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Wednesday, June 23, 2021

Why did Earthstone Energy Inc. (ESTE) stock fluctuate on Thursday, April 1, 2021?

Earthstone Energy Inc. (ESTE) stock gained 25.31% in the morning session but it lost 7.03% in the after-hours trading on Thursday, April 1, 2021.


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ESTE shares have gained 474.36% over the last 12 months, and they have moved up by 26.20% in the past week. Over the past three months, the stock has gained 65.31%, while over the past six months, it has added 245.95%.

Let’s try to find out the reason behind its negative performance in the after-hours session on Thursday.

Acquisition of  Midland Basin Asset 

On April 1, 2021, Earthstone Energy Inc. (ESTE) announced the acquisition of privately-held operating assets located in the Midland Basin from Tracker Resource Development III, LLC and from affiliates of Sequel Energy Group LLC which hold well-bore interests in certain of the producing wells operated by Tracker.

1901 Partners Management LP and EnCap Investments L.P. both have 49% each ownership interest in Tracker. The acquisition is done in approximately $126.5 million.

Recent financial results

On March 11, 2021, ESTE announced financial and operating results for the quarter and year ended December 31, 2020.

Fourth Quarter 2020 Highlight

  • ESTE reported revenues of 36.68 million for the quarter ended December 2020.
  • For the fourth quarter, ESTE Adjusted EBITDAX was $29.8 million.
  • ESTE stock had a free cash flow of $8.4 million in the reported quarter
  • ESTE spent $20.3 million in capital expenditures in Q4 2020.
  • It suffered a net loss of $18.4 million or $0.28 per Adjusted Diluted Share in Q4 2020.
  • ESTE reported an adjusted net income of $5.8 million or $0.09 per Adjusted Diluted Share in Q4 2020.

The full Year 2020 Highlights

  • For the full year 2020, ESTEAdjusted EBITDAX was $144.2 million.
  • ESTE had a free cash flow of $72.2 million for full-year 2020.
  • It spent $66.8 million in capital expenditures for full-year 2020.
  • Earthstone Energy suffered a net loss of $29.4 million or $0.45 per Adjusted Diluted Share in the year 2020.
  • It had an adjusted net income of $30.0 million or $0.46 per Adjusted Diluted Share in 2020.

About ESTE

Earthstone Energy, Inc. is a growth-oriented, independent energy company engaged in the development and operation of oil and natural gas properties. Its primary assets are located in the Midland Basin of West Texas and the Eagle Ford Trend of south Texas.

Conclusion: The ESTE turnaround in the extended trading session on April 1 is still a mystery. We can only assume that the investors did not like the recent acquisition which we mentioned earlier and we hope that the negative trend will not continue after the Easter break.

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