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Earthstone Energy, Inc., First Quarter 2023 Results
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Earthstone Energy, Inc., announced first quarter 2023 results.
Highlights
- Average daily production of 104,450 Boepd(1), up 194% from Q1 2022
- Net income(2) of $86.2 million, and Adjusted Net Income(3) of $109.1 million
- Adjusted EBITDAX(3) of $266.9 million, up 117% from Q1 2022
- Net cash provided by operating activities of $258.3 million
- Free Cash Flow(3) of $41.8 million, up 17% from Q1 2022
- Reduced Long-term debt by $62.0 million
- Capital expenditures of $202.3 million
Operational Overview
The Company operated a five-rig drilling program during the first quarter of 2023 with three rigs in the Delaware Basin and two in the Midland Basin.
Delaware Basin Highlights
In the Delaware Basin, during the first quarter of 2023, Earthstone commenced drilling ten gross (8.4 net) wells, brought six gross (3.8 net) wells online, and had six gross (5.2 net) drilled but uncompleted ("DUC") wells at quarter end.
Earthstone completed the Jade 34-3 Fed Com pad on acreage acquired in the Chisholm acquisition in the northern Delaware Basin in Lea County, New Mexico. The wells targeted the First and Second Bone Spring intervals. The four wells had an average peak IP-30 rate of 1,240 Boepd from laterals averaging approximately 9,900 feet with an average oil percentage of 91%.
In Eddy County, New Mexico, the Company completed the Dark Canyon 15-22 State Com pad. The 2-well pad had an average peak IP-30 of 1,422 Boepd and was approximately 69% oil. The average lateral length of the two wells was about 7,100 feet, and both wells are producing from the Wolfcamp A zone. The Dark Canyon 15-22 State Com pad is located on acreage also acquired in the Chisholm acquisition.
At the Company's El Campeon project, acquired in the Titus acquisition, Earthstone is currently operating two drilling rigs on the six-well project. The lateral lengths for the six wells will range from 9,400 to 10,000 feet. The Company expects the wells to start producing in August 2023. These will be the first wells completed across the New Mexico-Texas state line.
Midland Basin Highlights
During the first quarter of 2023, the Company began drilling six gross (3.9 net) wells, brought nine gross (nine net) wells online, and had two gross (1.3 net) DUC wells at quarter end.
In Reagan County, Texas, the WTG 5-234 two-well pad is producing from the Wolfcamp Upper and Lower B zones. These wells were drilled with a lateral length of approximately 9,850 feet and had an average peak IP-30 rate of about 945 Boepd with a production stream of approximately 77% oil.
Liquidity and Equity Capitalization
As of March 31, 2023, we had approximately $452 million of long-term debt outstanding under our senior secured credit facility ("Credit Facility"), with elected commitments of $1.4 billion, resulting in available borrowings of approximately $948 million. As of March 31, 2023, our borrowing base was $1.65 billion.
Through March 31, 2023, we had incurred $202.3 million of capital expenditures. Our 2023 capital expenditure guidance remains at $725-$775 million. We expect to fund our remaining 2023 capital expenditures with cash flow from operations while any excess cash flow will be used to repay borrowings under our Credit Facility.
As of March 31, 2023, 106,303,568 shares of Class A Common Stock and 34,259,641 shares of Class B Common Stock were outstanding, resulting in 140,563,209 combined shares of common stock outstanding.
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