Each one in plain English, with the numbers worked through for a shareholder.
13 July 2015production update▲ GoodMajor
Earthstone issued an operations update on July 13, 2015. On June 30 it acquired a 50% operated interest in about 970 gross acres and two Austin Chalk wells in Gonzales County, Texas, from an unaffiliated party, with a private company taking the other 50% non-operated. It also raised its 2015 capital budget from $85.0M to $90.0M, continuing a one-rig program with 12 Eagle Ford wells drilled in 2015 versus the four in the March 9 budget. The Reeves Unit #1H Upper Austin Chalk well averaged 411 Boepd (95% oil) for the week ended June 30. This builds on the Eagle Ford development started after the Dec 2014 Oak Valley closing.
On June 4, 2015, Earthstone and the parties to the October 2014 Flatonia contribution agreement amended it so Flatonia keeps its right to send an observer to board meetings but gives up its alternative right to name a director. The director right can be reinstated if Oak Valley's ownership falls below 50%, if certain management changes occur, on a Change of Control, or on June 1, 2017, whichever comes first.
On December 19, 2014, Earthstone closed both the Oak Valley exchange (about 9,124,452 shares issued for three subsidiaries including about $130.0 million of cash) and the Flatonia contribution (2,957,288 shares for a 20% interest in the Eagle Ford project, leaving Earthstone's subsidiary and Flatonia with 50% each). Stockholders also approved the 2014 incentive plan (up to 750,000 shares). Ownership is now Oak Valley 66.0%, Flatonia 21.4%, and former Earthstone holders 12.6%, as the proxy forecast, and registration-rights deals were signed with both holders. The company's address moved to The Woodlands, Texas, and a $500.0 million four-year senior secured credit facility with Bank of Texas was entered into (rest of the filing is cut off).
Earthstone filed the final proxy for a December 19, 2014 special meeting (record date November 7). It adds a second deal signed October 16, 2014: a 'Flatonia contribution' in which Earthstone would issue 2,957,291 shares (21.4% after both deals) for a further 20% interest in the Fayette and Gonzales County, Texas properties, taking the combined company from 30% to 50%. If both deals close, existing shareholders would own 12.6%, Oak Valley 66.0% and Flatonia 21.4%; the Flatonia deal cannot proceed unless the Oak Valley exchange is approved. This expands the earlier Oak Valley proposal and further reduces existing holders' share.
20 Oct 2014asset acquisition disposition▲ GoodMajor
Earthstone agreed to take full ownership of the Eagle Ford acreage it had been developing jointly in Fayette and Gonzales Counties, Texas, buying out partner Flatonia Energy's 70% share entirely with stock. The barrels came at the price of a large new shareholder: Flatonia ends up holding 21.4% of the company.
On September 26, 2014, Earthstone and Oak Valley amended their exchange agreement. The deadline for closing moved from November 30, 2014 to January 31, 2015 (and the fallback date from December 31, 2014 to February 28, 2015), and Oak Valley is limited to at most one interim acquisition before closing. This continues the pending Oak Valley deal and gives it more time.
Earthstone filed a preliminary proxy statement asking shareholders to approve an exchange agreement (dated May 15, 2014) with Oak Valley Resources, LLC. Earthstone would acquire Oak Valley's three Texas subsidiaries for about 9.12 million new shares, which would leave existing shareholders with 16% and Oak Valley with 84% and put control with Oak Valley-affiliated people. Oak Valley is to make further capital contributions of $107,020,000 (subject to adjustment). Shareholders would also vote on raising authorized shares to 100 million common and 20 million preferred, a 2014 incentive plan of up to 750,000 shares, and an advisory vote on an executive severance plan. The meeting date was left blank.
On December 21, 2012, Earthstone signed a credit agreement with BOKF, N.A. (Bank of Oklahoma) for a revolving line of credit of up to $25,000,000, limited by a borrowing base that starts at $6,000,000, expiring December 20, 2017 and secured by a first lien on its oil and gas properties. The company's press release says it replaces the earlier American National Bank line and that the money is mainly meant to pay its share of horizontal Bakken drilling and completion costs in the Williston Basin; the CEO says the company, which had avoided debt, now needs outside funding.
Drilling has finished on the first horizontal well, the Federal #1-5H in Sheridan County, Montana, which went through about 5,000 feet of Ratcliffe formation with what the company calls encouraging results. Completion work is expected within two weeks, so no production results are yet known. The nearby vertical Federal 22-5 well averages about 45 barrels of oil per producing day, up 180% from before the acquisition, and a workover is planned on the Hoffelt 2.
Earthstone disclosed a new Montana exploration project in Sheridan County targeting the Ratcliffe formation: about $170,000 for leasehold plus a 4.5% working interest in an existing oil well, and a commitment to join at least two horizontal wells costing roughly another $1,000,000. Vess Oil Corporation operates, and drilling of the first well has begun. The filing also confirms the NYSE Amex listing took effect December 20, 2011, completing the move announced December 9. The Williston Basin focus fits the stated plan for the Colorado sale proceeds.
Earthstone's board approved moving its stock listing from the NASDAQ Capital Market to NYSE Amex, expected around December 20, 2011, under the same ticker ESTE. The company says the move is meant to raise its profile with investors and may narrow the gap between buying and selling prices. This is a voluntary move, not a compliance problem.
22 Nov 2011asset acquisition disposition● NeutralMajor
Earthstone agreed on November 18, 2011 to sell substantially all its Antenna-Federal interests in Colorado's Wattenberg Field (38 producing gas wells) to an unrelated private buyer for $6.25 million, about $5.85 million net after costs. The sale is subject to the buyer's final title review. The company calls the property non-core and says it plans to put the cash into other areas, especially the Williston Basin.
16 June 2011asset acquisition disposition● Neutral
The company (now called Earthstone Energy) announced earnings for the fiscal year ended March 31, 2011 through a press release attached as an exhibit. The filing text itself gives no figures, so no results can be stated here.
A second amendment repeating the March 16 withdrawal of FieldPoint's offer for Basic Earth, this time marked as the final amendment reporting the results. It adds nothing new beyond formally closing out the offer.
FieldPoint said it is ending its effort to swap its shares for Basic Earth's shares, and has asked the SEC to withdraw its registration statement. This ends the January 2009 offer, so Basic shareholders will not receive FieldPoint shares under it.
FieldPoint Petroleum launched a tender offer to swap its shares for Basic Earth's, at one FieldPoint share for every two Basic shares, for between 8,907,448 and 17,465,585 Basic shares. This was a bid from an outside company, not an agreed deal with Basic, and the filing does not say how Basic's board responded.
The auditor Hein & Associates stopped acting for the company on July 18, 2008, after telling the Audit Committee on July 15 it would decline to stand for re-election. The company hired Ehrhardt Keefe Steiner & Hottman PC for the year ending March 31, 2009. The filing says there were no disagreements with Hein and no adverse opinions, and it notes the earlier deferred-tax control weakness for fiscal 2006 and 2007 that led to the June 2008 restatement.
The company (then named Basic Earth Science Systems) said its fiscal 2007 and 2006 financial statements can no longer be relied on, because it miscalculated the deferred tax liability on its oil and gas properties. It expects the correction to add roughly $900,000 to $1.25 million to its accumulated deficit and says it is reassessing its internal controls.
