Earnings Per Share

6 Months Ended

Jun. 30, 2016

11. Earnings Per Share

In accordance with the provisions of current authoritative guidance, basic earnings or loss per share shown on the Consolidated Statements of Operations is computed on the basis of the weighted average number of common shares outstanding during the periods. Diluted earnings or loss per share is computed based upon the weighted average number of common shares outstanding plus the assumed issuance of common shares for all potentially dilutive securities. The Company includes the number of stock options in the calculation of diluted weighted average shares outstanding when the grant date or exercise prices are less than the average market prices of the Company’s common stock for the period. When a loss from operations exists, all potentially dilutive common shares outstanding are anti-dilutive and therefore excluded from the calculation of diluted weighted average shares outstanding. There is no dilutive effect for the three and six months ended June 30, 2016 as the Company reported a loss from operations for those periods. The Company had net income from operations at the three months ended June 30, 2015, however, as the options were considered to be out of the money, the potentially dilutive common shares outstanding are treated as anti-dilutive and therefore, excluded from the calculation of diluted weighted average shares outstanding.

In connection with the Reorganization, discussed in Note 1, Lonestar Resources US Inc., immediately prior to the Reorganization, will acquire the Parent via an Australian Scheme of Arrangement. As a result, certain accounting policies have been adopted in these financial statements as if the Company were a public company. The following table presents unaudited pro forma earnings per share of Lonestar Resources US Inc., assuming that the 1 for 2 reverse stock split upon Reorganization had occurred at the beginning of the three and six month periods ended June 30, 2016 and 2015:

Unaudited Pro Forma Earnings Per Share (After Reorganization)

	Three months ended						Six months ended
	June 30,						June 30,
	2016			2015			2016			2015
Net income (loss) per common share:
Basic	$	(1.71	)	$	(1.11	)	$	(3.21	)	$	(1.21	)
Diluted		(1.71	)		(1.11	)		(3.21	)		(1.21	)

Weighted average common shares outstanding:
Basic		7,522,025			7,522,025			7,522,025			7,522,025
Diluted		7,522,025			7,522,025			7,522,025			7,522,025