Each one in plain English, with the numbers worked through for a shareholder.
21 Dec 2016business combination● NeutralMajor
Earthstone filed a preliminary proxy statement (dated Dec 20, 2016, meeting date still blank) asking holders to vote on the Bold Energy contribution agreement signed in November 2016. Votes also cover transferring substantially all Earthstone assets into the new holding company, increasing authorized shares from 100M to 250M (200M Class A, 50M Class B), converting existing stock one-for-one into Class A, and a plan amendment. The board unanimously recommends approval after a special committee (Joliat and Urban, advised by Stephens) reviewed the deal; the stock closed at $8.98 on Nov 7, 2016, and the fee table values the deal at about $452.5M using a $13.62 price on Dec 15. This continues the Bold thread, which is still pending and subject to the vote; Bold holders are expected to own about 61%.
EARTHSTONE ENERGY INC shareholders approved the routine matters put to a vote at the company's annual meeting (director elections, auditor ratification, and the executive-pay advisory vote).
Oak Valley Resources, LLC, Bold Energy Holdings, LLC, EnCap Energy Capital Fund V, L.P, EnCap V-B Acquisitions, L.P, EnCap Energy Capital Fund VI, L.P, EnCap VI-B Acquisitions, L.P, EnCap Energy Capital Fund VII, L.P, EnCap Energy Capital Fund IX, L.P, EnCap Partners, LLC reported a EARTHSTONE ENERGY INC shareholding of 9,162,452 shares (41.10% of votes) in a periodic institutional filing.
8 Nov 2016capital raising announcement● NeutralMajor
On November 7, 2016, Earthstone signed a contribution agreement with Bold Energy (Midland Basin properties); Bold and Earthstone are both affiliates of funds controlled by EnCap. Under an 'Up-C' structure, Earthstone and Lynden would put their assets into a new holding company, Earthstone Energy Holdings, and Bold would get 36,070,828 units plus voting Class B shares; existing Earthstone holders would own about 39% and Bold holders about 61% on a fully diluted, as-converted basis. Oak Valley (41.1% of the stock) has agreed to vote in favor, closing needs a stockholder vote (including a majority of holders other than Oak Valley and executives) and NYSE MKT listing, and it is expected in Q1 2017 with an outside date of March 31, 2017. Earthstone may owe Bold a $5.5M termination fee in certain alternative-deal cases. The board would be nine members, four designated by EnCap. This opens a major new thread that would heavily dilute current holders and shift control to EnCap.
EARTHSTONE ENERGY INC announced its upcoming annual shareholder meeting, covering the routine agenda (director elections, auditor ratification, executive-pay advisory vote).
EARTHSTONE ENERGY INC announced its upcoming annual shareholder meeting, covering the routine agenda (director elections, auditor ratification, executive-pay advisory vote).
EARTHSTONE ENERGY INC shareholders approved the routine matters put to a vote at the company's annual meeting (director elections, auditor ratification, and the executive-pay advisory vote).
On July 13, 2016, Earthstone dismissed its auditor Weaver and Tidwell and appointed Grant Thornton to audit the 2016 financial statements; the audit committee approved the change. The filing says there were no disagreements and no adverse or qualified opinions, but Weaver had reported a material weakness in internal controls at Dec 31, 2015 (segregation of duties, review and approval, verification, and system access), which was already disclosed in the 10-K. The filing does not state why the auditor was changed.
On June 16, 2016, Earthstone sold 4,500,000 new shares at $10.50 each in an underwritten public offering (SunTrust Robinson Humphrey and Seaport Global), closed June 21, with net proceeds of about $44.7M. Underwriters have a 30-day option for up to 675,000 more shares. Proceeds are meant to repay revolver debt, which rose after the Lynden deal, and for general purposes including completing 12 gross (5.3 net) wells awaiting completion. This adds new shares, diluting existing holders further.
On May 18, 2016, Earthstone completed the Lynden Energy acquisition announced in December 2015, issuing about 3.7 million shares at 0.02842 Earthstone share per Lynden share; Lynden is now a wholly owned subsidiary and Lynden stock has stopped trading on the TSX Venture Exchange. Lynden holders approved on May 12 and the BC court gave its final order on May 13. Former Lynden holders now own 21% of 17.535 million Earthstone shares, so existing holders are diluted to 79%, as expected. The same day Earthstone amended its Bank of Texas credit agreement (second amendment): borrowing base set at $75.0M (down from $80.0M), higher interest margins, hedging required within 60 days, and the Lynden properties mortgaged as security. Press release says about $47.8M of debt and $0.2M of letters of credit were in use, with about $12.0M of cash. Audited Lynden financials and pro formas are still to be filed by amendment.
