Transaction Costs

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Transaction Costs

Transaction Costs

During the year ended December 31, 2019, the Company recorded transaction costs totaling approximately $1.1 million primarily due to legal fees related to the business combination (the “Bold Transaction”) pursuant to the Bold Contribution Agreement (as defined below) which closed on May 9, 2017, as described in under the “Legal” section of Note 16. Commitments and Contingencies.

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 terminated 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 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 $14.3 million including $13.4 million associated with the terminated Sabalo Acquisition, and $0.8 million of legal fees related to the Bold Transaction which closed on May 9, 2017.