- Fiscal Q4 Revenues Up 17% Y/Y to $21.2 Million - - Fiscal Q4 Net Income Increases to $1.2 Million; Adjusted EBITDA up 72% Y/Y to $8.0 Million -
HOUSTON, Sept. 10, 2024 (GLOBE NEWSWIRE) -- Evolution Petroleum Corporation (NYSE:EPM) ("Evolution" or the "Company") today announced its financial and operating results for its fiscal fourth quarter and full year ended June 30, 2024. Evolution also declared a quarterly cash dividend of $0.12 per common share for the fiscal 2025 first quarter.
Financial & Operational Highlights ($ in thousands)
Q4 2024
Q4 2023
Q3 2024
% ChangeQ4/Q4
% ChangeQ4/Q3
Average BOEPD
7,209
6,484
7,209
11%
—%
Revenues
$21,227
$18,174
$23,025
17%
(8)%
Net Income
$1,235
$166
$289
644%
327%
Adjusted Net Income(1)
$1,093
$166
$978
558%
12%
Adjusted EBITDA(2)
$8,037
$4,672
$8,476
72%
(5)%
Cash Flow from Operations
$7,987
$(447)
3,364
NA
137%
(1) Adjusted Net Income is a non-GAAP financial measure; see the "Non-GAAP Information" section later in this release for more information, including reconciliations to the most comparable GAAP measures.
(2) Adjusted EBITDA is Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization and is a non-GAAP financial measure; see the "Non-GAAP Information" section later in this release for more information, including reconciliations to the most comparable GAAP measures.
Participated in 3 new producing wells during the fiscal fourth quarter and 27 in fiscal 2024; 10 wells in progress subsequent to fiscal year-end.
Returned $4.0 million to shareholders in the form of cash dividends during the fiscal fourth quarter of 2024 and $16.0 million for fiscal year 2024. The Company also declared its 44th consecutive quarterly dividend of $0.12 per common share, payable September 30th.
Generated record oil revenues in fiscal year 2024.
Generated record liquids (oil + NGLs1) revenue and production in fiscal year 2024.
Proved oil reserves increased by 20% fiscal year-over-year.
Kelly Loyd, President and Chief Executive Officer, commented, "Following our record year of natural gas production and revenue in fiscal 2023, this fiscal year we recognized the importance of balancing our portfolio. This helped reduce exposure to natural gas price volatility while increasing our ability to participate in organic growth of reserves and production. As a result, we generated record liquids revenues and production for the year and completed two transformative transactions that added 6.6 MMBOE of proved reserves, with the majority of the locations yet to be booked. We expect these acquisitions to meaningfully contribute to cash flow and further support our dividend-focused policy over the next ten years.
"In Fiscal 2024, we added 300+ drilling locations in the SCOOP/STACK and 80+ drilling locations at Chaveroo, fundamentally strengthening and diversifying our organic growth portfolio. We participated in 22 SCOOP/STACK wells that, on average, are performing well above our original type curve projections. In Chaveroo, we partnered on our first 3 horizontal San Andres wells with early results exceeding our estimates. At Delhi, we worked with ExxonMobil to begin development of Test Site V with the first of 3 initial wells scheduled to be drilled by calendar year-end. This development drilling activity combined with the acquisition of SCOOP/STACK producing reserves enabled us to more than replace production despite the adverse impact of lower natural gas prices during the year."
_______________________
1) Natural Gas Liquids.
Mr. Loyd concluded, "Looking ahead, we plan to continue executing our plans to deliver long-term shareholder value. We have diversified our asset base of long-lived, low-decline properties through acquisitions of proved developed reserves, bolstered with additional drilling locations, at attractive costs that were designed to support our dividend program, we expect, well into the future."
Fiscal Fourth Quarter 2024 Financial Results
Total revenues increased 17% to $21.2 million compared to $18.2 million in the year-ago period. The improvement was driven by an increase in oil and NGL revenue, partially offset by lower natural gas revenue.
Lease operating costs ("LOE") decreased to $11.4 million compared to $11.8 million in the year-ago period. On a per unit basis, total LOE decreased 13% to $17.39 per BOE compared to $20.02 per BOE last year. The decrease was driven by suspended CO2 purchases for the quarter due to maintenance on the pipeline that began in February 2024. CO2 purchases are expected to restart in the early second quarter of fiscal 2025.
Depletion, depreciation, and accretion expense was $5.3 million compared to $3.8 million in the year-ago period. On a per BOE basis, the Company's current quarter depletion rate increased to $7.51 per BOE compared to $6.01 per BOE in the year-ago period due to an increase in depletable base related to the Company's SCOOP/STACK acquisitions and capital development expenditures since the prior fiscal year, partially offset by an increase in proved reserves.
General and administrative ("G&A") expenses decreased to $2.1 million compared to $2.3 million in the year-ago period. On a per BOE basis, G&A expenses were $3.22 compared to $3.84 in the year-ago period. The decrease was primarily due to a reduction in third-party consulting fees.
Net income increased 644% to $1.2 million or $0.04 per diluted share, compared to $0.2 million or $0.00 per diluted share in the year-ago period.
Adjusted EBITDA increased 72% to $8.0 million compared to $4.7 million in the year-ago period. The increase was primarily due to increased revenue and reduced operating costs from the year-ago period.
Production & Pricing
Total production for the fourth quarter of fiscal 2024 increased 11% to 7,209 net BOEPD compared to 6,484 net BOEPD in the year-ago period. Total production for the fourth quarter of fiscal 2024 was comprised of 2,088 barrels per day ("BOPD") of crude oil, 3,945 BOEPD of natural gas, and 1,176 BOEPD of NGLs. The increase in total production was driven by the closing of the Company's SCOOP/STACK acquisitions in February 2024 and production from an initial three wells in the Chaveroo oilfield in February 2024.
Average realized commodity price (excluding the impact of derivative contracts) increased 5% to approximately $32.36 per BOE compared to $30.80 per BOE in the year-ago period. Realized oil and NGL prices increased approximately 10% and 20%, respectively, over the prior year period. These increases were partially offset by a decrease of approximately 32% in realized natural gas prices compared to the year-ago period.
Operations Update
During the quarter, the Company's operators turned-in-line 3 gross wells in the SCOOP/STACK with 10 additional gross wells in progress, and as of today, 7 of these 10 wells are currently producing. Additionally, Evolution has agreed to participate in 3 gross new horizontal wells across the acreage. Since the effective date of the acquisitions, 22 gross wells have been converted to Proved Developed Producing.
In the Chaveroo oilfield, Evolution plans to participate in fiscal 2025 for its full 50% working interest in four horizontal wells in Drilling Block 2. These operations are expected to begin in fiscal Q2 2025. The Company has preliminarily agreed to six additional horizontal wells in Drilling Block 3 that are estimated to begin in fiscal Q4 2025. The Company also purchased acreage in advance for Drilling Blocks 4 and 5, bringing the total number of Proved Undeveloped locations to 18, and expects to systematically participate in future development blocks. Future acreage costs are fixed at $36,000 per additional net horizontal well, spaced at approximately 160 gross acres per well.
Williston Basin production increased during the fiscal quarter due to a full quarter of natural gas and NGL sales from the ONEOK Grassland System, which came back online during the prior quarter.
At Delhi, production was affected during the quarter by field-wide power outages for 7 days combined with downtime from one of the CO2 recycle compressors, reducing CO2 injection volumes for most of the quarter. The compressor was replaced, and full CO2 recycling resumed in July 2024. The CO2 purchase pipeline was taken offline for preventative maintenance at the end of February 2024 and remained down through this quarter. The operator anticipates resuming CO2 purchases in the early second quarter of fiscal 2025.
Balance Sheet, Liquidity, and Capital Spending
On June 30, 2024, cash and cash equivalents totaled $6.4 million and working capital was $5.9 million. Evolution had $39.5 million of borrowings outstanding under its revolving credit facility, which was used to fund the acquisitions of SCOOP/STACK, and total liquidity of $16.9 million, including cash and cash equivalents. In fiscal Q4, Evolution paid $4.0 million in common stock dividends, repaid $3.0 million of borrowings under its revolving credit facility, and paid $2.5 million in capital expenditures.
During the quarter, the Company received cash payments totaling $5.0 million related to purchase price reductions from the SCOOP/STACK properties for net cash flows received during the period between the effective date of November 1, 2023, and the closing date.
Evolution believes its near-term capital spending requirements will be funded from cash flows from operations, current working capital, and borrowings as needed under its revolving credit facility.
Cash Dividend on Common Stock
On September 9, 2024, Evolution's Board of Directors declared a cash dividend of $0.12 per share of common stock, which will be paid on September 30, 2024, to common stockholders of record on September 20, 2024. This will be the 44th consecutive quarterly cash dividend on the Company's common stock since December 31, 2013. To date, Evolution has returned approximately $118.4 million, or $3.57 per share, back to stockholders in common stock dividends.
Conference Call
As previously announced, Evolution Petroleum will host a conference call on Wednesday, September 11, 2024, at 10:00 a.m. Central Time to review its fiscal year-end 2024 financial and operating results. To join by phone, please dial (844) 481-2813 (Toll-free) or (412) 317-0677 (International) and ask to join the Evolution Petroleum Corporation call. To join online, click the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=782c79My. A webcast replay will be available through September 11, 2025, via the webcast link above and on Evolution's website at www.ir.evolutionpetroleum.com.
About Evolution Petroleum
Evolution Petroleum Corporation is an independent energy company focused on maximizing total shareholder returns through the ownership of and investment in onshore oil and natural gas properties in the U.S. The Company aims to build and maintain a diversified portfolio of long-life oil and natural gas properties through acquisitions, selective development opportunities, production enhancements, and other exploitation efforts. Properties include non-operated interests in the following areas: the SCOOP/STACK plays of the Anadarko Basin in Oklahoma; the Chaveroo Oilfield located in Chaves and Roosevelt Counties, New Mexico; the Jonah Field in Sublette County, Wyoming; the Williston Basin in North Dakota; the Barnett Shale located in North Texas; the Hamilton Dome Field located in Hot Springs County, Wyoming; the Delhi Holt-Bryant Unit in the Delhi Field in Northeast Louisiana; as well as small overriding royalty interests in four onshore Texas wells. Visit www.evolutionpetroleum.com for more information.
Cautionary Statement
All forward-looking statements contained in this press release regarding the Company's current expectations, potential results, and future plans and objectives involve a wide range of risks and uncertainties. Statements herein using words such as "believe," "expect," "plans," "outlook," "should," "will," and words of similar meaning are forward-looking statements. Although the Company's expectations are based on business, engineering, geological, financial, and operating assumptions that it believes to be reasonable, many factors could cause actual results to differ materially from its expectations. The Company gives no assurance that its goals will be achieved. These factors and others are detailed under the heading "Risk Factors" and elsewhere in our periodic reports filed with the Securities and Exchange Commission ("SEC"). The Company undertakes no obligation to update any forward-looking statement.
Our proved reserves as of June 30, 2024, were estimated by Netherland, Sewell & Associates, Inc., DeGolyer & MacNaughton, and Cawley, Gillespie and Associates, Inc., all worldwide petroleum consultants. All reserve estimates are continually subject to revisions based on production history, results of additional exploration and development, price changes, and other factors. Drilling locations are based on the Company's internal estimates, which may prove incorrect, and actual locations drilled and quantities that may be ultimately recovered may differ substantially from these estimates. Factors affecting the scope of our drilling program will be directly affected by the decisions of the operators of our properties, availability of capital, drilling and production costs, availability of drilling and completion services and equipment, drilling results, agreement terminations, regulatory approvals and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of reserves may change significantly as development of our oil and gas properties provides additional data.
ContactInvestor Relations (713) 935-0122
Evolution Petroleum CorporationProved Reserves as of June 30, 2024
Our proved reserves as of June 30, 2024, were estimated by our independent reservoir engineers, Netherland, Sewell & Associates, Inc., DeGolyer and MacNaughton and Cawley, Gillespie and Associates, Inc., all worldwide petroleum consultants.
The SEC sets rules related to reserve estimation and disclosure requirements for oil and natural gas companies. These rules require disclosure of oil and natural gas proved reserves by significant geographic area, using the trailing 12-month average price, calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, rather than year-end prices, and allows the use of new technologies in the determination of proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserve volumes. Subject to limited exceptions, the rules also require that proved undeveloped reserves may only be classified as such if a development plan has been adopted indicating that they are scheduled to be drilled within five years.
Oil
Natural Gas
NGLs
Total Proved Reserves
Reserve Category
(MBbls)
(MMcf)
(MBbls)
(MBOE)
Proved Developed Producing
7,746
66,627
5,065
23,917
Proved Non-Producing
108
33
9
123
Proved Undeveloped
3,956
11,249
1,914
7,745
Total Proved
11,810
77,909
6,988
31,785
Oil
Natural Gas
NGLs
Total Proved Reserves
Asset
(MBbls)
(MMcf)
(MBbls)
(MBOE)
SCOOP/STACK
1,277
12,314
787
4,116
Chaveroo Field
2,218
636
137
2,461
Jonah Field
239
25,113
318
4,744
Williston Basin
2,798
7,135
1,653
5,640
Barnett Shale
78
32,711
2,452
7,983
Hamilton Dome Field
2,182
—
—
2,182
Delhi Field
3,018
—
1,641
4,659
Total Proved
11,810
77,909
6,988
31,785
Evolution Petroleum Corporation
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Years Ended
June 30,
March 31,
June 30,
2024
2023
2024
2024
2023
Revenues
Crude oil
$
14,533
$
10,982
$
14,538
$
53,446
$
51,044
Natural gas
3,582
4,984
5,860
21,525
63,800
Natural gas liquids
3,112
2,208
2,627
10,906
13,670
Total revenues
21,227
18,174
23,025
85,877
128,514
Operating costs
Lease operating costs
11,408
11,818
12,624
48,273
59,545
Depletion, depreciation, and accretion
5,302
3,834
5,900
20,062
14,273
General and administrative expenses
2,114
2,263
2,417
9,636
9,583
Total operating costs
18,824
17,915
20,941
77,971
83,401
Income (loss) from operations
2,403
259
2,084
7,906
45,113
Other income (expense)
Net gain (loss) on derivative contracts
(109
)
—
(1,183
)
(1,292
)
513
Interest and other income
59
95
63
342
121
Interest expense
(875
)
(54
)
(518
)
(1,459
)
(458
)
Income (loss) before income taxes
1,478
300
446
5,497
45,289
Income tax (expense) benefit
(243
)
(134
)
(157
)
(1,417
)
(10,072
)
Net income (loss)
$
1,235
$
166
$
289
$
4,080
$
35,217
Net income (loss) per common share:
Basic
$
0.04
$
—
$
0.01
$
0.12
$
1.05
Diluted
$
0.04
$
—
$
0.01
$
0.12
$
1.04
Weighted average number of common shares outstanding:
Basic
32,679
32,618
32,702
32,691
32,985
Diluted
32,835
32,891
32,854
32,901
33,190
Evolution Petroleum Corporation
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share amounts)
June 30, 2024
June 30, 2023
Assets
Current assets
Cash and cash equivalents
$
6,446
$
11,034
Receivables from crude oil, natural gas, and natural gas liquids revenues
10,826
7,884
Derivative contract assets
596
—
Prepaid expenses and other current assets
3,855
2,277
Total current assets
21,723
21,195
Property and equipment, net of depletion, depreciation, and impairment
Oil and natural gas properties, net—full-cost method of accounting, of
which none were excluded from amortization
139,685
105,781
Other noncurrent assets
Derivative contract assets
171
—
Other assets
1,298
1,341
Total assets
$
162,877
$
128,317
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$
8,308
$
5,891
Accrued liabilities and other
6,239
6,027
Derivative contract liabilities
1,192
—
State and federal taxes payable
74
365
Total current liabilities
15,813
12,283
Long term liabilities
Senior secured credit facility
39,500
—
Deferred income taxes
6,702
6,803
Asset retirement obligations
19,209
17,012
Derivative contract liabilities
468
—
Operating lease liability
58
125
Total liabilities
81,750
36,223
Commitments and contingencies
Stockholders' equity
