EVOLUTION PETROLEUM CORP

For the period ended Dec 31, 2025. Filed Feb 11, 2026.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Dec 31, 2025 · Filed Feb 11, 2026

EPM$3.54+1.7%Stored close · as of Nov 9, 2026

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Contents

Item 2. Results of Operations

Results of Operations

Three Months Ended December 31, 2025 and 2024

We reported net income of $1.1 million and net loss of $1.8 million for the three months ended December 31, 2025 and 2024, respectively. The following table summarizes the comparison of financial information for the periods presented:


· Three Months Ended · · · · · ·
· · December 31, · · · · · ·
(in thousands, except per unit and per BOE amounts) · · 2025 · · 2024 · · Variance · · Variance %
Net income (loss)	$1,065	$(1,825)	$2,890	(158.4)%
Revenues:
Crude oil	10,696	11,763	(1,067)	(9.1)%
Natural gas	7,441	5,793	1,648	28.4%
Natural gas liquids	2,542	2,719	(177)	(6.5)%
Total revenues	20,679	20,275	404	2.0%
Operating costs:
Lease operating costs:
Ad valorem and production taxes	588	1,441	(853)	(59.2)%
Gathering, transportation, and other costs	2,667	2,889	(222)	(7.7)%
Other lease operating costs	8,255	8,463	(208)	(2.5)%
Depletion, depreciation, and accretion:
Depletion of full cost proved oil and natural gas properties	5,532	5,024	508	10.1%
Accretion of asset retirement obligations	387	409	(22)	(5.4)%
General and administrative expenses:
General and administrative	1,979	1,995	(16)	(0.8)%
Stock-based compensation	613	659	(46)	(7.0)%
Other income (expense):
Net gain (loss) on derivative contracts	2,235	(1,219)	3,454	(283.3)%
Interest and other income	12	52	(40)	(76.9)%
Interest expense	(1,003)	(764)	(239)	31.3%
Income tax (expense) benefit	(837)	711	(1,548)	(217.7)%

Production:
Crude oil (MBBL)	193	179	14	7.8%
Natural gas (MMCF)	2,241	2,125	116	5.5%
Natural gas liquids (MBBL)	112	105	7	6.7%
Equivalent (MBOE)(1)	679	638	41	6.4%
Average daily production (BOEPD)(1)	7,380	6,935	445	6.4%

Average price per unit(2):
Crude oil (BBL)	$55.42	$65.72	$(10.30)	(15.7)%
Natural gas (MCF)	3.32	2.73	0.59	21.6%
Natural Gas Liquids (BBL)	22.70	25.90	(3.20)	(12.4)%
Equivalent (BOE)(1)	30.46	31.78	(1.32)	(4.2)%

Average cost per unit:
Operating costs:
Lease operating costs:
Ad valorem and production taxes	0.87	2.26	(1.39)	(61.5)%
Gathering, transportation, and other costs	3.93	4.53	(0.60)	(13.2)%
Other lease operating costs	12.16	13.26	(1.10)	(8.3)%
Depletion of full cost proved oil and natural gas properties	8.15	7.87	0.28	3.6%
General and administrative expenses:
General and administrative	2.91	3.13	(0.22)	(7.0)%
Stock-based compensation	0.90	1.03	(0.13)	(12.6)%

(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.

Revenues

Crude oil, natural gas and NGL revenues were $20.7 million and $20.3 million for the three months ended December 31, 2025 and 2024, respectively, with the increase in revenues due to an increase in production volumes partially offset by decreases in our average realized price per BOE. Average daily equivalent production increased 6.4% to 7,380 BOEPD in the current year period from 6,935 BOEPD in the prior period primarily as a result production from our Minerals Acquisition in August 2025 and TexMex Acquisition in April 2025. Our average realized commodity price (excluding the impact of derivative contracts) for the three months ended December 31, 2025 decreased approximately $1.32 per BOE, or 4.2%, over the prior year period as our realized crude oil decreased 15.7% and realized NGL prices decreased 12.4% from the three months ended December 31,2024. The overall decrease in our realized crude oil and NGL prices was partially offset by a 21.6% increase in our realized natural gas prices over the prior period.

Lease Operating Costs

Ad valorem and production taxes were $0.6 million and $1.4 million, respectively, for the three months ended December 31, 2025 and 2024. The $0.8 million decrease is directly related to a reduction of calendar years 2024 and 2025 ad valorem taxes which were passed along from the operator of our Barnett Shale natural gas properties. On a per unit basis, ad valorem and production taxes were $0.87 per BOE and $2.26 per BOE for the three months ended December 31, 2025 and 2024, respectively.

Gathering, transportation and other costs were $2.7 million for the three months ended December 31, 2025 compared to $2.9 million for the three months ended December 31, 2024. These costs are gathering, transportation and processing fees we incur primarily for our natural gas producing properties. The decrease is primarily due to decreased natural gas sales at Jonah Field and Barnett Shale. On a per unit basis, gathering, transportation and other costs were $3.93 per BOE and $4.53 per BOE for the three months ended December 31, 2025 and 2024, respectively.

Other lease operating costs were $8.3 million for the three months ended December 31, 2025 compared to $8.5 million for the three months ended December 31,2024. Other lease operating costs decreased primarily due to the cessation of CO 2 purchases at Delhi late during the third quarter of fiscal 2025. For the three months ended December 31, 2024, we had net CO 2 purchases of $1.1 million. Partially offsetting the overall decrease in other lease operating costs were increases due tothe TexMex Acquisition in April 2025, which increased other lease operating costs by $1.1 million over the prior year period. On a per unit basis, other lease operating costs decreased to $12.16 per BOE for the three months ended December 31, 2025 from $13.26 per BOE in the three months ended December 31, 2024.

Depletion of Full Cost Proved Oil and Natural Gas Properties

Depletion expense increased from $5.0 million for the three months ended December 31, 2024 to $5.5 million for the three months ended December 31, 2025 primarily due to an increase in the depletion rate and decrease in reserves volumes. On a per unit basis, depletion expense was $8.15 per BOE and $7.87 per BOE for the three months ended December 31, 2025 and 2024, respectively.

General and Administrative Expenses

General and administrative expenses were $2.0 million for each of the periods ended December 31, 2025 and 2024. On a per unit basis, general and administrative expenses were $2.91 per BOE and $3.13 per BOE for the three months ended December 31,2025 and 2024, respectively. The decrease on a per unit basis is primarily the result of the increase in production for the current year period.

Stock-based Compensation Expense

Stock-based compensation expense for the three months ended December 31, 2025 was $0.6 million compared to $0.7 million for theyear-ago period. The decrease is due to a decrease in the awards granted in the current fiscal period compared to the year-ago period.

Net Gain (Loss) on Derivative Contracts

We utilize commodity derivative financial instruments to reduce our exposure to fluctuations in oil and natural gas prices. Financial hedges are a requirement under our Senior Secured Credit Facility and help establish commodity price floors, contributing to stable cash flows when derivative contracts are settled. We have elected not to designate our open derivative contracts for hedge accounting, and accordingly, we recorded the net change in the mark-to-market valuation of the derivative contracts in the unaudited condensed consolidated statements of operations. The amounts recorded on the unaudited condensed consolidated statements of operations related to derivative contracts represent the (i) gains (losses) related to fair value adjustments on our open, or unrealized, derivative contracts, and (ii) gains (losses) on settlements of derivative contracts for positions that have settled or been realized. The table below summarizes our net realized and unrealized gains (losses) on derivative contracts as well as the impact of net realized gains (losses) on our average realized prices for the periods presented. As a result of our recent acquisitions and the corresponding borrowings on our Senior Secured Credit Facility, we were required by terms in our Senior Secured Credit Facility to hedge a portion of our production. As of December 31, 2025, we had $3.3 million derivative assets, $3.2 million of which was classified as current, and $2.0 million derivative liabilities, $1.5 million of which was classified as current. Subsequent to the end of the quarter through February 2026, we have seen increased volatility in the crude oil and natural gas commodity markets, and we expect to see continued volatility in the fair value of our derivative contracts.


· · Three Months Ended · · · · · ·
· · December 31, · · · · · ·
(in thousands, except per unit and per BOE amounts) · · 2025 · · 2024 · · Variance · · Variance %
Realized gain (loss) on derivative contracts	$792	$149	$643	431.5%
Unrealized gain (loss) on derivative contracts	1,443	(1,368)	2,811	(205.5)%
Total net gain (loss) on derivative contracts	$2,235	$(1,219)	$3,454	(283.3)%

Average realized crude oil price per BBL	$55.42	$65.72	$(10.30)	(15.7)%
Cash effect of oil derivative contracts per BBL	1.69	0.83	0.86	103.6%
Crude oil price per BBL (including impact of realized derivatives)	$57.11	$66.55	$(9.44)	(14.2)%

Average realized natural gas price per MCF	$3.32	$2.73	$0.59	21.6%
Cash effect of natural gas derivative contracts per MCF	0.21	—	0.21	—%
Natural gas price per MCF (including impact of realized derivatives)	$3.53	$2.73	$0.80	29.3%

Interest Expense

Interest expense increased $0.2 million for the three months ended December 31, 2025 compared to the prior year period primarily due to additional borrowings drawn on our Senior Secured Credit Facility to finance our Minerals Acquisition in August 2025.

Income Tax (Expense) Benefit

For the three months ended December 31, 2025, we recognized income tax expense of $0.8 million on net income before income taxes of $1.9 million compared to income tax benefit of $0.7 million on net losses before income taxes of $2.5 million for the three months ended December 31, 2024. The effective tax rates were 44.0% and 28.0% for three months ended December 31, 2025 and 2024, respectively. The increase in the effective tax rate from the prior year period is due to projected higher state income taxes in Oklahoma associated with the Minerals Acquisition in August 2025. We continue to evaluate our tax provision on a quarterly basis and adjust our effective tax rate for any given changes in facts and circumstances that are expected in the future.

Six Months Ended December 31, 2025 and 2024

We reported net income of $1.9 million and $0.2 million for the six months ended December 31, 2025 and 2024, respectively. The following table summarizes the comparison of financial information for the periods presented:


· Six Months Ended · · · · · ·
· · December 31, · · · · · ·
(in thousands, except per unit and per BOE amounts) · · 2025 · · 2024 · · Variance · · Variance %
Net income (loss)	$1,889	$240	$1,649	687.1%
Revenues:
Crude oil	23,568	26,500	(2,932)	(11.1)%
Natural gas	13,341	10,078	3,263	32.4%
Natural gas liquids	5,058	5,593	(535)	(9.6)%
Total revenues	41,967	42,171	(204)	(0.5)%
Operating costs:
Lease operating costs:
Ad valorem and production taxes	2,008	2,855	(847)	(29.7)%
Gathering, transportation, and other costs	5,559	5,679	(120)	(2.1)%
Other lease operating costs	17,030	16,049	981	6.1%
Depletion, depreciation, and accretion:
Depletion of full cost proved oil and natural gas properties	11,092	10,349	743	7.2%
Accretion of asset retirement obligations	788	809	(21)	(2.6)%
General and administrative expenses:
General and administrative	3,767	3,963	(196)	(4.9)%
Stock-based compensation	1,150	1,218	(68)	(5.6)%
Other income (expense):
Net gain (loss) on derivative contracts	4,416	579	3,837	662.7%
Interest and other income	22	109	(87)	(79.8)%
Interest expense	(1,920)	(1,587)	(333)	21.0%
Income tax (expense) benefit	(1,202)	(110)	(1,092)	992.7%

Production:
Crude oil (MBBL)	400	383	17	4.4%
Natural gas (MMCF)	4,391	4,353	38	0.9%
Natural gas liquids (MBBL)	220	218	2	0.9%
Equivalent (MBOE)(1)	1,352	1,327	25	1.9%
Average daily production (BOEPD)(1)	7,348	7,212	136	1.9%

Average price per unit(2):
Crude oil (BBL)	$58.92	$69.19	$(10.27)	(14.8)%
Natural gas (MCF)	3.04	2.32	0.72	31.0%
Natural Gas Liquids (BBL)	22.99	25.66	(2.67)	(10.4)%
Equivalent (BOE)(1)	31.04	31.78	(0.74)	(2.3)%

Average cost per unit:
Operating costs:
Lease operating costs:
Ad valorem and production taxes	$1.49	$2.15	$(0.66)	(30.7)%
Gathering, transportation, and other costs	4.11	4.28	(0.17)	(4.0)%
Other lease operating costs	12.60	12.09	0.51	4.2%
Depletion of full cost proved oil and natural gas properties	8.20	7.80	0.40	5.1%
General and administrative expenses:
General and administrative	2.79	2.99	(0.20)	(6.7)%
Stock-based compensation	0.85	0.92	(0.07)	(7.6)%

(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.

Revenues

Crude oil, natural gas and NGL revenues were $42.0 million and $42.2 million for the six months ended December 31, 2025 and 2024, respectively, with the decrease in revenues due to decreases in our average realized price per BOE partially offset by increases in production volumes. Average daily equivalent production increased 1.9% from 7,212 BOEPD in the prior year period to 7,348 BOEPD in the current period primarily as a result ofproduction from our Minerals Acquisition in August 2025 and TexMex Acquisition in April 2025. Our average realized commodity price (excluding the impact of derivative contracts) for the six months ended December 31, 2025 decreased approximately $0.74 per BOE, or 2.3%, over the prior year period as our realized crude oil decreased 14.8% and realized NGL prices decreased 10.4% from the six months ended December 31,2024. The overall decrease in our crude oil and NGL realized prices was partially offset by a 31.0% increase in our realized natural gas prices over the prior period.

Lease Operating Costs

Ad valorem and production taxes were $2.0 million and $2.9 million for the six months ended December 31, 2025 and 2024, respectively. The decrease is primarily related to a reduction of calendar years 2024 and 2025 ad valorem taxes which were passed along from the operator of our Barnett Shale natural gas properties. On a per unit basis, ad valorem and production taxes were $1.49 per BOE and $2.15 per BOE for the six months ended December 31, 2025 and 2024, respectively.

Gathering, transportation and other costs were $5.6 million for the six months ended December 31, 2025 compared to $5.7 million for the six months ended December 31, 2024. These costs are gathering, transportation and processing fees we incur primarily for our natural gas producing properties. The decrease is primarily due to decreased natural gas sales at Jonah Field partially offset by increased natural gas sales at Barnett Shale. On a per unit basis, gathering, transportation and other costs were $4.11 per BOE and $4.28 per BOE for the six months ended December 31, 2025 and 2024, respectively.

Other lease operating costs were $17.0 million for the six months ended December 31, 2025 compared to $16.0 million for the six months ended December 31,2024. Other lease operating costs increased primarily due tothe TexMex Acquisition in April 2025, which increased other lease operating costs by $2.4 million over the prior year period. Partially offsetting the overall increase in other lease operating costs is the cessation of CO 2 purchases at Delhi late during the third quarter of fiscal 2025. For the six months ended December 31, 2024, we had net CO 2 purchases of $1.1 million. On a per unit basis, other lease operating costs increased to $12.60 per BOE for the six months ended December 31, 2025 from $12.09 per BOE in the six months ended December 31, 2024.

Depletion of Full Cost Proved Oil and Natural Gas Properties

Depletion expense increased from $10.3 million for the six months ended December 31, 2024 to $11.1 million for the six months ended December 31, 2025 primarily due to an increase in the depletion rate and decrease in reserves volumes. On a per unit basis, depletion expense was $8.20 per BOE and $7.80 per BOE for the six months ended December 31, 2025 and 2024, respectively.

General and Administrative Expenses

General and administrative expenses for the six months ended December 31, 2025 and 2024 were $3.8 million and $4.0 million, respectively. The decrease in the current period is primarily due to a decrease in professional fees. On a per unit basis, general and administrative expenses were $2.79 per BOE and $2.99 per BOE for the six months ended December 31,2025 and 2024, respectively.

Net Gain (Loss) on Derivative Contracts


· · Six Months Ended · · · · · ·
· · December 31, · · · · · ·
(in thousands, except per unit and per BOE amounts) · · 2025 · · 2024 · · Variance · · Variance %
Realized gain (loss) on derivative contracts	$1,670	$79	$1,591	2,013.9%
Unrealized gain (loss) on derivative contracts	2,746	500	2,246	449.2%
Total net gain (loss) on derivative contracts	$4,416	$579	$3,837	662.7%

Average realized crude oil price per BBL	$58.92	$69.19	$(10.27)	(14.8)%
Cash effect of oil derivative contracts per BBL	1.39	0.21	1.18	561.9%
Crude oil price per BBL (including impact of realized derivatives)	$60.31	$69.40	$(9.09)	(13.1)%

Average realized natural gas price per MCF	$3.04	$2.32	$0.72	31.0%
Cash effect of natural gas derivative contracts per MCF	0.25	—	0.25	—%
Natural gas price per MCF (including impact of realized derivatives)	$3.29	$2.32	$0.97	41.8%

Interest Expense

Interest expense increased $0.3 million for the six months ended December 31, 2025 compared to the prior year period primarily due to additional borrowings drawn on our Senior Secured Credit Facility to finance our Minerals Acquisition in August 2025. The weighted average interest rate on our borrowings was 6.88% for the six months ended December 31, 2025 compared to 7.80% for the six months ended December 31, 2024.

Income Tax (Expense) Benefit

For the six months ended December 31, 2025, we recognized income tax expense of $1.2 million on net income before income taxes of $3.1 million compared to income tax expense of $0.1 million on net income before income taxes of $0.4 million for the six months ended December 31, 2024. The effective tax rates were 38.9% and 31.4% for six months ended December 31, 2025 and 2024, respectively. The increase in the effective tax rate from the prior year period is due to projected higher state income taxes in Oklahoma associated with the Minerals Acquisition. We continue to evaluate our tax provision on a quarterly basis and adjust our effective tax rate for any given changes in facts and circumstances that are expected in the future.

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