EVOLUTION PETROLEUM CORP
For the period ended Jun 30, 2025. Filed Sep 17, 2025.
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FY2025 · Filed Sep 17, 2025
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Executive Overview
General
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. In support of that objective, our long-term goal is to maximize total shareholder return from a diversified portfolio of long-life oil and natural gas properties built through acquisitions and through selective development opportunities, production enhancements, and other exploitation efforts on our oil and natural gas properties.
Our oil and natural gas properties consist primarily of non-operated interests in the following areas (as well assmall overriding royalty interests in four onshore central Texas wells):
| ● | Our non-operated interest in TexMex consists of oil and natural gas producing properties where we hold an approximate 42% net working interest and 35% average net revenue interest located on approximately 27,800 gross (11,200 net) acres (all held by production) primarily in Lea, Eddy and Chaves Counties, New Mexico and Stephens County, Texas. The oil and natural gas properties are operated by Texian Operating Company. |
| ● | Our non-operated interests in the SCOOP and STACK plays, consist of oil and natural gas producing properties in the Anadarko basin, where we hold approximately 2.6% average net working interest and approximately 2.0% average net revenue interests located on approximately 103,700 gross (4,200 net) acres (approximately 97% held by production) across Blaine, Canadian, Carter, Custer, Dewey, Garvin, Grady, Kingfisher, McClain, Murray, and Stephens counties in Oklahoma. The oil and natural gas properties are operated by Continental Resources, Inc., Ovintiv USA Inc. and EOG Resources, Inc. with approximately 40% of wells operated by other operators. |
| ● | Our non-operated interests in the Chaveroo Field consist of a 50% net working interest, with an average associated 41% revenue interest, in approximately 4,500 gross (2,300 net) acres all held by production, associated with six development blocks, with the right to acquire the same working interest in additional development locations and associated acreage at a fixed price. The field is operated by PEDEVCO Corp. (“PEDEVCO”). |
| ● | Our non-operated interests in the Jonah Field, a natural gas and NGL property in Sublette County, Wyoming, consist of approximately 20% average net working interest and approximately 15% average net revenue interest located on approximately 5,300 gross (950 net) acres all held by production. The properties are operated by Jonah Energy. |
| ● | Our non-operated interests in the Williston Basin, an oil and natural gas producing property, consist of approximately 39% average net working interest and approximately 33% average net revenue interest located on approximately 138,200 gross (41,300 net) acres (approximately 97% held by production) across Billings, Golden Valley, and McKenzie Counties in North Dakota. The properties are operated by Foundation Energy Management. |
| ● | Our non-operated interests in the Barnett Shale, a natural gas and NGL producing shale reservoir, consist of approximately 17% average net working interest and approximately 14% average net revenue interest (inclusive of small overriding royalty interests). The approximately 123,800 gross (21,000 net) acres are held by |
production across nine North Texas counties. The oil and natural gas properties are primarily operated by Diversified Energy Company with approximately 10% of wells operated by six other operators.
| ● | Our non-operated interests in the Hamilton Dome Field, a secondary recovery field utilizing water injection wells to pressurize the reservoir, consist of approximately 24% average net working interest, with an associated 20% average net revenue interest (inclusive of a small overriding royalty interest). The 5,900 gross acre unitized field, of which we hold approximately 1,400 net acres, is operated by Merit Energy Company, who owns the majority of the remaining working interest in the Hamilton Dome Field. The Hamilton Dome Field is located in the southwest region of the Big Horn Basin in northwest Wyoming. |
| ● | Our non-operated interests in the Delhi Field, a CO2-EOR project, consist of approximately 24% average net working interest, with an associated 19% revenue interest and separate overriding royalty and mineral interests of approximately 7% yielding a total average net revenue interest of approximately 26%. The field is operated by Denbury Onshore LLC, a subsidiary of Exxon Mobil Corporation. The 13,600 gross acre unitized Delhi Field, of which we hold approximately 3,200 acres, is located in northeast Louisiana in Franklin, Madison, and Richland Parishes. |
Recent Developments
On September 11, 2025, Evolution’s Board of Directors approved and declared a quarterly dividend of $0.12 per common share payable September 30, 2025.
On August 4, 2025, we completed the acquisition of certain mineral and royalty interests in the SCOOP/STACK area of Oklahoma from a non-affiliated private seller (the “Minerals Acquisition”) in a cash transaction valued at approximately $17.0 million, subject to customary post-closing adjustments. The Minerals Acquisition has an effective date of May 1, 2025. We funded the purchase price for the Minerals Acquisition with a combination of $15.0 million in borrowings under our Senior Secured Credit Facility and cash on hand. The acquired assets includean average royalty interest of 0.6% located onapproximately 5,500 net royalty acres located primarily in Grady and Canadian Counties, Oklahoma.
Senior Secured Credit Facility
On June 30, 2025, we entered into an amended and restated senior secured reserve-based credit agreement (the “Senior Secured Credit Facility”) with MidFirst Bank, as administrative agent for the lenders party thereto, in an amount up to $200.0 million with an initial borrowing base of $65.0 million maturing on June 30, 2028. Refer to “Liquidity and Capital Resources” below for a further discussion.
Purchase of Non-operated Oil and Natural Gas Assets
On April 14, 2025, we closed the acquisition of non-operating working interests in certain long-life oil and natural gas wells located primarily in Lea, Eddy and Chaves Counties, New Mexico and Stephens County, Texas (the “TexMex Acquisition”) from a private seller. The total purchase price for the TexMex Acquisition was approximately $9.0 million before customary post-closing adjustments, with an effective date of February 1, 2025. We funded the purchase price for the TexMex Acquisition with a combination of cash on hand and borrowings under our Senior Secured Credit Facility. The TexMex Acquisition includes an average working interest of 42% and an average revenue interest of 35% in approximately 600 wells.
At-the-Market (“ATM”) Equity Sales Program
On October 21, 2024, we entered into an ATM equity Sales Agreement (the “ATM Sales Agreement”) with Roth Capital Partners, LLC (the “Lead Agent”), Northland Securities Inc., and A.G.P./Alliance Global Partners pursuant to which we
may issue and sell, from time to time, up to $30.0 million of shares of common stock through or to the Lead Agent, acting as agent or principal. For the year ended June 30, 2025, we sold a total of approximately 0.7 million shares of our common stock under the ATM Sales Agreement for net proceeds of approximately $3.5 million, after deducting $0.3 million in offering costs. We intend to use the net proceeds from any sales of common stock for general corporate purposes, including to repay outstanding indebtedness.
Proved Reserves
The following table is a summary of our proved reserves as of June 30, 2025 and 2024:
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| · · Proved Reserves · · · · | ||||||||||
| · 2025 · · 2024 · · Change | ||||||||||
| Proved Reserves MMBOE | | | 27.1 | | | | 31.8 | | | (14.8)% |
| % Developed | | | 83.7% | | | 75.6% | | 8.1% | ||
| Liquids % | | | 62.2% | | | 59.1% | | 3.1% | ||
| Standardized Measure ($MM) | | $155.2 | | | $166.6 | | | (6.8)% | ||
Proved oil equivalent reserves as of June 30, 2025 were 27.1 MMBOE, a 4.7 MMBOE, or 14.8%, decrease from the previous year of 31.8 MMBOE. The net decrease in total proved reserves was primarily due to net negative revisions of 6.0 MMBOE and production roll-off of 2.6 MMBOE. These decreases were partially offset by 3.0 MMBOE of proved reserves purchased in the TexMex Acquisition as well as extensions of 0.9 MMBOE primarily at Chaveroo Field and SCOOP/STACK. Approximately 1.6 MMBOE of downward revisions were in our oil reserves and 4.4 MMBOE of downward revisions were in our natural gas and NGL reserves. Proved oil reserves declined primarily due to a decrease in the SEC trailing 12-month oil price of 10.4% from the prior fiscal year and drop-off of Williston Basin PUDs due to timing of future drilling plans. Natural gas and natural gas liquids reserves decreased due to a combination of lower price differentials received, specifically at Jonah Field, an increase in lease operating costs at our Barnett Shale properties, and drop-off of the Williston Basin PUDs due to timing of future drilling plans. These metrics impacted the late-in-life economic limits for oil, natural gas, and NGL production.
The Standardized Measure for proved reserves decreased 6.8% to $155.2 million, primarily due to volumes produced and sold and our overall downward revisions in proved reserves as discussed above. Oil prices decreased 10.4% from the prior year when oil was $79.45 per barrel compared to $71.20 per barrel at June 30, 2025. While the SEC price for natural gas increased 23.7% from $2.32 per MMBtu of natural gas at June 30, 2024 to $2.87 per MMBtu of natural gas at June 30,2025, certain changes in other metrics such as lower price differentials caused our natural gas and natural gas liquids reserves to decrease, as stated above. Our proved reserves consist of 45% oil, 38% natural gas, and 17% NGLs; 83.7% are classified as proved developed and 16.3% are proved undeveloped.
Additional property and project information is included under Item 1.* Business* and in Note 4,“Property and Equipment”and ourSupplemental Disclosure about Oil and Natural Gas Properties (unaudited) to our consolidated financial statements in Item 8.Financial Statements and Supplementary Data, and in Exhibit 99.1 and 99.2 of this Form 10-K.
Risks and uncertainties
The oil and natural gas industry is a global market impacted by many factors, such as government regulations, particularly in the areas of tariffs, trade sanctions, taxation, energy, climate change and the environment, geopolitical instability and armed conflicts (including between Russia and Ukraine and in the Middle East between Israel and Gaza), demand in Asian and European markets, and the extent to which members of OPEC and other oil exporting nations manage oil supply through export quotas. Natural gas prices are generally determined by North American supply and demand and are also affected by imports and exports of liquefied natural gas. Weather also has a significant impact on demand for natural gas since it is a primary heating source.
Oil, natural gas, and NGL prices have been, and we expect may continue to be, volatile. Lower oil and natural gas prices not only decrease our revenues, but an extended decline in oil or natural gas prices may affect planned capital
expenditures and the oil and natural gas reserves that we can economically produce. Lower oil and natural gas prices may also reduce the amount of our borrowing base under our Senior Secured Credit Facility, which is determined at the discretion of the lenders based on various factors including the collateral value of our proved reserves.
At times, we do maintain cash balances in excess of the U.S. Federal Deposit Insurance Corporation (“FDIC”); however, we believe our bank counterparty to be financially sound. We also utilize insured cash sweep deposits to maximize the amount of our cash that is protected by FDIC insurance. We also rely heavily on our third-party operators who manage their own liquidity with various financial institutions. In recent years, the Federal Reserve took actions to raise interest rates in an attempt to tame inflation and slow the economy, which has contributed to volatility in markets. Currently, our oil and natural gas properties are operated by third-party operators and involve other third-party working interest owners. As a result, we have limited ability to influence the operation or future development of such properties. Despite these uncertainties, we remain focused on our long-term objectives and continue to be proactive with our third-party operators to review the management of capital expenditures.
Given the dynamic nature of these factors and events, we cannot reasonably estimate the period of time that certain market conditions will persist. Continuing volatility in political, trade, regulatory and economic conditions could impact supply and demand fundamentals, and any related significant declines in crude oil, natural gas, and NGL prices could lead to proved property impairments in the future. Future impairments of proved properties are difficult to predict, especially in a volatile price environment.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.