EVOLUTION PETROLEUM CORP

Six Months Ended December 31, 2024 and 2023

We reported net income of $0.2 million and $2.6 million for the six months ended December 31, 2024 and 2023, respectively. The following table summarizes the comparison of financial information for the periods presented:

Revenues

Crude oil, natural gas and NGL revenues were $42.2 million and $41.6 million for the six months ended December 31, 2024 and 2023, respectively. The increase in revenues is primarily due to an increase in production volumes partially offset by the decrease in our average realized price per BOE. Average daily equivalent production increased 13.0% from 6,380 BOEPD in the prior year period to 7,212 BOEPD in the current period as a result ofthe SCOOP/STACK Acquisitions in February 2024 and first production of our wells at Chaveroo Field in early February 2024, which collectively increased production for the six months ended December 31, 2024 by approximately 1,400 BOEPD. The overall increase in production is partially offset bynatural production declines in our other fields combined with reduced oil recovery at Delhi Field as the field experienced reduced CO 2 injected volumes during the current period as compared to the prior year period. The CO 2 purchase pipeline was taken offline for preventative maintenance at the end of February 2024 and CO 2 purchases were not resumed until late October 2024. Our average realized commodity price (excluding the impact of derivative contracts) for the six months ended December 31, 2024 decreased approximately $3.68 per BOE, or 10.4%, over the prior year period. The amount we realize for our production depends predominantly upon commodity prices, which are affected by changes in market demand and supply, as impacted by overall economic activity, weather, inventory storage levels, basis differentials and other factors. Realized natural gas prices decreased 23.7% from the six months ended December 31, 2023, which was the primary driver of the decreased revenues.

Lease Operating Costs

Ad valorem and production taxes were $2.9 million and $2.6 million for the six months ended December 31, 2024 and 2023, respectively. The increase in ad valorem and production taxes is primarily due to our SCOOP/STACK Acquisitions since the prior year period. On a per unit basis, ad valorem and production taxes were $2.15 per BOE and $2.17 per BOE for the six months ended December 31, 2024 and 2023, respectively. The slight decrease on a per BOE basis is a result of the increase in production for the current year period.

Gathering, transportation and other costs were $5.7 million for the six months ended December 31, 2024 compared to $4.4 million for the six months ended December 31,2023. Costs include gathering, transportation and processing fees we incur primarily for our natural gas producing properties. The increase is primarily due to the acquisitions of non-operated working interests in the SCOOP/STACK plays in February 2024 which added $1.0 million in gathering, transportation and other costs for the six months ended December 31, 2024. On a per unit basis, gathering, transportation and other costs were $4.28 per BOE and $3.75 per BOE for the six months ended December 31, 2024 and 2023, respectively.

Other lease operating costs were $16.0 million for the six months ended December 31, 2024 compared to $17.3 million for the six months ended December 31, 2023. Other lease operating costs decreased primarily due to reduced CO 2 purchases at Delhi. CO 2 purchases resumed in late October of 2024 and we had net purchases $1.1 million of CO 2 for the six months ended December 31, 2024 compared to net purchases of $3.2 million in theyear-ago period. Partially offsetting the reduction in CO 2 purchases were cost increases due to the acquisitions of non-operated working interests in the SCOOP/STACK plays in February 2024 and the addition of wells drilled since acquisitions which collectively added $0.8 million in other lease operating costs. On a per unit basis, other lease operating costs decreased to $12.09 per BOE for the six months ended December 31, 2024 from $14.73 per BOE in the six months ended December 31, 2023.

Depletion of Full Cost Proved Oil and Natural Gas Properties

Depletion expense increased $2.2 million or 27.0% from $8.1 million to $10.3 million for the six months ended December 31, 2024 primarily due to an increase in the depletion rate and increase in depletable assets. On a per unit basis, depletion expense was $7.80 per BOE and $6.94 per BOE for the six months ended December 31, 2024 and 2023, respectively. The depletion rate of our unit of production calculation increased due to an increase in our depletable base due to our SCOOP/STACK Acquisitions and capital expenditures since theyear-ago period.

General and Administrative Expenses

General and administrative expenses for the six months ended December 31, 2024 and 2023 were $4.0 million and $4.1 million, respectively. The decrease primarily relates to lower transaction and consulting fees. On a per unit basis, general and administrative expenses were $2.99 per BOE and $3.47 per BOE for the six months ended December 31,2024 and 2023, respectively. In addition to lower transaction and consulting fees, the increase in production for the current year period further reduced general and administrative expense on per BOE basis.

Stock-based Compensation Expense

Stock-based compensation expense for the six months ended December 31, 2024 increased $0.2 million to $1.2 million compared to $1.0 million for theyear-ago period. The increase is associated with new awards granted since 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. 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 SCOOP/STACK Acquisitions in February 2024 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. The decrease in forward commodity prices as of December 31, 2024 as compared to June 30, 2024, resulted in an unrealized gain on the mark-to-market of our hedges for the six months ended December 31, 2024. As of December 31, 2024, we had $1.3 million derivative assets, $1.1 million of which was classified as current, and $1.7 million derivative liabilities, $0.4 million of which was classified as current.

Interest Expense

Interest expense increased $1.5 million for the six months ended December 31, 2024 compared to the prior year period primarily due to borrowings drawn on our Senior Secured Credit Facility to finance our SCOOP/STACK Acquisitions in February 2024. The weighted average interest rate on our borrowings was 7.80% for the six months ended December 31, 2024.

Income Tax (Expense) Benefit

For the six months ended December 31, 2024, we recognized income tax expense of $0.1 million on net income before income taxes of $0.4 million compared to income tax expense of $1.0 million on net income before income taxes of $3.6 million for the six months ended December 31, 2023. The effective tax rates were 31.4% and 28.5% for six months ended December 31,2024 and 2023, respectively. The effective tax rate increased compared to the year-ago period as projected state income taxes have become a larger component of our overall income tax expense during the current period.