Evolution Petroleum Corporation, Inc. · AMEX:EPM
Evolution Petroleum — Investor Presentation (April 2017)
26 slides from Evolution Petroleum's investor presentation, April 2017
Slide 1: Evolution Petroleum Corporation Corporate Presentation – April 2017
Evolution Petroleum Corporation Corporate Presentation – April 2017 Corporate Presentation – April 2017 1
Slide 2: Forward Looking Statements
Corporate Presentation – April 2017 Forward Looking Statements This presentation contains “forward-looking statements.” Such statements may relate to capital expenditures, drilling and exploitation activities, production efforts and sales volumes, Proved, Probable, and Possible reserves, operating a
Slide 3: Texas / Gulf Coast Focus Overview
Corporate Presentation – April 2017 Texas / Gulf Coast Focus Overview (Quarter Ended December 31, 2016) New York Stock Exchange EPM Shares Outstanding (12/31/2016) 33.1 MM Fully Diluted Shares (12/31/2016) 33.2 MM Delhi Field Share Price (3/31/2017) $8.00 Total Equity Value (3/31/2017) $265 MM Commo
Slide 4: Summary Financial Statements December 31, 2016
Corporate Presentation – April 2017 Summary Financial Statements December 31, 2016 Amounts in $000’s, except EPS Balance Sheet Income Statement – December Quarter Cash $ 19,156 Delhi field oil revenues $ 8,530 Other current assets 3,720 Lease operating expenses 2,292 Property and equipment 63,881 DD
Slide 5: Recent Developments
Corporate Presentation – April 2017 Recent Developments Dividend Increased 40% to $0.28 per Year NGL Plant Complete and Online $27.5MM Litigation Settlement Proceeds § Greatly Improves Financial Strength § Removes Uncertainty and Continuing Legal Costs Redemption of all Preferred Stock 5
Slide 6: Investment Considerations
Corporate Presentation – April 2017 Investment Considerations § High Quality Asset Base w/ Near-Term Growth Catalysts § Extremely Long-Lived Production (25 Year Life; Much Longer with Higher Oil Prices) § Debt-Free Balance Sheet with Solid Working Capital Position § Positive Net Income reported in t
Slide 7: Delhi Field Recycle Facility and NGL Plant
Corporate Presentation – April 2017 Delhi Field Recycle Facility and NGL Plant Foundation Cash Flow Asset for Evolution Petroleum 7
Slide 8: Delhi Field EOR Project Development
Corporate Presentation – April 2017 Delhi Field EOR Project Development Exceptional resource: Other advantages: § 418 MMBO of gross original oil in place § No LA severance taxes (12.5%) § 323 MMBO OOIP in proved flood area until financial payout of the project § 195 MMBO production prior to EOR § Oi
Slide 9: Delhi Field Daily Oil Production
Corporate Presentation – April 2017 Delhi Field Daily Oil Production Gross Net BOPD Gross and Net BOPD BOPD 10,000 4,000 9,000 3,500 8,000 3,000 7,000 2,500 6,000 5,000 2,000 4,000 1,500 3,000 Reversion of Working 1,000 Interest – Nov 2014 2,000 500 1,000 - - Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-1
Slide 10: Delhi Field - Net Daily Oil Production
Corporate Presentation – April 2017 Delhi Field - Net Daily Oil Production 2,200 21% Production Increase 1,987 2,000 1,800 1,640 1,600 1,400 1,200 1,000 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Average Net Delhi Production by Quarter (BOPD) 10
Slide 11: EPM Interests in the Delhi Field
Corporate Presentation – April 2017 EPM Interests in the Delhi Field Costs Revenues Working Interest (a) 23.9% 19.0% Royalty Interests None 7.2% Combined Interests 23.9% 26.2% (a) Field Payout and Reversion of Working Interest to EPM Occurred Effective November 1, 2014 (Working Interest in the Menge
Slide 12: Delhi Operating Costs per BOE
Corporate Presentation – April 2017 Delhi Operating Costs per BOE $24.00 140 CO2 Purchases & Transp $19.83 R&M/Labor/Chemicals $20.00 Electricity 120 $18.15 $16.41 Purchased CO2 MMcf/d $16.00 100 $13.53 $13.13 $13.14 $12.54 $11.72 $12.00 80 $8.00 60 $4.00 40 $0.00 20 Mar-15 Jun-15 Sep-15 Dec-15 Mar-
Slide 13: EPM Delhi Reserves – Three Cases
Corporate Presentation – April 2017 EPM Delhi Reserves – Three Cases § Proved Reserves assume 13.8% (MBOE – 6/30/16) Incremental CO2 Recovery (Up from 13.0% in 2015) 20,000 § (a) 2P Combined Proved plus 18,034 Incremental Probable assumes 15,320 18.0% incremental CO2 recovery 15,000 § (b) 3P Combine
Slide 14: Oil Price and Discount Rate Sensitivities
Corporate Presentation – April 2017 Oil Price and Discount Rate Sensitivities Combined Values as of June 30, 2016 ($MM) $450 Three Important Variables: Net present value, $400 discounted at: 1) Oil Price Expectations 10% 8% 6% $350 2) Ultimate Reserve Recovery $300 3) Appropriate Discount Rate $250
Slide 15: Litigation with Delhi Operator Settled in June 2016
Corporate Presentation – April 2017 Litigation with Delhi Operator Settled in June 2016 In a comprehensive resolution of all issues, Evolution received: § Cash Payment of $27.5MM § 23.9% Working Interest in Mengel Sand in Delhi Field Expected to ultimately expand the Delhi project § Quantified attra
Slide 16: Delhi NGL Plant
Corporate Presentation – April 2017 Delhi NGL Plant Photo Taken in October 2016 16
Slide 17: Delhi NGL Storage Tanks
Corporate Presentation – April 2017 Delhi NGL Storage Tanks 2,000 Bbl+ Capacity Each 17
Slide 18: Inside General Electric LM-2500 Turbine
Corporate Presentation – April 2017 Inside General Electric LM-2500 Turbine Approx 25 Megawatt Max Capacity 18
Slide 19: Multiple Projects To Build Long-Term Value
Corporate Presentation – April 2017 Multiple Projects To Build Long-Term Expand CO2 Flood Value to Mengel Sand and Additional Expand CO2 Thinner Intervals Flood to Eastern Part of Delhi (Price Dependent) Field (Price Dependent) Start-up NGL Plant, Increase Production & Improve EOR Efficiency 19
Slide 20: Key Financial Matters
Corporate Presentation – April 2017 Key Financial Matters 20
Slide 21: Delhi Capital Spending by Quarter
Corporate Presentation – April 2017 Delhi Capital Spending by Quarter $7,500 Cum Capex – Dec 2016 NGL Plant - $26.0MM Conformance - $5.3MM $5,000 (Post Mar 2015) $2,500 Forecast $0 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17e Jun-17e Sep-17e Dec-17e NGL Plant Conformance and Other Foreca
Slide 22: New Credit Agreement Strengthens Financial Flexibility
Corporate Presentation – April 2017 New Credit Agreement Strengthens Financial Flexibility $50MM Reserve-Based Credit Agreement with MidFirst Bank – Financially Strong Private Bank § Initially Elected Borrowing Base of $10MM § Attractive Rate Structure: Mid-3% Range All-in § 25 Basis Points on Undra
Slide 23: Defensive Hedging Strategy
Corporate Presentation – April 2017 Defensive Hedging Strategy § Goals for Hedging Program: Protect Dividends and Capex Obligations Retain Long-term Commodity Price Upside § Policy allows Hedging of Maximum 70% of Estimated Production not to exceed one year forward Started Program in 2H 2015 – Reali
Slide 24: EPM Dividend History vs WTI Oil Prices
Corporate Presentation – April 2017 EPM Dividend History vs WTI Oil Prices $0.12 $120 $0.11 Cumulative Payout Dec 2013 thru Mar 2017: $0.10 $100 $32.2 MM ($0.985 per share) $0.09 $0.08 $80 $0.07 $0.07 Quarterly $0.06 $60 WTI Avg Dividend Oil Prices Rate per $0.05 (Bloomberg) Share $0.04 $40 $0.03 $0
Slide 25: Opportunities for EPM
Corporate Presentation – April 2017 Opportunities for EPM § We see an Improving Market for Acquisitions Price and Value Expectations more Reasonable § Over time, we expect to see a continuing rationalization of mature conventional cash flow properties by large entities § We are patiently seeking opp
Slide 26: Value Proposition Summary
Corporate Presentation – April 2017 Value Proposition Summary § Accretive Growth § Delhi Field Production Increasing from CO2 Flood Enhancements § Low-Cost Reserves Additions and Upgrades § Start up of the NGL Plant at Delhi Field § Underlying Value § Long-Lived Cash Flow from Very Large Delhi Field
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