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Earthstone Energy (Earthstone Energy) Free Cash Flow : $-543 Mil (TTM As of Sep. 2023)


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What is Earthstone Energy Free Cash Flow?

Earthstone Energy's total free cash flow for the months ended in Sep. 2023 was $-729 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Sep. 2023 was $-543 Mil.

Earthstone Energy's Free Cash Flow per Share for the months ended in Sep. 2023 was $-6.73. Its free cash flow per share for the trailing twelve months (TTM) ended in Sep. 2023 was $-4.99.

During the past 3 years, the average Free Cash Flow per Share Growth Rate was -57.10% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Earthstone Energy's highest 3-Year average Free Cash Flow per Share Growth Rate was 149.30% per year. The lowest was -85.80% per year. And the median was -17.40% per year.


Earthstone Energy Free Cash Flow Historical Data

The historical data trend for Earthstone Energy's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Earthstone Energy Free Cash Flow Chart

Earthstone Energy Annual Data
Trend Mar13 Mar14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22
Free Cash Flow
Get a 7-Day Free Trial Premium Member Only Premium Member Only -80.34 -78.55 43.29 -196.34 -998.90

Earthstone Energy Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23
Free Cash Flow Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -262.55 143.00 75.73 -32.71 -728.85

Earthstone Energy Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Earthstone Energy's Free Cash Flow for the fiscal year that ended in Dec. 2022 is calculated as

Free Cash Flow (A: Dec. 2022 )=Cash Flow from Operations+Capital Expenditure
=1018.879+-2017.782
=-999

Earthstone Energy's Free Cash Flow for the quarter that ended in Sep. 2023 is calculated as

Free Cash Flow (Q: Sep. 2023 )=Cash Flow from Operations+Capital Expenditure
=285.131+-1013.98
=-729

Free Cash Flow for the trailing twelve months (TTM) ended in Sep. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $-543 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Earthstone Energy  (NYSE:ESTE) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Sep23, Earthstone Energy's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Sep23)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=-4.836/20.24+0.2
=-3.89 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Earthstone Energy Free Cash Flow Related Terms

Thank you for viewing the detailed overview of Earthstone Energy's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.


Earthstone Energy (Earthstone Energy) Business Description

Traded in Other Exchanges
N/A
Address
1400 Woodloch Forest Drive, Suite 300, The Woodlands, TX, USA, 77380
Earthstone Energy Inc is an independent oil and natural gas development and production company. The company focuses on the acquisition, development, exploration, and production of onshore, crude oil and natural gas reserves. It is also active in corporate mergers and the acquisition of oil and natural gas properties. The company's reserve portfolio consists of assets in the Midland Basin of West Texas, and the Eagle Ford Trend of South Texas. Its operations are all in the upstream segment of the oil and natural gas industry and are conducted onshore in the United States.
Executives
Tony Oviedo officer: EVP, PAO 909 FANNIN, SUITE 1850, HOUSTON TX 77010
Mark Jr Lumpkin officer: EVP and CFO 1400 WOODLOCH FOREST DRIVE, SUITE 300, THE WOODLANDS TX 77380
Frank Alan Lodzinski director, officer: CEO 1400 WOODLOCH FOREST DRIVE, SUITE 300, THE WOODLANDS TX 77380
Wp Energy Chisholm Holdings, L.p. 10 percent owner 450 LEXINGTON AVENUE, NEW YORK NY 10017
Warburg Pincus Private Equity (e&p) Xi-a, L.p. 10 percent owner C/O WARBURG PINCUS LLC, 450 LEXINGTON AVE, NEW YORK NY 10017
Warburg Pincus (e&p) Xii, L.p. 10 percent owner 450 LEXINGTON AVENUE, NEW YORK NY 10017
Warburg Pincus Partners Ii (us), L.p. 10 percent owner 450 LEXINGTON AVENUE, C/O WARBURG PINCUS LLC, NEW YORK NY 10017
Robert John Anderson officer: President 1400 WOODLOCH FOREST DRIVE, SUITE 300, THE WOODLANDS TX 77380
Cypress Investments, Llc director 34 S. WYNDEN DR., SUITE 300, HOUSTON TX 77056
Post Oak Energy Holdings, Llc director 34 S. WYNDEN DR, STE 300, HOUSTON TX 77056
Jay Frederick Joliat director 36801 WOODWARD AVE., SUITE 301, BIRMINGHAM MI 48009
Post Oak Energy Capital, Lp director 34 S. WYNDEN DR, STE 300, HOUSTON TX 77056
Swanson Douglas E Jr director 1100 LOUISIANA, SUITE 4900, HOUSTON TX 77002
Steven C. Collins officer: EVP and COO 1400 WOODLOCH FOREST DRIVE, SUITE 300, THE WOODLANDS TX 77380
Encap Energy Capital Fund Xi, L.p. director, 10 percent owner 9651 KATY FREEWAY, SUITE 600, HOUSTON TX 77024

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