Each one in plain English, with the numbers worked through for a shareholder.
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.
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.
Earthstone agreed on March 31, 2021 to buy Irion County, Texas oil and gas assets from Tracker Resource Development III for $29.6 million cash plus 4.7 million new Class A shares, and well-bore interests from Sequel for $52.0 million cash plus 1.5 million new Class A shares. Closing is expected in Q3 2021 and needs shareholder approval of the share issuance (including a majority excluding EnCap and management); Warburg Pincus entities, holding 13,238,110 Class A shares, agreed to vote in favour. The share issuance would dilute existing holders, and the Sequel deal only closes if the Tracker deal does.
22 Dec 2020capital raising announcement● NeutralMajor
On Dec 17, 2020 Earthstone agreed to buy the subsidiaries of Independence Resources Holdings and Independence Resources Manager (unaffiliated sellers, principally owned by Warburg Pincus) for about $135.2 million cash (mostly paying off the sellers' credit facility, estimated $132.7 million) plus about 12.7 million newly issued Class A shares, which would dilute existing holders. Closing was expected in Q1 2021. Warburg would get a right to appoint one director and a 120-day lock-up on its shares. A credit agreement amendment, effective only if the deal closes, would raise the borrowing base from $240.0 million to $360.0 million and raise the interest rate.
17 Oct 2018capital raising announcement● NeutralMajor
On Oct 17, 2018 Earthstone agreed to acquire Sabalo Energy's Midland Basin assets (about 20,800 net acres) for about $950 million: roughly $650 million cash and roughly $300 million in new EEH units and Class B shares (32,315,695 each) issued to Sabalo Holdings. It also agreed to sell EIG $225 million of Series A convertible preferred stock plus up to $30 million of Class A stock, to close alongside the acquisition. Closing needs stockholder approvals (EnCap, with about 61.2% of votes, agreed to vote yes) and is expected in Q4 2018 or Q1 2019. A $16 million termination fee applies in certain cases. Existing holders face dilution from the new shares, and the cash portion is to be funded partly by a bridge loan or notes and revolver borrowings.
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.
