeutralMajor
On February 15, 2022 Earthstone closed the Chisholm acquisition of oil and gas leases in Lea and Eddy Counties, New Mexico, paying about $314.7 million in cash (subject to final settlement) and issuing 19,417,476 Class A shares, of which 4,441,748 are held in escrow for indemnity obligations. This is the company's first New Mexico position in the context seen, and the large share issue dilutes existing holders; Chisholm gets resale registration (filing within 45 days) and staged lock-ups, and Warburg keeps its right to appoint one director under an amended voting agreement with EnCap. Financial statements and pro forma information are still to be filed by amendment.
29 Dec 2021debt financing● NeutralMajor
On December 24, 2021 Earthstone's lenders amended the credit facility (fifth amendment), raising the borrowing base from $650 million to $825 million unless Earthstone completes a note offering before closing. The amendment depends on closing of a December 15, 2021 purchase agreement with Chisholm Energy, and also adds hedging requirements, adjusts some financial covenants and changes limits on restricted payments (such as payments to owners).
2 Nov 2021asset acquisition disposition▲ GoodMajor
The Foreland and BCC acquisitions announced in October closed on November 2, 2021. Earthstone paid about $39.3 million in cash (less than the $49.2 million at signing, reflecting preliminary adjustments, with final settlement still to come) and issued 2,611,111 Class A shares. Foreland holders get resale registration rights (filing within 60 days) and staged lock-ups of 60, 90 and 120 days; the company calls it its fourth acquisition of the year.
4 Oct 2021capital raising announcement▲ GoodMajor
On September 30, 2021 Earthstone agreed to buy Midland Basin oil and gas assets in Irion and Crockett Counties, Texas from Foreland Investments LP for $23.5 million cash plus about 2.6 million new Class A shares, and well-bore interests from BCC-Foreland LLC for $25.66 million cash (announced Oct 4). The press release puts the combined price at about $73.2 million, with closing expected in Q4 2021 and a December 29, 2021 outside date; this continues the 2021 run of Midland Basin deals (Independence, Tracker/Sequel) and would add new shares for holders.
20 Sept 2021material agreement▲ GoodMajor
Earthstone's lenders raised the credit facility borrowing base from $550 million to $650 million on September 17, 2021, and added provisions for replacing LIBOR and some lender changes. As of August 31, 2021 the company had $286.6 million drawn and about $364.6 million of liquidity after the increase; management attributed the increase to its 2021 drilling, Eagle Ford acquisitions closed in May and June, and better commodity prices.
23 July 2021asset acquisition disposition● NeutralMajor
The Tracker and Sequel acquisitions announced in April closed on July 20, 2021, for $67.8 million in cash (after adjustments, still subject to final settlement) and 6.2 million new Class A shares. EnCap, which owned 49% of Tracker, receives its share of the price; an independent audit committee approved the deal with a fairness opinion. At the same meeting, shareholders approved increasing the board from nine to eleven seats (Anderson added as a Class III director) and 2.6 million more shares for the incentive plan; resale registration and 120-day lock-ups for EnCap Fund VIII and ZIP apply to the new shares.
20 Apr 2021material agreement▲ GoodMajor
Earthstone's lenders raised the credit facility borrowing base from $360 million (the level set in the December 2020 Second Amendment) to $475 million in a scheduled redetermination, with a further rise to $550 million once the Tracker/Sequel acquisition closes. At March 31, 2021 the company had $223.4 million drawn and about $253.0 million of liquidity after the increase.