Evolution Petroleum Closes Acquisition of Non-Operated Oil and Natural Gas Assets in New Mexico, Texas, and Louisiana
Evolution Petroleum (NYSE American: EPM) has completed its acquisition of non-operated oil and natural gas assets in New Mexico, Texas, and Louisiana for $9.0 million. The TexMex acquisition, effective February 1, 2025, was funded through cash and existing credit facility.
Key highlights include:
- Valuation at approximately 3.4x estimated next 12 months Adjusted EBITDA based on current strip pricing
- Addition of ~440 net BOEPD of stable, low-decline production (60% oil, 40% natural gas)
- Purchase price of $9.0 million versus ~$13 million of Proved Developed PV-10
The acquisition aims to enhance cash flow visibility and strengthen long-term dividend sustainability, while offering low-risk development upside for potential production growth.
Evolution Petroleum (NYSE American: EPM) ha completato l'acquisizione di asset petroliferi e di gas naturale non operativi in New Mexico, Texas e Louisiana per un valore di 9,0 milioni di dollari. L'acquisizione TexMex, effettiva dal 1° febbraio 2025, è stata finanziata tramite liquidità e linea di credito esistente.
Punti salienti:
- Valutazione pari a circa 3,4 volte l'Adjusted EBITDA stimato per i prossimi 12 mesi, basata sui prezzi correnti di mercato
- Aggiunta di circa 440 BOEPD netti di produzione stabile e a basso declino (60% petrolio, 40% gas naturale)
- Prezzo d'acquisto di 9,0 milioni di dollari rispetto a circa 13 milioni di PV-10 Proved Developed
L'acquisizione mira a migliorare la visibilità del flusso di cassa e a rafforzare la sostenibilità a lungo termine dei dividendi, offrendo al contempo un potenziale di sviluppo a basso rischio per la crescita della produzione.
Evolution Petroleum (NYSE American: EPM) ha completado la adquisición de activos petroleros y de gas natural no operados en Nuevo México, Texas y Luisiana por 9,0 millones de dólares. La adquisición TexMex, con vigencia desde el 1 de febrero de 2025, fue financiada mediante efectivo y una línea de crédito existente.
Puntos clave:
- Valoración de aproximadamente 3,4 veces el EBITDA ajustado estimado para los próximos 12 meses, basado en los precios actuales del mercado
- Adición de ~440 BOEPD netos de producción estable y de bajo declive (60% petróleo, 40% gas natural)
- Precio de compra de 9,0 millones de dólares frente a aproximadamente 13 millones de PV-10 Proved Developed
La adquisición busca mejorar la visibilidad del flujo de caja y fortalecer la sostenibilidad a largo plazo de los dividendos, al tiempo que ofrece un potencial de desarrollo de bajo riesgo para el crecimiento de la producción.
Evolution Petroleum (NYSE American: EPM)은 뉴멕시코, 텍사스, 루이지애나에 있는 비운영 석유 및 천연가스 자산을 900만 달러에 인수 완료했습니다. 2025년 2월 1일부로 발효된 TexMex 인수는 현금과 기존 신용 시설을 통해 자금 조달되었습니다.
주요 내용:
- 현재 선물 가격을 기준으로 향후 12개월 예상 조정 EBITDA의 약 3.4배 평가
- 안정적이고 저감소율의 약 440 순 BOEPD 생산량 추가 (석유 60%, 천연가스 40%)
- 구매 가격 900만 달러, 증명 개발 PV-10 약 1300만 달러 대비
이번 인수는 현금 흐름 가시성을 높이고 장기 배당 지속 가능성을 강화하는 동시에 잠재적 생산 성장에 대한 저위험 개발 기회를 제공합니다.
Evolution Petroleum (NYSE American : EPM) a finalisé l'acquisition d'actifs pétroliers et gaziers non exploités au Nouveau-Mexique, au Texas et en Louisiane pour un montant de 9,0 millions de dollars. L'acquisition TexMex, effective au 1er février 2025, a été financée par des liquidités et une facilité de crédit existante.
Points clés :
- Valorisation d'environ 3,4 fois l'EBITDA ajusté estimé pour les 12 prochains mois, basée sur les prix actuels du marché
- Ajout d'environ 440 BOEPD nets de production stable à faible déclin (60 % pétrole, 40 % gaz naturel)
- Prix d'achat de 9,0 millions de dollars contre environ 13 millions de PV-10 Proved Developed
Cette acquisition vise à améliorer la visibilité des flux de trésorerie et à renforcer la durabilité à long terme des dividendes, tout en offrant un potentiel de développement à faible risque pour une croissance potentielle de la production.
Evolution Petroleum (NYSE American: EPM) hat den Erwerb von nicht betriebenen Öl- und Erdgasanlagen in New Mexico, Texas und Louisiana für 9,0 Millionen US-Dollar abgeschlossen. Die TexMex-Akquisition, wirksam ab dem 1. Februar 2025, wurde durch Bargeld und eine bestehende Kreditfazilität finanziert.
Wichtige Highlights:
- Bewertung bei etwa dem 3,4-fachen des geschätzten bereinigten EBITDA der nächsten 12 Monate basierend auf aktuellen Strip-Preisen
- Hinzufügung von ca. 440 netto BOEPD stabiler, gering rückläufiger Produktion (60 % Öl, 40 % Erdgas)
- Kaufpreis von 9,0 Millionen US-Dollar gegenüber ca. 13 Millionen PV-10 Proved Developed
Die Akquisition zielt darauf ab, die Cashflow-Transparenz zu verbessern und die langfristige Nachhaltigkeit der Dividenden zu stärken, während sie gleichzeitig ein risikoarmes Entwicklungspotenzial für ein mögliches Produktionswachstum bietet.
- Purchase price represents significant discount to PV-10 value ($9M vs $13M)
- Adds 440 BOEPD of stable, low-decline production
- Attractive valuation at 3.4x estimated NTM Adjusted EBITDA
- Expected to be highly accretive to near and long-term cash flows
- Strengthens long-term dividend sustainability
- Increases debt level through credit facility borrowing
- Exposure to commodity price volatility
Insights
Evolution Petroleum's $9 million TexMex acquisition represents a strategically sound transaction that strengthens the company's dividend sustainability positioning. At
The transaction metrics are particularly compelling with a 3.4x multiple on next twelve months' estimated EBITDA based on current strip pricing. This is substantially below typical upstream acquisition multiples, which often range from 4-6x in the current market environment for similar assets.
The production profile enhances EPM's asset base quality with 440 BOEPD that carries a favorable 60/40 oil-to-gas ratio, improving the company's commodity mix toward higher-value oil. The low-decline nature of these assets is especially important for a dividend-focused entity like Evolution, as it provides more predictable cash flow streams with less capital reinvestment required.
The balanced funding approach using cash on hand and existing credit facility demonstrates financial discipline and avoids overleveraging the balance sheet. This transaction aligns perfectly with EPM's stated strategy of acquiring stable, long-life assets at attractive valuations to support sustainable dividend payments to shareholders, particularly valuable in today's volatile commodity price environment.
Transaction Remains Highly Accretive to Both Near and Long-Term Cash Flows
HOUSTON, April 14, 2025 (GLOBE NEWSWIRE) -- Evolution Petroleum Corporation (NYSE American: EPM) ("Evolution" or the "Company") today announced the closing of its previously announced acquisition of non-operated oil and natural gas assets located in New Mexico, Texas, and Louisiana (the "Acquisition", or "TexMex"). The total purchase price for the Acquisition is
Strategic Benefits of the Acquisition:
- Attractive valuation at ~3.4x estimated next 12 months (NTM) Adjusted EBITDA1 based on current strip pricing.
- Adds ~440 net BOEPD of stable, low-decline production (
60% oil and40% natural gas). - Provides enhanced cash flow visibility and strengthens long-term dividend sustainability.
- Offers low-risk development upside with potential for incremental production growth.
$9.0 million purchase price vs. ~$13 million of Proved Developed PV-102.2
Kelly Loyd, President and Chief Executive Officer, commented: "Despite recent commodity price and market volatility, our TexMex transaction remains highly accretive to both near-term and long-term cash flows and directly supports our core objective — preserving and enhancing the long-term sustainability of our dividend. Our negotiated deal represents a significant discount to PV10 at the current strip and, due to its low-decline nature, should only get better if oil prices move back up to a more normalized price range. TexMex is yet another execution of our proven strategy and represents exactly the kind of transaction that underpins Evolution's long-standing commitment to deliver a stable and sustainable dividend."
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. Visit www.evolutionpetroleum.com for more information.
Non-GAAP Disclosure
Certain financial information utilized by the Company are not measures of financial performance recognized by accounting principles generally accepted in the United States (“GAAP”).
Adjusted EBITDA is a non-GAAP financial measure used as a supplemental financial measure by management and external users of the Company's financial statements, such as investors, commercial banks, and others, to assess our operating performance as compared to that of other companies in our industry. We use these measures to assess our ability to incur and service debt and fund capital expenditures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The Company defines “Adjusted EBITDA” as net income (loss) plus interest expense, income tax expense (benefit), depreciation, depletion, and accretion (DD&A), stock-based compensation, ceiling test impairment, and other impairments, unrealized loss (gain) on change in fair value of derivatives, and other non-recurring or non-cash expense (income) items. The Company cannot provide a reconciliation of 2025E Adjusted EBITDA without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for reconciliation. These items are uncertain, depend on various factors and could have a material impact on GAAP reported results.
PV-10 is a non-GAAP financial measure that differs from a financial measure under GAAP known as “standardized measure of discounted future net cash flows” in that PV-10 is calculated without including future income taxes. The Company believes the presentation of PV-10 provides useful information because it is widely used by investors in evaluating oil and natural gas companies without regard to specific income tax characteristics of such entities. The Company also uses PV-10 when assessing the potential return on investment related to oil and natural gas properties and in evaluating acquisition opportunities. PV-10 is not intended to represent the current market value of the Company’s estimated proved reserves. PV-10 should not be considered in isolation or as a substitute for the standardized measure as defined under GAAP. The Company also presents PV-10 at strip pricing, which is PV-10 adjusted for price sensitivities. Since GAAP does not prescribe a comparable GAAP measure for PV-10 of reserves adjusted for pricing sensitivities, it is not practicable for the Company to reconcile PV-10 at strip pricing to a standardized measure or any other GAAP measure.
Cautionary Statement
All forward-looking statements contained in this press release regarding the Company's current and future expectations, potential results, and plans and objectives involve a wide range of risks and uncertainties. Statements herein using words such as "believe," "expect," "may," "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.
Contact
Investor Relations
(713) 935-0122
ir@evolutionpetroleum.com
___________________________________
1) Adjusted EBITDA is Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization and is a non-GAAP financial measure; see disclosures at the end of this release for more information. NTM Adjusted EBITDA multiple based on Company estimates and NYMEX strip pricing as of 4/11/25.
2) PV-10 is based on current NYMEX strip prices as of 4/11/25 and is a non-GAAP financial measure; see disclosures at the end of this release for more information.
This press release was published by a CLEAR® Verified individual.
FAQ
What is the value and location of Evolution Petroleum's (EPM) latest acquisition?
How much production will EPM's TexMex acquisition add to their portfolio?
What is the valuation multiple for EPM's TexMex acquisition?
How does EPM's acquisition purchase price compare to its PV-10 value?
How did Evolution Petroleum fund the TexMex acquisition?
