Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Consideration Transferred, Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the consideration transferred, fair value of assets acquired and liabilities assumed (in thousands, except share and share price amounts):



Consideration:
Shares of Class A Common Stock issued pursuant to the Bold Contribution Agreement to certain employees of Bold	150,000
EEH Units issued to Bold Holdings	36,070,828

Total equity interest issued in the Bold Transaction	36,220,828
Closing per share price of Class A Common Stock as of May 9, 2017	$	13.58

Total consideration transferred (1) (2)	$	491,879

Fair value of assets acquired:
Cash and cash equivalents	$	2,355
Other current assets	10,078
Oil and gas properties (3)	557,704
Amount attributable to assets acquired	$	570,137

Fair value of liabilities assumed:
Long-term debt (4)	$	58,000
Current liabilities	17,042
Deferred tax liability	2,857
Noncurrent asset retirement obligations	359
Amount attributable to liabilities assumed	$	78,258


(1)	Consideration included 150,000 shares of Class A Common Stock recorded above based upon its fair value which was determined using the closing price of $13.58 per share on May 9, 2017.

(2)

Consideration was 36,070,828 EEH Units. Additionally, Bold Holdings purchased 36,070,828 shares of Class B Common Stock for $36,071. Each EEH Unit, together with one share of Class B Common Stock, is convertible into one share of Class A Common Stock. The fair value of the consideration was determined using the closing price of the Company’s Class A Common Stock of $13.58 per share on May 9, 2017.

(3)

The market assumptions as to the future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of the future development and operating costs, projections of future rates of production, expected recovery rate and risk adjusted discount rates used by the Company to estimate the fair value of the oil and natural gas properties represent Level 3 inputs; see Note 5. Fair Value Measurements, below.


(4)	Concurrent with the closing of the Bold Transaction, EEH repaid Bold’s outstanding borrowings of $58.0 million under its credit agreement.

Schedule of Unaudited Pro forma Revenues and Expenses of Assets Acquired and Liabilities Assumed

Future results may vary significantly from the results reflected in this unaudited pro forma financial information (in thousands, except per share amounts):



	Year Ended
	December 31, 2017
	(Unaudited)
Revenue	$	126,839
Loss before taxes	$	(44,461	)
Net loss	$	(35,617	)
Less: Net loss attributable to noncontrolling interest	$	(22,005	)
Net loss attributable to Earthstone Energy, Inc.	$	(13,612	)
Pro forma net loss per common share attributable to Earthstone Energy, Inc.:
Basic and diluted	$	(0.57	)