Imperial Capital Remains Bullish on Earthstone Energy (ESTE) Following Lyndon Energy Acquisition

Imperial Capital reiterated an Outperform rating and $22.00 price target on Earthstone Energy (NYSE: ESTE) following the company's acquisition of Lynden Energy in a 3.7mn common share transaction. The acquisition includes both producing assets of 1,450boe/d and over 150 derisked vertical and 50 horizontal Wolfcamp A/B locations with upside from the Spraberry and other zones.

Analyst Kim Pacanovsky commented, "We are maintaining our Outperform rating on ESTE and shares and our $22 price target, about 55% above the recent share prices. ESTE has used its stock, which has outperformed the small cap group QTD (+3% vs. the group at -8%) to enter the Permian Basin with a well-priced acquisition. On 12/17/15, the company announced the acquisition of Lynden Energy in a 3.7mn common share transaction. While diluting shareholders by 20%, ESTE has gained a foothold in the Permian Basin. The acquisition includes both producing assets of 1,450boe/d and over 150 derisked vertical and 50 horizontal Wolfcamp A/B locations with upside from the Spraberry and other zones. The company is also acquiring 5,883 net acres which are undeveloped horizontally. Additionally, we believe that further acquisition and/or bolt-on opportunities remain possible for the company as the transaction was financed entirely through stock with the firm still able to execute transactions due to its strong liquidity position."

For an analyst ratings summary and ratings history on Earthstone Energy click here. For more ratings news on Earthstone Energy click here.

Shares of Earthstone Energy closed at $14.20 yesterday.

You May Also Be Interested In

• Sony/Apollo bid for Paramount could be worth as much as $29 billion - Source
• Uber Inc. (UBER) PT Raised to $96 at Tigress Financial Partners
• KDDI Corp. (9433:JP) (KDDIY) PT Lowered to JPY4,520 at HSBC