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Earthstone Energy (ESTE) Aperçu de l'action
Earthstone Energy, Inc., operates as an independent oil and gas company in the United States. Plus de détails
| Score flocon de neige | |
|---|---|
| Évaluation | 4/6 |
| Croissance future | 4/6 |
| Performances passées | 1/6 |
| Santé financière | 2/6 |
| Dividendes | 0/6 |
Récompenses
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ESTE Community Fair Values
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Earthstone Energy, Inc. Concurrents
Historique des prix et performances
| Historique des cours de bourse | |
|---|---|
| Prix actuel de l'action | US$21.17 |
| Plus haut sur 52 semaines | US$22.45 |
| Plus bas sur 52 semaines | US$11.32 |
| Bêta | 2.07 |
| Variation sur 1 mois | 8.68% |
| Variation sur 3 mois | 30.92% |
| Variation sur 1 an | 33.82% |
| Variation sur 3 ans | 771.19% |
| Variation sur 5 ans | 165.95% |
| Évolution depuis l'introduction en bourse | 6,674.40% |
Nouvelles et mises à jour récentes
Recent updates
Seeking Alpha • Oct 08
Permian Resources: The Best Permian Pure Play On The Market
Summary Permian Resources recently announced plans to acquire Earthstone Energy, creating one of the largest oil and gas producers in the Permian Basin. Permian Resources is undervalued relative to its Permian peers, and the recent Exxon Mobil announcement to buy Pioneer will cause valuations to increase. Permian Resources has a disciplined balance sheet and a track record of strong growth in annual cash flows. The Earthstone acquisition will likely put the company's growth in overdrive. Permian Resources has an enviable position staked out in Lea and Eddy counties in New Mexico. Read the full article on Seeking AlphaSeeking Alpha • Aug 22
Earthstone Energy: Valued Fairly In Its $4.5 Billion Acquisition By Permian Resources
Summary Earthstone is being acquired by Permian Resources in a $4.5 billion transaction. The 1.446 Permian share to 1.0 Earthstone share deal ratio is roughly in-line with my estimates of their standalone values of $12 and $17 per share respectively. Permian expects the deal to result in $175 million per year in cost savings and improved efficiencies. This would boost Permian's value to $13 per share if it can achieve the majority of those savings and $13.50 per share if it can fully achieve those savings. Earthstone's equivalent value would be $18.80 and $19.52 per share respectively in those scenarios. Read the full article on Seeking AlphaArticle d’analyse • Aug 16
Here's Why Earthstone Energy (NYSE:ESTE) Can Manage Its Debt Responsibly
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...Seeking Alpha • Jul 26
Earthstone Energy: Still Shopping For Bargains
Summary The multiple Earthstone Energy acquisitions in the Delaware Basin may be depressing the stock price. Using 100% debt is a strategy change that may also raise investment risk. The recent acquisition is in an area with a lot of government land and a government permitting process. That may affect future values. The production has a fair amount of natural gas that could become more valuable as exporting capacity increases. Management experience will likely make this acquisition and all the others successful. Read the full article on Seeking AlphaSeeking Alpha • Jun 18
Earthstone Buys Novo Oil & Gas For A Modest Price; Significant Upside For Heavily Discounted Vital Energy
Summary Earthstone Energy acquires Novo Oil & Gas Holdings for $1.5B, with Northern Oil & Gas obtaining a 33% working interest for $500MM. Earthstone's acquisition includes 38,000 boe/d of production, 11,300 net acres, 21 drilled uncompleted wells, and 200 gross drilling locations. The transaction implies an 83% upside for Vital Energy's assets in a similar deal, potentially benefiting from the ongoing oil and gas M&A boom. Read the full article on Seeking AlphaArticle d’analyse • Jun 08
Why We Like The Returns At Earthstone Energy (NYSE:ESTE)
What trends should we look for it we want to identify stocks that can multiply in value over the long term? One common...Article d’analyse • May 23
Here's Why We Think Earthstone Energy (NYSE:ESTE) Is Well Worth Watching
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...Article d’analyse • May 05
Earthstone Energy (NYSE:ESTE) Takes On Some Risk With Its Use Of Debt
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...Article d’analyse • Mar 07
A Look At The Fair Value Of Earthstone Energy, Inc. (NYSE:ESTE)
Key Insights Using the 2 Stage Free Cash Flow to Equity, Earthstone Energy fair value estimate is US$17.59 With...Seeking Alpha • Feb 17
Earthstone Energy Provides 2023 Guidance After A Strong Finish To 2022
Summary Earthstone reported excellent Q4 2022 results, with total production 5% above the guidance midpoint along with oil production 9% above the guidance midpoint. This sets Earthstone up well to average 100,000 BOEPD in production during 2022 despite a minor divestiture. At the current strip, it is projected to generate close to $300 million in free cash flow after cash income taxes. This would leave it with 0.6x leverage. PD reserves may have a PV-10 of $3.3 billion to $3.4 billion at the current strip. At a 0.9x multiple to PD PV-10 and using year-end 2023 projected net debt, Earthstone is worth close to $16 per share. Earthstone Energy (ESTE) produced well above expectations in Q4 2022, with oil production that was 9% above its guidance midpoint. It also provided 2023 guidance for approximately 100,000 BOEPD in average production during 2023. At current high-$70s oil strip (and with weak near-term natural gas prices), Earthstone is projected to generate close to $300 million in free cash flow and end 2023 with 0.6x leverage. Earthstone also provided information on its reserves, and updating that for current strip results in an estimated value of close to $16 per share using a 0.9x multiple to PD PV-10. Earthstone's outlook for 2023 is fairly close to what I had modeled for it before. It is dealing with a bit of further cost inflation, but that is balanced out by its strong finish to 2022. Q4 2022 Update Earthstone's Q4 2022 production was quite strong. It initially provided guidance for 98,000 to 102,000 BOEPD in average production for Q4 2022, with a 43% oil cut. Earthstone ended up with 104,766 BOEPD in production during Q4 2022, with a 45% oil cut. Thus its total production for Q4 2022 was 5% above the midpoint of its guidance and its oil production was 9% above the midpoint of its guidance. Earthstone's capex for the quarter was within its guidance range. This contributed to Earthstone ending 2022 with less debt than I had modeled. Earthstone reported having $1.07 billion in debt principal outstanding at the end of 2022, compared to my projection for $1.11 billion in net debt. Earthstone also reduced its debt a bit from a minor Midland Basin sale. It received $21 million in net proceeds from the divestiture of its Sugg Ranch assets, which included 850 BOEPD in 2022 production. Notes On Sugg Ranch The Sugg Ranch assets included over 30,000 net acres in Sterling, Tom Green and Irion Counties. These assets were acquired as part of the IRM acquisition back in 2021, but were the fringe acreage component of the deal. Earthstone added inventory from Midland and Ector Counties as part of that deal, but did not claim any inventory from Sugg Ranch, which nearly completely consists of low volume vertical wells. The $21 million sale price is a discount to PDP PV-10, which Earthstone estimated at $35 million at the time (for Sugg Ranch alone), albeit with forward year oil prices near $90, along with strong natural gas prices. 2023 Outlook I had previously modeled a scenario where Earthstone maintained 2023 production at Q4 2022 levels. Earthstone previously expected to average approximately 100,000 BOEPD in Q4 2022, but ended up beating its guidance by approximately 5%. Earthstone's official 2023 guidance keeps production expectations at previous levels of approximately 100,000 BOEPD, but bumps up the oil cut slightly from 43% to 44%. Earthstone also divested a small amount of production in Q4 2022 as mentioned above. At current strip of high-$70s WTI oil, Earthstone may generate around $1.615 billion in revenues before hedges now. Earthstone's 2023 hedges appear to have roughly neutral value at current strip. Type Units $/Unit $ Million Oil (Barrels) 16,060,000 $79.00 $1,269 NGLs (Barrels) 9,125,000 $30.50 $278 Natural Gas [MCF] 67,890,000 $1.00 $68 Total Revenue $1,615 Compare to when I modeled Earthstone's 2023 results in December, it appears to expect slightly higher costs that are around mid-single digits percent higher than my model (which was done at low-$70s oil). Expenses $ Million Lease Operating $315 Production Taxes $121 Cash G&A $52 Cash Interest $70 Capital Expenditures $750 Cash Income Taxes $20 Total Expenses $1,328 Earthstone is now projected to generate $287 million in positive cash flow at current strip prices in 2023, inclusive of the impact of cash income taxes. Notes On Debt And Valuation This would allow Earthstone to reduce its net debt to around $783 million at the end of 2023, assuming no further acquisitions or divestures and no further spending on share repurchases. This would give Earthstone leverage of approximately 0.6x at the end of 2023. Earthstone reported having proved reserves with a PV-10 of $7.79 billion, including PD reserves with a PV-10 of $5.84 billion at the end of 2022. This was based on SEC pricing though, which included $93.67 oil and $6.36 natural gas as benchmark prices though. Earthstone also provided reserve valuations at strip prices (from the end of 2022), which is more relevant. This included proved reserves with a PV-10 of $4.56 billion and PD reserves with a PV-10 of $3.62 billion. The current oil strip is pretty similar to what it was at the end of 2022, but natural gas prices have slumped a fair bit from the $4.30 in 2023 and $4.28 in 2024 that Earthstone used in its calculations. The current natural gas strip is approximately $3.00 in 2023 and $3.63 in 2024.Seeking Alpha • Dec 19
Earthstone Energy: It Is Showtime
Summary The acquisition binge is causing market concern. Management has built and sold companies before. Keeping the debt ratio really low provides safety and financial flexibility "just in case". EBITDA and debt ratio calculation include all the debt presently. But the income part only happens over the future quarters. This management was one of the few company builders to survive the brutal period from 2015-2020. Earthstone Energy (ESTE) management went on an impressive acquisition binge that made the company far larger than it was just two years ago. But such a "shopping spree" makes quarterly comparisons difficult. Mr. Market relies upon "a confused mind says no" to react to good news here until there are adequate comparisons available for the company as currently configured. That means that Mr. Market is likely to look askance at more (and sizable) acquisitions in the future for the time being. The prevailing attitude is that management has what it wants. Now, it's time to perform with those assets as advertised. In theory, the performance demand should be straightforward because this management has built and sold companies before. In fact, this management is one of the few company builders that did not go broke during the five-year period from 2015-2020 that claimed a lot of company builders who were previously successful. Acquisition Financial Strategy Management used a combination of stock and debt to keep the debt ratio low. But the market needs to rely upon management's statement about this because the company did not previously exist in the current form. That makes Mr. Market uncomfortable. Earthstone Energy Two Year History Of Acquisitions (Earthstone Energy Earnings Conference Call Slides Third Quarter 2022) Management has stated that the goal was to keep the consolidated debt ratio around 1. Mr. Market is keenly aware that any debt ratio calculation would likely be "pro forma" because of all the acquisition activity. The problem with the "real" debt ratio is that the company was considerably smaller in the past. Therefore, the debt counts in the ratio calculation right away. But quarterly earnings replace previously reported earnings for the calculation over the next fiscal year. An acquisition strategy at the brutal pace shown above has its own risks of assimilation because management has to gain some knowledge and experience of all the parts. To some extent, the management issues can be minimized by keeping the same personnel to run the acquisition after the combination completes. However, synergies generally require combining some operations, and that can get tricky with so many acquisitions. Management needs to walk a fine line to make sure there is not a material "brain-drain" that sets back progress in the process of optimizing operations. The result of all this is that the market has reasonable doubts about the situation. So, the stock price will likely trade at a discount as a kind of new issue until the market sees the success of the company as it is now configured. Valuation That means the current valuation is a statement about market doubts that will disappear if management is successful in running the "new" Earthstone Energy. Earthstone Energy Value Comparison To Competitive Operators (Earthstone Energy Corporate Presentation November 2022) Earthstone Energy does have some cheap valuation metrics, no matter the comparison. Given that management can choose the companies to compare values with, there still is a valid argument that there is considerable appreciation potential as long as management executes the strategy as expected. For obvious reasons, the market considers the 2023 EBITDA guidance riskier than it would be with established companies in the comparison. That is going to be reflected in a risk discount readily available in the comparison above. Given the experience of this management in building and selling companies, that discount should be overcome over time. The same goes for management's statements about great acreage, leading margins, and all the other good stuff. The market wants proof of all this and more. The current market is largely heading down, with a lot of losses from the "one decision stocks" that were thought to be safe. That means that Mr. Market will go overboard being safe because risk is now a big part of the calculation. Before the current stock market decline, it was more about "keeping up with the Joneses" in terms of competitive annual returns. In that sense, management has a bigger assurance and evidence hurdle to overcome than would have been the case a few years back. Fourth Quarter 2022 The company is raising its guidance for the fourth quarter based upon strong results. So far, things appear to be off to a good start. That has to be reflecting at least some of the prior experience that management has. Earthstone Energy Fourth Quarter 2022, Guidance (Earthstone Energy Corporate Presentation November 2022) The market is clearly looking for an indication as to how well all the acquisitions work together in one company. So far, so good. But it will take more than one quarter to prove to the market that the good news will last. Oil prices have been in a downtrend lately. But the reasons for that downtrend appear relatively transient. Even with the recent downtrend in prices, those commodity prices are still high enough for decent profits. Mr. Market will in time realize that. Management appears to be ready to prove just that and more to the market. Companies that command premium prices in an acquisition are companies with a history of superior profitability that allows an outperformance throughout the industry business cycle. The onus is now on management to keep the good news coming out and prove it can still successfully build a very profitable business. The Future Back when this company was formed through a reverse merger, investors paid considerably more for the stock than is the current price. The original formation of the company involved prices per share that was closer to $20 than it is to the current price.Seeking Alpha • Dec 08
Earthstone Energy: A Look At Its Potential 2023 Outlook
Summary Earthstone is projected to generate close to $400 million in positive cash flow in 2023 at current strip in a maintenance capex scenario. This would put its net debt at the end of 2023 at around $725 million, or 0.6x EBITDAX. Near-term cash flow projections have been reduced due to weaker strip prices plus cost inflation. Earthstone appears to still be worth close to $16 per share in a long-term (after 2023) $70 WTI oil environment.Seeking Alpha • Nov 11
Earthstone Energy Doing Well - Can It Continue?
Summary ESTE has been doing very well over the last couple of years, but after consolidating over last year, much of its performance may already be priced in. The three major things weighing on the company appear to be its debt load, high interest rates, and the possibility of decreasing demand. With the company throwing off an enormous amount of free cash flow, it has more than enough to pay down debt while seeking more quality acquisitions. Measured by the last couple of years, Earthstone Energy (ESTE) has been performing very well, but when considering its share price movement from the beginning of 2022, it has, outside of a brief three-week period, traded in a fairly tight range. With the significant amount of free cash flow, the company throws off, it would appear the market would reward ESTE, but I think concerns about demand, its heavy debt load, and rising interest rates may be holding the stock back. In this article we'll look at its recent earnings report, its business strategy, and the challenges the company faces over the next year or so. Latest earnings Revenue in the third quarter soared to $531.5 million, up 381.9 percent year-over-year, beating estimates by $71.06 million. Net income in the quarter was $2.99 million, or $2.09 per adjusted diluted share. Adjusted net income was $1.30, missing estimates by $0.12. Adjusted EBITDAX was $346 million, up 15 percent sequentially. Both of those numbers were records for the company, attributed to strong commodity prices, and "a full quarter of Bighorn assets and a partial quarter of Titus assets." ESTE continues to throw off a lot of free cash flow, with the company generating about $175 million in free cash flow in the reporting period, up seven percent from the prior quarter. For the first three quarters the company generated $374 million in free cash flow, another record for the firm. A major priority of ESTE is to use free cash flow to pay down its debt. Excluding the acquisition of Titus, the company paid down $290 million in debt on its credit facility, bringing total debt to a little under $1.2 billion. At the end of the third quarter the company had about $636 million drawn on its credit facility. Management said its debt to adjusted EBITDA should remain below 1x going forward. On the production side, ESTE produced 94,329 barrels of oil equivalent per day, of which 41 percent was oil, 32 percent natural gas, and 27 percent natural gas liquids. Based upon results from its drilling program, the company raised its production guidance in the fourth quarter by approximately 2 percent, with expectations production will be in a range of 98,000 to 102,000 barrels of oil equivalent per day. CapEx in the third quarter was $147 million, but the company is guiding for CapEx in Q4 to be from $170 million to $185 million. The additional spend will be to "extend the completed lateral length of wells drilled in the fourth quarter by about 30 percent compared to our prior plan and our guidance, which is really resulting in significantly improved capital efficiency with the longer laterals." Concerning hedging, the company is hedged at about 54 percent for oil and 62 percent for gas in the fourth quarter. For 2023, it is hedged at approximately 35 percent oil and about 31 percent for gas. It also has hedging structures in place to protect the downside as well. On a WAHA basis, the company is hedged at close to 75 percent of overall gas for 2023, and 100 percent of its WAHA pricing exports gases. Last, on its borrowing base ESTE increased it from $1.7 billion to $1.85 billion after the Titus acquisition. Share price performance Over the last two years, ESTE's share price has soared from about $2.50 in early November 2020, to a high of $22.25 on June 6, 2022. Since early January 2022 the share price has consolidated, moving in a range of $11.00 to $16.00 per share, with the exception of a short-term burst to its 52-week high of $22.25, before pulling back again. That suggests that its shares may be fully priced based upon current visibility and guidance. It appears the major concern is the growing debt load of the company after closing seven acquisitions over the last seven quarters. In that regard management is saying and doing the right things, asserting the balance sheet remains the top priority for the company, adding they're not only interested in growing scale, but making decisions that allow for profitable growth, not growth for its own sake. More than likely ongoing concerns about the costs associated with higher interest rates are weighing on some investors' minds, and that could be a reason it hasn't been able to sustainably break out in 2022. With the company's strategy of primarily growing via acquisitions, cost of debt is going to rise for the company. CEO Robert Anderson did allude to the strength of its asset base commenting its "large, low declining asset base also assisted in our outperformance." That of course is a positive for the company, but it also reminds investors that the asset base is still declining. It also reminds shareholders that the company will have to continue to acquire assets to maintain its inventory. This isn't a near-term issue, but over time it could start to have an impact on the performance of ESTE. One last thing I do want to comment on, which may be having an impact on the share price is, there is some uncertainty concerning demand going forward. If demand does start to fall, all the inventory and production capacity won't matter if sales start to decline. That, combined with debt is probably the two things keeping its share price from sustainably breaking out. Cash flow and its strategy Cash flow has been extraordinary for ESTE, and it's likely to improve going forward. That will allow the company to not only pay down its debt load, but also to make strategic acquisitions that add to it inventory. With solid cash flow it provides flexibility and options that will benefit shareholders. For example, the company can buy back shares. One thing I believe investors will have to come to terms with is ESTE will continue to make acquisitions that make financial sense to the company as it builds and replenishes its inventory. So, while it has the capacity to pay down its debt, it will also, without a doubt, add more debt, depending on the size of the acquisitions it's targeting.Seeking Alpha • Oct 12
Earthstone Energy announces repurchase of 3M shares for $44M
Earthstone Energy (NYSE:ESTE) has purchased 3M shares of Earthstone's Class A Common Stock for a total purchase price of ~$44M from certain affiliates of Warburg Pincus. Separately and concurrently, Warburg Pincus sold 3.75M shares of Class A Common Stock. As of Oct. 11, 2022, including the impact of the share repurchase, Earthstone's outstanding share count of Class A and Class B Common Stock is 139.7M shares.Article d’analyse • Sep 19
These 4 Measures Indicate That Earthstone Energy (NYSE:ESTE) Is Using Debt Extensively
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...Seeking Alpha • Aug 28
Earthstone Energy: Market Perceived Risk Climbing
Summary Earthstone Energy's Titus acquisition was announced to a lukewarm market reception. The company is rapidly growing. Rapid growth has its own risks. The ability to service the rapidly growing debt load is a concern. Debt repayment along the lines of management guidance will be a priority. This management has the experience to rapidly grow and optimally combine a company. (Note: This article was in the newsletter on July 1, 2022, and has been updated as needed.) Earthstone Energy (ESTE) had announced the Titus acquisition. This comes after several significant acquisitions that have enlarged the company to several times the size before the shopping spree began. The stock price is beginning to reflect concerns about so many acquisitions as well as the handling of more stock outstanding. Investors need to keep in mind that sellers that receive stock often sell that stock. That will depress the stock price until the large seller exits. The market also has concerns about management making so many significant acquisitions in such a small space of time. This management may prove those worries unfounded as because the management has built and sold companies before. Nonetheless, it is clear that the market is factoring more risk into the stock price. Earthstone Energy Titus Acquisition Benefits (Earthstone Energy Titus Acquisition Presentation June 2022.) The current debt measures shown above are clearly conservative. The worry is that debt is growing at a very fast rate and the company is rapidly expanding. Therefore, the reported trailing debt ratio will not reflect the numbers above until a full year of operations with all the acquisitions is reported. This market is seeing ghosts all over the place. Nothing is a worse nightmare for the market than a high debt ratio. Even though there is production on the latest purchased leases (and hence established cash flow), management still has to report essentially mixed numbers until the company operates one year. The market is concerned when there is one major acquisition about risks like the logistics of combining major acquisitions into an optimal combination. Here, there are now several large acquisitions. So those concerns are beginning to multiply. Earthstone Energy Publicly Traded Stock Price History And Key Valuation Measures (Seeking Alpha Website August 27, 2022) Clearly the market reaction to the latest acquisition announcement has been less than stellar. Some of that has to do with the recent decline in the price of oil and other market worries about the industry. Another worry is that the series of transactions is creating large shareholders from the stock issued through these transactions. One of these, Warburg Pincus just announced holding a sizable amount of stock. A large shareholder can depress the price of the stock considerably until the sales pressure declines. This company has issued a lot of stock to acquire a fair number of properties. An additional risk is that some of those large sellers will liquidate their holdings to delay an appreciation of the stock when combined results would indicate a stock price rally. But the accelerating pace of debt growth also has the market worried. The first order of business will likely be to pay down that debt as quickly as possible. Admittedly, management may use some of the cash flow initially to combine the acquisitions and optimize operations. But if the cash flow is as generous as management states, then debt repayment should begin rather quickly. This is a notoriously low visibility industry that often has unpleasant surprises. Even though the current recovery appears to be sustainable for a while, long term readers know we have been down that road before only to be quickly disappointed. Therefore, it may be time to slow down the shopping spree to allow the market to see the benefits of the "new" Earthstone Energy. Probably a concern is not the debt ratio in the current pricing environment, but the debt ratio when commodity prices are much lower. Having gone through some severe situations in both 2008 and 2020 (and less severe ones like 2015), this market has an increasingly concerned view of debt. On top of that, the market has been disappointed by the "one decision" stocks that are no longer as "safe" as the market thought they were. This generally leads towards a swing towards safety where Mr. Market goes overboard as usual. That means that the management experience may not be valued as it would in other market climates (or situation). Earthstone Energy Valuation Method Cushion (Earthstone Energy Titus Acquisition Presentation June 2022.) Management is clearly countering these concerns by explaining the valuation method that they use. It does help that many of these acquisitions arrive with infrastructure and transportation commitments in place. Most likely the company retains necessary personnel as well because this reduces the risk of new personnel that are not familiar with the lease operations. The real key for the market will be the performance of the company during the next downturn. All the acquisitions have made this a materially new company without a public operating history. Therefore, investors should expect some stock pricing actions along the lines of other new issues (rather than an established company) until there is ample evidence of superior performance. Earthstone Energy Comparison Of All-In Costs (Earthstone Energy Second Quarter 2022, Corporate Presentation) One of the keys to better market performance will be the maintenance of the low costs shown above combined with at least expected well performance data. If management is able to keep up with the technology changes sweeping the industry to maintain the cost leadership shown above, then superior pricing action is likely to result. Management has clearly acquired some excellent acreage. The worries would be about the logistics that rapid growth entails. An inexperienced management can easily lose control of costs or quality (which would cost customers fast in a commodity business). This is also part of the worry about servicing the debt. The Future The stock price is likely to underperform the rest of the industry until it is apparent that management can report satisfactory (or better) results from the combined company. This latest acquisition is supposed to add economies of scale in one of the more profitable regions of the Permian. Many times, synergies are hard for individual investors to ascertain. But what will get the market attention is wide margins, low costs, and of course above average profitability.Article d’analyse • Aug 24
Calculating The Intrinsic Value Of Earthstone Energy, Inc. (NYSE:ESTE)
How far off is Earthstone Energy, Inc. ( NYSE:ESTE ) from its intrinsic value? Using the most recent financial data...Seeking Alpha • Aug 04
Earthstone Energy Non-GAAP EPS of $1.29 beats by $0.01, revenue of $472.55M beats by $92.52M
Earthstone Energy press release (NYSE:ESTE): Q2 Non-GAAP EPS of $1.29 beats by $0.01. Revenue of $472.55M (+427.0% Y/Y) beats by $92.52M.Seeking Alpha • Jul 01
Earthstone Energy: Growth Ahead
Earthstone Energy will double in size the second quarter. Management is firmly focused on growing company operations. Management will likely sell the company for the right price. Dividends are not important to the long-term plan. Mr. Market demands proof before revaluing the company stock as to the profitability of the newly combined company. That should be easy. This is yet another group of insiders buying production because it is cheap to do so. (Note: This article appeared in the newsletter on May 7, 2022, and has been updated with current information as needed.) Earthstone Energy, Inc. (ESTE) has done a lot of acquisitions. In fact, management just announced another large acquisition. They join several companies I follow in buying production because it is much cheaper than growing production and can be less risky for experienced buyers. I have followed this management through the building and sale of several companies through the years. Their experience in building and selling companies is very seldom matched. That makes the recent acquisition binge less risky than it would normally be. But Mr. Market is going to demand evidence that the newly amalgamated company will work as planned. That should be a straightforward exercise for this very experienced management. Earthstone Management Second Quarter Production Guidance And Map Of Operating Area (Earthstone Management First Quarter 2022, Investor Conference Call Slides) It may take some time for some nonrecurring activities to get through the quarterly reports so that quarterly reports solely reflect operating activities. There are obviously some cost savings to be achieved even when the leases held are spread out. The slide above is not pro forma for the recent acquisition announcement. The big deal on the slide above was the six acquisitions and the guidance (which will now get revised with the latest acquisition). The slide above is now basically limited to the second quarter report in the near future. Note that this management uses stock in its deals to keep that debt ratio down as it grows. That does mean there is a lot of new stock either ready to sell or to be converted to stock that the owner can sell. That can temporarily hold back the price of the stock until the market adjusts to more shares outstanding. Clearly, management has what it aimed to get. Therefore, the onus is on management for the acreage to meet profitability goals. Management has four rigs running currently. The latest acquisition is likely to result in a fifth rig as long as commodity prices remain strong. The key will be to see how production performs given the intended operations. In the eyes of the market, meeting guidance for a few quarters will be the first hurdle. Right now, the common appears priced for a fair amount of trouble. That should limit the downside action should trouble actually occur. However, given that this management has done acquisitions many times in the past, a likely expected reaction will be a significant upward re-evaluation of the enterprise value of the company as management meets goals. Earthstone Energy Relative Valuation and Production Levels (Earthstone Energy First Quarter Conference Call Slides May 2022) The key to any slide like this is to remember that the different companies on the slide have different strategies. Ironically, the company with a production mix closest to Earthstone is likely to be Diamondback Energy (FANG). Some companies like Pioneer (PXD) have a higher percentage of oil production so that they will be worth more. Earthstone is likely to be a bargain. But management gets to choose the comparison. Therefore, it is up to investors to decide the valuation of the company based upon the production, profitability and growth prospects. The investor may come to a different conclusion than what the slide suggests. But the investor could still conclude that this is a bargain. This management is paying about twice EBITDAX for the latest acquisition. That makes it very easy for management to hedge to protect the first two years of EBITDAX should that prove to be necessary. More importantly, the sales price is decent relative to proved reserves. Those reserves were developed at far more conservative prices than the current market prices. So, there should be a safety cushion for this purchase. Earthstone Energy Projection Of Costs And Margin Compared To A Selection Of Peers (Earthstone Energy First Quarter 2022, Earnings Conference Call Slides May 2022.) A similar argument can be made about a margin comparison. Probably the best margin that I ever saw came with the high percentage oil producers. Secondary recovery companies often have excellent margins. But the volumes of secondary recovery operations often restrict overall profitability when compared to capital invested despite the great margins. Investors need to remember that typical upstream companies are usually the most profitable. After that oil is gone, then secondary recovery is a possibility. But secondary recovery is actually more costly and hence generally less profitable. So, the investors may have to wait to see what the profitability history is for the combined company. Mr. Market will want proof that the great margin translates into superior profitability. This management has experience doing just that. So, the risk of management not meeting profitability goals is pretty small. The low-cost structure is probably necessitated by the production mix. The percentage of oil produced is on the low side. It could end up similar to Laredo Petroleum (LPI). Laredo Petroleum has acquired higher oil production leases to raise the company average of oil produced. Earthstone Energy has purchased leases that should have low production costs. But like Laredo Petroleum, a lean management is essential to good quarterly results. The management costs of Earthstone have so far pointed to a very lean management cost structure. But there is a risk of management costs ballooning skyward should unexpected challenges arise. This is another area where Mr. Market will be watching for good controls remaining in place in the future. The main strategy of just about any company I follow that is growing significantly by acquisition is to find bargains. That generally implies that the acreage is not top-notch prime acreage (or if it is great acreage, the holding is too small for adequate cost savings). Managements like this one will piece together subpar holding so that the combined acquisitions are more profitable as one entity than were the pieces. These managements usually produce superior results by increasing profitability of the purchases both through bolt-on acquisitions and economies of scale. That is then combined with very efficient operations.Rendement pour les actionnaires
| ESTE | US Oil and Gas | US Marché | |
|---|---|---|---|
| 7D | -1.5% | -5.9% | 2.5% |
| 1Y | 33.8% | 31.9% | 26.4% |
Rendement vs Industrie: ESTE a dépassé le secteur US Oil and Gas qui a rapporté 31.9 % au cours de l'année écoulée.
Rendement vs marché: ESTE a dépassé le marché US qui a rapporté 26.4 % au cours de l'année écoulée.
Volatilité des prix
| ESTE volatility | |
|---|---|
| ESTE Average Weekly Movement | 6.7% |
| Oil and Gas Industry Average Movement | 6.4% |
| Market Average Movement | 7.2% |
| 10% most volatile stocks in US Market | 16.5% |
| 10% least volatile stocks in US Market | 3.1% |
Cours de l'action stable: Le cours de l'action de ESTE a été volatil au cours des 3 derniers mois par rapport au marché US.
Volatilité au fil du temps: La volatilité hebdomadaire de ESTE ( 7% ) est restée stable au cours de l'année écoulée.
À propos de l'entreprise
| Fondée | Salariés | PDG | Site web |
|---|---|---|---|
| 1969 | 219 | Robert Anderson | www.earthstoneenergy.com |
Earthstone Energy, Inc. Résumé des fondamentaux
| ESTE statistiques fondamentales | |
|---|---|
| Capitalisation boursière | US$2.98b |
| Bénéfices(TTM) | US$309.57m |
| Recettes(TTM) | US$1.75b |
7.3x
Ratio P/E1.3x
Ratio P/SLe site ESTE est-il surévalué ?
Voir Juste valeur et analyse de l'évaluationBénéfices et recettes
| ESTE compte de résultat (TTM) | |
|---|---|
| Recettes | US$1.75b |
| Coût des recettes | US$497.98m |
| Marge brute | US$1.26b |
| Autres dépenses | US$946.37m |
| Les revenus | US$309.57m |
Derniers bénéfices déclarés
Sep 30, 2023
Prochaine date de publication des résultats
s/o
| Résultat par action (EPS) | 2.91 |
| Marge brute | 71.61% |
| Marge bénéficiaire nette | 17.65% |
| Ratio dettes/capitaux propres | 66.7% |
Quelles ont été les performances à long terme de ESTE?
Voir les performances historiques et les comparaisonsAnalyse de l'entreprise et données financières
| Données | Dernière mise à jour (heure UTC) |
|---|---|
| Analyse de l'entreprise | 2023/11/02 08:10 |
| Cours de l'action en fin de journée | 2023/10/31 00:00 |
| Les revenus | 2023/09/30 |
| Revenus annuels | 2022/12/31 |
Sources de données
Les données utilisées dans notre analyse de l'entreprise proviennent de S&P Global Market Intelligence LLC. Les données suivantes sont utilisées dans notre modèle d'analyse pour générer ce rapport. Les données sont normalisées, ce qui peut entraîner un délai avant que la source ne soit disponible.
| Paquet | Données | Cadre temporel | Exemple de source américaine * |
|---|---|---|---|
| Finances de l'entreprise | 10 ans |
| |
| Estimations consensuelles des analystes | +3 ans |
|
|
| Prix du marché | 30 ans |
| |
| Propriété | 10 ans |
| |
| Gestion | 10 ans |
| |
| Principaux développements | 10 ans |
|
* Exemple pour les titres américains ; pour les titres non américains, des formulaires réglementaires et des sources équivalentes sont utilisés.
Sauf indication contraire, toutes les données financières sont basées sur une période annuelle mais mises à jour trimestriellement. C'est ce qu'on appelle les données des douze derniers mois (TTM) ou des douze derniers mois (LTM). En savoir plus.
Modèle d'analyse et flocon de neige
Les détails du modèle d’analyse utilisé pour générer ce rapport sont disponibles sur notre page Github; nous proposons également des guides expliquant comment utiliser nos rapports et des tutoriels sur Youtube.
Découvrez l'équipe de classe mondiale qui a conçu et construit le modèle d'analyse Simply Wall St.
Indicateurs de l'industrie et du secteur
Nos indicateurs de secteur et de section sont calculés toutes les 6 heures par Simply Wall St. Les détails de notre processus sont disponibles sur Github.
Sources des analystes
Earthstone Energy, Inc. est couverte par 19 analystes. 5 de ces analystes ont soumis les estimations de revenus ou de bénéfices utilisées comme données d'entrée dans notre rapport. Les soumissions des analystes sont mises à jour tout au long de la journée.
| Analyste | Institution |
|---|---|
| Jeffrey Campbell | Alliance Global Partners |
| Joseph Allman | Baird |
| Subhasish Chandra | Benchmark Company |