Transaction Costs

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Transaction Costs

Transaction Costs

On October 17, 2018, Earthstone, EEH and Sabalo Holdings, LLC (“Sabalo Holdings”) entered into a contribution agreement (the “Contribution Agreement”) which provided for the contribution by Sabalo Holdings of all its interests in Sabalo Energy, LLC (“Sabalo Energy”) and Sabalo Energy, Inc. to EEH (the “Sabalo Acquisition”). On December 21, 2018, Earthstone, EEH and Sabalo Holdings entered into a termination agreement (the “Termination Agreement”), pursuant to which the parties mutually agreed to terminate the Contribution Agreement.

In connection with the Termination Agreement, Earthstone, EEH and Sabalo Holdings also agreed to release each other from certain claims and liabilities arising out of or related to the Contribution Agreement and the transactions contemplated therein or thereby. All other related agreements were also terminated in conjunction with the termination of the Contribution Agreement.

During the year ended December 31, 2018, the Company recorded transaction costs totaling approximately $13.5 million of which $13.4 million was associated with the terminated Sabalo Acquisition, including payment to Sabalo Holdings of $1.6 million for reimbursement of expenses.

During the year ended December 31, 2017, the Company recorded $4.7 million in transaction costs primarily associated with the Bold Transaction completed in May 2017. See Note 3. Acquisitions and Divestitures.