SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 5)

EARTHSTONE ENERGY, INC.

(Name of Issuer)

Class A Common Stock, $0.001 par value per share

(Title of Class of Securities)

27032D304

(CUSIP Number)

D. Martin Phillips

EnCap Investments L.P.

1100 Louisiana Street, Suite 4900

Houston, Texas 77002

(713) 659-6100

with a copy to:

W. Matthew Strock

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

(713) 758-2222

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

December 17, 2020

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 27032D304

1	Name of Reporting Person Bold Energy Holdings, LLC
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 39,207,076 (1)
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 39,207,076 (1)
11	Aggregate Amount Beneficially Owned by Each Reporting Person 39,207,076 (1)
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 61.10% (2)
14	Type of Reporting Person OO (Limited Liability Company)

(1) Bold Energy Holdings, LLC, a Texas limited liability company (“Bold”), (i) directly holds 33,956,524 shares of Class B common stock, $0.001 par value per share (“Class B Common Stock”), of Earthstone Energy, Inc., a Delaware corporation (“Earthstone”), and an equivalent number of membership units (“EEH Units”) of Earthstone Energy Holdings, LLC, a Delaware limited liability company (“EEH”), which together are exchangeable for shares of Class A common stock, $0.001 par value per share (“Class A Common Stock”), of Earthstone and (ii) may be deemed to beneficially own 5,250,552 shares of Class A Common Stock pursuant to a Voting Agreement, dated as of May 9, 2017, by and among Earthstone, Bold, Oak Valley Resources, LLC, a Delaware limited liability company (“Oak Valley”), and EnCap Investments L.P., a Delaware limited partnership (“EnCap Investments”), as amended by the First Amendment to the Voting Agreement, dated as of April 22, 2020, by and among Earthstone, Bold and EnCap Investments (the “Voting Agreement”), pursuant to which EnCap Investments and Bold have agreed not to vote any shares of Class A Common Stock or Class B Common Stock held by them in favor of certain actions in accordance with the terms of the Voting Agreement. The shares of Class B Common Stock covered by this item also may be deemed to be beneficially owned by EnCap Partners GP, LLC, a Delaware limited liability company (“EnCap Partners GP”), through its ownership of EnCap Investments, a party to the Voting Agreement. On May 19, 2017, Oak Valley was dissolved after filing a certificate of cancellation with the Delaware Secretary of State and, consequently, ceased to be a party to the Voting Agreement. The Class A Common Stock, Class B Common Stock and EEH Units are collectively referred to herein as “Securities.” Bold disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act of 1934, as amended (the “Exchange Act”) or any other purpose.

(2) This calculation is based on an assumed combined total of 64,167,273 shares of Class A Common Stock outstanding. This assumed combined total outstanding (a) consists of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020, and (b) assumes that all 33,956,524 shares of Class B Common Stock beneficially owned by the Reporting Persons (along with an equivalent number of EEH Units, but no other shares of Class B Common Stock or EEH Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. There were a total of 35,009,371 shares of Class B Common Stock outstanding on October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap Energy Capital Fund V, L.P.
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 82,782
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 82,782
11	Aggregate Amount Beneficially Owned by Each Reporting Person 82,782
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 0.27% (1)
14	Type of Reporting Person PN

(1) This calculation is based on a total of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap V-B Acquisitions, L.P.
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 65,539
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 65,539
11	Aggregate Amount Beneficially Owned by Each Reporting Person 65,539
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 0.22% (1)
14	Type of Reporting Person PN

(1) This calculation is based on a total of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap Energy Capital Fund VI, L.P.
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 316,937
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 316,937
11	Aggregate Amount Beneficially Owned by Each Reporting Person 316,937
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 1.05% (1)
14	Type of Reporting Person PN

(1) This calculation is based on a total of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap VI-B Acquisitions, L.P.
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 173,486
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 173,486
11	Aggregate Amount Beneficially Owned by Each Reporting Person 173,486
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 0.57% (1)
14	Type of Reporting Person PN

(1) This calculation is based on a total of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap Energy Capital Fund VII, L.P.
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 4,611,808
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 4,611,808
11	Aggregate Amount Beneficially Owned by Each Reporting Person 4,611,808
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 15.27% (1)
14	Type of Reporting Person PN

(1) This calculation is based on a total of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap Energy Capital Fund IX, L.P.
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 39,207,076 (1)
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 39,207,076 (1)
11	Aggregate Amount Beneficially Owned by Each Reporting Person 39,207,076 (1)
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 61.10% (2)
14	Type of Reporting Person PN

(1) EnCap Energy Capital Fund IX, L.P. (“EnCap Fund IX”) owns 100% of the membership interests of Bold. Bold (i) directly holds 33,956,524 shares of Class B Common Stock and an equivalent number of EEH Units, which together are exchangeable for shares of Class A Common Stock and (ii) may be deemed to beneficially own 5,250,552 shares of Class A Common Stock pursuant to the Voting Agreement. See Footnote 1 on Page 1 above. Therefore, EnCap Fund IX may be deemed to beneficially own all of the reported Securities that are deemed to be beneficially owned by Bold. EnCap Fund IX disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act or any other purpose.

(2) This calculation is based on an assumed combined total of 64,167,273 shares of Class A Common Stock outstanding. This assumed combined total outstanding (a) consists of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020, and (b) assumes that all 33,956,524 shares of Class B Common Stock beneficially owned by the Reporting Persons (along with an equivalent number of EEH Units, but no other shares of Class B Common Stock or EEH Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. There were a total of 35,009,371 shares of Class B Common Stock outstanding on October 29, 2020.

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CUSIP No. 27032D304

1	Name of Reporting Person EnCap Partners GP, LLC
2	Check the Appropriate Box if a Member of a Group (A):  ☐        (B):  ☐
3	SEC Use Only
4	Source of Funds Other (Not Applicable, See Item 3)
5	Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E)  ☐
6	Citizenship or Place of Organization Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	Sole Voting Power -0-
		8	Shared Voting Power 39,207,076 (1)
		9	Sole Dispositive Power -0-
		10	Shared Dispositive Power 39,207,076 (1)
11	Aggregate Amount Beneficially Owned by Each Reporting Person 39,207,076 (1)
12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares  ☐
13	Percent of Class Represented by Amount in Row (11) 61.10% (2)
14	Type of Reporting Person OO (Limited Liability Company)

(1) EnCap Partners GP is the sole general partner of EnCap Partners, LP, which is the managing member of EnCap Investments Holdings, LLC, which is the sole member of EnCap Investments GP, L.L.C. (“EnCap Investments GP”), which is the general partner of EnCap Investments, which is the general partner of EnCap Equity Fund V GP, L.P. (“EnCap Fund V GP”), EnCap Equity Fund VI GP, L.P. (“EnCap Fund VI GP”), EnCap Equity Fund VII GP, L.P. and EnCap Equity Fund IX GP, L.P, each of which are the general partners of EnCap Energy Capital Fund V, L.P. (“EnCap Fund V”), EnCap Energy Capital Fund VI, L.P. (“EnCap Fund VI”), EnCap Energy Capital Fund VII, L.P. (“EnCap Fund VII”) and EnCap Fund IX, respectively. Additionally, EnCap Fund VI GP is the general partner of EnCap Energy Capital Fund VI-B, L.P., which is the sole member of EnCap VI-B Acquisitions GP, LLC, which is the general partner of EnCap VI-B Acquisitions, L.P. (“EnCap Fund VI-B”). EnCap Fund V GP is also the general partner of EnCap Energy Capital Fund V-B, L.P., which is the sole member of EnCap V-B Acquisitions GP, LLC, which is the general partner of EnCap V-B Acquisitions, L.P. (“EnCap Fund V-B” and, together with EnCap Fund V, EnCap Fund VI, EnCap Fund VII, EnCap Fund IX and EnCap Fund VI-B, the “Class A Funds”). Therefore, EnCap Partners GP, through its indirect ownership of Bold and the Class A Funds, may be deemed to share the right to direct the disposition of the reported Securities. Further, EnCap Partners GP, through its ownership of EnCap Investments, may be deemed to beneficially own and share the right to direct the vote of the Securities pursuant to the Voting Agreement. EnCap Partners GP disclaims beneficial ownership of the reported Securities except to the extent of its pecuniary interest therein, and this statement shall not be deemed an admission that it is the beneficial owner of the reported Securities for the purposes of Section 13(d) of the Exchange Act or any other purpose.

(2) This calculation is based on an assumed combined total of 64,167,273 shares of Class A Common Stock outstanding. This assumed combined total outstanding (a) consists of 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020, and (b) assumes that all 33,956,524 shares of Class B Common Stock beneficially owned by the Reporting Persons (along with an equivalent number of EEH Units, but no other shares of Class B Common Stock or EEH Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. There were a total of 35,009,371 shares of Class B Common Stock outstanding on October 29, 2020.

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Explanatory Note

This Amendment No. 5 (this “Amendment”) amends and supplements the Schedule 13D filed on May 27, 2014 (the “First Schedule 13D”) by Oak Valley Resources, LLC, a Delaware limited liability company (“Oak Valley”), as amended by Amendment No. 1 filed by Oak Valley on November 16, 2016 (the “Second Schedule 13D”), as further amended by Amendment No. 2 filed by Bold Energy Holdings, LLC, a Texas limited liability company (“Bold”), on June 1, 2018 (the “Third Schedule 13D”), as further amended by Amendment No. 3 filed by Bold on October 25, 2018 (the “Fourth Schedule 13D”), and as further amended by Amendment No. 4 filed by Bold on October 30, 2019 (the “Fifth Schedule 13D” and, together with the First Schedule 13D, the Second Schedule 13D, the Third Schedule 13D and the Fourth Schedule 13D, the “Original Schedule 13D” and, the Original Schedule 13D as further amended and supplemented by this Amendment, the “Schedule 13D”), and relates to the beneficial ownership of the shares of Class A common stock, $0.001 par value per share, of Earthstone Energy, Inc., a Delaware corporation (“Earthstone”). Except as otherwise specified in this Amendment, all items left blank remain unchanged in all material respects and any items that are reported are deemed to amend and restate the corresponding items in the Original Schedule 13D in their entirety. Capitalized terms used herein but not defined herein have the respective meanings ascribed to them in the Original Schedule 13D.

This Amendment is being filed on behalf of the reporting persons identified on the cover pages of this Amendment. Capitalized terms used in this Amendment and not otherwise defined shall have the same meanings ascribed to them in the Original Schedule 13D.

Item 4. Purpose of Transaction.

This Amendment amends and restates Item 4 of the Original Schedule 13D in its entirety as set forth below:

The Reporting Persons acquired the securities covered by this Schedule 13D for investment purposes and the Reporting Persons intend to review on a continuing basis the investments in Earthstone by the Reporting Persons. Depending upon market conditions and other factors that they may deem relevant, the Reporting Persons or their affiliates may seek to acquire additional securities of Earthstone or other financial instruments related to Earthstone or its securities (which may include rights or securities exercisable or convertible into securities of Earthstone) and/or sell or otherwise dispose of some or all of the Earthstone securities or financial instruments owned from time to time, in each case, in open market or private transactions, block sales or otherwise, including in connection with extraordinary corporate transactions such as a tender offer, merger or consolidation.

The Reporting Persons intend to communicate with Earthstone’s management and board of directors about a broad range of operational and strategic matters and may communicate with other shareholders or third parties regarding the foregoing. The Reporting Persons may in the future formulate, consider, explore, develop or make plans or proposals regarding Earthstone or its securities, including related to operational or financial matters or any other potential strategic alternative intended to maximize shareholder value, including but not limited to a take private transaction. Such discussions and actions may be preliminary and exploratory in nature and not rise to the level of a plan or a proposal.

Except as set forth herein, the Reporting Persons have no present plans or proposals that would relate to or result in any of the matters set forth in clauses (a) through (j) of Item 4 of Schedule 13D. Although the foregoing reflects activities presently contemplated by such persons with respect to Earthstone, the foregoing is subject to change at any time.

2017 Contribution Agreement

On May 9, 2017, Earthstone closed certain transactions structured in a manner known as an “Up-C” (the “2017 Contribution”) under the 2017 Contribution Agreement. Earthstone, Bold and Bold Sub are each affiliates of funds controlled by EnCap Partners GP.

In connection with the closing of the transactions contemplated by the 2017 Contribution Agreement (the “2017 Closing”), (i) Earthstone recapitalized all of its common stock, $0.001 par value per share, into two classes – Class A Common Stock and Class B Common Stock, (ii) all of Earthstone’s existing outstanding Common Stock was converted into Class A Common Stock pursuant to the Third Amended and Restated Certificate of Incorporation of

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Earthstone, (iii) Bold purchased 36,070,828 shares of Class B Common Stock for nominal consideration, with the Class B Common Stock having no economic rights in Earthstone but having voting rights on a pari passu basis with the Class A Common Stock and (iv) EEH issued 16,423,849 membership interests of EEH (“EEH Units”) to Earthstone and 5,865,328 EEH Units to Lynden, or 22,289,177 EEH Units in the aggregate, and 36,070,828 EEH Units to Bold in exchange for each of Earthstone, Lynden and Bold transferring all of their assets to EEH. Each EEH Unit held by Bold, together with one share of Class B Common Stock issued to Bold, are convertible, at the holders’ election, into Class A Common Stock on a one-for-one basis. Upon the 2017 Closing, Earthstone began conducting the combined business activities through EEH, with Earthstone as its sole managing member.

2017 Registration Rights Agreement

At the 2017 Closing and as required by the 2017 Contribution Agreement, Earthstone entered into a Registration Rights Agreement (the “2017 Registration Rights Agreement”) with Bold pursuant to which Earthstone agreed to register, at its cost, with the U.S. Securities and Exchange Commission (the “Commission”), the resale of the Class A Common Stock to be issued to holders of EEH Units and Class B Common Stock (such holders, the “Selling Stockholders”) upon the exchange with Earthstone, subject to the terms and conditions set forth therein. Pursuant to the 2017 Registration Rights Agreement, Earthstone filed a shelf registration statement on Form S-3 (File No. 333-218277) with the Commission on May 26, 2017, which was declared effective on October 18, 2017. In addition, the Selling Stockholders have (i) the right to demand that Earthstone register shares of their Class A Common Stock for sale in registered underwritten offerings, subject to certain limitations, and (ii) piggyback rights to register shares of Class A Common Stock held by them for sale in other registered underwritten offerings of equity securities conducted by Earthstone.

Amended Voting Agreement

On May 9, 2017, in connection with the 2017 Closing, Earthstone, Bold, Oak Valley and EnCap Investments L.P., a Delaware limited partnership (“EnCap Investments” and collectively with Bold and Oak Valley, the “Stockholders”), entered into a voting agreement (the “Voting Agreement”), pursuant to which EnCap, Oak Valley and Bold agreed not to vote any shares of Class A Common Stock or Class B Common Stock held by them in favor of any action, or take any action that would in any way alter the composition of Earthstone’s board of directors from its composition immediately following the 2017 Closing as long as the Voting Agreement is in effect, except in accordance with the Voting Agreement. Immediately following the 2017 Closing, Earthstone’s board of directors was increased to nine members from eight members, four of which were designated by EnCap Investments, three of which are independent (the “Independent Directors”), and two of which are members of Earthstone’s management, including Earthstone’s Chief Executive Officer (the “Earthstone Designated Directors” and, together with the Independent Directors, the “Non-EnCap Designated Directors”). On May 19, 2017, Oak Valley was dissolved after filing a certificate of cancellation with the Delaware Secretary of State and, consequently, ceased to be a party to the Voting Agreement.

On April 22, 2020, Earthstone, Bold and EnCap Investments entered into an amendment to the Voting Agreement (the Voting Agreement, as so amended, the “Amended Voting Agreement”), pursuant to which one of EnCap Investments’ designated directors did not seek re-election and Earthstone’s board of directors was reduced by one member effective at Earthstone’s 2020 Annual Meeting of Stockholders. EnCap Investments shall continue to have the ability to designate four directors to Earthstone’s board of directors and in the event that Earthstone’s board of directors has less than four directors designated by EnCap Investments, EnCap Investments shall have the ability to request that the size of the Board be increased by one member and EnCap Investments shall have the ability to designate such additional member during the term of the Amended Voting Agreement.

At any time while the Amended Voting Agreement is in effect and during which EnCap Investments’ collective ownership of Earthstone exceeds 50% of the total issued and outstanding voting stock, EnCap Investments may remove and replace one Non-EnCap Designated Director. Any such removal and replacement will be conducted in accordance with the provisions of the certificate of incorporation and bylaws of Earthstone then in effect. The Amended Voting Agreement terminates on the earlier of (i) May 9, 2022 and (ii) the date upon which EnCap Investments, Oak Valley and Bold collectively own, of record and beneficially, less than 20% of Earthstone’s outstanding voting stock. As of May 16, 2017, Oak Valley did not hold any outstanding voting stock of Earthstone.

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Oak Valley Distribution

On May 16, 2017, Oak Valley completed the Distribution. As a result of the Distribution, (i) EnCap Fund VII received 4,611,808 shares of Class A Common Stock, (ii) EnCap Fund VI received 316,937 shares of Class A Common Stock, (iii) EnCap Fund VI-B received 173,486 shares of Class A Common Stock, (iv) EnCap Fund V received 82,782 shares of Class A Common Stock and (v) EnCap Fund V-B received 65,539 shares of Class A Common Stock.

Bold Redemptions

On May 18, 2017, in connection with the 2017 Closing and in accordance with the Amended and Restated Limited Liability Company Agreement of Bold, dated as of May 9, 2017, Bold (a) redeemed (i) all of the Class B Units of Bold held by Bold Energy Management III LLC, a Texas limited liability company (“Bold Management”), in exchange for the distribution of 1,246,375 EEH Units and 1,246,375 shares of Class B Common Stock to Bold Management and (ii) all of the Class B Units of Bold held by Bold Energy Management Holdings III LLC, a Texas limited liability company (“Bold Management Holdings”), in exchange for the distribution of 217,929 EEH Units and 217,929 shares of Class B Common Stock to Bold Management Holdings and (b) following such redemption and distribution, canceled all of the outstanding Class B Units of Bold (the foregoing transactions, collectively, the “2017 Redemption”).

On June 1, 2018, Bold entered into a Redemption Agreement (the “Redemption Agreement”) with Bold Management. In connection with the closing of the transactions contemplated by the Redemption Agreement, Bold redeemed all of the Class C Units of Bold held by Bold Management in exchange for the distribution to Bold Management of 650,000 EEH Units and 650,000 shares of Class B Common Stock, and following such redemption Bold canceled all of the outstanding Class C Units of Bold (the foregoing transactions, collectively, the “2018 Redemption” and, together with the 2017 Redemption, the “Bold Redemptions”).

Purchase and Sale Agreement; Securities Purchase Agreement

On December 17, 2020, Earthstone, EEH, Independence Resources Holdings, LLC, a Delaware limited liability company (“IRH”), and Independence Resources Manager, LLC, a Delaware limited liability company (“IRM” and collectively with IRH, “Independence”), entered into a Purchase and Sale Agreement (the “PSA”). Pursuant to the PSA, among other things, EEH will acquire all of the issued and outstanding limited liability company interests in certain wholly owned subsidiaries of IRH and IRM (collectively, the “Acquisition”) for aggregate consideration consisting of the following, subject to certain adjustments: (i) an aggregate amount of cash from EEH equal to approximately $135.2 million and (ii) approximately 12.7 million shares of Class A Common Stock, to be newly issued to IRH.

On December 17, 2020, concurrently with the execution and delivery of the PSA, EnCap Fund V, EnCap Fund V-B, EnCap Fund VI, EnCap Fund VI-B (collectively, the “Sellers”) and IRH entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”). Pursuant to the Securities Purchase Agreement, immediately following (and subject to) the closing of the Acquisition (the “PSA Closing”), the Sellers will sell to IRH the 638,744 shares of Class A Common Stock held directly by the Sellers in the aggregate at a purchase price of $3.99 per share, subject to customary closing conditions (the “SPA Sale”). The Securities Purchase Agreement may only be terminated: (a) by the mutual written agreement of the Sellers and IRH; (b) upon written notice by the Sellers or IRH to the other party in the event that the PSA Closing shall not have occurred on or before February 15, 2021; provided, however that the right to terminate the Securities Purchase Agreement shall not be available to any party whose failure to fulfill any obligations under the Securities Purchase Agreement shall have been the cause of, or shall have resulted in, the failure of the PSA Closing to occur on or prior to such date; (c) by either the Sellers or IRH as to itself if a United States court of competent jurisdiction shall permanently enjoin the SPA Sale and such injunction shall be final and non-appealable; (d) without any action by any party, if the PSA is terminated in accordance with its terms at any time prior to the SPA Sale; (e) by notice if there have been certain inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made between the parties and such defects shall not have been cured within thirty (30) days.

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The foregoing description of the Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by the actual Securities Purchase Agreement, a copy of which is filed as Exhibit 10.5 to this Amendment and incorporated herein by reference.

Warburg Voting Agreement

In connection with the PSA Closing, certain affiliates of Warburg Pincus, LLC (“Warburg”), the principal owners of Independence, EnCap Investments and Earthstone will enter into a voting agreement containing provisions by which Warburg will have the right to appoint one director to Earthstone’s board of directors. Warburg’s right to appoint one director will terminate when Warburg, in the aggregate, no longer owns: (i) 8% of the outstanding Class A Common Stock; or (ii) 10% or more of the outstanding Class A Common Stock as a result of a sale by Warburg.

Item 5. Interest in Securities of the Issuer.

This Amendment amends and restates Item 5 of the Original Schedule 13D in its entirety as set forth below:

(a)    The aggregate number and percentage of Class A Common Stock beneficially owned by each Reporting Person is set forth in Items 7, 8, 9, 10, 11 and 13 of the cover pages to this Schedule 13D relating to such Reporting Person and is incorporated by reference herein.

(b)    For purposes of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), EnCap Partners GP has the shared power to vote or to direct the vote and to dispose or to direct the disposition of the Class A Common Stock held by the EnCap Funds. The shares held by the EnCap Funds represent approximately 61.10% of the outstanding shares of Class A Common Stock (an assumed combined total of 64,167,273 shares of Class A Common Stock outstanding consisting of (a) 30,210,749 shares of Class A Common Stock outstanding as of October 29, 2020, and (b) 33,956,524 shares of Class B Common Stock held by Bold, assuming that all of such shares of Class B Common Stock beneficially owned by Bold, along with an equivalent number of EEH Units (but no other shares of Class B Common Stock or EEH Units outstanding) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis). Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by any Reporting Person that it is the beneficial owner of any shares of Class A Common Stock for purposes of Section 13(d) of the Exchange Act, or for any other purpose, and such beneficial ownership is expressly disclaimed.

(c)    Except as set forth in this Schedule 13D, none of the Reporting Persons or, to their knowledge, any of its directors, executive officers or other control persons named on Schedule A, Schedule B or Schedule C, attached hereto, has effected any transaction in the shares of Class A Common Stock during the past 60 days.

(d)    No person other than the Reporting Persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Class A Common Stock reported on this Schedule 13D.

(e)    Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

This Amendment amends and restates Item 6 of the Original Schedule 13D in its entirety as set forth below:

The information set forth in Item 4 of this Schedule 13D is incorporated by reference in its entirety into this Item 6.

Other than as described in this Schedule 13D and in the agreements and documents attached as exhibits hereto or incorporated herein by reference, to the knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 or between such persons and any other person with respect to any securities of Earthstone, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, the existence of which would give another person voting or investment power over the securities of Earthstone.

12

Item 7. Material to be Filed as Exhibits.

This Amendment amends and restates Item 7 of the Original Schedule 13D in its entirety as set forth below:

Exhibit     No.	Description of Exhibit
1.1	Joint Filing Agreement dated October 25, 2018 (incorporated by reference to Exhibit 1.1 to the Schedule 13D/A filed by Bold Energy Holdings, LLC with the Commission on October 25, 2018).
2.1	Contribution Agreement dated November 7, 2016, by and among Earthstone Energy, Inc., Earthstone Energy Holdings, LLC, Lynden USA Inc., Lynden USA Operating, LLC, Bold Energy Holdings, LLC and Bold Energy III LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Earthstone Energy, Inc. with the Commission on November 8, 2016).
2.2	First Amendment to the Contribution Agreement dated March 21, 2017 by and among Earthstone Energy, Inc., Earthstone Energy Holdings, LLC, Lynden USA Inc., Lynden USA Operating, LLC, Bold Energy Holdings, LLC, and Bold Energy III LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Earthstone Energy, Inc. with the Commission on March 23, 2017).
10.1	Registration Rights Agreement dated May 9, 2017, by and among Earthstone Energy, Inc., Bold Energy Holdings, LLC and the other persons parties thereto (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by Earthstone Energy, Inc. with the Commission on May 15, 2017).
10.2	Voting Agreement dated May 9, 2017, by and among Earthstone Energy, Inc., EnCap Investments L.P., Oak Valley Resources, LLC and Bold Energy Holdings, LLC (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by Earthstone Energy, Inc. with the Commission on May 15, 2017).
10.3	First Amendment to the Voting Agreement dated April 22, 2020, by and among Earthstone Energy, Inc., EnCap Investments L.P. and Bold Energy Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Earthstone Energy, Inc. with the Commission on April 24, 2020).
10.4	Redemption Agreement dated June 1, 2018, by and between Bold Energy Holdings, LLC and Bold Energy Management III LLC (incorporated by reference to Exhibit 10.3 to the Schedule 13D/A filed by Bold Energy Holdings, LLC with the Commission on June 18, 2018).
10.5	Securities Purchase Agreement dated December 17, 2020, by and among EnCap Energy Capital Fund V, L.P., EnCap V-B Acquisitions, L.P., EnCap Energy Capital Fund VI, L.P., EnCap VI-B Acquisitions, L.P. and Independence Resources Holdings, LLC.

13

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: December 23, 2020

Bold Energy Holdings, LLC
By:	EnCap Energy Capital Fund IX, L.P.,
	its sole member
By:	EnCap Equity Fund IX GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director
EnCap Energy Capital Fund V, L.P.
By:	EnCap Equity Fund V GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director

14

EnCap V-B Acquisitions, L.P.
By:	EnCap V-B Acquisitions GP, LLC,
	its general partner
By:	EnCap Energy Capital Fund V-B, L.P.,
	its sole member
By:	EnCap Equity Fund V GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director
EnCap VI-B Acquisitions, L.P.
By:	EnCap VI-B Acquisitions GP, LLC,
	its general partner
By:	EnCap Energy Capital Fund VI-B, L.P.,
	its sole member
By:	EnCap Equity Fund VI GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director

15

EnCap Energy Capital Fund VI, L.P.
By:	EnCap Equity Fund VI GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director
EnCap Energy Capital Fund VII, L.P.
By:	EnCap Equity Fund VII GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director
EnCap Energy Capital Fund IX, L.P.
By:	EnCap Equity Fund IX GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director
EnCap Partners GP, LLC
By:	/s/ Douglas E. Swanson, Jr.
Name:	Douglas E. Swanson, Jr.
Title:	Managing Director

16

Schedule A

CONTROL PERSONS OF BOLD

The name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each of the general partner and other control persons of Bold are set forth below:

Name and Business Address	Capacity in which Serves	Principal Occupation	Name, Principal Business and Address of Organization in which Principal Occupation is Conducted
EnCap Energy Capital Fund IX, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of Bold Energy Holdings, LLC	n/a	n/a
EnCap Equity Fund IX GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund IX, L.P.	n/a	n/a
EnCap Investments L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Equity Fund IX GP, L.P.	n/a	n/a
EnCap Investments GP, L.L.C. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Investments L.P.	n/a	n/a
EnCap Investments Holdings, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap Investments GP, L.L.C.	n/a	n/a
EnCap Partners, LP 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of EnCap Investments Holdings, LLC	n/a	n/a
EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Partners, LP	n/a	n/a

A-1

Schedule B

CONTROL PERSONS OF THE ENCAP FUNDS

The name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each of the general partner and other control persons of the EnCap Funds are set forth below:

Name and Business Address	Capacity in which Serves	Principal Occupation	Name, Principal Business and Address of Organization in which Principal Occupation is Conducted
EnCap Equity Fund V GP, L.P. 100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund V, L.P. and EnCap Energy Capital Fund V-B, L.P.	n/a	n/a
EnCap V-B Acquisitions GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap V-B Acquisitions, L.P.	n/a	n/a
EnCap Energy Capital Fund V-B, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap V-B Acquisitions GP, LLC	n/a	n/a
EnCap Equity Fund VI GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VI, L.P. and EnCap Energy Capital Fund VI-B, L.P.	n/a	n/a
EnCap VI-B Acquisitions GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap VI-B Acquisitions, L.P.	n/a	n/a
EnCap Energy Capital Fund VI-B, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap VI-B Acquisitions GP, LLC	n/a	n/a
EnCap Equity Fund VII GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund VII, L.P.	n/a	n/a
EnCap Equity Fund IX GP, L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Energy Capital Fund IX, L.P.	n/a	n/a
EnCap Investments L.P. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Equity Fund V GP, L.P., EnCap Equity Fund VI GP, L.P., EnCap Equity Fund VII GP, L.P. and EnCap Equity Fund IX GP, L.P.	n/a	n/a
EnCap Investments GP, L.L.C. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Investments L.P.	n/a	n/a
EnCap Investments Holdings, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Sole Member of EnCap Investments GP, L.L.C.	n/a	n/a
EnCap Partners, LP 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Member of EnCap Investments Holdings, LLC	n/a	n/a
EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	General Partner of EnCap Partners, LP	n/a	n/a

B-1

On July 10, 2018, EnCap Investments L.P. (“EnCap”) entered into a settlement with the Securities and Exchange Commission (“SEC”) under which EnCap consented to the entry of an order (the “Order”) that finds that EnCap violated Section 206(4) under the Investment Advisers Act of 1940 (the “Advisers Act”) and Rule 206(4)-5 thereunder. Solely for the purpose of settling these proceedings, EnCap admitted to the SEC’s jurisdiction, the subject matter of these proceedings and consented to the Order. The Order required EnCap to cease and desist from committing or causing any violations and any future violations of Section 206(4) of the Advisers Act and Rule 206(4)-5 thereunder, to be censured, and to pay a civil monetary penalty in the amount of $500,000 to the SEC.

B-2

Schedule C

CONTROL PERSONS OF ENCAP PARTNERS GP

The name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each of the general partner and other control persons of EnCap Partners GP are set forth below. Except as indicated below, all members of the Board of Managers of EnCap Partners GP listed below are citizens of the United States.

Name and Business Address	Capacity in which Serves	Principal Occupation	Name, Principal Business and Address of Organization in which Principal Occupation is Conducted
David B. Miller 3811 Turtle Creek Blvd., Suite 2100 Dallas, Texas 75219	Managing Partner	Managing Partner	EnCap Partners GP, LLC 3811 Turtle Creek Blvd., Suite 2100 Dallas, Texas 75219
Gary R. Petersen 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002
D. Martin Phillips 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002
Robert L. Zorich 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002
Jason M. DeLorenzo 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002
Douglas E. Swanson, Jr. 1100 Louisiana Street, Suite 4900 Houston, Texas 77002	Managing Partner	Managing Partner	EnCap Partners GP, LLC 1100 Louisiana Street, Suite 4900 Houston, Texas 77002

C-1

EX-99.10.5

Exhibit 10.5

Execution Version

SECURITIES PURCHASE AGREEMENT

dated as of December 17, 2020

by and among

ENCAP ENERGY CAPITAL FUND V, L.P.,

ENCAP V-B ACQUISITIONS, L.P.,

ENCAP ENERGY CAPITAL FUND VI, L.P.,

ENCAP VI-B ACQUISITIONS, L.P.

and

INDEPENDENCE RESOURCES HOLDINGS, LLC

TABLE OF CONTENTS

		Page
ARTICLE I
PURCHASE; CLOSING
Section 1.1	Purchase	1
Section 1.2	Closing	1
Section 1.3	Closing Conditions	2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1	Representations and Warranties of the Sellers	3
Section 2.2	Representations and Warranties of the Purchaser	6
ARTICLE III
COVENANTS
Section 3.1	Negative Covenants	9
ARTICLE IV
INDEMNIFICATION, COSTS AND EXPENSES
Section 4.1	Indemnification by the Sellers	9
Section 4.2	Indemnification by the Purchaser	9
ARTICLE V
ADDITIONAL AGREEMENT
Section 5.1	Legend	10
ARTICLE VI
MISCELLANEOUS
Section 6.1	Expenses	10
Section 6.2	Amendment; Waiver	10
Section 6.3	Counterparts	11
Section 6.4	Governing Law; Submission to Jurisdiction	11
Section 6.5	WAIVER OF JURY TRIAL	11
Section 6.6	Notices	11
Section 6.7	Entire Agreement	12
Section 6.8	Assignment	12
Section 6.9	Interpretation; Other Definitions	13
Section 6.10	Captions	14
Section 6.11	Severability	14
Section 6.12	No Third Party Beneficiaries	14
Section 6.13	Specific Performance	14
Section 6.14	Termination	14
Section 6.15	Effects of Termination	15
Section 6.16	Non-Recourse	15

i

INDEX OF DEFINED TERMS

Term	Location of Definition
Acquisition	Recitals
Acquisition Agreement	Recitals
Affiliate	6.9(f)
Agreement	Preamble
business day	6.9(d)
Common Stock	Recitals
Closing	1.2(a)
Closing Date	1.2(a)
control/controlled by/under common control with	6.9(f)
Earthstone	Recitals
EnCap V	Preamble
EnCap V-B	Preamble
EnCap VI	Preamble
EnCap VI-B	Preamble
Exchange Act	6.9(g)
Governmental Entity	2.1(b)(iv)
Knowledge of Seller	6.9(g)
Law	6.9(i)
Lien	6.9(j)
Non-Recourse Party	6.16
Per Share Common Purchase Price	1.1
Person	6.9(e)
Purchase	1.1
Purchased Common Stock	1.1
Purchase Price	1.2(b)(ii)
Purchaser	Preamble
Purchaser Indemnitees	4.1
Representatives	6.9(k)
Securities Act	2.1(c)
Seller	Preamble
Seller Indemnitees	4.2

ii

SECURITIES PURCHASE AGREEMENT, dated as of December 17, 2020 (this “Agreement”), by and among EnCap Energy Capital Fund V, L.P., a Texas limited partnership (“EnCap V”), EnCap V-B Acquisitions, L.P., a Texas limited partnership (“EnCap V-B”), EnCap Energy Capital Fund VI, L.P., a Texas limited partnership (“EnCap VI”), EnCap VI-B Acquisitions, L.P., a Texas limited partnership (“EnCap VI-B”), and Independence Resources Holdings, LLC, a Delaware limited liability company (“Purchaser”). Each of EnCap V, EnCap V-B, EnCap VI and EnCap VI-B is individually referred to herein as a “Seller” and collectively as the “Sellers.”

RECITALS:

WHEREAS, Earthstone Energy, Inc., a Delaware corporation (“Earthstone”), has entered into a Purchase and Sale Agreement dated of even date herewith (as it may be amended or supplemented from time to time, the “Acquisition Agreement” and, the transactions contemplated thereby, the “Acquisition”), by and among Independence Resources Holdings, LLC, Independence Resources Manager, LLC, Earthstone Energy Holdings, LLC and Earthstone;

WHEREAS, immediately following the consummation of the Acquisition, the Sellers propose to sell to the Purchaser shares of Class A common stock, par value $0.001 per share, of Earthstone (the “Common Stock”), subject to the terms and conditions set forth in this Agreement;

WHEREAS, capitalized terms used in this Agreement have the meanings set forth in Section 6.9 or such other Section indicated in the preceding Index of Defined Terms.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

PURCHASE; CLOSING

Section 1.1 Purchase. On the terms and subject to the conditions herein, on the Closing Date, each Seller, severally and not jointly, agrees to sell to the Purchaser, and the Purchaser agrees to purchase from each Seller, the number of shares of Common Stock held by such Seller set forth opposite such Seller’s name on Schedule I, comprising 638,744 shares of Common Stock in the aggregate (such aggregate shares of Common Stock, the “Purchased Common Stock”), at a purchase price of $3.99 per share of Common Stock (the “Per Share Common Purchase Price”), and each Seller agrees to transfer all right, title and interest in such shares of Common Stock held by such Seller. The purchase and sale of the Purchased Common Stock pursuant to this Section 1.1 is referred to as the “Purchase.”

Section 1.2 Closing.

(a) Subject to the terms and conditions hereof, the closing of the Purchase (the “Closing”) shall be held at the same location as the closing of the Acquisition at a time immediately following the consummation of the Acquisition, or at such other time and place as the Sellers and the Purchaser agree (the “Closing Date”).

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(b) In addition and subject to the satisfaction or waiver on the Closing Date of the conditions to the Closing in Section 1.3, at the Closing:

(i) each Seller will deliver, or cause to be delivered, to the Purchaser a duly completed and executed stock power or other documentation reasonably acceptable to Purchaser and Earthstone evidencing the transfer of the Purchased Common Stock from such Seller to the Purchaser; and

(ii) Purchaser will deliver or cause to be delivered to a bank account (such bank account to be designated by each Seller in writing at least two (2) business days prior to the Closing Date) an amount in cash, by wire transfer of immediately available funds, equal to the number of shares of Purchased Common Stock set forth opposite such Seller’s name on Schedule I multiplied by the Per Share Common Purchase Price (such amount, the “Purchase Price”).

Section 1.3 Closing Conditions.

(a) The obligations of the Purchaser, on the one hand, and the Sellers, on the other hand, to effect the Closing is subject to the satisfaction or, to the extent permitted by applicable Law, waiver by the Purchaser and the Sellers at or prior to the Closing of the following conditions:

(i) no temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any Governmental Entity and no Law shall be in effect restraining, enjoining, making illegal or otherwise prohibiting the consummation of the transactions contemplated by this Agreement; and

(ii) all conditions to closing the Acquisition set forth in Article 6 of the Acquisition Agreement shall have been satisfied on the terms and conditions contemplated by the Acquisition Agreement and the closing of the Acquisition shall have occurred immediately prior to the Closing.

(b) The obligations of the Purchaser to effect the Closing are also subject to the satisfaction or, to the extent permitted by applicable Law, waiver by the Purchaser at or prior to the Closing of the following conditions:

(i) the representations and warranties of the Sellers set forth in Section 2.1 hereof shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that such representation or warranty speaks to an earlier date, in which case each of such earlier date);

(ii) the Sellers shall have performed in all material respects their respective obligations required to be performed by each Seller pursuant to this Agreement at or prior to the Closing;

2

(iii) the Purchaser shall have received a certificate signed on behalf of each Seller by a senior executive officer certifying to the effect that the conditions set forth in Section 1.3(b)(i) and (ii) have been satisfied;

(iv) each Seller shall have delivered, or caused to be delivered, to the Purchaser the stock power or other documentation described in Section 1.2(b)(i); and

(v) each Seller shall have delivered, or caused to be delivered, any information reasonably requested by the Company’s transfer agent with respect to the transfer of the Purchased Common Stock to the Purchaser, if applicable.

(c) The obligation of Sellers to effect the Closing is also subject to the satisfaction or, to the extent permitted by applicable Law, waiver by Sellers at or prior to the Closing of the following conditions:

(i) the representations and warranties of the Purchaser set forth in Section 2.2 hereof shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that such representation or warranty speaks of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such date);

(ii) the Purchaser shall have performed in all material respects its obligations required to be performed by it pursuant to this Agreement at or prior to the Closing;

(iii) the Sellers shall have received a certificate signed on behalf of the Purchaser by a senior executive officer (or equivalent) thereof certifying to the effect that the conditions set forth in Section 1.3(c)(i) and (ii) have been satisfied by the Purchaser; and

(iv) the Purchaser shall have delivered, or caused to be delivered, to the Sellers the wire transfers described in Section 1.2(b)(ii).

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties of the Sellers. Each Seller, severally and not jointly, represents and warrants to the Purchaser as of the date hereof and as of the Closing Date as follows:

(a) Organization and Ownership.

(i) Each Seller is a limited partnership duly organized and validly existing under the laws of the State of Texas, has all requisite power and authority to own its properties and conduct its business as presently conducted and is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely affect such Seller’s

3

ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis, and each Seller has the limited partnership or other power and authority and governmental authorizations to own its properties and assets and to carry on its business as it is now being conducted.

(ii) As of the date of this Agreement, (i) EnCap V owns of record 82,782 shares of Common Stock, (ii) EnCap V-B owns of record 65,539 shares of Common Stock, (iii) EnCap VI owns of record 316,937 shares of Common Stock and (iv) EnCap VI-B owns of record 173,486 shares of Common Stock. Each Seller has good and valid title to the shares of Common Stock owned by such Seller (as identified in the immediately preceding sentence), free and clear of all Liens and, upon delivery of the Purchased Common Stock and payment therefor pursuant to this Agreement, good and valid title to such shares of Purchased Common Stock, free and clear of all Liens, will be transferred to the Purchaser. The shares of Purchased Common Stock are not subject to any prior sale, transfer, assignment or participation by any Seller or any agreement by any Seller to assign, convey, transfer or participate, in whole or in part, and no other Person has any preemptive or similar rights to participate in the sale or transfer of the Purchased Common Stock to the Purchaser.

(b) Authorization.

(i) Each Seller has the power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Agreement by each Seller and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of each Seller, and no further approval or authorization by any of the partners or other equity owners of each Seller is required. This Agreement has been duly and validly executed and delivered by each Seller and, assuming due authorization, execution and delivery by the Purchaser, is a valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii) None of the Sellers is (a) in violation of any of the terms, conditions or provisions of the certificate of formation of such Seller or the partnership agreement (or other constituent governing document) of such Seller, (b) in violation of any law, statute, ordinance, rule, regulation, permit, or franchise applicable to it or of any judgment, ruling, order, writ, injunction or decree of any Governmental Entity having jurisdiction over such Seller or any of its properties or assets or (c) in breach, default (or an event which, with notice or lapse of time or both, would constitute such a default) or violation in the performance of any obligation, agreement, covenant or condition contained in any note, bond, debenture, or any other evidence of indebtedness or in any agreement, indenture, lease or other agreement or instrument to which such Seller is a party or by which such Seller or any of its properties or assets are bound, which breach, default or violation in the case of clauses (b) or (c) would, if continued, reasonably be expected to materially and adversely affect such Seller’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

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(iii) None of the sale and transfer by any Seller of the Purchased Common Stock, the execution, delivery and performance by any Seller of this Agreement, the consummation of the transactions contemplated hereby, nor compliance by each Seller with any of the provisions hereof, will, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the material properties or assets of such Seller under any of the terms, conditions or provisions of (i) their respective governing instruments of each Seller or (ii) any note, bond, mortgage, indenture, deed of trust, license, loan agreement, lease, agreement or other instrument or obligation to which any Seller is a party or by which it may be bound, or to which any Seller or any of the properties or assets of such Seller may be subject, or(B) violate any law, statute, ordinance, rule, regulation, permit, franchise or any judgment, ruling, order, writ, injunction or decree applicable to any Seller or any of its properties or assets, except in the case of clauses (A)(ii) and (B) for such violations, conflicts and breaches as would not, individually or in the aggregate, reasonably be expected to expected to materially and adversely affect such Seller’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(iv) No notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any court, administrative agency or commission or other governmental or arbitral body or authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization (each, a “Governmental Entity”), nor expiration or termination of any statutory waiting period, is necessary for the consummation by the Sellers of the transactions contemplated by this Agreement.

(c) Sale of Securities. Assuming the accuracy of the representations and warranties of the Purchasers contained in Section 2.2, the transfer and sale of the Purchased Common Stock to the Purchaser pursuant to this Agreement is exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder, and each Seller has not, and to each Seller’s Knowledge, no person acting on its behalf, has taken nor will take any action hereafter that would cause the loss of such exemption. Without limiting the foregoing, none of the Sellers nor to the Knowledge of each Seller any other Person authorized by such Seller to act on its behalf, has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of the Purchased Common Stock and none of the Sellers nor, to the Knowledge of each Seller, any Person acting on their respective behalf has made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of Purchased Common Stock under this Agreement to be integrated with prior offerings by Earthstone or any sales by any of the Sellers for purposes of the Securities Act that would result in none of Regulation D or any other applicable exemption from registration under the Securities Act to be available, and the Sellers will not take any action or steps that would cause the offering or issuance of the Purchased Common Stock under this Agreement to be integrated with other offerings.

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(d) Brokers and Finders. None of the Sellers nor any of their respective Affiliates or Representatives have employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Sellers in connection with this Agreement or the transactions contemplated hereby.

(e) No Additional Representations. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES MADE BY THE SELLERS IN THIS SECTION 2.1, NONE OF THE SELLERS NOR ANY OTHER PERSON MAKES (AND THE PURCHASER HEREBY ACKNOWLEDGES AND AGREES ON BEHALF OF ITSELF AND ITS AFFILIATES AND REPRESENTATIVES THAT IT HAS NOT RELIED UPON) ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE PURCHASED COMMON STOCK, THE COMMON STOCK OR EARTHSTONE OR ITS BUSINESSES, OPERATIONS, ASSETS, LIABILITIES, CONDITION OR PROSPECTS, AND THE SELLERS HEREBY DISCLAIM ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES. IN PARTICULAR, WITHOUT LIMITING THE FOREGOING DISCLAIMER, NONE OF THE SELLERS NOR ANY OTHER PERSON MAKES OR HAS MADE ANY REPRESENTATION OR WARRANTY TO THE PURCHASER, OR ANY OF ITS AFFILIATES OR REPRESENTATIVES WITH RESPECT TO (I) ANY FINANCIAL PROJECTION, FORECAST, ESTIMATE, BUDGET OR PROSPECT INFORMATION RELATING TO EARTHSTONE OR ITS BUSINESS, OR (II) ANY ORAL OR WRITTEN INFORMATION PRESENTED TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES IN THE COURSE OF THEIR DUE DILIGENCE INVESTIGATION OF EARTHSTONE, THE NEGOTIATION OF THIS AGREEMENT OR IN THE COURSE OF THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to each Seller as of the date hereof and as of the Closing Date as follows:

(a) Organization and Authority. The Purchaser is a limited liability company duly organized and validly existing under the laws of the State of Delaware, has all requisite power and authority to own its properties and conduct its business as presently conducted and is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis, and the Purchaser has the limited liability company power and authority and governmental authorizations to own its properties and assets and to carry on its business as it is now being conducted.

(b) Authorization.

(i) The Purchaser has the power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the

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Purchaser, and no further approval or authorization by any of its members or other equity owners is required. This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by each Seller, is a valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii) The Purchaser is not (a) in violation of any of the terms, conditions or provisions of its certificate of formation or the limited liability company agreement (or other constituent governing document) of the Purchaser, (b) in violation of any law, statute, ordinance, rule, regulation, permit, or franchise applicable to it or of any judgment, ruling, order, writ, injunction or decree of any Governmental Entity having jurisdiction over the Purchaser or any of its properties or assets or (c) in breach, default (or an event which, with notice or lapse of time or both, would constitute such a default) or violation in the performance of any obligation, agreement, covenant or condition contained in any note, bond, debenture, or any other evidence of indebtedness or in any agreement, indenture, lease or other agreement or instrument to which the Purchaser is a party or by which the Purchaser or any of its properties or assets are bound, which breach, default or violation in the case of clauses (b) or (c) would, if continued, reasonably be expected to expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(iii) Neither the execution, delivery and performance by the Purchaser of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by the Purchaser with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the material properties or assets of the Purchaser under any of the terms, conditions or provisions of (i) its governing instruments or (ii) any note, bond, mortgage, indenture, deed of trust, license, loan agreement, lease, agreement or other instrument or obligation to which the Purchaser is a party or by which it may be bound, or to which the Purchaser or any of the properties or assets of the Purchaser may be subject, or(B) violate any law, statute, ordinance, rule or regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to the Purchaser or its properties or assets except in the case of clauses (A)(ii) and(C) for such violations, conflicts and breaches as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(iv) No notice to, registration, declaration or filing with, or review by, or authorization, order, consent or approval of, any Governmental Entity, nor expiration or termination of any statutory waiting period, is necessary for the consummation by the Purchaser of the transactions contemplated by this Agreement.

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(c) Purchase for Investment. The Purchaser acknowledges that the Purchased Common Stock has not been registered under the Securities Act or under any state securities laws. The Purchaser (i) acknowledges that it is acquiring the Purchased Common Stock pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to distribute any of such Purchased Common Stock to any Person in violation of applicable securities laws, (ii) will not sell or otherwise dispose of any of the Purchased Common Stock, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Purchased Common Stock and of making an informed investment decision, (iv) is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act) and (v) (A) has been furnished with or has had full access to all the information that it considers necessary or appropriate to make an informed investment decision with respect to the Purchased Common Stock, (B) has had an opportunity to discuss with management of Earthstone the intended business and financial affairs of Earthstone and to obtain information necessary to verify any information furnished to it or to which it had access and (C) can bear the economic risk of (x) an investment in the Purchased Common Stock indefinitely and (y) a total loss in respect of such investment. The Purchaser has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of and form an investment decision with respect to its investment in the Purchased Common Stock and to protect its own interest in connection with such investment.

(d) Financial Capability. At Closing, immediately upon the consummation of the Acquisition, the Purchaser will have available funds necessary to consummate the Closing on the terms and conditions contemplated by this Agreement.

(e) Brokers and Finders. Neither the Purchaser nor any of its Affiliates or Representatives have employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Purchaser, in connection with this Agreement or the transactions contemplated hereby.

(f) Non-Reliance. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES MADE BY SELLERS IN SECTION 2.1, THE PURCHASER HEREBY ACKNOWLEDGES AND AGREES ON BEHALF OF ITSELF AND ITS AFFILIATES AND REPRESENTATIVES THAT IT HAS NOT RELIED UPON ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE PURCHASED COMMON STOCK, THE COMMON STOCK OR EARTHSTONE OR ANY OF ITS BUSINESSES, OPERATIONS, ASSETS, LIABILITIES, CONDITION OR PROSPECTS, INCLUDING WITH RESPECT TO (I) ANY FINANCIAL PROJECTION, FORECAST, ESTIMATE, BUDGET OR PROSPECT INFORMATION RELATING TO EARTHSTONE OR ANY OF ITS BUSINESSES, OR (II) ANY ORAL OR WRITTEN INFORMATION PRESENTED TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES IN THE COURSE OF ITS DUE DILIGENCE INVESTIGATION OF EARTHSTONE, THE NEGOTIATION OF THIS AGREEMENT OR IN THE COURSE OF THE TRANSACTIONS CONTEMPLATED HEREBY.

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ARTICLE III

COVENANTS

Section 3.1 Negative Covenants. From the date of this Agreement through the Closing, each Seller shall not, without the prior written consent of the Purchaser:

(a) sell, lease, assign, convey or otherwise dispose of any of the shares of Purchased Common Stock; or

(b) impose any Lien on any of the shares of Purchased Common Stock.

ARTICLE IV

INDEMNIFICATION, COSTS AND EXPENSES

Section 4.1 Indemnification by the Sellers. Each Seller agrees, severally and not jointly, to indemnify the Purchaser, its Affiliates and their respective Representatives (collectively, the “Purchaser Indemnitees”) from all costs, losses, liabilities, damages or expenses of any kind or nature whatsoever, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands and causes of action (“Claims”), and, in connection therewith, promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them), whether or not involving a third-party Claim, as a result of, arising out of, or in any way related to the breach of any representations, warranties or covenants of such Seller contained herein; provided that such claim for indemnification relating to the breach of representations, warranties or covenants is made prior to the third anniversary of the Closing Date; provided, further, that for purposes of determining when an indemnification claim has been made, the date upon which a Purchaser Indemnitee shall have given notice (stating in reasonable detail the basis of the claim for indemnification) to such Seller shall constitute the date upon which such claim has been made; provided, further, that the aggregate liability of each Seller to the Purchaser Indemnitees pursuant to this Section 4.1 shall not be greater in amount than the Purchase Price payable to such Seller. No Purchaser Indemnitee shall be entitled to recover special, indirect, exemplary, lost profits, speculative or punitive damages under this Section 4.1; provided, however, that such limitation shall not prevent any Purchaser Indemnitee from recovering under this Section 4.1 for any such damages to the extent that such damages are in the form of diminution in value or are payable to a third party in connection with any third-party Claims.

Section 4.2 Indemnification by the Purchaser. The Purchaser agrees to indemnify each Seller, its Affiliates and their respective Representatives (collectively, the “Seller Indemnitees”) from, all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to

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defend any such matter that may be incurred by them or asserted against or involve any of them), whether or not involving a third-party Claim, as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Purchaser contained herein; provided that such Claim for indemnification relating to a breach of any representation or warranty is made prior to the third anniversary of the Closing Date; provided, further, that for purposes of determining when a Claim for indemnification has been made, the date upon which a Seller Indemnitee shall have given notice (stating in reasonable detail the basis of the Claim for indemnification) to the Purchaser shall constitute the date upon which such Claim has been made; provided, further, that the aggregate liability of the Purchaser shall not be greater in amount than the aggregate Purchase Price paid to the Sellers. No Seller Indemnitee shall be entitled to recover special, indirect, exemplary, lost profits, speculative or punitive damages under this Section 4.2; provided, however, that such limitation shall not prevent any Seller Indemnitee from recovering under this Section 4.2 for any such damages to the extent that such damages are in the form of diminution in value or are payable to a third party in connection with any third-party Claims.

ARTICLE V

ADDITIONAL AGREEMENT

Section 5.1 Legend. The Purchaser agrees that all certificates or other instruments representing the Purchased Common Stock will bear a legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Expenses. Each of the parties to this Agreement will bear and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement.

Section 6.2 Amendment; Waiver. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The conditions to each party’s obligation to consummate the Closing are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law. No waiver of any party to this Agreement, as the case may be, will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

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Section 6.3 Counterparts. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other means of electronic transmission and such facsimiles or other means of electronic transmission will be deemed as sufficient as if actual signature pages had been delivered.

Section 6.4 Governing Law; Submission to Jurisdiction. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether in the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the Court of Chancery located in the State of Delaware, or in the event (but only in the event) that such court shall not have subject matter jurisdiction, any federal court of the United States or other state court located in the State of Delaware, for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. Each party to this Agreement hereby irrevocably waives any defense in any such action, suit or proceeding that it is not personally subject to the jurisdiction of the above named courts and to the fullest extent permitted by applicable law, that the action, suit or proceeding in any such court is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.

Section 6.5 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 6.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by electronic mail, upon confirmation of receipt (it being understood that the parties agree to provide confirmation of receipt immediately upon the receipt of any notice by electronic mail), (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. The Purchaser agrees to notify the Sellers of any change to the Purchaser’s electronic mail address, and further agrees that the provision of such notice to the Sellers shall constitute the consent of the Purchaser to receive notice at such electronic mail address. The Sellers agrees to notify the Purchaser of any change to any Seller’s electronic mail address, and further agrees that the provision of such notice to the Purchaser shall constitute the consent of such Seller to receive notice at such electronic mail address. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

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If to the Purchaser:

Independence Resources Holdings, LLC

11450 Compaq Center Drive West,

Building 10, Suite 470

Houston, TX 77070

Attn: Chief Executive Officer

E-mail: rod.steward@independenceresources.com

with a copy to (which copy shall not constitute notice):

Latham & Watkins LLP

811 Main St., Suite 3700

Houston, TX 77002

Attn:     Jeffrey S. Muñoz

             Thomas G. Brandt

E-mail: jeff.munoz@lw.com

             thomas.brandt@lw.com

(a) If to the Sellers:

EnCap Investments

1100 Louisiana Street

Suite 4900

Houston, TX 77002

Attn:

E-mail:

with a copy to (which copy shall not constitute notice):

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Attn: W. Matthew Strock

E-mail: mstrock@velaw.com

Section 6.7 Entire Agreement. This Agreement (including the Exhibits hereto) constitute the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof.

Section 6.8 Assignment. Neither this Agreement, nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties.

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Section 6.9 Interpretation; Other Definitions. Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. All article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex and schedule references not attributed to a particular document shall be references to such exhibits, annexes and schedules to this Agreement. In addition, the following terms are ascribed the following meanings:

(a) the word “or” is not exclusive;

(b) the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(c) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision;

(d) the term “business day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other governmental action to close; and

(e) the term “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

(f) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

(g) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(h) “Knowledge” means, with respect to any Seller, the actual knowledge of Craig Friou, Brad Thielemann and Bryan Stahl.

(i) “Law” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.

(j) “Lien” means any mortgage, pledge, security interest, encumbrance, lien, charge or other restriction of any kind, whether based on common law, statute or contract.

(k) “Representatives” means, with respect to any Person, such Person’s directors, officers, employees, agents, consultants and advisors.

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Section 6.10 Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

Section 6.11 Severability. If any provision of this Agreement or the application thereof to any Person (including the officers and directors the parties hereto) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

Section 6.12 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the parties hereto (and their permitted assigns), any benefit right or remedies.

Section 6.13 Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement and the transactions contemplated hereby were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, without the necessity of posting bond or other undertaking, the parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity, and in the event that any action or suit is brought in equity to enforce the provisions of this Agreement, no party will allege, and each party hereby waives the defense or counterclaim, that there is an adequate remedy at law.

Section 6.14 Termination. This Agreement will survive the Closing. Prior to the Closing, this Agreement may only be terminated:

(a) by mutual written agreement of the Sellers and the Purchaser;

(b) by the Sellers or the Purchaser, upon written notice to the other party in the event that the Closing shall not have occurred on or before February 15, 2021; provided, however that the right to terminate this Agreement pursuant to this Section 6.14(b) shall not be available to any party whose failure to fulfill any obligations under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date;

(c) by either the Sellers or the Purchaser as to itself if a United States court of competent jurisdiction shall permanently enjoin the consummation of the Purchase and such injunction shall be final and non-appealable;

(d) without any action by any party, if the Acquisition Agreement is terminated in accordance with its terms at any time prior to the Closing;

(e) by notice given by the Sellers to the Purchaser if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Purchaser in this Agreement such that the conditions in Section 1.3(c)(i) or Section 1.3(c)(ii) would not be satisfied and which have not been cured by the Purchaser thirty (30) days after receipt by the Purchaser of written notice from the Sellers requesting such inaccuracies or breaches to be cured; or

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(f) by notice given by the Purchaser to the Sellers, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Sellers in this Agreement such that the conditions in Section 1.3(b)(i) or 1.3(b)(ii) would not be satisfied and which have not been cured by the Sellers within thirty (30) days after receipt by the Sellers of written notice from the Purchaser requesting such inaccuracies or breaches to be cured.

Section 6.15 Effects of Termination. Subject to Section 6.1, in the event of any termination of this Agreement in accordance with Section 6.14, no party (or any of its Affiliates) shall have any liability or obligation to the other party (or any of its Affiliates) under or in respect of this Agreement, except to the extent of (A) any liability arising from any breach by such party of its obligations of this Agreement arising prior to such termination and (B) any fraud or intentional or willful breach of this Agreement. In the event of any such termination, this Agreement shall become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the parties hereto, in each case, except (x) as set forth in the preceding sentence and (y) that the provisions of Sections 6.1 through 6.13, and Section 6.16 and Section 6.1 shall survive the termination of this Agreement.

Section 6.16 Non-Recourse. This Agreement may only be enforced against, and any Claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, including entities that become parties hereto after the date hereof, and no former, current or future equityholders, controlling Persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current or future equityholder, controlling Person, director, officer, employee, general or limited partner, member, manager, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any Claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any Claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party.

[Signature Page Follows.]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.

ENCAP ENERGY CAPITAL FUND V, L.P.
By:	EnCap Equity Fund V GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Robert L. Zorich
Name:	Robert L. Zorich
Title:	Managing Partner
ENCAP V-B ACQUISITIONS, L.P.
By:	EnCap V-B Acquisitions GP, LLC,
	its general partner
By:	EnCap Energy Capital Fund V-B, L.P.,
	its sole member
By:	EnCap Equity Fund V GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Robert L. Zorich
Name:	Robert L. Zorich
Title:	Managing Partner

[Signature Page to Securities Purchase Agreement]

ENCAP ENERGY CAPITAL FUND VI, L.P.
By:	EnCap Equity Fund VI GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Robert L. Zorich
Name:	Robert L. Zorich
Title:	Managing Partner
ENCAP VI-B ACQUISITIONS, L.P.
By:	EnCap VI-B Acquisitions GP, LLC,
	its general partner
By:	EnCap Energy Capital Fund VI-B, L.P.,
	its sole member
By:	EnCap Equity Fund VI GP, L.P.,
	its general partner
By:	EnCap Investments L.P.,
	its general partner
By:	EnCap Investments GP, L.L.C.,
	its general partner
By:	/s/ Robert L. Zorich
Name:	Robert L. Zorich
Title:	Managing Partner

[Signature Page to Securities Purchase Agreement]

INDEPENDENCE RESOURCES HOLDINGS, LLC
By:	/s/ Rodney L. Steward
Name:	Rodney L. Steward
Title:	Chief Executive Officer

[Signature Page to Securities Purchase Agreement]

SCHEDULE I

SELLER ALLOCATIONS

Seller	Shares of Purchased Common Stock
EnCap Energy Capital Fund V, L.P.		82,782
EnCap V-B Acquisitions, L.P.		65,539
EnCap Energy Capital Fund VI, L.P.		316,937
EnCap VI-B Acquisitions, L.P.		173,486

SCHEDULE I