Earthstone Energy, Inc. (NYSE:ESTE)

Third Quarter 2012 Results

• Revenue of $3.9 million for the third quarter of fiscal 2012 compared to revenue of $2.0 million for the third quarter of fiscal 2011.
• Net income of $1,152,000, $0.68 per diluted share for third quarter 2012, compared to  net income of $74,000, $.04 per diluted share in third quarter 2011.

"We completed the first nine months of the fiscal year with compelling results, posting solid gains in revenues and net income," commented Ray Singleton, President of Earthstone. "We were especially pleased to generate robust growth in year-to-date EBITDA; increasing $1.9 million, or 83%, over the first nine months last year. While production for the first two quarters this year was hampered by severe flooding in the Williston, our third quarter has really seen the benefits of our increased drilling tempo. In fact, the foundation of solid earnings and free cash flow allowed for a year-to-date, capital deployment of more than double of that spent during the same period last year. In an effort to achieve continued long-term growth, the Company continues to pursue its strategy of drilling non-operated, horizontal Bakken wells where we have built momentum in production growth, bolstered by the acquisition of producing properties in the Williston Basin. While the Williston is our primary focus, we continue to evaluate non-Bakken opportunities which could positively impact the Company's reserves and production. We are excited, as the investments we made in growth projects this year are expected to benefit both next quarter's and next year's income and stock price growth."

From Third Quarter 2012 10Q

We have received numerous inquiries regarding the possibility of funding our efforts through equity contributions or debt instruments. Given strong cash flows, and the relatively modest nature of our current drilling projects, we have thus far declined these overtures. Our primary concern in this area is the dilution of our existing shareholders. However, going forward, given that one of the key components of our growth strategy is to expand our oil and natural gas reserve base through drilling and/or acquisitions, if we were presented with a significant opportunity, it is possible we would consider alternative forms of additional financing.