Evolution Petroleum Corporation: Evolution Petroleum Announces Results for Fiscal 2019 Third Quarter Ended March 31, 2019 and Declares Quarterly Common Stock Dividend

HOUSTON, TX / ACCESSWIRE / May 8, 2019 / Evolution Petroleum Corporation (NYSE American: EPM) ("Evolution" or the "Company") today announced financial and operating highlights for its fiscal third quarter ended March 31, 2019, with comparisons to the fiscal second quarter ended December 31, 2018 (the 'prior quarter') and the quarter ended March 31, 2018 (the 'year-ago quarter').

Highlights for the Quarter:

• Paid 22^nd consecutive quarterly cash dividend and declared the next cash dividend of $0.10 per share for the quarter ending June 30, 2019
• Net income was $2.4 million for the quarter, or $0.07 per common share
• Revenues were $9.5 million, a decrease of 6.4% from the year-ago quarter due primarily to a 7% decline in realized oil price and a 43% decline in realized natural gas liquid ("NGL") price
• NGL production grew 60% while oil volumes were flat compared to the year-ago quarter
• Increased working capital to $31.1 million after paying $3.3 million in common stock dividends

Robert Herlin, Executive Chairman and Interim CEO, said, "Evolution continues to demonstrate solid earnings and cash flow in the face of the significant, but abbreviated, downturn in realized oil and NGL prices that began in November and continued through February. Prices began to recover in March, aided by the substantial premium that our Louisiana Light Sweet oil received over NYMEX WTI, while production levels continued to benefit from the strategic infill program completed last year as well as ongoing field optimization. We remain positive in our ability to further maximize and grow our current asset with our low-cost structure. We continue to evaluate new opportunities that fit the criteria and strategy to enhance our current assets, production and net cash flows through careful and deliberate purchases of similar long-life producing properties. We are pleased that our previously announced CEO search has produced a number of very strong candidates that fit the standards and strategy of the Board. We are in the final stages of the process."

Financial Results for the Quarter Ended March 31, 2019

During the current quarter, Evolution reported operating revenues of $9.5 million, based on an average realized oil price of $59.12 per barrel and an average realized NGL price of $16.37 per barrel. In the year-ago quarter, operating revenues were $10.2 million, based on an average oil price of $63.56 per barrel and an average realized NGL price of $28.56 per barrel. Evolution continues to benefit from the Louisiana Light Sweet premium over NYMEX WTI prices which has averaged in excess of $4 to $5 per barrel in the current and prior quarters. Compared to the year-ago quarter, current quarter NGL revenue decreased 8% to $0.5 million due to a 43% price decline to $16.37 per barrel, partially offset by a 60% increase in NGL volumes.

Operating income was $3.0 million, a decrease from $3.8 million in the year-ago quarter. Net income for the quarter was $2.4 million, or $0.07 per diluted share, compared to $3.2 million, or $0.09 per share, in the year-ago quarter.

Production costs in the Delhi field were $3.8 million in the current quarter, up 16% from $3.3 million in the year-ago quarter. Production costs for the quarter increased primarily due to a 36% increase in purchased CO₂ volumes to 103 MMcf per day along with higher injections of CO₂, partially offset by a 7% decrease in CO₂ price per mcf, which correlates directly with realized oil price received at Delhi.

Depreciation, Depletion & Amortization expense for quarter increased $0.2 million compared to the year-ago quarter due to a 7% rise in production volumes to 181,429 BOE together with a 5% increase in amortization rate to $8.40 per BOE.

General and administrative expenses for the quarter decreased $0.6 million, or 35%, to $1.2 million compared to the year-ago quarter primarily due to $0.2 million of lower stock compensation and incentive bonus expenses and $0.4 million of lower litigation expense.

Lower income tax expense was primarily driven by the 37% decrease in pre-tax earnings compared to the prior quarter. The slightly higher effective tax rate in the current quarter had only a minor offsetting impact.

Delhi Operations and Capital Spending

Gross oil production averaged approximately 6,500 barrels per day during the quarter, a 4% decrease from the prior quarter, primarily due to scheduled plant maintenance in January. Gross NGL production for the quarter was approximately 1,250 barrels per day, up 23% from the prior quarter. The net production of approximately 2,030 barrels of oil equivalent per day ('BOEPD') was relatively flat compared to the prior quarter and increased 7% compared to the year-ago quarter. All nine of the infill producing wells and all but one injection well were in operation at the end of the quarter. Production is expected to improve as the Company sees response to the new CO₂ injectors and increases in injection volumes. The operator has been successful in new modifications to the facility, improving NGL plant efficiency and minimizing unplanned downtime resulting in improved NGL production in the current quarter and further improvements subsequent to quarter end. Evolution anticipates only modest amounts of capital spending in the Delhi field for the remainder of calendar 2019. The majority of capital will be dedicated to workover and conformance opportunities, which have been successfully generated and executed over the past few years.

Liquidity and Outlook

'Evolution ended the quarter with $31.1 million in working capital, continuing an upward trend of accumulating cash, even after distributing $3.3 million in common stock dividends during the quarter. The cash balance was $29.6 million with no debt outstanding. In February, the Company's $40 million elected borrowing base was reconfirmed through periodic redetermination, positioning us strategically for potential acquisitions of primarily producing properties. Our financial resources are more than sufficient to fund continuing development of the Delhi field, continue the dividend program and capitalize on potential acquisition opportunities going forward,' commented David Joe, Chief Financial Officer.

Cash Dividend on Common Stock

The Board of Directors declared a cash dividend of $0.10 per share of common stock, to be paid on June 28, 2019 to common stockholders of record on June 14, 2019. This will be the 23^rd consecutive quarterly cash dividend on the common stock. Common stock dividends, which have been paid since 2013, are a core component of the Company's strategy.

Quarterly Conference Call

Evolution will hold its quarterly conference call on Thursday, May 9, 2019 at 10:00 a.m. Eastern Time (9:00 a.m. Central). The call will be followed by a question and answer session. To access the conference call by phone, please dial 844-602-0380 (toll-free U.S. & Canada) or 862-298-0970 (toll International). To listen live via webcast or to hear a rebroadcast, please go to the Company's website at www.EvolutionPetroleum.com.

A replay will be available two hours after the end of the conference call through June 9, 2019 and will be accessible by calling 877-481-4010 (toll-free United States & Canada); 919-882-2331 (toll International) with the replay pin number of 46952.

Upcoming Investor Conferences

The following is a list of conferences in which Evolution is scheduled to participate this Spring:

• Louisiana Energy Conference, New Orleans, May 29-30, 2019
• East Coast IDEAS Conference, Boston, June 12-13, 2019

About Evolution Petroleum

Evolution Petroleum Corporation is an oil and gas company focused on delivering a sustainable dividend yield to its shareholders through the ownership, management and development of oil and gas properties onshore in the United States. The Company's long-term goal is to build a diversified portfolio of oil and gas assets primarily through acquisition, while seeking opportunities to maintain and increase production through selective development, production enhancement and other exploitation efforts on its properties. Our largest current asset is our interest in a CO₂ enhanced oil recovery project in Louisiana's Delhi field. Additional information, including the Company's annual report on Form 10-K and its quarterly reports on Form 10-Q, is available on its website at www.EvolutionPetroleum.com.

Cautionary Statement

All forward-looking statements contained in this press release regarding potential results and future plans and objectives of the Company involve a wide range of risks and uncertainties. Statements herein using words such as 'believe,' 'expect,' 'plans,' 'outlook' and words of similar meaning are forward-looking statements. Although our expectations are based on business, engineering, geological, financial and operating assumptions that we believe to be reasonable, many factors could cause actual results to differ materially from our expectations and we can give no assurance that our goals will be achieved. These factors and others are detailed under the heading 'Risk Factors' and elsewhere in our periodic documents filed with the SEC. The Company undertakes no obligation to update any forward-looking statement.

Company Contact:

David Joe, SVP & CFO
[phone]
[e-mail]

Evolution Petroleum Corporation and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)

		Three Months Ended												Nine Months Ended
		March 31,								Dec. 31,				March 31,
		2019				2018				2018				2019				2018
Revenues
Crude oil		$	9,032,032			$	$9,639,238			$	10,515,875			$	30,945,359			$	27,654,128
Natural gas liquids			468,525				511,917				532,243				1,910,395				1,825,214
Natural gas			471				-				-				471				-
Total revenues			9,501,028				10,151,155				11,048,118				32,856,225				29,479,342
Operating costs
Production costs			3,793,008				3,262,192				3,452,168				10,703,606				8,791,695
Depreciation, depletion and amortization			1,558,130				1,383,148				1,603,633				4,710,223				4,580,161
General and administrative expenses *			1,196,935				1,842,548				1,258,570				3,760,767				5,078,508
Total operating costs			6,548,073				6,487,888				6,314,371				19,174,596				18,450,364
Income from operations			2,952,955				3,663,267				4,733,747				13,681,629				11,028,978
Other
Enduro transaction breakup fee			-				-				-				1,100,000				-
Interest and other income			65,831				21,345				59,858				172,260				52,036
Interest expense			(28,789	)			(30,525	)			(29,345	)			(87,479	)			(71,436	)
Income before income taxes			2,989,997				3,654,087				4,764,260				14,866,410				11,009,578
Income tax provision (benefit)			591,122				585,733				859,695				2,767,169				(4,076,156	)
Net income available to common stockholders		$	2,398,875			$	$3,068,354			$	3,904,565			$	12,099,241			$	15,085,734
Earnings per common share
Basic		$	0.07			$	0.09			$	0.12			$	0.36			$	0.46
Diluted		$	0.07			$	0.09			$	0.12			$	0.36			$	0.45
Weighted average number of common shares
Basic			33,186,665				33,171,514				33,167,159				33,151,786				33,123,185
Diluted			33,196,197				33,191,312				33,176,503				33,163,661				33,155,870

*General and administrative expenses for the three months ended March 31, 2019 and 2018 and December 31, 2018 included non-cash stock-based compensation expenses of $208,665, $352,420, and $254,111, respectively. For the nine months ended March 31, 2019 and 2018, non-cash stock-based compensation expenses were $678,149 and $1,324,230 respectively.

Evolution Petroleum Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited)

		March 31, 2019				June 30, 2018
Assets
Current assets
Cash and cash equivalents		$	29,550,385			$	24,929,844
Restricted cash			-				2,751,289
Receivables			3,687,016				3,941,916
Prepaid expenses and other current assets			679,871				524,507
Total current assets			33,917,272				32,147,556
Oil and natural gas property and equipment, net (full-cost method of accounting)			61,333,933				61,239,746
Other property and equipment, net			20,120				30,407
Total property and equipment			61,354,053				61,270,153
Other assets			220,190				244,835
Total assets		$	95,491,515			$	93,662,544
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	2,123,776			$	3,432,568
Accrued liabilities and other			571,009				874,886
State and federal income taxes payable			99,918				122,760
Total current liabilities			2,794,703				4,430,214
Long term liabilities
Senior secured credit facility (Note 13)			-				-
Deferred income taxes			11,189,060				10,555,435
Asset retirement obligations			1,533,083				1,387,416
Total liabilities			15,516,846				16,373,065
Commitments and contingencies (Note 14)
Stockholders' equity
Common stock; par value $0.001; 100,000,000 shares authorized; 33,186,665 and 33,080,543 shares issued and outstanding as of March 31, 2019 and June 30, 2018, respectively			33,186				33,080
Additional paid-in capital			42,297,050				41,757,645
Retained earnings			37,644,433				35,498,754
Total stockholders' equity			79,974,669				77,289,479
Total liabilities and stockholders' equity		$	95,491,515			$	93,662,544

Evolution Petroleum Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Unaudited)

		Nine Months Ended March 31,
		2019				2018
Cash flows from operating activities
Net income attributable to the Company		$	12,099,241			$	15,085,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization			4,721,590				4,622,361
Stock-based compensation			678,149				1,324,230
Deferred income tax expense (benefit)			633,625				(5,072,214	)
Changes in operating assets and liabilities:
Receivables			254,900				(1,223,271	)
Prepaid expenses and other current assets			(155,364	)			(294,973	)
Accounts payable and accrued expenses			123,853				73,678
Income taxes payable			(22,842	)			-
Net cash provided by operating activities			18,333,152				14,515,545
Cash flows from investing activities
Capital expenditures for oil and natural gas properties			(6,369,363	)			(1,668,820	)
Capital expenditures for other property and equipment			(2,337	)			(6,033	)
Net cash used in investing activities			(6,371,700	)			(1,674,853	)
Cash flows from financing activities
Cash dividends to common stockholders			(9,953,562	)			(8,286,486	)
Common share repurchases, including shares surrendered for tax withholding			(138,638	)			(395,550	)
Net cash used in financing activities			(10,092,200	)			(8,682,036	)
Net increase in cash, cash equivalents and restricted cash			1,869,252				4,158,656
Cash, cash equivalents and restricted cash, beginning of period			27,681,133				23,028,153
Cash, cash equivalents and restricted cash, end of period		$	29,550,385			$	27,186,809

Supplemental disclosures of cash flow information:		Nine Months Ended March 31,
		2019				2018
Income taxes paid		$	2,362,919			$	1,456,754
Non-cash transactions:
Change in accounts payable used to acquire property and equipment			(1,748,122	)			622,185
Oil and natural gas property costs incurred through recognition of asset retirement obligations			84,999				(778	)

Supplemental Information on Oil and Natural Gas Operations (Unaudited)

		Three Months Ended
		March 31, 2019				Dec. 31, 2018				Variance				Variance %
Oil and gas production:
Crude oil revenues		$	9,032,032			$	10,515,875			$	(1,483,843	)			(14.1	)%
NGL revenues			468,525				532,243				(63,718	)			(12.0	)%
Natural gas revenues			471				-				471			n.m.
Total revenues		$	9,501,028			$	11,048,118			$	(1,547,090	)			(14.0	)%
Crude oil volumes (Bbl)			152,776				163,361				(10,585	)			(6.5	)%
NGL volumes (Bbl)			28,626				23,701				4,925				20.8	%
Natural gas volumes (Mcf)			160				-				160			n.m.
Equivalent volumes (BOE)			181,429				187,062				(5,633	)			(3.0	)%
Crude oil (BOPD, net)			1,698				1,776				(78	)			(4.4	)%
NGLs (BOEPD, net)			318				258				60				23.3	%
Natural gas (BOEPD, net)		n.m.					-			n.m.				n.m.
Equivalent volumes (BOEPD, net)			2,016				2,034				(18	)			(0.9	)%
Crude oil price per Bbl		$	59.12			$	64.37			$	(5.25	)			(8.2	)%
NGL price per Bbl			16.37				22.46				(6.09	)			(27.1	)%
Natural gas price per Mcf			2.94				-				2.94			n.m.
Equivalent price per BOE		$	52.37			$	59.06			$	(6.69	)			(11.3	)%
CO2 costs		$	1,873,720			$	1,504,930			$	368,790				24.5	%
Other production costs			1,919,288				1,947,238				(27,950	)			(1.4	)%
Total production costs		$	3,793,008			$	3,452,168			$	340,840				9.9	%
CO2 costs per BOE		$	10.33			$	8.05			$	2.28				28.3	%
All other production costs per BOE			10.58				10.40				0.18				1.7	%
Production costs per BOE		$	20.91			$	18.45			$	2.46				13.3	%
CO2 volumes (Mcf, gross)			9,294,903				7,016,703				2,278,200				32.5	%
CO2 volumes (MMcf per day, gross)			103.3				76.3				27.0				35.4	%
DD&A of proved oil and gas properties		$	1,523,990			$	1,571,321			$	(47,331	)			(3.0	)%
Depreciation of other property and equipment			4,338				4,143				195				4.7	%
Amortization of intangibles			3,391				3,391				-				-	%
Accretion of asset retirement obligations			26,411				24,778				1,633				6.6	%
Total DD&A		$	1,558,130			$	1,603,633			$	(45,503	)			(2.8	)%
Oil and gas DD&A rate per BOE		$	8.40			$	8.40			$	-				-	%

n.m. Not meaningful.

Supplemental Information on Oil and Natural Gas Operations (Unaudited)

		Three Months Ended
		March 31, 2019				March 31, 2018				Variance				Variance %
Oil and gas production:
Crude oil revenues		$	9,032,032			$	9,639,238			$	(607,206	)			(6.3	)%
NGL revenues			468,525				511,917				(43,392	)			(8.5	)%
Natural gas revenues			471				-				471			n.m.
Total revenues		$	9,501,028			$	10,151,155			$	(650,127	)			(6.4	)%
Crude oil volumes (Bbl)			152,776				151,665				1,111				0.7	%
NGL volumes (Bbl)			28,626				17,926				10,700				59.7	%
Natural gas volumes (Mcf)			160				-				160			n.m.
Equivalent volumes (BOE)			181,429				169,591				11,838				7.0	%
Crude oil (BOPD, net)			1,698				1,685				13				0.8	%
NGLs (BOEPD, net)			318				199				119				59.8	%
Natural gas (BOEPD, net)		n.m.					-			n.m.				n.m.
Equivalent volumes (BOEPD, net)			2,016				1,884				132				7.0	%
Crude oil price per Bbl		$	59.12			$	63.56			$	(4.44	)			(7.0	)%
NGL price per Bbl			16.37				28.56				(12.19	)			(42.7	)%
Natural gas price per Mcf			2.94				-				2.94			n.m.
Equivalent price per BOE		$	52.37			$	59.86			$	(7.49	)			(12.5	)%
CO2 costs		$	1,873,720			$	1,459,349			$	414,371				28.4	%
Other production costs			1,919,288				1,802,843				116,445				6.5	%
Total production costs		$	3,793,008			$	3,262,192			$	530,816				16.3	%
CO2 costs per BOE		$	10.33			$	8.61			$	1.72				20.0	%
All other production costs per BOE			10.58				10.63				(0.05	)			(0.5	)%
Production costs per BOE		$	20.91			$	19.24			$	1.67				8.7	%
CO2 volumes (Mcf, gross)			9,294,903				6,816,453				2,478,450				36.4	%
CO2 volumes (MMcf per day, gross)			103.3				75.7				27.6				36.5	%
DD&A of proved oil and gas properties		$	1,523,990			$	1,353,340			$	170,650				12.6	%
Depreciation of other property and equipment			4,338				4,153				185				4.5	%
Amortization of intangibles			3,391				3,392				(1	)			-	%
Accretion of asset retirement obligations			26,411				22,263				4,148				18.6	%
Total DD&A		$	1,558,130			$	1,383,148			$	174,982				12.7	%
Oil and gas DD&A rate per BOE		$	8.40			$	7.98			$	0.42				5.3	%

Supplemental Information on Oil and Natural Gas Operations (Unaudited)

		Nine Months Ended March 31,
		2019				2018				Variance				Variance %
Oil and gas production:
Crude oil revenues		$	30,945,359			$	27,654,128			$	3,291,231				11.9	%
NGL revenues			1,910,395				1,825,214				85,181				4.7	%
Natural gas revenues			471				-				471			n.m.
Total revenues		$	32,856,225			$	29,479,342			$	3,376,883				11.5	%
Crude oil volumes (Bbl)			475,043				496,169				(21,126	)			(4.3	)%
NGL volumes (Bbl)			76,728				69,205				7,523				10.9	%
Natural gas volumes (Mcf)			160				-				160			n.m.
Equivalent volumes (BOE)			551,798				565,374				(13,576	)			(2.4	)%
Crude oil (BOPD, net)			1,734				1,811				(77	)			(4.3	)%
NGLs (BOEPD, net)			280				252				28				11.1	%
Natural gas (BOEPD, net)		n.m.					-			n.m.				n.m.
Equivalent volumes (BOEPD, net)			2,014				2,063				(49	)			(2.4	)%
Crude oil price per Bbl		$	65.14			$	55.74			$	9.40				16.9	%
NGL price per Bbl			24.90				26.37				(1.47	)			(5.6	)%
Natural gas price per Mcf			2.94				-				2.94			n.m.
Equivalent price per BOE		$	59.54			$	52.14			$	7.40				14.2	%
CO2 costs		$	4,862,502			$	3,813,192			$	1,049,310				27.5	%
Other production costs			5,841,104				4,978,503				862,601				17.3	%
Total production costs		$	10,703,606			$	8,791,695			$	1,911,911				21.7	%
CO2 costs per BOE		$	8.81			$	6.74			$	2.07				30.7	%
All other production costs per BOE			10.59				8.81				1.78				20.2	%
Production costs per BOE		$	19.40			$	15.55			$	3.85				24.8	%
CO2 volumes (Mcf, gross)			22,715,888				19,599,118				3,116,770				15.9	%
CO2 volumes (MMcf per day, gross)			82.9				71.5				11.4				15.9	%
DD&A of proved oil and gas properties		$	4,612,053			$	4,490,545			$	121,508				2.7	%
Depreciation of other property and equipment			12,624				12,578				46				0.4	%
Amortization of intangibles			10,173				10,173				-				-	%
Accretion of asset retirement obligations			75,373				66,865				8,508				12.7	%
Total DD&A		$	4,710,223			$	4,580,161			$	130,062				2.8	%
Oil and gas DD&A rate per BOE		$	8.36			$	7.94			$	0.42				5.3	%

SOURCE: Evolution Petroleum Corporation

View source version on accesswire.com:
https://www.accesswire.com/544606/Evolution-Petroleum-Announces-Results-for-Fiscal-2019-Third-Quarter-Ended-March-31-2019-and-Declares-Quarterly-Common-Stock-Dividend