Earthstone Energy, Inc. announces the closing of the acquisition of assets of privately held Bighorn Permian Resources, LLC in the Midland Basin.
The company also announced the closing of a $550 million private offering of senior unsecured notes; a $280 million private placement of equity; and an amendment to the company's revolving credit facility.
Earthstone provided an update on key balance sheet metrics as of March 31, 2022, and as adjusted for the recent closings of the Bighorn acquisition, the notes offering, the PIPE and the amendment to the credit facility. Additionally, the company provided an estimate of daily production sales volumes for the first quarter of 2022.
"We are pleased to have taken multiple significant steps in the ongoing transformation of Earthstone as we have closed on the Bighorn acquisition and on significant debt and equity financings this week," said Robert J. Anderson, president and CEO of Earthstone. "Based on the purchase price adjustments at closing as a result of the significant cash flows from the effective date, we will have funded the Bighorn Acquisition with well over 50% equity in the form of direct consideration to the seller and the new equity investment from the PIPE, maintaining our conservative capital structure," he added.
Anderson said that the combination of the recently closed Chisholm acquisition and its high-quality inventory in the northern Delaware Basin with the Bighorn acquisition and its low-decline, high free cash flow production base in the Midland Basin, has created significant incremental scale for Earthstone.
"We believe that the balance of high return drilling inventory and strong free cash flow production base within Earthstone creates an optimal opportunity for value creation as we continue our 2022 operating and capital plan," said Anderson.
"Our near-term focus will be to continue integration efforts on both the northern Delaware Basin assets and the newly acquired Midland Basin assets. We expect to continue our pursuit of additional scale through accretive acquisitions that we believe will result in continued improved cost structure and creation of shareholder value, while always keeping our balance sheet strength as the top priority."
