UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

Earthstone Energy, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

27032D205

(CUSIP Number)

Ron Hulme

Parallel Resource Partners, LLC

700 Louisiana St., 50^th Floor

Houston, Texas 77002

(713) 238-9500

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

with a copy to:

J. Mark Metts

Sidley Austin LLP

1000 Louisiana St., Suite 6000

Houston, Texas 77002

(713) 495-4501

December 19, 2014

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

This Amendment No. 1 (“Amendment No. 1”) amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on October 27, 2014 (the “Original Schedule 13D” and, together with this Amendment No. 1, this “Schedule 13D”), and is being filed by the undersigned, pursuant to §240.13d-1(a), with respect to the common stock, $0.001 par value per share (the “Common Stock”), of Earthstone Energy, Inc., a Delaware corporation (the “Issuer” or “Earthstone”), whose principal executive offices are located at 633 Seventeenth Street, Suite 2320, Denver, Colorado 80202. Except as set forth herein, the Original Schedule 13D is unmodified.

Item 2 of this Schedule 13D is hereby amended and restated to read as follows:

This Schedule 13D is filed jointly by and on behalf of each of the following entities/persons (collectively, the “Reporting Persons”):

(i) Flatonia Energy, LLC, a Delaware limited liability company (“Flatonia”);

(ii) Flatonia Holdings, LLC, a Delaware limited liability company (“Flatonia Holdings”);

(iii) Energy Recapitalization and Restructuring Fund, L.P., a Delaware limited partnership (“ERR”);

(iv) ERR FI Flatonia Holdings, LLC, a Delaware limited liability company (“ERR FI Flatonia Holdings”);

(v) Energy Recapitalization and Restructuring FI, Ltd, a Cayman Islands exempted company (“ERR FI Ltd.”);

(vi) Energy Recapitalization and Restructuring FI Fund, L.P., a Cayman Islands limited partnership (“ERR FI”);

(vii) ERR FI II Flatonia Intermediate, L.P., a Delaware limited partnership (“ERR FI II Flatonia Intermediate”);

(viii) Parallel Resource Partners, LLC, a Delaware limited liability company (“Parallel”);

(ix) Bluescape Energy Partners LLC, a Delaware limited liability company (“BEP”);

(x) Bluescape Resources Company LLC, a Delaware limited liability company (“Bluescape Resources”);

(xi) C. John Wilder Jr., a United States citizen;

(xii) Carlson Energy Partners I, LLC, a Delaware limited liability company (“CEP I”);

(xiii) Carlson Energy Corp., a Delaware corporation (“Carlson Corp.”);

(xiv) Clint D. Carlson, a United States citizen;

(xv) Ron Hulme, a United States citizen; and

(xvi) John K. Howie, a United States citizen.

The entities listed at (i) through (vii) are referred to herein collectively as the “Parallel Entities.” The entities and individuals listed at (ix) through (xi) are referred to herein collectively as the “Bluescape Persons” and the entities and individuals listed at (xii) through (xiv) are referred to herein collectively as the “Carlson Persons.” The individuals listed at (xv) through (xvi) above are referred to herein collectively as the “CEP I Persons.”

SCHEDULE 13D

The name, citizenship, present principal occupation or employment and business address of each director and executive officer of ERR FI Ltd. and Carlson Corp. are set forth in Appendix A attached hereto.

The principal business of each of the Parallel Entities is to invest in securities. The principal business of Parallel is to serve as the investment manager of the Parallel Entities. The principal business of each of BEP and CEP I is to manage the business of Parallel. The principal business of Bluescape Resources is to manage BEP and to invest in private oil and gas assets. The principal occupation of Mr. C. John Wilder Jr., is to serve as the Executive Chairman of Bluescape Resources. The principal business of Carlson Corp. is to serve as a manager of CEP I. The principal occupation of Mr. Clint D. Carlson is serving as President of Carlson Capital, L.P., a Delaware limited partnership and an affiliate of Carlson Corp., the principal business of which is to serve as an investment manager. The principal occupation of both Mr. Ron Hulme and Mr. John K. Howie is to serve as a member of the board of managers of Parallel.

The principal business address of the Parallel Entities, Parallel and the CEP I Persons is 700 Louisiana St., 50th Floor Houston, Texas 77002. The principal business address of the Bluescape Persons is 200 Crescent Ct. #200, Dallas, Texas 75201. The principal business address of the Carlson Persons and Carlson Capital, L.P. is 2100 McKinney Avenue, Suite 1800, Dallas, TX 75201.

None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

None of the Reporting Persons has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3 of this Schedule 13D is hereby amended and restated to read as follows:

In connection with the closing on December 19, 2014 (the “Closing Date”) of the transactions contemplated by the Contribution Agreement (the “Contribution Agreement”) dated as of October 16, 2014 entered into by and among Flatonia, Parallel, Sabine River Energy, LLC (“Sabine”), Oak Valley Operating LLC (“Oak Valley Operator”), Oak Valley Resources, LLC (“Oak Valley”) and Earthstone, Flatonia contributed to Sabine (a wholly owned subsidiary of Earthstone), a 20% undivided ownership interest (the “Contribution”) in an Eagle Ford horizontal development project operated by Oak Valley Operator (such properties, the “Properties”) in exchange for the issuance by Earthstone to Flatonia of 2,957,288 shares of Common Stock, which was equal to 21.4% of Earthstone’s outstanding shares of Common Stock, on an as-converted, as-exercised basis immediately after giving effect to the Exchange (as defined below) and the Contribution (the “Contribution Shares”).

Item 4 of this Schedule 13D is hereby amended and restated to read as follows:

Contribution Agreement

Prior to the Contribution, Flatonia owned a 70% undivided interest, and Sabine owned a 30% undivided interest in the Properties. After the Contribution, Flatonia continues to hold a 50% undivided interest in the Properties, and Sabine holds the remaining 50%.

The closing of the Contribution was subject to the closing of the transactions contemplated by that certain Exchange Agreement, dated May 15, 2014 and as amended as of September 26, 2014, between the Issuer and Oak Valley (the “Exchange Agreement”), as referenced in the Issuer’s Current Report on Form 8-K filed on May 16, 2014 with the SEC. Pursuant to the Exchange Agreement, Oak Valley contributed to the Issuer the membership interests of its three subsidiaries, including Oak Valley Operator and Sabine, in exchange for the issuance of 9,124,452 shares of Common Stock to Oak Valley (the “Exchange”). The Exchange was consummated on December 19, 2014, immediately prior to the consummation of the Contribution.

SCHEDULE 13D

In consideration for the Contribution, Earthstone issued to Flatonia at the closing of the Contribution the Contribution Shares. The disclosures set forth in Item 3 of this Schedule 13D are incorporated by reference herein.

Immediately following the closing of the transactions contemplated by the Exchange Agreement and the Contribution Agreement, the pre-Exchange stockholders of the Issuer own an aggregate of 12.6%, Oak Valley owns 66.0%, and Flatonia owns 21.4%, respectively, of the Issuer’s outstanding Common Stock.

Under the Contribution Agreement, Flatonia is entitled to designate one person to serve on the Earthstone Board as long as Flatonia continues to own at least 7.5% of the outstanding Earthstone Common Stock or, if Flatonia does not exercise this right, then Flatonia may elect instead to designate a Board observer to the Earthstone Board. Flatonia has informed Earthstone that it does not intend to designate a person to serve on the Earthstone Board at this time or in the foreseeable future. Since Flatonia has not exercised its right to designate a director on the Earthstone Board, Flatonia has elected instead to designate John K. Howie as an observer of the Earthstone Board. As an observer, John K. Howie is not a director and does not have voting rights.

Amended Joint Operating Agreement

The Issuer’s interest in the Properties represents approximately 56% of the proved reserves of the Issuer, based on the December 31, 2013 reserve estimates. On the Closing Date, Sabine, Flatonia and Oak Valley Operator entered into an amended joint operating agreement (the “Amended JOA”). The Amended JOA sets forth the obligations of Sabine, Flatonia and Oak Valley Operator with respect to the day-to-day operations of the Properties and became effective upon the closing of the Contribution.

The Amended JOA contains industry standard terms and provisions, and provides, among other things, that (i) Oak Valley Operator is the party designated as the “Operator” of the Properties and, as such, has full control of the Properties, subject to any limitations specifically contained in the Amended JOA and (ii) the costs and liabilities incurred in connection with exploring, developing and operating the Properties will be borne by the parties to the Amended JOA in proportion to their applicable ownership interests.

The Amended JOA includes an Area of Mutual Interest (the “AMI”) covering the area depicted on Exhibit A to the Amended JOA (the “Contract Area”). In the event that Oak Valley, the Issuer, Flatonia Holdings, or any of their subsidiaries acquires, directly or indirectly, an interest within the AMI, the Amended JOA provides that each non-acquiring party will have the option to participate for its proportionate share in such acquisition.

In the event that any party to the Amended JOA elects not to participate in the first well within a drilling unit (or, if such well is not located within a drilling unit, the first well on an oil and gas lease), such non-participating party must assign its working interest and net revenue interest in the applicable lease (or the applicable leases covered by such drilling unit in which such well is drilled) to the parties to the Amended JOA participating in that well. The non-participating party will be paid $2,000 per net mineral acre for such assignment.

SCHEDULE 13D

The Amended JOA contains restrictions on the ability of Sabine to dispose of its interest in the Properties and, in certain instances, Sabine could be required to sell a portion of its interest in the Properties along with Flatonia. Sabine may not make a “Disposition” (as defined in the Amended JOA) of its interest in the Properties without Flatonia’s consent, which may be withheld if Flatonia reasonably believes the proposed buyer does not have the requisite financial capability or technical expertise to fulfill obligations under the Amended JOA. However, Flatonia does not have a consent right with respect to a Change of Control (as defined in the Amended JOA) of the Issuer. Flatonia also will have a right of first refusal in the event Sabine desires to “Dispose” (as defined in the Amended JOA) of its interest in the Properties in connection with any transaction other than a bona fide public company transaction at the Issuer level or resulting in a change in beneficial ownership of the Issuer. If Flatonia desires to Dispose of some or all of its interest, it is required to provide Operator with notice and give Operator and its affiliates 60 days to negotiate and enter into a purchase and sale agreement with Flatonia. If no agreement is reached, Flatonia may freely enter into negotiations with third parties and, if Flatonia is Disposing of 100% of its interests in the Properties, it can exercise certain drag-along rights. Flatonia’s drag-along rights permit it to require Sabine to sell some of its interests in the Properties, though Sabine has the right to retain up to a 30% non-operated interest in the Properties. The Amended JOA also contains tag-along rights in the event that any party to the Amended JOA receives an offer to Dispose of all or a portion of its interest in the Properties.

However, in connection with a bona fide public company transaction at the Issuer level or resulting in a change in beneficial ownership of the Issuer, in lieu of tag-along rights, Flatonia has the option to cause the Issuer to acquire its interest in the Properties at fair market value in connection with the consummation of the bona fide public company transaction. The Amended JOA also restricts Operator’s ability to directly or indirectly transfer operatorship. Under the Amended JOA, the Exchange is not considered a Change of Control or Disposition of Sabine or Operator.

Operator may resign at any time upon written notice and shall be deemed to have resigned if (i) it terminates its legal existence, (ii) Sabine fails to own at least a 50% undivided interest in the Properties or (iii) if Operator is no longer capable of serving as operator. In addition, Operator may be removed if certain removal events occur, including (A) a Change of Control of the Issuer, Operator or Sabine and (B) certain significant changes in the management team of the Issuer. In the event that Flatonia sells all of its interests in the Properties, Flatonia may require Operator to resign and support the buyer to become the operator under the Amended JOA.

As long as Flatonia owns at least a 50% interest in the Contract Area, then in those instances under the Amended JOA in which the approval of the majority of the interest owners is required, Flatonia’s vote will be deemed to constitute a majority (i.e., even if it owns exactly 50%).

The Amended JOA will remain in full force and effect so long as any of the “Oil and Gas Leases” (as defined in the Amended JOA) remain or are continued in force with respect to the Contract Area. However, if Flatonia sells all of its interests in the Contract Area to a third party, and such third party becomes Operator, certain provisions of the Amended JOA will terminate.

Registration Rights Agreement

On the Closing Date, the Issuer, Parallel, Flatonia and Oak Valley entered into a registration rights agreement (the “Registration Rights Agreement”) requiring the Issuer to register, at its cost, with the SEC the resale of the Contribution Shares at the request of Flatonia, Parallel or any affiliate of Parallel to which Flatonia, Parallel or any affiliate thereof has transferred shares of Common Stock (collectively, the “Flatonia Stockholders”).

The Registration Rights Agreement will terminate after the third anniversary of the Closing Date. The Flatonia Stockholders owning a majority of the “Registrable Securities” (as defined in the Registration Rights Agreement) may request registration no more than two times, and no more frequently than once in any six-month period, of shares having an estimated offering price of greater than $5 million. With certain exceptions, the Issuer must file and have the registration statement declared effective and must maintain the effectiveness of the registration statement for nine months or such shorter period if all shares have been sold.

SCHEDULE 13D

At any time following the six month anniversary of the Closing Date, if the Issuer is eligible to use a Form S-3 to register its securities for resale, then the Flatonia Stockholders owning a majority of the Registrable Securities may require the Issuer to file a shelf registration statement on Form S-3. The shelf registration statement must be filed within 20 days after the Issuer receives the request. The Issuer may also permit other persons, including Oak Valley, to register shares on the shelf registration statement. At any time during the term of the Registration Rights Agreement, the Flatonia Stockholders owning a majority of the Registrable Securities registered pursuant to a shelf registration statement may request that a public offering be made under the shelf registration statement if the aggregate proceeds of such sale are expected to equal or exceed $3 million.

If the Issuer files a registration statement, it must offer to the Flatonia Stockholders the opportunity to include the resale of their Registrable Securities in such registration statement, subject to customary qualifications and limitations.

The Issuer is prohibited from entering into or amending any registration rights agreements or other agreements that violate or are detrimental to rights granted to the Flatonia Stockholders in the Registration Rights Agreement. Additionally, Oak Valley, Parallel, Flatonia and the Issuer have all agreed that the registration rights granted to Oak Valley in connection with the Exchange Agreement are, subject to the provisions of both the Flatonia and Oak Valley registration rights agreements, pari passu with the rights of the Flatonia Stockholders to register their shares of Common Stock.

The Flatonia Stockholders have agreed that they will not, without the Issuer’s prior written consent, during the period commencing on the Closing Date and ending on the one year anniversary thereof (the “lock-up period”), sell or transfer any Registrable Securities. However, the foregoing restriction does not apply to: (i) sales or transfers to Parallel or any affiliate of Parallel; (ii) the ability of the Flatonia Stockholders to exercise their piggy-back registration rights in connection with the sale of Common Stock by any “Stockholder” (as defined in the Oak Valley Registration Rights Agreement entered into in connection with the Exchange Agreement), whether upon exercise of its own demand registration rights, piggy-back registration rights or otherwise; or (iii) the ability of the Flatonia Stockholders to exercise their tag-along rights, as described below.

If, during the lock-up period, any “Stockholder” (as defined in the Oak Valley Registration Rights Agreement entered into in connection with the Exchange Agreement) proposes or agrees to transfer all or a portion of its shares of Common Stock (including beneficial ownership with respect thereto) that are not sold as part of a public offering (excluding certain small transfers to family members for estate planning purposes), then each Flatonia Stockholder has the right to participate in such transfer as provided in the Registration Rights Agreement.

Item 5 of this Schedule 13D is hereby amended and restated to read as follows:

(a) and (b). The responses of the Reporting Persons to rows 7 through 13 on the cover pages of this Schedule 13D are incorporated by reference herein.

1. As of the date hereof, for purposes of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Flatonia and the other Reporting Persons may be each deemed to be the beneficial owner of an aggregate of 2,957,288 shares of Earthstone Common Stock, representing 21.4% of the outstanding shares of Earthstone’s outstanding Common Stock, based on a total of 13,819,100 shares of Earthstone Common Stock (as defined below), which Earthstone has represented to the Reporting Persons was outstanding as of December 19, 2014.

The filing of this statement on Schedule 13D shall not be construed as an admission that any Reporting Person other than Flatonia is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any of the shares of Common Stock. Pursuant to Rule 13d-4, each such Reporting Person disclaims all such beneficial ownership.

SCHEDULE 13D

2. Flatonia Holdings owns, directly and indirectly, 100% of the membership interests of Flatonia.

3. ERR owns 41.8%, ERR FI Flatonia Holdings owns 3.3% and ERR FI Flatonia Intermediate owns 14.4%, in each case, of the membership interests of Flatonia Holdings.

4. ERR FI Ltd. owns 100% of the membership interests of ERR FI Flatonia Holdings, and ERR FI owns 100% of the issued and outstanding shares of stock of ERR FI Ltd.

5. As set forth above, ERR, ERR FI and ERR FI II Flatonia Intermediate (collectively, the “ERR Entities”) own 59.6% of the membership interests of Flatonia Holdings. Parallel serves as the general partner of, and has the power to direct the affairs of, each of the ERR Entities. Parallel also serves as the manager of Flatonia Holdings and owns, directly or indirectly, 1.5% of the membership interests of Flatonia Holdings. The board of managers of Parallel consists of Clint D. Carlson, C. John Wilder, Jr., Ron Hulme, John K. Howie, and Jonathan Siegler.

6. Together, CEP I and BEP have the power to direct the affairs of Parallel. Additionally, CEP I and BEP each own 50% of the outstanding membership interests of Parallel. Together, Carlson Corp., Ron Hulme and John K. Howie form the board of managers CEP I and have the power to direct its affairs. Collectively, Carlson Corp., Ron Hulme and John Howie own 100% of the membership interests of CEP I. Mr. Clint D. Carlson has the power to direct the affairs of Carlson Corp., as its President. Bluescape Resources owns 100% of the membership interests of BEP and has the power to direct the affairs of BEP. Mr. C. John Wilder, Jr. has the power to direct the affairs of Bluescape Resources as its Executive Chairman.

(c) Except as set forth in this Schedule 13D with reference to the Contribution Agreement and the Amended Voting Agreement referenced in the original Schedule 13D, none of the Reporting Persons or, to their knowledge, any of its directors or executive officers, has effected any transaction in the shares of Common Stock during the past 60 days.

(d) No person other than the Reporting Persons is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Contribution Shares.

(e) Not applicable.

Item 6 of this Schedule 13D is hereby amended and restated to read as follows:

Contribution Agreement and Related Agreements

The description of the Contribution Agreement, the Registration Rights Agreement and the Amended JOA in Item 4 are hereby incorporated into this Item 6 by reference. The copy of the Contribution Agreement attached hereto as Exhibit B is incorporated by reference herein.

Amendment to Rights Agreement

On October 16, 2014, immediately prior to the execution and delivery of the Contribution Agreement, and in order to induce Flatonia to enter into the Contribution Agreement, Earthstone entered into the Third Amendment to Earthstone’s Rights Agreement, dated February 4, 2009 and as amended by the First Amendment to the Rights Agreement dated May 15, 2014 and the Second Amendment to the Rights Agreement dated May 15, 2014 (the “Earthstone Rights Agreement”). The Earthstone Rights Agreement sets forth the terms under which the Issuer would issue preferred share purchase rights (the “Earthstone Rights”).

SCHEDULE 13D

The primary purposes of the Third Amendment to the Earthstone Rights Agreement are to:

Under the terms of the Earthstone Rights Agreement, as amended, the Earthstone Rights Agreement was terminated automatically upon the consummation of the Exchange. Therefore, the Earthstone Rights Agreement is no longer in effect.

Amended and Restated Joint Filing Agreement

The Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is filed as Exhibit A hereto and is incorporated by reference herein.

Except as set forth herein, there are no contracts, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to the Common Stock.

SCHEDULE 13D

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: December 19, 2014

SCHEDULE 13D

SCHEDULE 13D

Attention: Intentional misstatements or omissions of act constitute federal violations (see 18 U.S.C. 1001).

SCHEDULE 13D

Appendix A

DIRECTORS AND EXECUTIVE OFFICERS OF ERR FI LTD. AND CARLSON CORP.

The following sets forth the name, position, principal occupation, and principal business address of each director and executive officer of Energy Recapitalization and Restructuring FI, Ltd. and Carlson Energy Partners I, LLC, respectively. To the best of the Reporting Persons’ knowledge, except as set forth in this Schedule 13D, none of the directors or executive officers of Energy Recapitalization and Restructuring FI, Ltd. or Carlson Energy Partners I, LLC owns any Common Stock.

ERR FI LTD.

CARLSON CORP.

SCHEDULE 13D

EXHIBIT A

JOINT FILING AGREEMENT

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D Amendment No.1 is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

DATE: December 19, 2014

SCHEDULE 13D

SCHEDULE 13D