Earthstone Energy Inc.

Concurrent with the signing of the Bighorn acquisition agreement on Jan. 31, entered into an agreement to privately issue equity through a PIPE financing with two institutional investors, including affiliates of EnCap Investments LP, which is a current beneficial owner of approximately 47% of Earthstone's total Class A and Class B common stock. Funds managed by Post Oak Energy Capital LP, an unaffiliated party, is the other PIPE investor. Closing of the PIPE is conditioned upon and will occur concurrently with the closing of the Bighorn acquisition, expected in second-quarter 2022. Equity issued in the PIPE will initially be in the form of convertible equity that will automatically be converted into 25.2 million shares of Class A Common Stock, including 19.8 million shares to affiliates of EnCap. Johnson Rice & Co. LLC served as financial adviser to the audit committee of Earthstone.