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|   |   |                                                                                     |
|--------|--------|------------------------------------------------------------------------------------------|
| þ |   | ANNUAL      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |

|   |   |                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------|
| o      |   | TRANSITION      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |

| Delaware(State      of Incorporation or Organization)                                             | 84-0592823(I.R.S.      Employer Identification No.) |   |
|---------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------|
| 633 17th Street, Suite      1645Denver,      Colorado(Address      of principal executive office) | 80202-3625(Zip      Code)                           |   |
|  (303) 296-3076(Registrant’s      telephone number, including area code)          |                                                |   |

|                           |   |                     |   |                                                                            |   |                                  |
|--------------------------------|--------|--------------------------|--------|---------------------------------------------------------------------------------|--------|---------------------------------------|
| Large      accelerated filer o |   | Accelerated      filer o |   | Non-accelerated      filer o (Do      not check if a smaller reporting company) |   | Smaller      reporting company þ |

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|   | •      our      strategies, either existing oranticipated; |
|--------|------------------------------------------------------------------------------------------------|

|   | •      our      future financial position, including anticipated liquidity, including the      amount of and our ability to make debt service payments should           we      utilize some or all of our available borrowing    capacity;  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | •      amounts      and nature of future capitalexpenditures; |
|--------|---------------------------------------------------------------------------------------------------|

|   | •      acquisitions      and other business opportunities; |
|--------|------------------------------------------------------------------------------------------------|

|   | •      operating      costs and other expenses; |
|--------|-------------------------------------------------------------------------------------|

|   | •      wells      expected to be drilled, other anticipated exploration efforts and the      expenses associated therewith; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | •      asset      retirement obligations; and |
|--------|-----------------------------------------------------------------------------------|

|   | •      estimates      of proved oil and natural gas reserves, deferred tax assets, and depletion      rates. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   |    |
|--------|--------------|

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Earthstone Energy, Inc.

|         | Part      I                                                                                                             | Page   |
|--------------|-------------------------------------------------------------------------------------------------------------------------|--------|
|         |                                                                                                                    |   |
| Item      1  | Description of Business                                                                                                 | 4      |
| Item      1A | Risk Factors                                                                                                            | 8      |
| Item      1B | Unresolved Staff Comments                                                                                               | 8      |
| Item      2  | Description of Property                                                                                                 | 8      |
| Item      3  | Legal Proceedings                                                                                                       | 13     |
|         |                                                                                                                    |   |
|         | Part      II                                                                                                            |   |
|         |                                                                                                                    |   |
| Item      5  | Market for Registrant’s Common Equity, Related Stockholder      Matters and Issuer Purchases of Equity Securities | 14     |
| Item      6  | Selected Financial Data                                                                                                 | 16     |
| Item      7  | Management's Discussion and Analysis of Financial Condition      and Results of Operations                              | 17     |
| Item      7A | Quantitative and Qualitative Disclosures About Market      Risk                                                         | 23     |
| Item      8  | Financial Statements and Supplementary    Data                                                                          | 24     |
| Item      9  | Changes in and Disagreements With Accountants on Accounting      and Financial Disclosure                               | 44     |
| Item      9A | Controls and Procedures                                                                                                 | 44     |
| Item      9B | Other Information                                                                                                       | 44     |
|         |                                                                                                                    |   |
|         | Part      III                                                                                                           |   |
|         |                                                                                                                    |   |
| Item      10 | Directors, Executive Officers and Corporate      Governance                                                             | 46     |
| Item      11 | Executive Compensation                                                                                                  | 46     |
| Item      12 | Security Ownership of Certain Beneficial Owners and      Management and Related Stockholder Matters                     | 46     |
| Item      13 | Certain Relationships and Related Transactions and Director      Independence                                           | 46     |
| Item      14 | Principal Accountant Fees and Services                                                                                  | 46     |
|         |                                                                                                                    |   |
|         | Part      IV                                                                                                            |   |
|         |                                                                                                                    |   |
| Item      15 | Exhibits, Financial      Statement  Schedules                                                                 | 47     |
|         | Signatures                                                                                                              | 49     |

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PartI

|   | • |   | Identification      and acquisition of strategic and significant producing properties;      strategic and significant in that they are either accretive to our      existing production or will provide an increase to the Company’s existing      production base. |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |   |                                                                                                                                                                                                                                                                      |
|   | • |   | Cost      effective implementation of internally and externally generated      exploration and development drilling projects.                                                                                                                                             |
|   |    |   |                                                                                                                                                                                                                                                                      |
|   | • |   | Boosting      cash flows from existing oil and gas production through a combination of      cost control and the exploitation of behind-pipe  potential.                                                                                                                  |

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ITEM 1A

ITEM 1B

ITEM 2

|              |   | Gross      Wells (1) |    |   | Net      Wells (2) |   |
|-------------------|--------|----------------------|---------|--------|--------------------|--------|
|              |   | Oil                  |    |   | Gas                |   |   | Oil |   |   | Gas |   |
|              |   |                 |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Colorado          |   |                 | — |   |               |   | 37 |   |   |   | — |   |   |   | 7.50 |   |
| Louisiana         |   |                 | 1       |   |               |   | 1 |   |   |   | 0.01 |   |   |   | 0.10 |   |
| Montana           |   |                 | 20      |   |               |   | — |   |   |   | 9.77 |   |   |   | — |   |
| North      Dakota |   |                 | 56      |   |               |   | — |   |   |   | 9.64 |   |   |   | — |   |
| Texas             |   |                 | 23      |   |               |   | 1 |   |   |   | 20.66 |   |   |   | 0.11 |   |
| Wyoming           |   |                 | 1       |   |               |   | — |   |   |   | 0.47 |   |   |   | — |   |
|              |   |                 |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total             |   |                 | 101     |   |               |   | 39 |   |   |   | 40.55 |   |   |   | 7.71 |   |

|   | (1)    | The      number of gross wells is the total number of wells in which a working      interest is owned.                                                                                                                                                                            |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                              |
|   | (2)    | A      net well is deemed to exist when the sum of fractional ownership working      interests in gross wells equals one. The number of net wells is the sum of      the fractional working interests owned in gross wells expressed as whole      numbers and fractions thereof. |

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|                                       |   | Net      Oil |    |   | Net      Gas |   |    | BOE    |   |   |    |   |
|--------------------------------------------|--------|--------------|---------|--------|--------------|--------|---------|--------|--------|--------|---------|--------|
|                                       |   | (Bbls)       |    |   | (Mcf)        |   |    | (1)    |   |   | %       |   |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |
| Williston      Basin                       |   |         |    |   |         |   |    |   |   |   |    |   |
|           Operated     |   |         | 202,000 |   |         |   | 45,000  |   |   |   | 210,000 |   |   |   | 21.6 | % |
|           Non-Operated |   |         | 248,000 |   |         |   | 152,000 |   |   |   | 273,000 |   |   |   | 28.1 | % |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
|                                       |   |         | 450,000 |   |         |   | 197,000 |   |   |   | 483,000 |   |   |   | 49.7 | % |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
| South      Texas/Onshore Gulf Coast        |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
|           Operated     |   |         | 312,000 |   |         |   | 2,000   |   |   |   | 312,000 |   |   |   | 32.2 | % |
|           Non-Operated |   |         | ― |   |         |   | 126,000 |   |   |   | 21,000  |   |   |   | 2.2 | % |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
|                                       |   |         | 312,000 |   |         |   | 128,000 |   |   |   | 333,000 |   |   |   | 34.4 | % |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
| D-J      Basin                             |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
|           Operated     |   |         | 16,000  |   |         |   | 310,000 |   |   |   | 68,000  |   |   |   | 7.0 | % |
|           Non-Operated |   |         | 40,000  |   |         |   | 277,000 |   |   |   | 86,000  |   |   |   | 8.9 | % |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
|                                       |   |         | 56,000  |   |         |   | 587,000 |   |   |   | 154,000 |   |   |   | 15.9 | % |
|                                       |   |         |    |   |         |   |    |   |   |   |    |   |   |   |   |   |
| Total                                      |   |         | 818,000 |   |         |   | 912,000 |   |   |   | 970,000 |   |   |   | 100 | % |

|  | (1) | Per      equivalent barrel (6 Mcf of gas is equivalent to 1 barrel of      oil) |
|--|-----|---------------------------------------------------------------------------------|

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|                                                |   | Proved    |    |   |          |   |
|-----------------------------------------------------|--------|-----------|---------|--------|---------------|--------|
|                                                |   | Developed |    |   |          |   |   |   |   |
|                                                |   | Producing |    |   | Non-Producing |   |   | Undeveloped |   |   | Total      Proved (1) |   |
|                                                |   |      |    |   |          |   |   |   |   |   |   |   |
| Net      Remaining Reserves                         |   |      |    |   |          |   |   |   |   |   |   |   |
|           Oil/Condensate - Bbls |   |      | 727,000 |   |          |   | ― |   |   |   | 91,000 |   |   |   | 818,000 |   |
|           Plant Products - Bbls |   |      | ― |   |          |   | ― |   |   |   | ― |   |   |   | ― |   |
|           Gas - MCF             |   |      | 912,000 |   |          |   | ― |   |   |   | ― |   |   |   | 912,000 |   |

|   | (1) | Disclosure      of probable and possible reserves became optional under SEC guidelines for      years ended March 31, 2010, and accordingly, we have elected not to      present probable or possiblereserves. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                |   |   | 2010    |   |   |   | 2009    |   |   |   | 2008    |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                |   |   | Gross   |   |   |   | Net     |   |   |   | Gross   |   |   |   | Net |   |   |   | Gross |   |   |   | Net |   |
| Exploratory      (1)                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Productive            |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Oil |   |   | ― |   |   |   | ― |   |   |   | 1       |   |   |   | 0.01 |   |   |   | ― |   |   |   | ― |   |
|         Gas |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
|      Dry      holes        |   |   | 1       |   |   |   | 0.55    |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
|                                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                               |   |   | 1       |   |   |   | 0.55    |   |   |   | 1       |   |   |   | 0.01 |   |   |   | ― |   |   |   | ― |   |
|                                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Development      (2)                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Productive            |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Oil |   |   | 5       |   |   |   | 0.36    |   |   |   | 3       |   |   |   | 0.09 |   |   |   | ― |   |   |   | ― |   |
|         Gas |   |   | ― |   |   |   | ― |   |   |   | 9       |   |   |   | 2.27 |   |   |   | 7 |   |   |   | 1.60 |   |
|      Dry      holes        |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
|                                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                               |   |   | 5       |   |   |   | 0.36    |   |   |   | 12      |   |   |   | 2.36 |   |   |   | 7 |   |   |   | 1.60 |   |

|   | (1) | An      exploratory well is a well drilled to find a new field or to find a new      reservoir in a field previously found to be productive of oil or gas in      another reservoir. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | A      development well is a well drilled in a proven territory in a field to      complete a pattern of production |
|--------|-----|---------------------------------------------------------------------------------------------------------------------|

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|              |   | Developed      Acreage |                                                            |   | Undeveloped      Acreage (1) |   |
|-------------------|--------|------------------------|-----------------------------------------------------------------|--------|------------------------------|--------|
|              |   | Gross      (2)         |                                                            |   | Net      (3)                 |   |   | Gross      (2) |   |   | Net      (3) |   |
|              |   |                   |                                                            |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Colorado          |   |                   |           640 |   |                         |   |           384 |   |   |   |  — |   |   |   |  — |   |
| Louisiana         |   |                   |           687 |   |                         |   |             51 |   |   |   |  — |   |   |   |  — |   |
| Montana           |   |                   |        6,490                 |   |                         |   |        3,206 |   |   |   |        2,761 |   |   |   |        2,123 |   |
| North      Dakota |   |                   |      14,856                            |   |                         |   |        2,952 |   |   |   |      26,506 |   |   |   |        4,623 |   |
| Texas             |   |                   |        3,080                 |   |                         |   |        2,486 |   |   |   |  — |   |   |   |  — |   |
| Utah              |   |                   |  —                                                   |   |                         |   |  — |   |   |   |      35,945 |   |   |   |           719 |   |
| Wyoming           |   |                   |        1,555                 |   |                         |   |           329 |   |   |   |             40 |   |   |   |               1 |   |
|              |   |                   |                                                       |   |                         |   |    |   |   |   |    |   |   |   |    |   |
| Total             |   |                   |      27,308                            |   |                         |   |        9,408 |   |   |   |      65,252 |   |   |   |        7,466 |   |

|   | (1) | Undeveloped      acreage encompasses leased acres on which wells have not been drilled or      completed to a point that would permit the production of economic      quantities of oil or natural gas.                                                                      |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (2) | The      number of gross acres is the total number of acres in which a working      interest is owned.                                                                                                                                                                       |
|   | (3) | A      net acre is deemed to exist when the sum of fractional ownership working      interests in gross acres equals one. The number of net acres is the sum of      the fractional working interests owned in gross acres expressed as whole      numbers and fractions thereof. |

ITEM 3

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PartII

|                                         |   | High   |   |   | Low    |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                         |   |   |   |   |   |   |   |   |
| Year      Ended March 31, 2009          |   |   |   |   |   |   |   |   |
|           First Quarter  |   | $      | 3.04   |   |   | $      | 1.09 |   |
|           Second Quarter |   |   | 2.31   |   |   |   | 1.21 |   |
|           Third Quarter  |   |   | 1.30   |   |   |   | 0.51 |   |
|           Fourth Quarter |   |   | 1.08   |   |   |   | 0.51 |   |
|                                         |   |   |   |   |   |   |   |   |
| Year      Ended March 31, 2010          |   |   |   |   |   |   |   |   |
|           First Quarter  |   | $      | 0.99   |   |   | $      | 0.65 |   |
|           Second Quarter |   |   | 0.95   |   |   |   | 0.73 |   |
|           Third Quarter  |   |   | 0.89   |   |   |   | 0.68 |   |
|           Fourth Quarter |   |   | 0.93   |   |   |   | 0.70 |   |

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| Plan      Category                                              |   | Number      of securities to be issued upon exercise of outstanding options, warrants      and rights |    | Weighted-average      exercise price of outstanding options, warrants and      rights |   | Number      of securities remaining available for future issuance under equity      compensation plans |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|---------|---------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|
|                                                            |   |                                                                                                  |    |                                                                                  |   |                                                                                                   |   |   |   |   |   |   |
| Equity      compensation plans approved by security holders     |   |                                                                                                  | ― |                                                                                  |   |                                                                                                   | N/A |   |   |   | ― |   |
| Equity      compensation plans not approved by security holders |   |                                                                                                  | ― |                                                                                  |   |                                                                                                   | N/A |   |   |   | 300,000 |   |
|                                                            |   |                                                                                                  |    |                                                                                  |   |                                                                                                   |   |   |   |   |   |   |
| Total                                                           |   |                                                                                                  | ― |                                                                                  |   |                                                                                                   | N/A |   |   |   | 300,000 |   |

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|                                      |   | Total      Number of Shares Purchased (1) |   |   | Average      Price Paid Per Share |   |   | Number      of Shares Purchased as Part of a Publicly Announced Plan(1) |   |   | Maximum      Shares that May Yet be Purchased under the Plan(1) |   |
|-------------------------------------------|--------|------------------------------------------------|--------|--------|-----------------------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------|--------|
|                                      |   |                                           |   |   |                              |   |   |                                                                    |   |   |                                                                 |   |   |   |   |   |
| January      1, 2010 - January 31, 2010   |   |                                           | 9,415  |   |                              | $      | 0.84   |                                                                    |   |   | 9,415                                                                |   |   |   | 1,207,570 |   |
| February      1, 2010 - February 28, 2010 |   |                                           | 400    |   |                              | $      | 0.80   |                                                                    |   |   | 400                                                                  |   |   |   | 1,207,170 |   |
| March      1, 2010 - March 31, 2010       |   |                                           | 2,800  |   |                              | $      | 0.85   |                                                                    |   |   | 2,800                                                                |   |   |   | 1,204,370 |   |
|                                      |   |                                           |   |   |                              |   |   |                                                                    |   |   |                                                                 |   |   |   |   |   |
| Total                                     |   |                                           | 12,615 |   |                              |   |   |                                                                    |   |   | 12,615                                                               |   |   |   |   |   |

|   | (1) | On      October 22, 2008, the Company’s Board of Directors authorized a stock      buyback program for the Company to repurchase up to 500,000 shares of its      common stock for a period of up to 18 months. The program does not require      the Company to repurchase any specific number of shares, and the Company      may terminate the repurchase program at any time.  On November      13, 2009, the board of directors increased the number of shares authorized      for repurchase to 1,500,000.  On February 10, 2010, the board      extended the termination date of the program from April 22, 2010 to      October 22, 2011.  During the year ended March 31, 2010, 265,430      shares were repurchased under the stock buyback program and 1,204,370      shares remain available for futurerepurchase. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 6

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ITEM 7

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Results of Operations

|                                                        |   | Years      Ended |      |
|-------------------------------------------------------------|--------|------------------|-----------|
|                                                        |   | March      31,   |      |
|                                                        |   | 2010             |      |   | 2009 |   |   | 2008 |   |
|                                                        |   |             |      |   |   |   |   |   |   |
| Sales      volume                                           |   |             |      |   |   |   |   |   |   |
|      Oil      (barrels)            |   |             | 98,865    |   |   |   | 92,657 |   |   |   | 89,400 |   |
|      Gas      (mcf)      1         |   |             | 228,575   |   |   |   | 175,413 |   |   |   | 108,600 |   |
|                                                        |   |             |      |   |   |   |   |   |   |   |   |   |
| Revenue                                                     |   |             |      |   |   |   |   |   |   |   |   |   |
|      Oil                           |   | $                | 6,223,000 |   |   | $ | 7,406,000 |   |   | $ | 6,748,000 |   |
|      Gas                           |   |             | 996,000   |   |   |   | 1,585,000 |   |   |   | 667,000 |   |
| Total      revenue 2                                        |   |             | 7,219,000 |   |   |   | 8,991,000 |   |   |   | 7,415,000 |   |
|                                                        |   |             |      |   |   |   |   |   |   |   |   |   |
| Total      production expense 3                             |   |             | 2,935,000 |   |   |   | 3,183,000 |   |   |   | 2,706,000 |   |
|                                                        |   |             |      |   |   |   |   |   |   |   |   |   |
| Gross      profit                                           |   | $                | 4,284,000 |   |   | $ | 5,808,000 |   |   | $ | 4,709,000 |   |
|                                                        |   |             |      |   |   |   |   |   |   |   |   |   |
| Depletion      expense                                      |   | $                | 1,185,000 |   |   | $ | 1,188,000 |   |   | $ | 673,000 |   |
|                                                        |   |             |      |   |   |   |   |   |   |   |   |   |
| Average      sales price 4                                  |   |             |      |   |   |   |   |   |   |   |   |   |
|      Oil      (per barrel)         |   | $                | 62.94     |   |   | $ | 79.93 |   |   | $ | 75.47 |   |
|      Gas      (per mcf)            |   | $                | 4.36      |   |   | $ | 9.04 |   |   | $ | 6.13 |   |
|                                                        |   |             |      |   |   |   |   |   |   |   |   |   |
| Average      per BOE                                        |   |             |      |   |   |   |   |   |   |   |   |   |
|      Production      expense 3,4,5 |   | $                | 21.43     |   |   | $ | 26.09 |   |   | $ | 19.27 |   |
|      Gross      profit 4,5         |   | $                | 31.28     |   |   | $ | 47.61 |   |   | $ | 43.96 |   |
|      Depletion      expense 4,5    |   | $                | 8.65      |   |   | $ | 9.74 |   |   | $ | 5.59 |   |

|   | 1 | Due      to the timing and accuracy of sales information received from a third      party operator as described in “Volumes and Prices”      above, sales volume amounts may not be indicative of actual production or      future performance.                                                                                                                                                                      |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 2 | Amount      does not include water service and disposal revenue.  For the      year ended March 31, 2010 this revenue amount is net of $50,000 in water      service and disposal revenue, which would otherwise total $7,269,000 in      revenue for the year ended March 31, 2010, compared to $95,000 and $32,000      to total $9,086,000 and $7,447,000 for the same periods in 2009 and 2008      respectively.  |
|   | 3 | Overall      lifting cost (oil and gas production expenses and production      taxes)                                                                                                                                                                                                                                                                                                                                            |
|   | 4 | Averages      calculated based upon non-rounded figures                                                                                                                                                                                                                                                                                                                                                                          |
|   | 5 | Per      equivalent barrel (6 Mcf of gas is equivalent to 1 barrel of      oil)                                                                                                                                                                                                                                                                                                                                                       |

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ITEM 7A

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ITEM 8

|                                                                                                         | Page  |
|--------------------------------------------------------------------------------------------------------------|-------|
| Report of Independent Registered Public Accounting Firm –      Ehrhardt Keefe Steiner & Hottman PC | 25    |
| Consolidated Balance Sheets                                                                                  | 26-27 |
| Consolidated Statements of Operations                                                                        | 28    |
| Consolidated Statements of Shareholders’      Equity                                                   | 29    |
| Consolidated Statements of Cash Flows                                                                        | 30    |
| Notes to Consolidated Financial    Statements                                                                | 31-43 |

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

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Table of Contents

Earthstone Energy, Inc.

|                                                                                                                                                                                                                                      |   | March      31, |        |   | March      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|--------|----------------|--------|
|                                                                                                                                                                                                                                      |   | 2010           |        |   | 2009           |   |
| Assets                                                                                                                                                                                                                                    |   |           |        |   |           |   |
| Current      assets:                                                                                                                                                                                                                      |   |           |        |   |           |   |
|      Cash      and cash equivalents                                                                                                                                                                              |   | $              | 4,905,000   |   |           | $      | 4,088,000 |   |
|      Accounts      receivable:                                                                                                                                                                                   |   |           |        |   |           |   |   |   |
|           Oil      and gas sales                                                                                                                                                        |   |           | 1,021,000   |   |           |   | 1,611,000 |   |
|           Joint      interest and other receivables, net of $86,000 and $71,000               in allowance      for bad debt, respectively |   |           | 401,000     |   |           |   | 230,000 |   |
|      Other      current assets                                                                                                                                                                                   |   |           | 732,000     |   |           |   | 508,000 |   |
|                                                                                                                                                                                                                                      |   |           |        |   |           |   |   |   |
| Total      current assets                                                                                                                                                                                                                 |   |           | 7,059,000   |   |           |   | 6,437,000 |   |
|                                                                                                                                                                                                                                      |   |           |        |   |           |   |   |   |
| Oil      and gas property, full cost method:                                                                                                                                                                                              |   |           |        |   |           |   |   |   |
|      Proved      property                                                                                                                                                                                        |   |           | 33,915,000  |   |           |   | 32,187,000 |   |
|      Unproved      property                                                                                                                                                                                      |   |           | 1,555,000   |   |           |   | 1,077,000 |   |
|      Accumulated      depletion and impairment                                                                                                                                                                   |   |           | (23,582,000 | )      |           |   | (22,397,000 | ) |
|                                                                                                                                                                                                                                      |   |           |        |   |           |   |   |   |
|      Net      oil and gas property                                                                                                                                                                               |   |           | 11,888,000  |   |           |   | 10,867,000 |   |
|                                                                                                                                                                                                                                      |   |           |        |   |           |   |   |   |
| Support      equipment and other non-current assets, net of $374,000 and $337,000          in      accumulated depreciation, respectively                                                                   |   |           | 451,000     |   |           |   | 458,000 |   |
|                                                                                                                                                                                                                                      |   |           |        |   |           |   |   |   |
| Total      non-current assets                                                                                                                                                                                                             |   |           | 12,339,000  |   |           |   | 11,325,000 |   |
|                                                                                                                                                                                                                                      |   |           |        |   |           |   |   |   |
| Total      assets                                                                                                                                                                                                                         |   | $              | 19,398,000  |   |           | $      | 17,762,000 |   |

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Table of Contents

|                                                                                                                                                                                                     |   | March      31, |       |   | March      31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|----------------|--------|
|                                                                                                                                                                                                     |   | 2010           |       |   | 2009           |   |
| Liabilities      and Shareholders' Equity                                                                                                                                                                |   |           |       |   |           |   |
| Current      liabilities:                                                                                                                                                                                |   |           |       |   |           |   |
|      Accounts      payable                                                                                                                                                      |   | $              | 161,000    |   |           | $      | 64,000 |   |
|      Accrued      liabilities                                                                                                                                                   |   |           | 1,836,000  |   |           |   | 1,328,000 |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Total      current liabilities                                                                                                                                                                           |   |           | 1,997,000  |   |           |   | 1,392,000 |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Long-term      liabilities:                                                                                                                                                                              |   |           |       |   |           |   |   |   |
|      Deferred      tax liability                                                                                                                                                |   |           | 2,217,000  |   |           |   | 2,242,000 |   |
|      Asset      retirement obligation                                                                                                                                           |   |           | 1,674,000  |   |           |   | 1,558,000 |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Total      long-term liabilities                                                                                                                                                                         |   |           | 3,891,000  |   |           |   | 3,800,000 |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Total      liabilities                                                                                                                                                                                   |   |           | 5,888,000  |   |           |   | 5,192,000 |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Commitments                                                                                                                                                                                         |   |           |       |   |           |   |   |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Shareholders’      Equity:                                                                                                                                                                         |   |           |       |   |           |   |   |   |
|      Preferred      stock, $.001 par value, 3,000,000 authorized and none issued      or      outstanding                                                                       |   |           | —    |   |           |   | — |   |
|      Common      stock, $.001 par value, 32,000,000 shares authorized and 17,704,000      and 17,506,000   shares issued      and outstanding, respectively |   |           | 18,000     |   |           |   | 18,000 |   |
|      Additional      paid-in capital                                                                                                                                            |   |           | 22,945,000 |   |           |   | 22,825,000 |   |
|      Treasury      stock (646,000 and 380,000 shares respectively) at cost                                                                                                      |   |           | (251,000   | )      |           |   | (43,000 | ) |
|      Accumulated      deficit                                                                                                                                                   |   |           | (9,202,000 | )      |           |   | (10,230,000 | ) |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Total      shareholders’ equity                                                                                                                                                                    |   |           | 13,510,000 |   |           |   | 12,570,000 |   |
|                                                                                                                                                                                                     |   |           |       |   |           |   |   |   |
| Total      liabilities and shareholders’ equity                                                                                                                                                    |   | $              | 19,398,000 |   |           | $      | 17,762,000 |   |

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Table of Contents

Earthstone Energy, Inc.

|                                                                        |   |   | Year      Ended |   |
|-----------------------------------------------------------------------------|--------|--------|-----------------|--------|
|                                                                        |   |   | March      31,  |   |
|                                                                        |   |   | 2010            |   |   |   | 2009 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Revenues:                                                                   |   |   |            |   |   |   |   |   |
|      Oil      and gas sales                        |   | $      | 7,219,000       |   |   | $ | 8,991,000 |   |
|      Well      service and water disposal revenue  |   |   | 50,000          |   |   |   | 95,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Total      revenues                                                         |   |   | 7,269,000       |   |   |   | 9,086,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Expenses:                                                                   |   |   |            |   |   |   |   |   |
|      Oil      and gas production                   |   |   | 2,437,000       |   |   |   | 2,539,000 |   |
|      Production      tax                           |   |   | 498,000         |   |   |   | 644,000 |   |
|      Well      servicing expenses                  |   |   | 43,000          |   |   |   | 33,000 |   |
|      Depreciation      and depletion               |   |   | 1,221,000       |   |   |   | 1,224,000 |   |
|      Accretion      of asset retirement obligation |   |   | 166,000         |   |   |   | 98,000 |   |
|      Asset      retirement expense                 |   |   | 7,000           |   |   |   | 164,000 |   |
|      Impairment      of oil and gas properties     |   |   | ―         |   |   |   | 2,694,000 |   |
|      General      and administrative               |   |   | 1,779,000       |   |   |   | 1,347,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Total      expenses                                                         |   |   | 6,151,000       |   |   |   | 8,743,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Income      from operations                                                 |   |   | 1,118,000       |   |   |   | 343,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Other      Income (Expense):                                                |   |   |            |   |   |   |   |   |
|      Interest      and other income                |   |   | 90,000          |   |   |   | 57,000 |   |
|      Interest      and other expenses              |   |   | (32,000)        |   |   |   | (34,000) |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Total      other income                                                     |   |   | 58,000          |   |   |   | 23,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Income      before income taxes                                             |   |   | 1,176,000       |   |   |   | 366,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Current      income tax expense                                             |   |   | 172,000         |   |   |   | 346,000 |   |
| Deferred      income taxes (benefit)                                        |   |   | (24,000)        |   |   |   | (558,000) |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Total      income tax expense (benefit)                                     |   |   | 148,000         |   |   |   | (212,000) |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Net      income                                                             |   | $      | 1,028,000       |   |   | $ | 578,000 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Per      share amounts:                                                     |   |   |            |   |   |   |   |   |
|      Basic                                         |   | $      | 0.06            |   |   | $ | 0.03 |   |
|      Diluted                                       |   | $      | 0.06            |   |   | $ | 0.03 |   |
|                                                                        |   |   |            |   |   |   |   |   |
| Weighted      average common shares outstanding:                            |   |   |            |   |   |   |   |   |
|      Basic                                         |   |   | 17,073,526      |   |   |   | 17,105,352 |   |
|      Diluted                                       |   |   | 17,073,526      |   |   |   | 17,105,352 |   |

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Earthstone Energy, Inc.

|                                                                                |   |              |                                                                          |   |    |   |                                |                |   | Additional |                                                                            |   |   |   |                                   |   |    |   |                                   |   |   |   |                                                                |   |   |   |                                                                            |
|-------------------------------------------------------------------------------------|--------|-------------------|-------------------------------------------------------------------------------|--------|---------|--------|-------------------------------------|---------------------|--------|------------|---------------------------------------------------------------------------------|--------|--------|--------|----------------------------------------|--------|---------|--------|----------------------------------------|--------|--------|--------|---------------------------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------|
|                                                                                |   | Common      stock |                                                                          |   | paid-in |   |                                | Treasury      stock |   |       | Accumulated                                                                     |   |   |   |                                   |   |
|                                                                                |   | Shares            |                                                                          |   | Amount  |   |                                | capital             |   |       | Shares                                                                          |   |   | Amount |                                   |   | deficit |   |                                   | Total  |   |
|                                                                                |   |              |                                                                          |   |    |   |                                |                |   |       |                                                                            |   |   |   |                                   |   |    |   |                                   |   |   |   |                                                                |   |   |   |                                                                            |   |
| March 31,      2008                                                            |   |              |    17,466,000                                                  |   |    | $      |    17,000            |                |   | $          |    22,798,000                                                    |   |   |   |    (349,000)            |   |    | $      |      (23,000) |   |   | $      |    (10,808,000)                                      |   |   | $      |    11,984,000                                                    |   |
|                                                                                |   |              |                                                                          |   |    |   |                                |                |   |       |                                                                            |   |   |   |                                   |   |    |   |                                   |   |   |   |                                                                |   |   |   |                                                                            |   |
|      Purchase      of treasury shares                      |   |              | —                                                                       |   |    |   | —                             |                |   |       | —                                                                         |   |   |   |      (31,000) |   |    |   |      (20,000) |   |   |   | —                                                             |   |   |   |          (20,000)                  |   |
|      Shares      issued to independent      directors |   |              |           15,000            |   |    |   | —                             |                |   |       |           24,000              |   |   |   | —                                |   |    |   | —                                |   |   |   | —                                                             |   |   |   |           24,000              |   |
|      Stock      options exercised                          |   |              |           25,000            |   |    |   |      1,000 |                |   |       |             3,000   |   |   |   | —                                |   |    |   | —                                |   |   |   | —                                                             |   |   |   |             4,000   |   |
|      Net      income                                       |   |              | —                                                                       |   |    |   | —                             |                |   |       | —                                                                         |   |   |   | —                                |   |    |   | —                                |   |   |   |           578,000 |   |   |   |         578,000                         |   |
|                                                                                |   |              |                                                                          |   |    |   |                                |                |   |       |                                                                            |   |   |   |                                   |   |    |   |                                   |   |   |   |                                                                |   |   |   |                                                                            |   |
| March 31,      2009                                                            |   |              |    17,506,000                                                  |   |    | $      |    18,000            |                |   | $          |    22,825,000                                                    |   |   |   |    (380,000)            |   |    | $      |      (43,000) |   |   | $      |    (10,230,000)                                      |   |   | $      |    12,570,000                                                    |   |
|                                                                                |   |              |                                                                          |   |    |   |                                |                |   |       |                                                                            |   |   |   |                                   |   |    |   |                                   |   |   |   |                                                                |   |   |   |                                                                            |   |
|      Purchase      of treasury shares                      |   |              | —                                                                       |   |    |   | —                             |                |   |       | —                                                                         |   |   |   |    (266,000)            |   |    |   |    (208,000)            |   |   |   | —                                                             |   |   |   |        (208,000)                             |   |
|      Shares      issued to independent      directors      |   |              |         192,000                       |   |    |   | —                             |                |   |       |         120,000                         |   |   |   | —                                |   |    |   | —                                |   |   |   | —                                                             |   |   |   |         120,000                         |   |
|      Shares      issued to employees                       |   |              |             6,000 |   |    |   | —                             |                |   |       |             — |   |   |   | —                                |   |    |   | —                                |   |   |   | —                                                             |   |   |   |             — |   |
|      Net      income                                       |   |              | —                                                                       |   |    |   | —                             |                |   |       | —                                                                         |   |   |   | —                                |   |    |   | —                                |   |   |   |        1,028,000                 |   |   |   |      1,028,000                                         |   |
|                                                                                |   |              |                                                                          |   |    |   |                                |                |   |       |                                                                            |   |   |   |                                   |   |    |   |                                   |   |   |   |                                                                |   |   |   |                                                                            |   |
| March 31,      2010                                                            |   |              |    17,704,000                                                  |   |    | $      |    18,000            |                |   | $          |    22,945,000                                                    |   |   |   |    (646,000)            |   |    | $      |    (251,000)            |   |   | $      |      (9,202,000)                           |   |   | $      |    13,510,000                                                    |   |

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Earthstone Energy, Inc.

|                                                                                                  |   |   | Year      Ended                                                                                       |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------|--------|
|                                                                                                  |   |   | March      31,                                                                                        |   |
|                                                                                                  |   |   | 2010                                                                                                  |   |   |   | 2009 |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Cash      flows from operating activities:                                                            |   |   |                                                                                                  |   |   |   |   |   |
|      Net      income                                                         |   | $      |          1,028,000                                       |   |   | $ |             578,000 |   |
| Adjustments      to reconcile net income to net cash provided by operating activities:           |   |   |                                                                                                  |   |   |   |   |   |
|      Depreciation      and depletion                                         |   |   |          1,221,000                                       |   |   |   |          1,224,000 |   |
|      Deferred      tax liability                                             |   |   |             (24,000)                      |   |   |   |           (558,000) |   |
|      Accretion      of asset retirement obligation                           |   |   |             166,000                       |   |   |   |               98,000 |   |
|      Share      based compensation                                           |   |   |               72,000            |   |   |   |               24,000 |   |
|      Impairment      of oil and gas properties                               |   |   |  ―                                                                                         |   |   |   |          2,694,000 |   |
| Change      in:                                                                                       |   |   |                                                                                                  |   |   |   |   |   |
|      Accounts      receivable, net                                           |   |   |             419,000                       |   |   |   |           (495,000) |   |
|      Other      assets                                                       |   |   |           (224,000)                                 |   |   |   |           (287,000) |   |
|      Accounts      payable and accrued liabilities                           |   |   |               8,000             |   |   |   |           (406,000) |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Net      cash provided by operating activities                                                        |   |   |          2,666,000                                       |   |   |   |          2,872,000 |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Cash      flows from investing activities:                                                            |   |   |                                                                                                  |   |   |   |   |   |
|      Oil      and gas property                                               |   |   |        (1,612,000)                                                 |   |   |   |        (4,338,000) |   |
|      Support      equipment                                                  |   |   |             (29,000)                      |   |   |   |  ― |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Net      cash used in investing activities                                                            |   |   |        (1,641,000)                                                 |   |   |   |        (4,338,000) |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Cash      flows from financing activities:                                                            |   |   |                                                                                                  |   |   |   |   |   |
|      Proceeds      from exercise of common stock options                     |   |   |  ―                                                                                         |   |   |   |                 3,000 |   |
|      Purchase      of treasury shares                                        |   |   |           (208,000)                                 |   |   |   |             (20,000) |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Net      cash used in financing activities                                                            |   |   |           (208,000)                                 |   |   |   |             (17,000) |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Cash      and cash equivalents:                                                                       |   |   |                                                                                                  |   |   |   |   |   |
|      Increase      (decrease) in cash and cash equivalents                   |   |   |             817,000                       |   |   |   |        (1,483,000) |   |
|      Balance,      beginning of year                                         |   |   |          4,088,000                                       |   |   |   |          5,571,000 |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Balance,      end of period                                                                           |   | $      |          4,905,000                                       |   |   | $ |          4,088,000 |   |
|                                                                                                  |   |   |                                                                                                  |   |   |   |   |   |
| Supplemental      disclosure of cash flow information:                                                |   |   |                                                                                                  |   |   |   |   |   |
|      Cash      paid for interest                                             |   | $      |               17,000            |   |   | $ |               10,000 |   |
|      Cash      paid for income tax                                           |   | $      |                 6,500 |   |   | $ |             517,000 |   |
| Non-cash:                                                                                             |   |   |                                                                                                  |   |   |   |   |   |
|     Increase      in oil and gas property due to asset retirement obligation |   | $      |               54,000            |   |   | $ |             33,000 |   |
|     Vested      shares issued as compensation                                     |   | $      |               48,000            |   |   | $ |               24,000 |   |
|     Additions      to oil and gas also included in accrued liabilities            |   | $      |          687,000                                         |   |   | $ |               43,000 |   |

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Earthstone Energy, Inc.

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|                                                                      |   |   | 2010       |   |   |   | 2009       |   |
|---------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|
| Numerator:                                                                |   |   |       |   |   |   |       |   |
|           Net income available to common shareholders |   | $      | 1,028,000  |   |   | $      | 578,000    |   |
|                                                                      |   |   |       |   |   |   |       |   |
| Denominator:                                                              |   |   |       |   |   |   |       |   |
|           Denominator for basic earnings per share    |   |   | 17,073,526 |   |   |   | 17,105,352 |   |
| Effect      of dilutive securities:                                       |   |   |       |   |   |   |       |   |
|           Stock options                               |   |   | —    |   |   |   | —    |   |
|                                                                      |   |   |       |   |   |   |       |   |
| Denominator      for diluted earnings per share                           |   |   | 17,073,526 |   |   |   | 17,105,352 |   |

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|                           |   |   | 2010    |   |   |   | 2009   |   |
|--------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|
|                           |   |   |    |   |   |   |   |   |
| Valero      Energy             |   |   | 16%     |   |   |   | 17%    |   |
| Nexen      Marketing USA, Inc. |   |   | 10%     |   |   |   | 14%    |   |
| Murphy      Oil USA, Inc.      |   |   | 8%      |   |   |   | 25%    |   |
| Plains      Inc.               |   |   | — |   |   |   | 14%    |   |
|                           |   |   |    |   |   |   |   |   |
|  Total                    |   |   | 34%     |   |   |   | 70%    |   |

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|                                          |   |   | 2010    |   |   |   | 2009    |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                          |   |   |    |   |   |   |    |   |
| Lease      and well equipment inventory       |   | $      | 399,000 |   |   | $      | 170,000 |   |
| Drilling      and completion cost prepayments |   |   | 244,000 |   |   |   | 149,000 |   |
| Prepaid      insurance premiums               |   |   | 49,000  |   |   |   | 44,000  |   |
| Other      current assets                     |   |   | 40,000  |   |   |   | 145,000 |   |
|                                          |   |   |    |   |   |   |    |   |
| Total      other current assets               |   | $      | 732,000 |   |   | $      | 508,000 |   |

|                                                          |   |   | 2010    |   |   |   | 2009    |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                          |   |   |    |   |   |   |    |   |
| Support      equipment and lease and well equipment inventory |   | $      | 272,000 |   |   | $      | 261,000 |   |
| Plugging      bonds                                           |   |   | 60,000  |   |   |   | 60,000  |   |
| Other      non-current assets                                 |   |   | 119,000 |   |   |   | 137,000 |   |
|                                                          |   |   |    |   |   |   |    |   |
| Total      support equipment and other non-current assets     |   | $      | 451,000 |   |   | $      | 458,000 |   |

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|                                        |   |   | 2010      |   |   |   | 2009      |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|
|                                        |   |   |      |   |   |   |      |   |
| Revenue      and production taxes payable   |   | $      | 348,000   |   |   | $      | 532,000   |   |
| Accrued      compensation                   |   |   | 172,000   |   |   |   | 288,000   |   |
| Accrued      operations payable             |   |   | 820,000   |   |   |   | 225,000   |   |
| Accrued      taxes payable and other        |   |   | 396,000   |   |   |   | 143,000   |   |
| Short      term asset retirement obligation |   |   | 100,000   |   |   |   | 140,000   |   |
|                                        |   |   |      |   |   |   |      |   |
|  Total                                 |   | $      | 1,836,000 |   |   | $      | 1,328,000 |   |

|                                                                          |   |   | 2010      |   |   |   | 2009      |   |
|-------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|
|                                                                          |   |   |      |   |   |   |      |   |
| Asset      retirement obligation at beginning of period                       |   | $      | 1,698,000 |   |   | $      | 2,179,000 |   |
|           Liabilities settled during the period           |   |   | (134,000) |   |   |   | (168,000) |   |
|           New obligations for wells drilled and completed |   |   | 54,000    |   |   |   | 33,000    |   |
|           Accretion of asset retirement obligation        |   |   | 166,000   |   |   |   | 98,000    |   |
|           Revisions to estimates                          |   |   | (10,000)  |   |   |   | (444,000) |   |
|                                                                          |   |   |      |   |   |   |      |   |
| Asset      retirement obligation at end of period                             |   | $      | 1,774,000 |   |   | $      | 1,698,000 |   |
|                                                                          |   |   |      |   |   |   |      |   |
|      Current      liability                          |   | $      | 100,000   |   |   | $      | 140,000   |   |
|      Long-term      liability                        |   |   | 1,674,000 |   |   |   | 1,558,000 |   |
|                                                                          |   |   |      |   |   |   |      |   |
| Asset      retirement obligation at end of each period                        |   | $      | 1,774,000 |   |   | $      | 1,698,000 |   |

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|                                                  |   | 2010   |    |   | 2009     |   |
|-------------------------------------------------------|--------|--------|---------|--------|----------|--------|
|                                                  |   |   |    |   | Weighted |   |   |   |   |   | Weighted |   |
|                                                  |   |   |    |   | Average  |   |   |   |   |   | Average |   |
|                                                  |   |   |    |   | Exercise |   |   |   |   |   | Exercise |   |
|                                                  |   | Shares |    |   | Price    |   |   | Shares |   |   | Price |   |
|                                                  |   |   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Options      unexercised, beginning of year           |   |   | — |   |     | $      | — |   |   |   | 25,000 |   |   | $ | 0.1325 |   |
|                                                  |   |   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
|           Granted                 |   |   | — |   |     |   | — |   |   |   | — |   |   |   | — |   |
|           Cancelled               |   |   | — |   |     |   | — |   |   |   | — |   |   |   | — |   |
|      Exercised               |   |   | — |   |     |   | — |   |   |   | (25,000 | ) |   |   | (0.1325 | ) |
|                                                  |   |   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Options      unexercised and exercisable, end of year |   |   | — |   |     | $      | — |   |   |   | — |   |   | $ | — |   |

|                                             |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Current:                                         |   |   |    |   |   |   |
|   Federal                              |   | $      | 171,000 |   |   | $      | 305,000 |   |
|   State                                |   |   | 1,000   |   |   |   | 41,000 |   |
|  Total      current income tax expense      |   |   | 172,000 |   |   |   | 346,000 |   |
|                                             |   |   |    |   |   |   |   |   |
| Deferred:                                        |   |   |    |   |   |   |   |   |
|   Federal                              |   |   | (23,000 | )      |   |   | (483,000 | ) |
|   State                                |   |   | (1,000  | )      |   |   | (75,000 | ) |
| Total      deferred income tax expense (benefit) |   |   | (24,000 | )      |   |   | (558,000 | ) |
|                                             |   |   |    |   |   |   |   |   |
| Income      tax expense (benefit)                |   | $      | 148,000 |   |   | $      | (212,000 | ) |

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|                                     |   | 2010   |     |   | 2009   |   |
|------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                     |   |   |     |   |   |   |   |   |
| Federal      taxes at statutory rate     |   | $      | 400,000  |   |   | $      | 124,000 |   |
| State      taxes, net of federal benefit |   |   | 9,000    |   |   |   | (18,000 | ) |
| Excess      percentage depletion         |   |   | (283,000 | )      |   |   | (322,000 | ) |
| Other      adjustments                   |   |   | 22,000   |   |   |   | 4,000 |   |
|                                     |   |   |     |   |   |   |   |   |
| Income      tax expense (benefit)        |   | $      | 148,000  |   |   | $      | (212,000 | ) |

|                                                       |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Deferred      tax assets:                                  |   |   |       |   |   |   |
| Allowance      for doubtful accounts                       |   | $      | 31,000     |   |   | $      | 26,000 |   |
| Asset      retirement obligation                           |   |   | 647,000    |   |   |   | 633,000 |   |
| Statutory      depletion carryforward                      |   |   | 1,074,000  |   |   |   | 858,000 |   |
|                                                       |   |   |       |   |   |   |   |   |
| Gross      deferred tax assets                             |   |   | 1,752,000  |   |   |   | 1,517,000 |   |
|                                                       |   |   |       |   |   |   |   |   |
| Other      accruals                                        |   |   | 47,000     |   |   |   | (4,000 | ) |
| Depreciation,      depletion and intangible drilling costs |   |   | (4,016,000 | )      |   |   | (3,755,000 | ) |
|                                                       |   |   |       |   |   |   |   |   |
| Gross      deferred tax liabilities                        |   |   | (3,969,000 | )      |   |   | (3,759,000 | ) |
|                                                       |   |   |       |   |   |   |   |   |
| Deferred      tax assets (liabilities), net                |   | $      | (2,217,000 | )      |   | $      | (2,242,000 | ) |

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|                                      |   |   | 2010         |   |   |   | 2009         |   |
|-------------------------------------------|--------|--------|--------------|--------|--------|--------|--------------|--------|
|                                      |   |   |         |   |   |   |         |   |
| Proved      property                      |   | $      | 33,915,000   |   |   | $      | 32,187,000   |   |
| Unproved      property                    |   |   | 1,555,000    |   |   |   | 1,077,000    |   |
|                                      |   |   |         |   |   |   |         |   |
|                                      |   |   | 35,470,000   |   |   |   | 33,264,000   |   |
| Accumulated      depletion and impairment |   |   | (23,582,000) |   |   |   | (22,397,000) |   |
|                                      |   |   |         |   |   |   |         |   |
| Net      capitalized oil and gas property |   | $      | 11,888,000   |   |   | $      | 10,867,000   |   |

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| Costs      Incurred During |   | Exploration |    |   | Development |   |    | Acquisition |   |   | Total      Unproved |   |
|----------------------------|--------|-------------|---------|--------|-------------|--------|---------|-------------|--------|--------|---------------------|--------|
| Year      Ended            |   | Costs       |    |   | Costs       |   |    | Costs       |   |   | Property            |   |
|                       |   |        |    |   |        |   |    |        |   |   |                |   |   |   |   |   |
| March 31,      2010   |   | $           | 1,000   |   |        | $      | 791,000 |        |   | $      | —             |   |   | $ | 792,000 |   |
| March 31,      2009   |   |        | 249,000 |   |        |   | — |        |   |   | —             |   |   |   | 249,000 |   |
| March 31,      2008   |   |        | 29,000  |   |        |   | — |        |   |   | —             |   |   |   | 29,000 |   |
| March 31,      2007   |   |        | 308,000 |   |        |   | — |        |   |   | —             |   |   |   | 308,000 |   |
| March 31,      2006   |   |        | 134,000 |   |        |   | 39,000  |        |   |   | —             |   |   |   | 173,000 |   |
| March 31,      2005   |   |        | 4,000   |   |        |   | — |        |   |   | —             |   |   |   | 4,000 |   |
|                       |   |        |    |   |        |   |    |        |   |   |                |   |   |   |   |   |
| Total                      |   | $           | 725,000 |   |        | $      | 830,000 |        |   | $      | —             |   |   | $ | 1,555,000 |   |

|                                   |   |   | 2010      |   |   |   | 2009      |   |
|----------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|
|                                   |   |   |      |   |   |   |      |   |
| Development      costs                 |   | $      | 1,536,000 |   |   | $      | 2,177,000 |   |
| Exploration      costs                 |   |   | 620,000   |   |   |   | —   |   |
| Acquisitions:                          |   |   |      |   |   |   |      |   |
|           Proved   |   |   | —   |   |   |   | —   |   |
|           Unproved |   |   | —   |   |   |   | —   |   |
|                                   |   |   |      |   |   |   |      |   |
| Total                                  |   | $      | 2,156,000 |   |   | $      | 2,177,000 |   |

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|                                                                                                      |   | March      31, 2010 |                                                                |   | March      31, 2009 |   |          | March      31, 2008 |   |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------|---------------------------------------------------------------------|--------|---------------------|--------|---------------|---------------------|--------|
|                                                                                                      |   | Oil(Bbls)           |                                                                |   | Gas(Mcf)            |   |          | Oil(Bbls)           |   |   | Gas (Mcf) |   |   | Oil(Bbls) |   |   | Gas(Mcf) |   |
| Proved      reserves:                                                                                     |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Balance, beginning of year                                                  |   |                | 638,000                                                             |   |                |   | 936,000       |                |   |   | 1,074,000 |   |   |   | 1,120,000 |   |   |   | 995,000 |   |   |   | 1,138,000 |   |
|                Revisions of previous estimates      (1) |   |                | 275,000                                                             |   |                |   | 195,000       |                |   |   | (429,000) |   |   |   | (262,000) |   |   |   | 112,000 |   |   |   | (113,000) |   |
|                Extensions and discoveries      (2)      |   |                | 4,000                                                               |   |                |   | 10,000        |                |   |   | 86,000 |   |   |   | 253,000 |   |   |   | 19,000 |   |   |   | 203,000 |   |
|                Sales of reserves in place                    |   |                | —                                                             |   |                |   | —       |                |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                Improved recovery                             |   |                | —                                                             |   |                |   | —       |                |   |   | — |   |   |   | — |   |   |   | 15,000 |   |   |   | 1,000 |   |
|                Purchase of reserves                          |   |                | —                                                             |   |                |   | —       |                |   |   | — |   |   |   | — |   |   |   | 22,000 |   |   |   | — |   |
|                Production (3)                                |   |                | (99,000)                                                            |   |                |   | (229,000)     |                |   |   | (93,000) |   |   |   | (175,000) |   |   |   | (89,000) |   |   |   | (109,000) |   |
|                                                                                                      |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Balance, end of year                                                        |   |                | 818,000                                                             |   |                |   | 912,000       |                |   |   | 638,000 |   |   |   | 936,000 |   |   |   | 1,074,000 |   |   |   | 1,120,000 |   |
|                                                                                                      |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved      developed reserves:                                                                           |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Balance, beginning of year                                                  |   |                |           587,000 |   |                |   | 907,000       |                |   |   | 1,074,000 |   |   |   | 1,120,000 |   |   |   | 995,000 |   |   |   | 1,138,000 |   |
|                                                                                                      |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Balance, end of year                                                        |   |                | 727,000                                                             |   |                |   | 912,000       |                |   |   | 587,000 |   |   |   | 907,000 |   |   |   | 1,074,000 |   |   |   | 1,120,000 |   |
|                                                                                                      |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved      undeveloped reserves:                                                                         |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Balance, beginning of year                                                  |   |                | 51,000                                                         |   |                |   | 29,000   |                |   |   | —  |   |   |   | —  |   |   |   | —  |   |   |   | —  |   |
|                                                                                                      |   |                |                                                                |   |                |   |          |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Balance, end of year                                                        |   |                | 91,000                                                              |   |                |   | —  |                |   |   | 51,000  |   |   |   | 29,000  |   |   |   | —  |   |   |   | —  |   |

|   | (1)   | Revisions      of Previous Estimates – Overall our properties experienced an increase in      estimated economic life due to increases in oil and gas prices during the      year ended March 31, 2010. Changes in performance constitute less than 10%      of the total amount of revisions of previous  estimates. |
|--------|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)   | Extensions      and Discoveries – The additions consisted of two new well in wells in Weld      County, Colorado and one new well in the Dunn County, North      Dakota. |
|--------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3)   | Production      – This change in reserves is due to volumes of oil and gas that was      produced and removed from reserves during the  year. |
|--------|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                            |   |   | For      the Years Ended March      31, |   |
|-----------------------------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                                            |   |   | 2010                                    |   |   |   | 2009 |   |   |   | 2008 |   |
|                                                            |   |   |                                    |   |   |   |   |   |   |   |   |   |
| Future      cash inflows                                        |   | $      | 55,991,000                              |   |   | $ | 31,793,000 |   |   | $ | 114,296,000 |   |
| Future      cash outflows:                                      |   |   |                                    |   |   |   |   |   |   |   |   |   |
|           Production cost                   |   |   | (29,065,000)                            |   |   |   | (17,924,000) |   |   |   | (49,599,000) |   |
|           Development cost                  |   |   | (991,000)                               |   |   |   | (490,000) |   |   |   | — |   |
|           Future income taxes               |   |   | (3,361,000)                             |   |   |   | (2,100,000) |   |   |   | (17,826,000) |   |
|                                                            |   |   |                                    |   |   |   |   |   |   |   |   |   |
| Future      net cash flows                                      |   |   | 22,574,000                              |   |   |   | 11,279,000 |   |   |   | 46,871,000 |   |
| Adjustment      to discount future annual net cash flows at 10% |   |   | (10,060,000)                            |   |   |   | (4,080,000) |   |   |   | (21,911,000) |   |
|                                                            |   |   |                                    |   |   |   |   |   |   |   |   |   |
| Standardized      measure of discounted future net cash flows   |   | $      | 12,514,000                              |   |   | $ | 7,199,000 |   |   | $ | 24,960,000 |   |

|                                                                                                                 |   |   | For      the Years Ended March,      31 |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                                                                                                 |   |   | 2010                                    |   |   |   | 2009 |   |   |   | 2008 |   |
|                                                                                                                 |   |   |                                    |   |   |   |   |   |   |   |   |   |
| Standardized      measure, beginning of period                                                                       |   | $      | 7,199,000                               |   |   | $ | 24,960,000 |   |   | $ | 14,624,000 |   |
|                                                                                                                 |   |   |                                    |   |   |   |   |   |   |   |   |   |
|           Sales of oil and gas, net of production cost                                           |   |   | (4,284,000)                             |   |   |   | (5,808,000) |   |   |   | (4,727,000) |   |
|           Net change in sales prices, net of production cost                                     |   |   | 6,279,000                               |   |   |   | (25,977,000) |   |   |   | 14,598,000 |   |
|           Discoveries, extensions and improved recoveries, net of future development      cost   |   |   | 154,000                                 |   |   |   | 2,298,000 |   |   |   | 3,054,000 |   |
|           Change in future development costs                                                     |   |   | 467,000                                 |   |   |   | — |   |   |   | — |   |
|           Development costs incurred during the period that reduced future      development cost |   |   | —                                 |   |   |   | — |   |   |   | — |   |
|           Sales of reserves in place                                                             |   |   | —                                 |   |   |   | — |   |   |   | — |   |
|           Revisions of quantity estimates                                                        |   |   | 5,280,000                               |   |   |   | (4,745,000) |   |   |   | 2,639,000 |   |
|           Accretion of discount                                                                  |   |   | 720,000                                 |   |   |   | 4,279,000 |   |   |   | 1,865,000 |   |
|           Net change in income taxes                                                             |   |   | (1,582,000)                             |   |   |   | 16,594,000 |   |   |   | (4,221,000) |   |
|           Purchase of reserves                                                                   |   |   | —                                 |   |   |   | — |   |   |   | 361,000 |   |
|           Changes in timing of rates of production                                               |   |   | (1,719,000)                             |   |   |   | (4,402,000) |   |   |   | (3,233,000) |   |
|                                                                                                                 |   |   |                                    |   |   |   |   |   |   |   |   |   |
| Standardized      measure, end of period                                                                             |   | $      | 12,514,000                              |   |   | $ | 7,199,000 |   |   | $ | 24,960,000 |   |

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ITEM 9

ITEM 9A

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ITEM 9B

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 ITEM 10

ITEM 11

ITEM 12

ITEM 13

ITEM 14

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ITEM 15

| (a)    |   | Documents      filed as part of this Annual Report on Form 10-K.                        |
|--------|--------|----------------------------------------------------------------------------------------------|
|   |   |                                                                                         |   |   |
|   |   | (1)                                                                                          |   | Financial      Statements |
|   |   |                                                                                         |   | All      financial statements as set forth under Item 8 of this    report. |
|   |   |                                                                                         |   |   |
|   |   | (2)                                                                                          |   | Supplementary      Financial Statement Schedules |
|   |   |                                                                                         |   | None. |
|   |   |                                                                                         |   |   |
|   |   | (3)                                                                                          |   | Exhibits |
|   |   |                                                                                         |   | See      (b) below |
|   |   |                                                                                         |   |   |
| (b)    |   | Exhibits                                                                                     |
|   |   |                                                                                         |   |   |
|   |   | The      following exhibits are filed pursuant to Item 601 of      Regulation S-K: |
|   |   |                                                                                         |

| Exhibit      No. |   | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(i)a            |   | Restated      Certificate of Incorporation of Earthstone Energy, Inc., effective      May 12, 1981, as amended by (i) Certificate of Amendment of      Certificate of Incorporation, effective November 20, 1986; (ii)      Certificate of Amendment of Certificate of Incorporation, effective July      1, 1996; and (iii) Certificate of Designations of Series A      Junior Participating Preferred Stock, effective February 5, 2009,      incorporated by reference to Exhibit 3(i) of our Quarterly Report on      Form 10-Q for the quarter ended December 31, 2009, filed with      the SEC on February 17, 2009.                                                                                                                                                                                                                                                                                                                                    |
| 3(i)b            |   | Amended      and Restated Certificate of Incorporation as approved by stockholders of      the Company at the Company’s 2009 Annual Meeting of Stockholders and the      amendments to the Company’s Certificate of Incorporation previously      disclosed in the Company’s proxy statement on Schedule 14A filed with the      Securities and Exchange Commission on November 5, 2009, incorporated by      reference to Exhibit 3(i) on Form 8-K filed with the SEC on March 3,      2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3(ii)a           |   | Bylaws      of Earthstone Energy, Inc., dated July 15, 1986, as amended by First      Amendment to Bylaws, dated February 4, 2009, incorporated by      reference to Exhibit 3(ii) of our Quarterly Report on Form 10-Q      for the quarter ended December 31, 2009, filed with the SEC on      February 17, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3(ii)b           |   | Amended      and Restated Bylaws reflecting recent changes made to the Company’s      Certificate of Incorporation to remove certain outdated and redundant      provisions that existed in our prior bylaws with respect to corporate      governance, stockholder and director meeting procedures, and      indemnification procedures.  Changes to the bylaws include,      among other things: (i) amendments to reflect the new name of the Company;      (ii) expansion of certain provisions with respect to stockholders’      meetings and record dates; (iii) amendments in respect of corporate      governance, board committees, and board meetings; (iv) amendments to      certain provisions in respect of officers and their duties; (v) amendments      to certain provisions in respect of share certificates; and (vi) removal      of indemnification provisions are incorporated by reference to Exhibit      3(ii) on Form 8-K filed with the SEC on March 3, 2010. |
| 4.1              |   | Rights      Agreement, dated February 4, 2009, between Earthstone Energy, Inc.      and Corporate Stock Transfer, Inc., incorporated by reference to      Exhibit 4.1 of our Current Report on Form 8-K., filed with the      SEC on February 5, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.1*            |   | Oil      and Gas Incentive Compensation Plan, dated April 1, 1980, as amended,      incorporated by reference to our Annual Report on Form 10-K for the      fiscal year ended March 31, 1985, filed with the  SEC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| (b) |   | Exhibits      (continued) |
|-----|--------|---------------------------|

| Exhibit      No. |   | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2             |   | Loan      Agreement, dated March 4, 2002, between The Bank of Cherry Creek and      Earthstone, incorporated by reference to Exhibit 10(i)a of our Annual      Report on Form 10-KSB for the fiscal year ended March 31, 2002,      filed with the SEC on June 28, 2002; as amended by Amended Loan      Agreement, dated January 3, 2006, between American National Bank      (formerly The Bank of Cherry Creek) and Earthstone, incorporated by      reference to Exhibit 10(i)a of our Annual Report on Form 10-KSB      for the fiscal year ended March 31, 2006, filed with the SEC on      July 14, 2006; and as further amended by Amended Loan Agreement,      dated December 31, 2006, between American National Bank and      Earthstone, incorporated by reference to Exhibit 10(i)a of our Annual      Report on Form 10-KSB for the fiscal year ended March 31, 2009,      filed with the SEC on June 29, 2007. |
| 10.3*            |   | Performance      Bonus Plan, dated effective April 1, 2007, incorporated by reference      to Exhibit 10.3 of our Amended 10-K/A, filed with the SEC on October 9,      2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.4*            |   | Director      Compensation Plan, dated effective April 1, 2007, incorporated by      reference to Exhibit 10.4 of our Amended 10-K/A, filed with the SEC on      October 9, 2009 as amended by board resolution dated March 31, 2010, filed      herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.5*            |   | Form      of Restricted Stock Agreement pursuant to the Director Compensation Plan,      incorporated by reference to Exhibit 10(ii) of the Annual Report on      Form 10-KSB for the fiscal year ended March 31, 2008, filed with      the SEC on July 11, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.6*            |   | Part-Time      Employment and Confidentiality Agreement, effective March 31,2008, between      Joseph Young and Earthstone, incorporated by reference to Exhibit 10.6 of      our Amended 10-K/A, filed with the SEC on October 9,  2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 14.1             |   | Code      of Business Conduct and Ethics, incorporated by reference to Exhibit 14.1      of our Annual Report on Form 10-KSB/A for the fiscal year ended March 31,      2004, filed with the SEC on May 11, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 16.1             |   | Letter      Regarding Change in Certifying Accountant, incorporated herein by      reference to Exhibit 16.1 of our Current Report on Form 8-K, filed with      the SEC on July 21, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 21               |   | List      of Subsidiaries of Earthstone, incorporated by reference to Exhibit 21 of      our Amended 10-K/A, filed with the SEC on October 9,  2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 31.1             |   | Certification      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Ray      Singleton, Chief Executive Officer)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 31.2             |   | Certification      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Joseph      Young, Principal Accounting Officer)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.1             |   | Certification      Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 (Ray Singleton, Chief Executive      Officer)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.2             |   | Certification      Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 (Joseph Young, Principal Accounting      Officer).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 99.1             |   | Nominating      Committee Charter, adopted September 28, 2009, incorporated by reference      to Exhibit 99.1 of our Amended 10-K/A, filed with the SEC on October 9,      2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.2             |   | Compensation      Committee Charter, adopted September 28, 2009, incorporated by reference      to Exhibit 99.2 of our Amended 10-K/A, filed with the SEC on October 9,      2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 99.3             |   | Report      of Ryder Scott Company filedherewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

| * |   | Indicates      management contracts or compensatory plans or arrangements required to be      filed as exhibits pursuant to Item 15 of Form  10-K. |
|---|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

Signatures

|                                                  |   |               |
|-------------------------------------------------------|--------|--------------------|
|                                                  |   | Date               |
|                                                  |   |               |
| By: /s/ Ray      Singleton                            |   | June      18, 2010 |
|                                                  |   |               |
| Ray      Singleton, President     |   |               |
|                                                  |   |               |
| By:      /s/ Joseph      Young                        |   | June      18, 2010 |
|                                                  |   |               |
| Joseph      Young,                                    |   |               |
| Principal      Accounting Officer                     |   |               |

|                                   |   |               |
|----------------------------------------|--------|--------------------|
| Name      and Capacity                 |   | Date               |
|                                   |   |               |
| By: /s/ Ray      Singleton             |   | June      18, 2010 |
|                                   |   |               |
| Ray      Singleton, Director           |   |               |
|                                   |   |               |
| By:      /s/ Richard K.      Rodgers   |   | June      18, 2010 |
|                                   |   |               |
| Richard      K. Rodgers, Director and  |   |               |
| Compensation      Committee Chairman   |   |               |
|                                   |   |               |
| By:      /s/ Monroe W.      Robertson  |   | June      18, 2010 |
|                                   |   |               |
| Monroe      W. Robertson, Director and |   |               |
| Audit      Committee Chairman          |   |               |