Evolution Petroleum Reports Fiscal Year 2023 Second Quarter Results and Declares Quarterly Cash Dividend for the Fiscal 2023 Third Quarter

Rhea-AI Summary

Evolution Petroleum (NYSE American:EPM) reported strong financial results for Q2 of fiscal 2023, with revenues of $33.7 million, net income of $10.4 million (or $0.31 per diluted share). Year-to-date revenues surged 78% and net income rose 75% compared to the previous year. Daily production reached 7,418 BOEPD, a 37% increase YOY. The company declared a quarterly cash dividend of $0.12 per share for Q3, marking a 60% increase from last year. Notably, Evolution eliminated all debt worth $12.3 million, enhancing liquidity to $53.7 million. The company aims to sustain dividend growth and evaluate potential acquisitions.

Positive

• Revenue increased 78% YOY to $73.5 million YTD.
• Net income rose 75% YOY to $21.1 million YTD.
• Quarterly cash dividend of $0.12 reflects a 60% increase from prior year.
• Adjusted EBITDA grew 79% YOY to $33.5 million YTD.
• Daily production increased 37% YOY to 7,418 BOEPD.
• Eliminated $12.3 million in debt, enhancing liquidity to $53.7 million.

Negative

• Quarterly revenue decreased 15% from the prior quarter.
• Oil revenue dropped 14% due to lower sales volumes and pricing.
• Natural gas revenue declined 12% as volumes and pricing fell.
• NGL revenue fell 33% due to decreased sales volumes and pricing.

HOUSTON, TX / ACCESSWIRE / February 7, 2023 / Evolution Petroleum (NYSE American:EPM) ("Evolution" or the "Company") today announced financial and operating results for its fiscal 2023 second quarter (the "current quarter") ended December 31, 2022. Evolution also declared a quarterly cash dividend of $0.12 per common share for the fiscal 2023 third quarter.

Key Highlights

• Recorded current quarter revenue of $33.7 million and net income of $10.4 million or $0.31 per diluted share;
  • Fiscal year to date ("YTD fiscal 2023") revenue and net income increased year-over-year ("YOY") 78% and 75%, respectively;
• Generated Adjusted EBITDA⁽¹⁾ of $16.4 million during the current quarter;
  • YTD fiscal 2023 Adjusted EBITDA grew 79% YOY to $33.5 million;
• YTD fiscal 2023 daily production was 7,418 BOEPD, or 37% higher YOY;
• Paid a quarterly dividend of $0.12 per common share for the current quarter - a 60% increase from the dividend paid during the second quarter of fiscal 2022;
• Eliminated all debt during the current quarter through the full repayment of $12.3 million of outstanding borrowings;
• $50 million availability under the senior secured credit facility;
• All operations, development capital expenditures, dividends, and debt reduction funded out of operating cash flow.

1. Adjusted EBITDA is Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization and is a non-GAAP financial measure; see "Non-GAAP Information" section later in this release for more information including reconciliations to the most comparable GAAP measures.

Kelly Loyd, President and Chief Executive Officer, commented, "We are pleased to report solid results for the second quarter of fiscal 2023. Our targeted portfolio of assets located in key prolific oil and natural gas producing regions in the onshore U.S. provide us with a strong platform for ongoing cash flow generation that is fully funding our operating and capital needs. As important, we paid off all outstanding borrowings under our credit facility incurred early in calendar 2022 to complete two major acquisitions and now have a debt-free balance sheet. Our increased liquidity enhances our ability to execute on our long-tenured return of shareholder capital program and continue to evaluate accretive acquisition opportunities."

Mr. Loyd added, "The benefits of our focused efforts to diversify, both geographically and by commodity mix, were on full display during the second quarter of fiscal 2023, highlighted by the premium natural gas price realized at our Jonah Field of $11.00 per MCF that helped raise company-wide natural gas realizations to $7.34 per MCF versus average Henry Hub pricing of $5.55 per MCF, over the same time period."

Mr. Loyd concluded, "With the payment in December of our 37^th consecutive quarterly cash dividend to our shareholders, the declaration of a $0.12 dividend for the next quarter and the completed repayment of borrowings on our credit facility, we continue to demonstrate our disciplined approach to maximizing total shareholder returns. In addition, we recently began making purchases through our share repurchase program to further implement our shareholder focus."

Cash Dividend on Common Stock

On February 6, 2023, Evolution's Board of Directors declared a cash dividend of $0.12 per share of common stock, which will be paid on March 31, 2023 to common stockholders of record on March 15, 2023. This will be the 38^th consecutive quarterly cash dividend on the Company's common stock, which has been paid since the quarter ended December 31, 2013. To date, Evolution has returned approximately $94.4 million, or $2.85 per share, back to stockholders in common stock dividends. Maintaining and ultimately growing the common stock dividend remains a key Company priority.

Financial and Operational Results for the Quarter Ended December 31, 2022

		Current Quarter			Current Quarter % Change From				Prior Quarter			Current Quarter % Change From				Year-Ago Quarter				Current YTD			Current YTD % Change From				Prior YTD
Average BOEPD			7,250			(5)	%			7,598			46	%			4,957				7,418			37	%			5,402
Revenues ($M)		$	33,676			(15)	%		$	39,797			51	%		$	22,339			$	73,473			78	%		$	41,218
Net Income ($M)		$	10,387			(3)	%		$	10,707			52	%		$	6,833			$	21,094			75	%		$	12,051
Adjusted Net Income(1) ($M)		$	9,646			(4)	%		$	10,075			41	%		$	6,833			$	19,721			64	%			12,051
Adjusted EBITDA(2) ($M)		$	16,446			(3)	%		$	17,005			62	%		$	10,182			$	33,451			79	%		$	18,697

1. Adjusted Net Income is a non-GAAP financial measure, see "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 "Non-GAAP Information" section later in this release for more information including reconciliations to the most comparable GAAP measures.

Total production for the second quarter of fiscal 2023 was 7,250 net BOEPD, including 1,804 barrels per day ("BOPD") of oil; 25,728 thousand cubic feet per day ("MCFPD"), or 4,294 BOEPD, of natural gas; and 1,152 BOEPD of natural gas liquids ("NGLs").

• The 1% decrease in oil production from 1,826 BOPD in the prior quarter was primarily due to downtime associated with severe winter storms in the current quarter.
• Natural gas production decreased 5% from 27,109 MCFPD, or 4,522 BOEPD, in the prior quarter primarily due to downtime associated with severe winter storms and slightly lower production in the Barnett Shale due to temporary issues at select compression stations and certain offset operator activities.
• NGL production decreased 8% from 1,250 BOEPD in the prior quarter primarily due to downtime associated with severe winter storms and slightly lower production in the Barnett Shale due to temporary issues at select compression stations and certain offset operator activities. Also contributing to the decrease was the decision to maximize natural gas production thus reducing NGL recoveries from Jonah Field during the current quarter to capitalize on higher relative natural gas pricing.

Evolution reported $33.7 million of total revenue for the current quarter, a 15% decrease from the prior quarter. Oil revenue decreased 14% to $13.1 million from the prior quarter due to 1% lower sales volumes and a 13% decrease in realized commodity pricing. Natural gas revenue decreased 12% to $17.4 million from the prior quarter due to 5% lower sales volumes and an 8% decrease in realized commodity pricing. NGL revenue decreased 33% to $3.2 million due to 8% lower sales volumes and a 27% decrease in realized pricing. The average realized price per BOE decreased 11% to $50.49 per BOE compared to $56.93 per BOE in the prior quarter.

Lease operating costs decreased 21% to $15.0 million from $19.1 million in the prior quarter. Primarily contributing to the decrease were changes in estimates from prior periods and lower ad valorem and production taxes associated with lower revenues in the current quarter. Also contributing to the decrease were lower workover expense in the Williston Basin and lower CO₂ costs at Delhi Field associated with the decrease in crude oil prices from the prior quarter.

Depletion, depreciation, and accretion ("DD&A") expense was $3.5 million compared to $3.6 million in the prior quarter. On a per BOE basis, the Company's depletion rate of $4.76 was essentially flat with the $4.75 depletion rate in the prior quarter.

The Company's general and administrative ("G&A") expenses were $2.6 million for the current quarter compared to $2.5 million in the prior quarter. The increase was primarily associated with higher non-cash stock-based compensation in the current quarter due to sign-on awards and additional one-time director grants that was partially offset by lower professional services fees compared to the prior quarter.

Net income for the current quarter was $10.4 million, or $0.31 per diluted share, compared to $10.7 million, or $0.32 per diluted share, in the prior quarter. Adjusted Net Income (see "Non-GAAP Information" section later in this release for a reconciliation of the GAAP to non-GAAP metric), was $9.6 million, or $0.28 per diluted share, compared to $10.1 million, or $0.30 per diluted share, in the prior quarter.

Adjusted EBITDA was $16.4 million for the current quarter compared to $17.0 million in the prior quarter. On a per BOE basis, Adjusted EBITDA was $24.66 for the current quarter versus $24.33 for the prior quarter.

Operations Update

Net production of the Jonah Field properties was 175 thousand barrels of oil equivalent ("MBOE") (950 million cubic feet ("MMCF") of natural gas) in the current quarter versus 181 MBOE (958 MMCF of natural gas) in the prior quarter. The average natural gas price per MCF realized by Evolution at the Jonah Field was $11.00 in the current quarter compared to $8.21 in the prior quarter, a 34% sequential increase primarily due to higher realized prices as a result of strong winter demand on the West Coast.

Net production of the Williston Basin properties was 45 MBOE (34 MBBL of oil) for the current quarter compared to 45 MBOE (37 MBBL of oil) in the prior quarter. The average oil price per barrel realized by Evolution at the Williston Basin during the current quarter was $82.31 compared to $90.76 during the prior quarter.

Net production of the Barnett Shale properties was 304 MBOE for the current quarter compared to 329 MBOE in the prior quarter. The average natural gas price per MCF realized by Evolution at Barnett Shale during the current quarter was $4.88 compared to $7.81 during the prior quarter.

Hamilton Dome Field oil production was 38 MBOE in the current quarter versus 38 MBOE in the prior quarter. The average oil price per barrel realized by Evolution at Hamilton Dome Field during the current quarter was $66.49 compared to $78.37 during the prior quarter, a decrease of 15%.

Net production at Delhi Field in the current quarter was 104 MBOE compared to 105 MBOE in the prior quarter. The average oil price per barrel realized by Evolution at Delhi Field during the current quarter was $83.50 compared to $93.31 during the prior quarter. The average realized NGL price per barrel was $32.15 compared to $40.91 during the prior quarter.

Balance Sheet, Liquidity and Capital Spending

At December 31, 2022, cash and cash equivalents totaled $3.7 million and working capital was $2.9 million. During the second quarter of fiscal 2023, Evolution fully repaid the remaining $12.3 million of debt outstanding under its revolving credit facility, which has a borrowing base of $50.0 million. As a result, total liquidity at December 31, 2022 was $53.7 million, including cash and cash equivalents. This represents an increase in liquidity of 45% since June 30, 2022.

During the second quarter of fiscal 2023, the Company fully funded operations, development capital expenditures, cash dividends, and debt repayment through cash generated from operations and working capital.

For the three months ended December 31, 2022, Evolution paid $4.1 million in common stock dividends and incurred $1.1 million in development capital expenditures. For fiscal 2023, the Company continues to expect development capital expenditures collectively across its existing portfolio of properties to range between $6.5 million to $9.5 million. These expenditures include anticipated capital costs at Delhi field for a NGL plant heat exchanger project, projected to improve operational efficiency throughout the year, which is currently underway. Evolution's expected capital expenditures for fiscal year 2023 also include participating in the drilling of two sidetrack locations targeting the Birdbear formation and recompleting up to four vertical wells in the Williston Basin, but do not include any capital expenditures for drilling in the Pronghorn and Three Forks locations in the Williston Basin at this time. We continue to evaluate those potential drilling locations with the operator.

Evolution believes its near-term capital spending requirements will be met from cash flows from operations and current working capital, as well as from borrowings under its revolving credit facility as needed.

Conference Call

As previously announced, Evolution Petroleum will host a conference call on Wednesday, February 8, 2023 at 2:00 p.m. Eastern (1:00 p.m. Central) to discuss its second quarter fiscal 2023 results and outlook. To access the call, please dial 1-877-270-2148 (Toll-free) or 1-412-902-6510 (International). Participants should ask to be joined into the Evolution Petroleum Corporation call. To listen live via webcast, click the link https://event.choruscall.com/mediaframe/webcast.html?webcastid=5m8kN1QH or go to the Company's website at www.evolutionpetroleum.com. A webcast replay will be available on Evolution's website under "Investors" on the "Presentations & Events" page following the call or via the webcast link listed above. The replay will be available through February 8, 2024.

About Evolution Petroleum

Evolution Petroleum Corporation is an independent energy company focused on maximizing total returns to its shareholders through the ownership of and investment in onshore oil and natural gas properties in the United States. The Company's long-term goal is to maximize total shareholder return from a diversified portfolio of long-life oil and natural gas properties built through acquisition and through selective development opportunities, production enhancement, and other exploitation efforts on its oil and natural gas properties. Properties include non-operated interests in the following areas: the Jonah Field in Sublette County, Wyoming, a natural gas and natural gas liquids producing field; the Williston Basin in North Dakota, a producing oil and natural gas property; the Barnett Shale located in North Texas, a natural gas and natural gas liquids producing property; the Hamilton Dome Field located in Hot Springs County, Wyoming, a secondary oil recovery field utilizing water injection wells to pressurize the reservoir; the Delhi Holt-Bryant Unit in the Delhi Field in Northeast Louisiana, a CO₂ enhanced oil recovery project; as well as small overriding royalty interests in four onshore Texas wells. 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 http://www.evolutionpetroleum.com.

Cautionary Statement

All forward-looking statements contained in this press release regarding current expectations, 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," "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 and can give no assurance that its goals will be achieved. These factors and others are detailed under the heading "Risk Factors" and elsewhere in our periodic documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement.

Company Contacts

Kelly Loyd, President and Chief Executive Officer
Ryan Stash, Senior Vice President & Chief Financial Officer
(713) 935-0122
KLoyd@evolutionpetroleum.com
RStash@evolutionpetroleum.com

Evolution Petroleum Corporation
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)

	Three Months Ended									Six Months Ended
	December 31,						September 30,			December 31,
	2022			2021			2022			2022			2021
Revenues
Crude oil	$	13,100		$	10,582		$	15,163		$	28,263		$	19,441
Natural gas		17,370			9,170			19,848			37,218			14,628
Natural gas liquids		3,206			2,587			4,786			7,992			7,149
Total revenues		33,676			22,339			39,797			73,473			41,218
Operating costs
Lease operating costs		15,041			10,671			19,116			34,157			19,296
Depletion, depreciation, and accretion		3,458			1,224			3,598			7,056			2,752
General and administrative expenses		2,581			1,823			2,472			5,053			3,763
Total operating costs		21,080			13,718			25,186			46,266			25,811
Income (loss) from operations		12,596			8,621			14,611			27,207			15,407
Other income and expenses
Net gain (loss) on derivative contracts		846			-			(603	)		243			-
Interest and other income		7			7			6			13			10
Interest expense		(129	)		(51	)		(243	)		(372	)		(102	)
Income (loss) before income taxes		13,320			8,577			13,771			27,091			15,315
Income tax (expense) benefit		(2,933	)		(1,744	)		(3,064	)		(5,997	)		(3,264	)
Net income (loss)	$	10,387		$	6,833		$	10,707		$	21,094		$	12,051
Net income (loss) per common share:
Basic	$	0.31		$	0.20		$	0.32		$	0.63		$	0.36
Diluted	$	0.31		$	0.20		$	0.32		$	0.62		$	0.36
Weighted average number of common shares outstanding:
Basic		33,174			32,929			33,134			33,154			32,896
Diluted		33,394			33,262			33,319			33,356			33,193

Evolution Petroleum Corporation
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share amounts)

		December 31, 2022				June 30, 2022
Assets
Current assets
Cash and cash equivalents		$	3,710			$	8,280
Receivables from crude oil, natural gas, and natural gas liquids revenues			18,213				24,043
Derivative contract assets			244				170
Prepaid expenses and other current assets			1,908				3,875
Total current assets			24,075				36,368
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			106,227				110,508
Other assets, net			1,358				1,171
Total assets		$	131,660			$	148,047
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	10,091			$	15,133
Accrued liabilities and other			9,883				11,893
Derivative contract liabilities			49				2,164
State and federal taxes payable			1,151				1,095
Total current liabilities			21,174				30,285
Long term liabilities
Senior secured credit facility			-				21,250
Deferred income taxes			6,744				7,099
Asset retirement obligations			14,455				13,899
Operating lease liability			149				-
Total liabilities			42,522				72,533
Commitments and contingencies
Stockholders' equity
Common stock; par value $0.001; 100,000,000 shares authorized: issued and
outstanding 33,808,233 and 33,470,710 shares as of December 31, 2022
and June 30, 2022, respectively			34				33
Additional paid-in capital			43,243				42,629
Retained earnings			45,861				32,852
Total stockholders' equity			89,138				75,514
Total liabilities and stockholders' equity		$	131,660			$	148,047

Evolution Petroleum Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

	Three Months Ended									Six Months Ended
	December 31,						September 30,			December 31,
	2022			2021			2022			2022			2021
Cash flows from operating activities:
Net income (loss)	$	10,387		$	6,833		$	10,707		$	21,094		$	12,051
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation, and accretion		3,458			1,224			3,598			7,056			2,752
Stock-based compensation		494			330			208			702			528
Settlement of asset retirement obligations		(64	)		-			(7	)		(71	)		-
Deferred income taxes		(319	)		65			(36	)		(355	)		(54	)
Unrealized (gain) loss on derivative contracts		(1,070	)		-			(1,119	)		(2,189	)		-
Accrued settlements on derivative contracts		(699	)		-			(220	)		(919	)		-
Other		4			(3	)		(8	)		(4	)		(7	)
Changes in operating assets and liabilities:
Receivables from crude oil, natural gas, and natural gas liquids revenues		1,309			3,364			6,804			8,113			(4,253	)
Prepaid expenses and other current assets		(349	)		76			33			(316	)		185
Accounts payable and accrued liabilities		(225	)		(2,518	)		(5,173	)		(5,398	)		2,122
State and federal income taxes payable		(2,522	)		(1,070	)		2,578			56			569
Net cash provided by operating activities		10,404			8,301			17,365			27,769			13,893
Cash flows from investing activities:
Acquisition of oil and natural gas properties		-			-			(31	)		(31	)		-
Capital expenditures for oil and natural gas properties		(1,038	)		(136	)		(1,848	)		(2,886	)		(526	)
Net cash used in investing activities		(1,038	)		(136	)		(1,879	)		(2,917	)		(526	)
Cash flows from financing activities:
Common stock dividends paid		(4,059	)		(2,523	)		(4,026	)		(8,085	)		(5,045	)
Common stock repurchases, including stock surrendered for tax withholding		(61	)		-			(26	)		(87	)		(2	)
Repayments of senior secured credit facility		(12,250	)		-			(9,000	)		(21,250	)		-
Net cash used in financing activities		(16,370	)		(2,523	)		(13,052	)		(29,422	)		(5,047	)
Net increase (decrease) in cash and cash equivalents		(7,004	)		5,642			2,434			(4,570	)		8,320
Cash and cash equivalents, beginning of period		10,714			7,955			8,280			8,280			5,277
Cash and cash equivalents, end of period	$	3,710		$	13,597		$	10,714		$	3,710		$	13,597

Evolution Petroleum Corporation
Non-GAAP Reconciliation - Adjusted EBITDA (Unaudited)
(In thousands)

Adjusted EBITDA and Net income (loss) and earnings per share excluding selected items are non-GAAP financial measures that are used as supplemental financial measures by our management and by external users of our financial statements, such as investors, commercial banks, and others, to assess our operating performance as compared to that of other companies in our industry, without regard to financing methods, capital structure, or historical costs basis. We use these measures to assess our ability to incur and service debt and fund capital expenditures. Our Adjusted EBITDA and Net income (loss) and earnings per share excluding selected items should not be considered alternatives to net income (loss), operating income (loss), cash flows provided by (used in) operating activities, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Our Adjusted EBITDA and Net income (loss) and earnings per share excluding selected items may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDA and Net income (loss) and earnings per share excluding selected items in the same manner.

We define 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.

	Three Months Ended									Six Months Ended
	December 31,						September 30,			December 31,
	2022			2021			2022			2022			2021
Net income (loss)	$	10,387		$	6,833		$	10,707		$	21,094		$	12,051
Adjusted by:
Interest expense		129			51			243			372			102
Income tax expense (benefit)		2,933			1,744			3,064			5,997			3,264
Depletion, depreciation, and accretion		3,458			1,224			3,598			7,056			2,752
Stock-based compensation		494			330			208			702			528
Unrealized loss (gain) on derivative contracts		(1,070	)		-			(1,119	)		(2,189	)		-
Severance		-			-			74			74			-
Transaction costs		115			-			230			345			-
Adjusted EBITDA	$	16,446		$	10,182		$	17,005		$	33,451		$	18,697

Evolution Petroleum Corporation
Non-GAAP Reconciliation - Adjusted Net Income (Unaudited)
(In thousands, except per share amounts)

	Three Months Ended									Six Months Ended
	December 31,						September 30,			December 31,
	2022			2021			2022			2022			2021
As Reported:
Net income (loss), as reported	$	10,387		$	6,833		$	10,707		$	21,094		$	12,051
Impact of Selected Items:
Unrealized loss (gain) on commodity contracts		(1,070	)		-			(1,119	)		(2,189	)		-
Severance		-			-			74			74			-
Transaction costs		115			-			230			345			-
Selected items, before income taxes	$	(955	)	$	-		$	(815	)	$	(1,770	)	$	-
Income tax effect of selected items(1)		(214	)		-			(183	)		(397	)		-
Selected items, net of tax	$	(741	)	$	-		$	(632	)	$	(1,373	)	$	-
As Adjusted:
Net income (loss), excluding selected items (2)	$	9,646		$	6,833		$	10,075		$	19,721		$	12,051
Undistributed earnings allocated to unvested restricted stock		(151	)		(143	)		(104	)		(256	)		(245	)
Net income (loss), excluding selected items for earnings per share calculation	$	9,495		$	6,690		$	9,971		$	19,465		$	11,806
Net income (loss) per common share - Basic, as reported	$	0.31		$	0.20		$	0.32		$	0.63		$	0.36
Impact of selected items		(0.02	)		-			(0.02	)		(0.04	)		-
Net income (loss) per common share - Basic, excluding selected items (2)	$	0.29		$	0.20		$	0.30		$	0.59		$	0.36
Net income (loss) per common share - Diluted, as reported	$	0.31		$	0.20		$	0.32		$	0.62		$	0.36
Impact of selected items		(0.03	)		-			(0.02	)		(0.04	)		-
Net income (loss) per common share - Diluted, excluding selected items (2)(3)	$	0.28		$	0.20		$	0.30		$	0.58		$	0.36

1. For the three and six months ended December 31, 2022, represents the tax impact using an estimated tax rate of 22.4%. For the three months ended September 30, 2022, represents the tax impact using an estimated tax rate of 22.5%.
2. Net income (loss) and earnings per share excluding selected items are non-GAAP financial measures presented as supplemental financial measures to enable a user of the financial information to understand the impact of these items on reported results. These financial measures should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Our Adjusted Net Income (Loss) and earnings per share may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted Net Income (Loss) and earnings per share in the same manner.
3. The impact of selected items for the three and six months ended December 31, 2022 was calculated based upon weighted average diluted shares of 33.4 million due to the net income (loss), excluding selected items. The impact of selected items for the three months ended September 30, 2022 was calculated based upon weighted average diluted shares of 33.3 million due to the net income (loss), excluding selected items. The impact of selected items for the three and six months ended December 31, 2021 were calculated based upon weighted average diluted shares of 33.3 million and 33.2 million, respectively, due to the net income (loss), excluding selected items.

Evolution Petroleum Corporation
Supplemental Information on Oil and Natural Gas Operations (Unaudited)
(In thousands, except per unit and per BOE amounts)

	Three Months Ended									Six Months Ended
	December 31,						September 30,			December 31,
	2022			2021			2022			2022			2021
Revenues:
Crude oil	$	13,100		$	10,582		$	15,163		$	28,263		$	19,441
Natural gas		17,370			9,170			19,848			37,218			14,628
Natural gas liquids		3,206			2,587			4,786			7,992			7,149
Total revenues	$	33,676		$	22,339		$	39,797		$	73,473		$	41,218
Lease operating costs:
CO2 costs	$	2,007		$	1,897		$	2,199		$	4,206		$	2,814
Ad valorem and production taxes		2,096			1,292			3,263			5,359			2,519
Other lease operating costs		10,938			7,482			13,654			24,592			13,963
Total lease operating costs	$	15,041		$	10,671		$	19,116		$	34,157		$	19,296
Depletion of full cost proved oil and gas properties	$	3,178		$	1,118		$	3,322		$	6,500		$	2,544
Production:
Crude oil (MBBL)		166			150			168			334			284
Natural gas (MMCF)		2,367			1,823			2,494			4,861			3,299
Natural gas liquids (MBBL)		106			2			115			221			160
Equivalent (MBOE)(1)		667			456			699			1,365			994
Average daily production (BOEPD)(1)		7,250			4,957			7,598			7,418			5,402
Average price per unit(2):
Crude oil (BBL)	$	78.92		$	70.55		$	90.26		$	84.62		$	68.45
Natural gas (MCF)		7.34			5.03			7.96			7.66			4.43
NGL (BBL)		30.25			1,293.50			41.62			36.16			44.68
Equivalent (BOE)(1)	$	50.49		$	48.99		$	56.93		$	53.83		$	41.47
Average cost per unit:
CO2 costs	$	3.01		$	4.16		$	3.15		$	3.08		$	2.83
Ad valorem and production taxes		3.14			2.83			4.67			3.93			2.53
Other lease operating costs		16.40			16.41			19.53			18.02			14.05
Total lease operating costs	$	22.55		$	23.40		$	27.35		$	25.03		$	19.41
Depletion of full cost proved oil and gas properties	$	4.76		$	2.45		$	4.75		$	4.76		$	2.56
CO2 costs per MCF	$	1.01		$	0.92		$	1.11		$	1.06		$	0.89
CO2 volumes (MMCF per day, gross)		90.7			94.3			90.0			90.4			71.7

1. Equivalent oil reserves are defined as six MCF of natural gas and 42 gallons of NGLs to one barrel of oil conversion ratio which reflects energy equivalence and not price equivalence. Natural gas prices per MCF and NGL prices per barrel often differ significantly from the equivalent amount of oil.
2. Amounts exclude the impact of cash paid or received on the settlement of derivative contracts since we did not elect to apply hedge accounting.

Evolution Petroleum Corporation
Summary of Production Volumes, Average Sales Price and Average Production Costs (Unaudited)

	Three Months Ended
	December 31,												September 30,
	2022						2021						2022
	Volume			Price			Volume			Price			Volume			Price
Production:
Crude oil (MBBL)
Jonah Field		9		$	85.21			-		$	-			9		$	94.00
Williston Basin		34			82.31			-			-			37			90.76
Barnett Shale		2			78.11			2			62.00			1			141.00
Hamilton Dome Field		38			66.49			39			62.95			38			78.37
Delhi Field		82			83.50			92			75.05			82			93.31
Other		1			84.31			17			57.74			1			107.49
Total		166		$	78.92			150		$	70.55			168		$	90.26
Natural gas (MMCF)
Jonah Field		950		$	11.00			-		$	-			958		$	8.21
Williston Basin		26			5.15			-			-			18			7.33
Barnett Shale		1,390			4.88			1,813			5.05			1,518			7.81
Other		1			5.95			10			1.20			-			-
Total		2,367		$	7.34			1,823		$	5.03			2,494		$	7.96
Natural gas liquids (MBBL)
Jonah Field		7		$	34.31			-		$	-			12		$	42.00
Williston Basin		7			28.54			-			-			5			42.60
Barnett Shale		70			29.40			(18	)		(100.22	)		75			41.71
Delhi Field		22			32.15			17			43.29			23			40.91
Other		-			-			3			16.00			-			-
Total		106		$	30.25			2		$	1,293.50			115		$	41.62
Equivalent (MBOE) (1)
Jonah Field		175		$	65.75			-		$	-			181		$	50.89
Williston Basin		45			69.36			-			-			45			82.29
Barnett Shale		304			29.62			286			38.74			329			45.96
Hamilton Dome Field		38			66.49			39			62.95			38			78.37
Delhi Field		104			72.38			109			70.10			105			83.04
Other		1			-			22			48.89			1			65.00
Total		667		$	50.49			456		$	48.99			699		$	56.93
Average daily production (BOEPD) (1)
Jonah Field		1,902						-						1,967
Williston Basin		489						-						489
Barnett Shale		3,304						3,109						3,576
Hamilton Dome Field		413						424						413
Delhi Field		1,131						1,185						1,153
Other		11						239						-
Total		7,250						4,957						7,598
Production costs (in thousands, except per BOE)
Lease operating costs	Amount			per BOE			Amount			per BOE			Amount			per BOE
Jonah Field	$	3,042		$	17.41		$	-		$	-		$	2,864		$	15.82
Williston Basin		1,306			29.11			-			-			1,490			33.11
Barnett Shale		5,196			17.13			5,368			18.77			8,853			26.91
Hamilton Dome Field		1,344			35.82			1,478			37.90			1,463			38.50
Delhi Field		4,153			39.79			3,825			35.08			4,446			42.34
Total	$	15,041		$	22.55		$	10,671		$	23.40		$	19,116		$	27.35

1. Equivalent oil reserves are defined as six MCF of natural gas and 42 gallons of NGLs to one barrel of oil conversion ratio which reflects energy equivalence and not price equivalence. Natural gas prices per MCF and NGL prices per barrel often differ significantly from the equivalent amount of oil.

Evolution Petroleum Corporation
Financial Commodity Derivative Positions
As of December 31, 2022

							Weighted Average			Weighted Average
				Volumes in			Floor Price per			Ceiling Price per
Period	Instrument	Commodity		MMBTU/BBL			MMBTU/BBL			MMBTU/BBL
January 2023 - February 2023	Collar	Natural Gas			214,931		$	3.75		$	7.30
January 2023 - March 2023	Collar	Natural Gas			220,875			5.25			7.50
January 2023 - February 2023	Collar	Crude Oil			29,995			70.00			87.50

SOURCE: Evolution Petroleum Corporation

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FAQ

What were Evolution Petroleum's Q2 results for fiscal 2023?

Evolution Petroleum reported $33.7 million in revenue and $10.4 million net income for Q2 fiscal 2023.

How much is the dividend for Evolution Petroleum in Q3 2023?

The declared cash dividend for Q3 2023 is $0.12 per share.

What is the production increase rate reported by Evolution Petroleum?

Evolution Petroleum reported a 37% increase in daily production, reaching 7,418 BOEPD.

How does Evolution Petroleum's debt situation look after Q2 fiscal 2023?

Evolution Petroleum eliminated all its debt of $12.3 million, resulting in a debt-free balance sheet.

What is the year-to-date performance of Evolution Petroleum?

Year-to-date, Evolution Petroleum's revenue increased by 78% and net income rose by 75% compared to the previous year.