Earthstone Energy, Inc (ESTE) saw its loss narrow to $54.54 million, or $2.92 a share for the year ended Dec. 31, 2016. In the previous year period, the company reported a loss of $116.66 million, or $8.43 a share. Revenue during the year dropped 11.52 percent to $42.27 million from $47.77 million in the previous year.
Operating loss for the year was $46.02 million, compared with an operating loss of $149.23 million in the previous year.
However, the adjusted EBITDA for the year stood at $16.26 million compared with $4.33 million in the prior year period. At the same time, adjusted EBITDA margin improved 2940 basis points in the year to 38.47 percent from 9.07 percent in the last year period.
Frank A. Lodzinski, President and Chief Executive Officer of Earthstone Energy, Inc., commented, “The fourth quarter of 2016 was a transformational period for our Company. We achieved meaningful production growth by completing our Eagle Ford inventory and participating in our first Wolfcamp A well in Howard County, Texas. In 2017, we plan to drill and complete 11 gross (4.4 net) Eagle Ford wells in southwestern Gonzales County, Texas. Further, as previously announced in November 2016, the pending acquisition of Bold Energy will position the Company as an operator in the prolific Midland Basin of west Texas. We are anxious to get the Bold transaction closed and fully demonstrate the potential of the acreage to the market. We expect to start with a one rig program in late April 2017, and we are planning to mobilize a second rig in the fourth quarter of 2017 to further accelerate development of Bold’s assets. In anticipation of closing, we have already started the process to integrate the operations of both companies.”
Operating cash flow turns positive
Earthstone Energy, Inc has generated cash of $1.71 million from operating activities during the year as against cash outgo of $10.44 million in the last year. The company has spent $59.87 million cash to meet investing activities during the year as against cash outgo of $66.60 million in the last year.
Cash flow from financing activities was $45.09 million for the year as against cash outgo of $0.14 million in the last year period.
Cash and cash equivalents stood at $10.20 million as on Dec. 31, 2016, down 56.16 percent or $13.06 million from $23.26 million on Dec. 31, 2015.
Working capital remains negative
Working capital of Earthstone Energy, Inc was negative $11.49 million on Dec. 31, 2016 compared with negative $2.67 million on Dec. 31, 2015. Current ratio was at 0.70 as on Dec. 31, 2016, down from 0.95 on Dec. 31, 2015.
Debt increases substantially
Earthstone Energy, Inc has witnessed an increase in total debt over the last one year. It stood at $14.30 million as on Dec. 31, 2016, up 27.75 percent or $3.11 million from $11.19 million on Dec. 31, 2015. Short-term debt stood at $1.60 million as on Dec. 31, 2016. Total debt was 4.52 percent of total assets as on Dec. 31, 2016, compared with 4.22 percent on Dec. 31, 2015. Debt to equity ratio was almost stable at 0.06 as on Dec. 31, 2016, when compared with the last year.
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