Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

FASB ASC Topic 850, Related Party Disclosures, requires that information about transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance.

Flatonia Energy, LLC (“Flatonia”), which owns approximately 10.2% of the outstanding Class A Common Stock and approximately 4.6% of the combined voting power of the Company's outstanding Class A and Class B Common Stock as of June 30, 2019, is a party to a joint operating agreement (the “Operating Agreement”) with the Company. The Operating Agreement covers certain jointly owned oil and natural gas properties located in the Eagle Ford Trend in Texas. In connection with the Operating Agreement, the Company made payments to Flatonia of $4.0 million and $8.3 million and received payments from Flatonia of $1.6 million and $2.9 million for the three and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2018, the Company made payments to Flatonia of $6.1 million and $12.4 million and received payments from Flatonia of $2.0 million and $4.1 million, respectively. At June 30, 2019 and December 31, 2018, amounts receivable from Flatonia in connection with the Operating Agreement were $1.0 million and $0.8 million, respectively. Payables related to revenues outstanding and due to Flatonia as of June 30, 2019 and December 31, 2018 were $1.3 million and $1.6 million, respectively.  

Earthstone's majority shareholder consists of various investment funds managed by a venture capital firm who may manage other investments in entities with which the Company interacts in the normal course of business.