Earnings Per Share

3 Months Ended

Mar. 31, 2017

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 Class A voting 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 months ended March 31, 2016 as the Company reported losses from operations for the period. Although the Company had net income from operations for the three months ended March 31, 2017, as the options and SARs 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. The 612,000 RSUs granted during the period are considered dilutive and are included in the diluted weighted average common shares outstanding for the three months ended March 31, 2017. The 760,000 warrants granted during the second half of 2016 are considered dilutive and are included in the diluted weighted average common shares outstanding for the three months ended March 31, 2017.

The following table presents unaudited 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 month period ended March 31, 2016:

Unaudited Earnings Per Share (After Reorganization)

	Three Months Ended
	March 31,
	2017		2016
Net income (loss) per common share:
Basic	$	0.14	$	(1.50	)
Diluted		0.13		(1.50	)

Weighted average common shares outstanding:
Basic		21,822,015		7,522,025
Diluted		22,833,615		7,522,025