Earthstone Energy, Inc. Announces Termination of Sabalo Acquisition and Cancellation of Special Meeting of Stockholders
21 Dezembro 2018 - 10:40PM
Business Wire
Earthstone Energy, Inc. (NYSE: ESTE) (“Earthstone” or the
“Company”), today announced that due to the recent significant
decline in commodity prices and the related adverse effect on the
debt and equity markets, the Company and Sabalo Holdings, LLC
(“Sabalo Holdings”) have entered into an agreement to terminate the
pending acquisition by the Company of Sabalo Energy, LLC under a
Contribution Agreement dated as of October 17, 2018, effective
immediately. In addition, the special meeting of Earthstone
stockholders scheduled for January 3, 2019 to approve the
acquisition has been cancelled. As part of the mutual termination
agreement, Earthstone will reimburse Sabalo Holdings for
transaction related expenses up to approximately $3.1 million,
including costs incurred related to the acquisition of well-bore
interests held by Shad Permian, LLC.
Management Comments
Frank A. Lodzinski, Chief Executive Officer of Earthstone,
commented, “Despite the high quality of the Sabalo assets and the
outstanding opportunity the transaction provided Earthstone, the
drastic change in commodity prices and in the debt and equity
markets has negatively affected the significant merits of the
acquisition. Accordingly, we have mutually agreed to terminate the
Contribution Agreement. While we are disappointed with this result,
we greatly appreciate the hard work of the Sabalo management team,
our officers and employees and our financial partners, as we all
worked tirelessly to close this deal.”
Mr. Lodzinski further commented, “We are pleased with our
achievements in 2018. As always, our highest priority is to protect
our shareholders’ interests and we believe that Earthstone is
well-positioned to continue to focus on shareholder returns and
successfully withstand even a prolonged downturn in commodity
prices and capital markets, given our operating strengths, low
leverage, disciplined capital approach, and favorable hedge
position. We will continue to concentrate on maintaining a strong
balance sheet, operating efficiently, making accretive acquisitions
that add production and enhance our acreage positions and pursuing
larger transactions that are beneficial to our shareholders.
Finally, in January, we expect to provide an operations update,
announce our capital program and provide guidance for 2019.”
About Earthstone Energy,
Inc.
Earthstone Energy, Inc. is a growth-oriented, independent energy
company engaged in the acquisition, development and operation of
oil and natural gas properties, primarily in the Midland Basin of
west Texas. Earthstone is listed on the New York Stock Exchange
under the symbol “ESTE.” For more information, visit the Company’s
website at www.earthstoneenergy.com.
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). Statements that are
not strictly historical statements constitute forward-looking
statements and may often, but not always, be identified by the use
of such words such as “expects,” “believes,” “intends,”
“anticipates,” “plans,” “estimates,” “forecast,” “guidance,”
“potential,” “possible,” or “probable” or statements that certain
actions, events or results “may,” “will,” “should,” or “could” be
taken, occur or be achieved. The forward-looking statements include
statements about the expected future reserves, production,
financial position, business strategy, revenues, earnings, costs,
capital expenditures and debt levels of the Company, and plans and
objectives of management for future operations. Forward-looking
statements are based on current expectations and assumptions and
analyses made by Earthstone and its management in light of
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors
appropriate under the circumstances. However, whether actual
results and developments will conform to expectations is subject to
a number of material risks and uncertainties, including but not
limited to: declines in oil, natural gas liquids or natural gas
prices; the level of success in exploration, development and
production activities; adverse weather conditions that may
negatively impact development or production activities; the timing
of exploration and development expenditures; inaccuracies of
reserve estimates or assumptions underlying them; revisions to
reserve estimates as a result of changes in commodity prices;
impacts to financial statements as a result of impairment
write-downs; risks related to level of indebtedness and periodic
redeterminations of the borrowing base under Earthstone’s credit
agreement; Earthstone’s ability to generate sufficient cash flows
from operations to meet the internally funded portion of its
capital expenditures budget; Earthstone’s ability to obtain
external capital to finance exploration and development operations
and acquisitions; the ability to successfully complete any
potential asset dispositions and the risks related thereto; the
impacts of hedging on results of operations; uninsured or
underinsured losses resulting from oil and natural gas operations;
Earthstone’s ability to replace oil and natural gas reserves; and
any loss of senior management or technical personnel. Earthstone’s
annual report on Form 10-K for the year ended December 31, 2017,
quarterly reports on Form 10-Q, recent current reports on Form 8-K,
and other SEC filings discuss some of the important risk factors
identified that may affect Earthstone’s business, results of
operations, and financial condition. Earthstone undertakes no
obligation to revise or update publicly any forward-looking
statements except as required by law.
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Mark Lumpkin, Jr.Executive Vice President – Chief Financial
OfficerEarthstone Energy, Inc.1400 Woodloch Forest Drive, Suite
300The Woodlands, TX 77380281-298-4246mark.lumpkin@earthstoneenergy.com
Scott ThelanderDirector of FinanceEarthstone Energy, Inc.1400
Woodloch Forest Drive, Suite 300The Woodlands, TX
77380281-298-4246scott@earthstoneenergy.com
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