EVOLUTION PETROLEUM CORP

Previous wording

“Current quarter” refers to the three months ended March 31, 2025, our third quarter of fiscal year 2025.

Current wording

“Current quarter” refers to the three months ended September 30, 2025, our first quarter of fiscal year 2026.

Previous wording

“Year-ago quarter” refers to the three months ended March 31, 2024, our third quarter of fiscal year 2024.

Current wording

“Year-ago quarter” refers to the three months ended September 30, 2024, our first quarter of fiscal year 2025.

Previous wording

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 141,400 gross or 42,200 net acres (approximately 95% held by production) across Billings, Golden Valley, and McKenzie Counties in North Dakota. The properties are operated by Foundation Energy Management. Production from our Williston Basin properties for the nine months ended March 31, 2025 is comprised of 77% crude oil, 13% NGL, and 10% natural gas.

Current wording

Management. Production from our Williston Basin properties for the three months ended September 30, 2025 is comprised of 73% crude oil, 17% NGL, and 10% natural gas.

Previous wording

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.

Current wording

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, 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.

Previous wording

Oil and natural gas 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, as well as the dividend rate determined by the Board of Directors each quarter.

Current wording

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.

Previous wording

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 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.

Current wording

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.

Previous wording

As of March 31, 2025, we had $5.6 million in cash and cash equivalents and $35.5 million outstanding borrowings on our Senior Secured Credit Facility compared to $6.4 million in cash and cash equivalents and $39.5 million borrowings outstanding on our Senior Secured Credit Facility at June 30, 2024. Our primary sources of liquidity and capital resources during the nine months ended March 31, 2025 were cash provided by operations and net proceeds from the ATM Sales Agreement. Our primary uses of liquidity and capital resources for the nine months ended March 31, 2025 were cash dividend payments to our common stockholders, repayments of borrowings under our Senior Secured Credit Facility, deposit made for the TexMex Acquisition, and development capital expenditures. As of March 31, 2025, working capital was a deficit of $2.7 million primarily due to our current derivative contracts, which vary quarter-to-quarter based on forecasted commodity prices at the end of each quarter, as well as current payables associated with our active drilling in the Chaveroo Field. As of June 30, 2024, working capital was $5.9 million.

Current wording

As of September 30, 2025, we had $0.7 million in cash and cash equivalents and $53.0 million outstanding borrowings on our Senior Secured Credit Facility compared to $2.5 million in cash and cash equivalents and $37.5 million outstanding borrowings on our Senior Secured Credit Facility at June 30, 2025. Our primary sources of liquidity and capital resources during the three months ended September 30, 2025 were cash provided by operations and net borrowings under our Senior Secured Credit Facility. Our primary uses of liquidity and capital resources for the three months ended September 30, 2025 were cash used to fund our Minerals Acquisition, cash dividend payments to our common stockholders, and development capital expenditures. As of September 30, 2025, working capital was a deficit of $5.4 million. As of June 30, 2025, working capital was a deficit of $4.0 million.

Previous wording

The Senior Secured Credit Facility has a maximum capacity of $50.0 million subject to a borrowing base determined by the lender based on the value of our oil and natural gas properties. The Senior Secured Credit Facility has a current borrowing base of $50.0 million, with $35.5 million drawn as of March 31, 2025. The Senior Secured Credit Facility is secured by substantially all of our oil and natural gas properties and matures on April 9, 2026. We have received approval from our lender, MidFirst Bank, to extend the maturity of our existing Senior Secured Credit Facility to April 2028 and increase their total commitments from $50.0 million to $55.0 million. Also, we expect to receive $10.0 million in additional commitments from a new lender, Prism Bank, bringing our total commitments to $65.0 million. We expect all other terms to remain substantially the same and anticipate closing on the facility during our fiscal fourth quarter.

Current wording

The syndicated Senior Secured Credit Facility has a maximum capacity of $200.0 million subject to a borrowing base determined by the lenders based on the value of our oil and natural gas properties. The Senior Secured Credit Facility has a current borrowing base of $65.0 million. As of September 30, 2025, we had $53.0 million of indebtedness, $0.8 million of letters of credit outstanding, and available capacity of $11.2 million. The Senior Secured Credit Facility is secured by substantially all of our oil and natural gas properties and matures on June 30, 2028.

Previous wording

Borrowings bear interest, at our option, at either the SOFR plus 2.80% or the Prime Rate, as defined under the Senior Secured Credit Facility, plus 1.0%. For the nine months ended March 31, 2025 and 2024, the weighted average interest on our borrowings was 7.59% and 8.13%, respectively. The Senior Secured Credit Facility contains covenants requiring the maintenance of (i) a total leverage ratio of not more than 3.00 to 1.00, (ii) a current ratio of not less than 1.00 to 1.00, and (iii) a consolidated tangible net worth of not less than $40.0 million, each as defined in the Senior Secured Credit Facility. It also contains other customary affirmative and negative covenants, including a hedging covenant discussed below, and events of default. As of March 31, 2025, we were in compliance with all covenants under the Senior Secured Credit Facility.

Current wording

Borrowings bear interest, at our option, at either (i) the SOFR, subject to a minimum SOFR of 3.25%, plus a credit spread adjustment of 0.05%, or the Prime Rate, as defined under the Senior Secured Credit Facility, plus 1.0%, plus, in either case of (i) or (ii), an applicable margin of 2.75%. For the three months ended September 30, 2025 and 2024, the weighted average interest on our borrowings was 7.12% and 8.09%, respectively. The Senior Secured Credit Facility contains covenants requiring the maintenance of (i) a total leverage ratio of not more than 3.00 to 1.00, (ii) a current ratio of not less than 1.00 to 1.00, and (iii) a consolidated tangible net worth of not less than $40.0 million, each as defined in the Senior Secured Credit Facility. In addition, the Senior Secured Credit Facility contains hedging requirements that apply when utilization is greater than 25% of (x) the Margined Collateral Value, as defined under the Senior Secured Credit Facility, at any time when the leverage ratio is less than 2.25 to 1.00, or (y) the borrowing base, at any time when the leverage ratio is greater than or equal to 2.25 to 1.00. It also contains other customary affirmative and negative covenants, including a hedging covenant discussed below, and events of default. As of September 30, 2025, we were in compliance with all covenants under the Senior Secured Credit Facility.

Previous wording

The Senior Secured Credit Facility contains hedging requirements that apply when there is 25% or more utilization of the Margined Collateral Value, as defined under the Senior Secured Credit Facility, to the extent it exceeds the borrowing base then in effect. The Required Hedging Percentage, as defined in the Eighth Amendment to the Senior Secured Credit Facility dated November 9, 2021, provides for a tiered approach for adding hedges based on the utilization of the facility. The Senior Secured Credit Facility requires for redeterminations of the borrowing base to occur semi-annually. At each redetermination, the Margined Collateral Value is updated based on the estimated value of our oil and natural gas properties, which includes our proved developed reserves, proved undeveloped reserves, and other relevant factors consistent with customary oil and natural gas lending criteria. On March 7, 2025, in conjunction with the spring redetermination, we entered into a letter agreement with MidFirst Bank, which allows us the option to hedge 72% of expected natural gas production rather than hedging 25% of expected crude oil production in each month for the calendar year ending December 31, 2026, as long as we remain in the 25% required hedging tier. As of March 31, 2025, we were in compliance with the hedging requirements under the Senior Secured Credit Facility.

Current wording

The Senior Secured Credit Facility requires redeterminations of the borrowing base to occur semi-annually. At each redetermination, the Margined Collateral Value is updated based on the estimated value of our oil and natural gas properties, which includes our proved developed reserves, proved undeveloped reserves, and other relevant factors consistent with customary oil and natural gas lending criteria. On August 29, 2025, we entered into an amendment to our Senior Secured Credit Facility with MidFirst Bank, whereas it was determined for purposes of the hedge covenant that total crude oil and natural gas production volumes from proved developed producing reserves will be combined on a barrels of oil equivalent (“BOE”) basis to determine compliance with the hedging covenant.

Previous wording

We have historically funded operations through cash from operations and working capital. Our primary source of cash is the sale of produced crude oil, natural gas, and NGLs. A portion of these cash flows is used to fund capital expenditures and pay cash dividends to shareholders. We expect to fund near-future capital development activities for our properties with cash flows from operating activities, existing working capital and, as needed, borrowings under our Senior Secured Credit Facility and proceeds from the ATM Sales Agreement (as described in “Recent Developments” above).

Current wording

We have historically funded operations through cash from operations and working capital. Our primary source of cash is the sale of produced crude oil, natural gas, and NGLs. A portion of these cash flows is used to fund capital expenditures and pay cash dividends to shareholders. We expect to fund near-future capital development activities for our properties with cash flows from operating activities, and, as needed, borrowings under our Senior Secured Credit Facility and proceeds from the ATM Sales Agreement.

Previous wording

We are pursuing new growth opportunities through acquisitions and other transactions. In addition to cash on hand, we have access to the undrawn portion of the borrowing base available under our Senior Secured Credit Facility, totaling $14.5 million as of March 31, 2025. We also have an effective shelf registration statement with the SEC under which we may issue up to $500.0 million of new debt or equity securities.

Current wording

We are pursuing new growth opportunities through acquisitions and other transactions. In addition to cash on hand, we have access to the undrawn portion of the borrowing base available under our Senior Secured Credit Facility, totaling $11.2 million as of September 30, 2025. We also have an effective shelf registration statement with the SEC under which we may issue up to $500.0 million of new debt or equity securities.

Previous wording

On October 21, 2024, we entered into an ATM Sales Agreement with Roth Capital Partners, LLC as our 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. During the nine months ended March 31, 2025, we sold a total of approximately 0.6 million shares of our common stock under the ATM Sales Agreement for net proceeds of approximately $3.1 million, after deducting $0.3 million in offering costs; however, we are not obligated to sell any shares of common stock in the future.

Current wording

On October 21, 2024, we entered into an ATM Sales Agreement with Roth Capital Partners, LLC as our 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. During the three months ended September 30, 2025, we sold a total of approximately 57 thousand shares of our common stock under the ATM Sales Agreement for net proceeds of approximately $246 thousand, net of $20 thousand of offering costs.

Previous wording

Our Board of Directors instituted a cash dividend on common stock in December 2013. We have since paid 46 consecutive quarterly dividends. Distribution of a substantial portion of free cash flow in excess of operating and capital requirements through cash dividends remains a priority of our financial strategy, and it is our long-term goal to increase dividends over time, as appropriate. Periodically, the Board of Directors reviews the dividend level, taking into account dividend stability, historical cash flow performance, financial strength of the Company, and future outlook. On May 12, 2025, the Board of Directors declared a quarterly cash dividend of $0.12 per share of common stock to shareholders of record on June 13, 2025 and payable on June 30, 2025.

Current wording

Our Board of Directors instituted a cash dividend on common stock in December 2013. We have since paid 48 consecutive quarterly dividends. Distribution of a substantial portion of free cash flow in excess of operating and capital requirements through cash dividends remains a priority of our financial strategy, and it is our long-term goal to increase dividends over time, as appropriate. On November 10, 2025, the Board of Directors declared a quarterly cash dividend of $0.12 per share of common stock to shareholders of record on December 15, 2025 and payable on December 31, 2025.

Previous wording

During the nine months ending March 31, 2025, we incurred $8.8 million on development capital expenditures. A majority of our spending occurred at Chaveroo Field, where we are actively participating in four gross drilling locations and at SCOOP/STACK, where our operators have brought 13 gross (0.14 net) wells online during the fiscal year. Based on discussions with our operators, we expect capital workover projects to continue in most of our fields throughout the remainder of the year as well as further drilling at SCOOP/STACK.

Current wording

During the three months ending September 30, 2025, we incurred $1.9 million on development capital expenditures. A majority of our spending occurred at SCOOP/STACK where our operators are actively drilling and completing three gross wells and capital workover projects across our assets. Based on discussions with our operators, we expect capital workover projects to continue in most of our fields throughout the remainder of the year as well as further drilling at SCOOP/STACK.

Previous wording

Under the full cost method of accounting, capitalized costs of oil and natural gas properties, net of accumulated depletion, depreciation, and amortization and related deferred taxes, are limited to the estimated future net cash flows from proved oil and natural gas reserves, discounted at 10%, plus the lower of cost or fair value of unproved properties, as adjusted for related income tax effects (the valuation “ceiling”). If capitalized costs exceed the full cost ceiling, the excess would be charged to expense as a write-down of oil and natural gas properties in the quarter in which the excess occurred. The quarterly ceiling test calculation requires that we use the average first day of the month price for our petroleum products during the 12-month period ending with the balance sheet date. The prices used in calculating our ceiling test as of March 31, 2025 were $75.33 per barrel of oil, $2.45 per MMBtu of natural gas and $22.38 per barrel of NGLs. As of March 31, 2025, our capitalized costs of oil and natural gas properties were below the full cost valuation ceiling. If commodity price levels were to substantially decline from the 12-month average first day of the month pricing levels as of March 31, 2025 and remain down for a prolonged period of time, our valuation ceiling over our capitalized costs may be reduced and adversely impact our ceiling test results in future quarters. While using the crude oil and natural gas price for April 1, 2025 of $71.61 per barrel and $4.11 per MMBtu and May 1, 2025 of $59.24 per barrel and $3.33 per MMbtu, and holding the May prices constant for one month to create a trailing 12-month period of average prices (which is more reflective of recent price trends) would not generate an impairment under our ceiling test limitation, we cannot give assurance that a write-down of capitalized oil and natural gas properties will not be required in the future.

Current wording

Under the full cost method of accounting, capitalized costs of oil and natural gas properties, net of accumulated depletion, depreciation, and amortization and related deferred taxes, are limited to the estimated future net cash flows from proved oil and natural gas reserves, discounted at 10%, plus the lower of cost or fair value of unproved properties, as adjusted for related income tax effects (the valuation “ceiling”). If capitalized costs exceed the full cost ceiling, the excess would be charged to expense as a write-down of oil and natural gas properties in the quarter in which the excess occurred. The quarterly ceiling test calculation requires that we use the average first day of the month price for our petroleum products during the 12-month period ending with the balance sheet date. The prices used in calculating our ceiling test as of September 30, 2025 were $68.07 per barrel of oil, $3.11 per MMBtu of natural gas and $23.89 per barrel of NGLs. As of September 30, 2025, our capitalized costs of oil and natural gas properties, subject to amortization, were below the full cost valuation ceiling. If commodity price levels were to substantially decline from the 12-month average first day of the month pricing levels as of September 30, 2025 and remain down for a prolonged period of time, our valuation ceiling over our capitalized costs may be reduced and adversely impact our ceiling test results in future quarters and the effect could be material to our net earnings. Using first day of the month prices for October and November 2025, which are more reflective of recent prices trends, to calculate a trailing 12-month average price of $66.98 per barrel of oil and $3.18 per MMBtu of natural gas, and keeping all other factors constant, the ceiling test calculation as of the first quarter of fiscal year 2026 would not have generated a ceiling test impairment. We cannot give assurance that a write-down of capitalized oil and natural gas properties will not be required at some point in the future as commodity prices are volatile and unpredictable. In addition to commodity prices, our production rates, levels of proved reserves, future development costs, transfers of unevaluated properties to our full cost pool, capital spending and other factors will determine our actual ceiling test calculation and impairment analyses in future periods.

Previous wording

Cash provided by operating activities for the nine months ended March 31, 2025 increased $7.9 million compared to the nine months ended March 31, 2024 primarily due to changes in the timing of our working capital. Cash flows provided by operating activities before changes in working capital for the nine months ended March 31, 2025 decreased $3.5 million compared to the nine months ended March 31, 2024 primarily due to increases in our lease operating costs and interest expense for the comparable periods. Refer to*“Results of Operations”* below for further information.

Current wording

Cash provided by operating activities for the three months ended September 30, 2025 increased $0.2 million compared to the three months ended September 30, 2024 primarily due to changes in the timing of our working capital. Cash flows provided by operating activities before changes in working capital for the three months ended September 30, 2025 decreased $0.8 million compared to the three months ended September 30, 2024, primarily due to a decrease in revenues and an increase in our lease operating costs for the comparable periods partially offset by realized gains on derivative contracts in the current period of $0.9 million compared to realized losses on derivative contracts in the prior year period of $0.1 million. Refer to*“Results of Operations”* below for further information.

Previous wording

Net cash flows used in financing activities for the nine months ended March 31, 2025 were $13.4 million compared to net cash flows provided by financing activities of $29.4 million for the nine months ended March 31, 2024. For the nine months ended, March 31, 2025, we paid $12.2 million in cash dividends to our common stockholders, repaid $4.0 million of borrowings under our Senior Secured Credit Facility, and receivednet proceeds from the sale of common stock under the ATM Sales Agreement of approximately $3.1 million, after deducting $0.3 million in offering costs. For the nine months ended March 31, 2024, we borrowed $42.5 million under our Senior Secured Credit Facility to finance our SCOOP/STACK Acquisitions which was partially offset by $12.0 million in cash dividends to our common stockholders together with $0.8 million paid to repurchase shares of our common stock under our share repurchase plan.

Current wording

Net cash flows provided by financing activities for the three months ended September 30, 2025 were $11.1 million compared to net cash flows used in financing activities of $4.1 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, we received net borrowings of $15.5 million under our Senior Secured Credit Facility to finance our Minerals Acquisition andpaid $4.2 million in cash dividends to our common stockholders. For the three months ended September 30, 2024, we paid $4.0 million in cash dividends to our common stockholders.