Evolution Petroleum Corporation, Inc. · AMEX:EPM

Evolution Petroleum — Euro Pacific Capital Global Investment Conference 2013

28 slides from Evolution Petroleum's conference presentation, September 2013

  1. Slide 1: Euro Pacific Capital Global Investment Conference 2013

    EURO PACIFIC CAPITAL GLOBAL INVESTMENT CONFERENCE 2013 KKEVOLUTION Petroleum Corporation

  2. Slide 2: Forward-looking statements and cautionary note to U.S. investors

    The data contained in this presentation that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements may relate to capital expenditures

  3. Slide 3: Four Factors for Repeating Success and Building Value per Share

    Four Factors for Repeating Success and Building Value per Share Every Day Innovative Engineering Redeploying Internal Cash Flows into Building Growth Value per Share Staff Fully Aligned with Shareholders Known Oil Fields 3

  4. Slide 4: Management Team — Value Creators

    MANAGEMENT TEAM — VALUE CREATORS Name/Title Background Achievements Robert Herlin Co-founded EPM in 2003, based on 30 years leadership experience in M&A, CEO & Chairman $8.3 MM in total common equity development, operations and finance in public capital raised during 2003-06. and private sectors. B.

  5. Slide 5: Transformed $8.3 MM common equity investment into $455 MM Proved PV10

    Transformed $8.3 MM common equity investment into $455 MM Proved PV10 + $129 MM Probable PV10 + Working Capital* $700 $109 MM $20 MM $600 $500 $455 MM $400 $MM $300 $200 $100 $25 MM $0 Initial Investment 6/30/13 W/C Proved Delhi Probable Delhi Probable Ms Lime Total 2P Reserves & Other -$100 * Notes

  6. Slide 6: Oil, NGL & Gas Reserves and Revenue

    Oil, NGL & Gas Reserves* Revenue MMBoe (FY2013 audit pending) $M 30 $25,000 25 $20,000 20 $15,000 15 $10,000 10 5 $5,000 0 $0 PD PUD Probable Possible * Note: 2012 & 2013 reserves exclude noncore assets sold in 2013 or scheduled for monetization in 2014. 6

  7. Slide 7: SEC Pretax PV10

    SEC Pretax PV10* 13.8 MM BOE Proved Reserves $MM Proved Probable Possible 7% $500 $459 Oil $450 $411 NGL $400 $375 93% $350 $300 $266 $250 11.2 MMBOE Probable Reserves $200 $162 $150 $135 20% Oil $100 $77 9% NGL $64 $50 $32.5 71% Gas $0 2010 2011 2012 2013 as of June 30 * Note: As of 6/30/2013 – Not

  8. Slide 8: Delhi Field, Ms Lime, GARP and Giddings assets

    Ms Lime – Drilling Began May 2012 34% in JV spanning 38 sections and ~11,700 acres 2 wells (0.81 net) & 1 SWDW drilled to date 111 gross drilling locations (up to 19 net to EPM) GARP® Patented artificial lift technology for horizontal and vertical wells. Successfully installed in commercial Delhi Fi

  9. Slide 9: Foundation Asset: CO2 Enhanced Oil Recovery

    Foundation Asset CO2 Enhanced Oil Recovery

  10. Slide 10: "Cash Annuity" to Fund Growth

    “Cash Annuity” to Fund Growth Jackson Dome Gross historic production 192 MMBO prior to EOR Delhi Production 7,188 gross BOPD (quarter ended 6/30/13) 6/30/2013 Reserves 10.0 MMBO Proved Developed (PV10: $380MM) 13.5 MMBOE Proved (PV10: $455MM) 7.4 MMBOE Probable (PV10: $109MM) 3.7 MMBOE Possible (PV1

  11. Slide 11: Royalty Interest and Reversionary Working Interest

    • EPM owns 7.4% of gross revenues • No CapEx or OpEx…ever 7.4% • Exempt from state severance tax until project payout of all actual Royalty costs plus capital cost Interest • Royalty interest = 28% of EPM’s Delhi 3P reserves volumes • Delhi crude sells as LLS (current premium to WTI) 23.9% • Fixed p

  12. Slide 12: Calendar 2013 gross CapEx and Delhi development activity

     Calendar 2013 gross CapEx of ~$49MM focused on optimizing flood within already developed western half of field – EPM bears no share of CapEx until WI reversion  Reversion of 23.9% WI & 19% RI in fiscal 2014 expected to add up to 1,500 net BOPD to EPM based on the then projected rate  6/30/2013 p

  13. Slide 13: Operator discovered underground fluid leak in June 2013

    • Operator discovered underground fluid leak in June 2013 in portion of field • Operator temporarily suspended CO2 injection in area of leak to lower reservoir pressure • Oil production from wells in affected area began decline due to temporarily suspended CO2 injection, reducing our royalty income

  14. Slide 14: Delhi Production: Actual and D&M Forecast of 3P

    Delhi Production: Actual and D&M Forecast of 3P 100,000 Actual Gross D&M 6/30/12 Gross Actual EPM Net D&M 6/30/13 Gross BOPD EPM Net D&M 6/30/13 Gross 10,000 EPM Net Reversion of 23.9% WI 1,000 100 Jul-10 Jul-15 Jan-13 Jun-13 Jan-18 Jun-18 Dec-10 Aug-12 Nov-13 Sep-14 Dec-15 Aug-17 Nov-18 Sep-19 Oct-

  15. Slide 15: High Probability of Achievement, Driven by Proved Reserves

    High Probability of Achievement, Driven by Proved Reserves Delhi Gross Production Forecast as of 6/30/2013 Possible Probable Proved Gr BOPD 10,000 1,000 Forecasted production over next 12 years of 43+ year life Notes: From independent report of 6/30/2013. First 3-6 months of production reflect tempo

  16. Slide 16: 13 Years of Delhi 3P Future Pretax Cash Flow, Net of Capex

    13 Years of Delhi 3P Future Pretax Cash Flow, Net of Capex $000 Reversionary WI Royalties 120,000 100,000 80,000 60,000 40,000 20,000 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Calendar Year Notes: From independent report of 6/30/2013. First 3-6 months of production reflect t

  17. Slide 17: Cumulative Pretax NCF and Residual PV10

    ($000) Cumul Pretax NCF Residual PV10 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 As of 6/30 Notes: From independent report of 6/30/2013 based on SEC LLS pricing of $106/bbl. Residual PV10 is the PV10 of remaining c

  18. Slide 18: Growth & Oily Projects: Growing Per-Share Value

    GROWTH & OILY PROJECTS Growing Per-Share Value KKEVOLUTION Petroleum Corporation

  19. Slide 19: Mississippian Lime project, Kay County, Oklahoma

     Fits selection criteria: Oil-prone, horizontal drilling, onshore U.S., known oil field, accessible, running room, repeatable  Kay County, Oklahoma – oily region of play  JV holds ~11,700 net acres in 38 sections (24,320 acres)  EPM owns 34% share of JV, 36%-45% in first 2 wells  111 gross (19

  20. Slide 20: Mississippian Lime is well defined by old vertical wells

     Mississippian Lime is well defined by old vertical wells Bowling 2-32H IP ~250 Bopd o Numerous vertical logs show thick, continuous IP 527 Bopd In 2013 pay 566 Boepd o Interpretation of well data and logs shows geologic continuity with offset wells Bird Creek 1A-15H  Vertical average EURS: EPM IP

  21. Slide 21: Innovation for Increasing Recovery

    Innovation for Increasing Recovery From NGS Technologies, a subsidiary of Evolution Petroleum www.garplift.com

  22. Slide 22: GARP technology addresses loss of reserves from liquid loading

     Industry at risk of losing vast quantities of reserves and production as mature horizontal wells, vertical wells with multiple pay zones and deep vertical wells encounter liquid loading and depletion issues.  These problems exist now in many areas – Giddings, Barnett, Bakken, Haynesville, Permian

  23. Slide 23: GARP Before and After

    BEFORE: AFTER: GARP®  Either fluid level eventually drops  May add substantial new reserves to a level where rod pump or gas lift are at low cost no longer effective, or  Benefit = up to 30% incremental recovery  Fluid production in gas well builds and at minimal cost eventually shuts off gas pr

  24. Slide 24: Selected Lands #2 daily rate versus cumulative production

    Downtime for repairs of inherited equipment Installed GARPR Pre-GARPR Selected Lands #2 Daily Rate versus Cumulative Production 1,000 Restored production BOPD rate from marginal 1 BOPD to ~12 BOPD due to GARP® 100 GARP® targeted recapture of “Tail” 10 Production decline due to well loading up 1 0 50

  25. Slide 25: Lopez Field and Giddings

    LOPEZ FIELD – SOUTH TEXAS • 100% oil production from two producers • 28 drilling locations on existing leases – 100% working interest • Lengthy expansion project development timeline = noncore asset • Monetizing GIDDINGS (non-GARP®) • 3%-5% royalty interest in almost 3,000 acres in EagleBine play 25

  26. Slide 26: Conservative, Strong and Aligned

    Conservative, Strong and Aligned

  27. Slide 27: Strong, Debt-Free Balance Sheet with Liquidity to Fund 2014 Strategic Plan

    Strong, Debt-Free Balance Sheet with Liquidity to Fund 2014 Strategic Plan Debt to Common Market Cap Liquidity Resources (8/30/13) 180% 167% Revolver 160% $5 MM 140% available 120% 111% 6/30/13 100% 79% 84% W/C 80% FY14 ~$25 MM 60% 50% 57% CFFO (audit pending) 45% 40% 20% 0% 0% EPM WRES DNR AXAS PQ

  28. Slide 28: Total Alignment with Accretive Growth per Share Strategy

    Total Alignment with Accretive Growth per Share Strategy  Delhi Cash flow “Annuity” from developed long lived production without shareholder dilution  Substantial “built in” production growth forecasted in Delhi EOR project PV grows through 2016 while we harvest pretax cash flows (growth catalyst)

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