Evolution Petroleum Corporation, Inc. · AMEX:EPM
Evolution Petroleum — EnerCom 2019
24 slides from Evolution Petroleum's conference presentation, August 2019
Slide 1: Evolution Petroleum Corporation Corporate Presentation – August 2019
Evolution Petroleum Corporation Corporate Presentation – August 2019 1
Slide 2: Forward Looking Statements
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 and administrative costs, future oper
Slide 3: Key Takeaways
KEY TAKEAWAYS Free Cash Flow 23 Consecutive Quarterly Cash Dividends 7 Consecutive Years of Net Income Under-levered Balance Sheet Buy Back Program 3
Slide 4: Texas / Gulf Coast Focus Overview
Texas / Gulf Coast Focus Overview New York Stock Exchange EPM Shares Outstanding 33.2 MM Share Price (8/8/2019) $6.10 Delhi Field Total Equity Value (8/8/2019) $203 MM Common Dividend (Annualized Rate) $0.40 per share Dividend Yield (8/8/2019) 6.5% EPM Houston Headquarters (Fiscal year ended 6/30/19
Slide 5: Investment Considerations
INVESTMENT CONSIDERATIONS High Quality, Long-lived Asset Base Steady cash flow from large, Delhi field resource; 20+ years remaining life Potential production additions from continuing development Phase V scheduled for late fiscal 2020 into fiscal 2021 Upside unquantified potential by extendin
Slide 6: Core Objectives
CORE OBJECTIVES Directly benefit our shareholders by distributing a large portion of cash flows through cash dividends Tax Reform makes C-Corps like EPM more tax-efficient Conservatively invest balance of cash flow into similar, long-life assets that fit our model and capabilities Diversify as
Slide 7: EPM Dividend History vs WTI Oil Prices
EPM Dividend History vs WTI Oil Prices $0.14 Cumulative Payout Dec 2013 thru Jun 2019 $140 > $59 MM (or $1.81/share) $0.12 $120 Sept 2019 Dividend Declared at $0.10 $0.10 $100 $0.08 $80 Quarterly WTI Avg Dividend Oil Prices Rate per $0.06 $60 (Bloomberg) Share $0.04 $40 $0.02 $20 $0.00 $- Common Sto
Slide 8: Seven Consecutive Years of Net Income (& Counting)
Seven Consecutive Years of Net Income (& Counting) $45 Revenues Net Income $40 $35 $30 (a) $Million $25 (b) $20 $15 $10 $5 $0 2012 2013 2014 2015 2016 2017 2018 2019 9 Mos YTD (a) Includes Litigation Settlement (b) Includes Tax Reform 8
Slide 9: Where is our operational cash flow going?
Where is our operational Uses of CFFO1, $000 cash flow going? $25,000 Uses of CFFO1, $000 $25,000 • Qualified Ordinary Dividends $20,000 to Shareholders $20,000 $15,000 $15,000 • Invested back into Delhi Field to support production level $10,000 $10,000 into next decade $5,000 $5,000 • Retained cash
Slide 10: Summary Financial Statements March 31, 2019
Summary Financial Statements March 31, 2019 Amounts in $000’s, except EPS Balance Sheet Income Statement (Nine months fiscal YTD) Cash $ 29,550 Delhi field revenues $ 32,856 Other current assets 4,368 Lease operating expenses 10,704 Property and equipment, net 61,354 DD&A and accretion 4,710 Other a
Slide 11: Delhi Recycle Facility & NGL Plant
Delhi Recycle Facility & NGL Plant Delhi Field EOR CO2 Flood • ~7,700 BOE per day • ~85% premium Louisiana Light Sweet (LLS) oil, connected by pipeline to market • 3 trains of processing of recycle gas • Rich mix of heavier NGLs, or 60% C5 + C4 11
Slide 12: Delhi Field EOR Project
Delhi Field EOR Project Delhi Unit 12+ miles long Unquantified 2010 2009 2012-13 Future Town Expansion of Delhi Phase Phase V IV Phase I Phase Unquantified future expansion in II downdip thinner reservoirs & eastern phase – dependent on oil Phase III 2020/21 price 2015-17 2018 PUD Infill Drilling in
Slide 13: Delhi Field Daily Production (Tertiary)
Delhi Field Daily Production (Tertiary) Gross and Net BOE per Day Infill Drilling Phase V First production Conformance Projects & NGL 2018 ~Fiscal from CO2 flood Plant Program 2020/21 10,000 BOEPD WI & Royalty Interests 1,000 Reversion of Working Interest in Nov 2014 Royalty Interests Only 100 Jun-1
Slide 14: EPM Interests in the Delhi Field
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 As part of 2016 litigation settlement, EPM also received 23.9% wor
Slide 15: Delhi Revenue and Field Operating Margin per BOE
Delhi Revenue and Field Operating Margin per BOE $70 Rev / BOE Rev/BOE $61.52 $59.54 $60 $55.39 $50 $44.88 $39.71 (71% of Rev) $40 (69% of Rev) (67% of Rev) (69% of Rev) $30 (65% of Rev) $20 $10 $- YE Jun 2015 YE Jun 2016 YE Jun 2017 YE June 2018 FYTD Mar 2019 LOE CO2 Costs Field Operating Margin Fi
Slide 16: Delhi Field Capital Spending by EPM
Delhi Field Capital Spending* by EPM ($000’s) (FY 2019 amounts unaudited) $8,000 $7,000 $6,000 $5,359 $5,430 $5,000 $4,313 $4,000 $3,000 $2,292 $2,397 $2,000 Forecast $800 $1,000 $0 FY 2015 FY 2016 FY 2017 FY 2018 Q3 FY 2019 Bal FY 2019e Well Integrity Field Enhancement Facilities/Other New Drilling
Slide 17: 6/30/19 Proved Reserves, BOE
6/30/19 Proved Reserves, BOE Reserve Report Prepared by DeGolyer & MacNaughton 240,460 1,124,300 Proved Reserves based on 14.4% incremental CO2 recovery (up from 13.0% in 1,341,820 82% Developed 2015). Probable* and Possible* Reserves based on improved recovery rates 6,273,910 Remaining PUD costs fo
Slide 18: Delhi NGL Plant
Delhi NGL Plant Producing 1,100 – 1,200 BOE of NGL’s per day Very Rich NGL Mix (TTM): • NGL Plant online Jan 2017 • Operating at effective capacity NGL Component % of Stream • GE turbine also at capacity Ethane 4% Fueled by field natural gas Propane 24% Replaces purchased electrical power Butanes (I
Slide 19: Multiple Projects To Build Long-Term Value
Multiple Projects To Build Long-Term Value Expand Delhi CO2 flood to Mengel Unit, additional thinner Delhi continued infill reservoirs and further drilling program expansion to eastern Expansion of Delhi CO2 edge (Phase VI, flood to eastern part of subject to oil price) Maintain/improve field (Phase
Slide 20: Management and Directors
Management and Directors (Average BOD Tenure 12 Years / Insiders Own ~8%*) Jason Brown – President & CEO, Founder of LongBow Energy; Co-founder of Halcon Resources David Joe – SVP & CFO (14 Years w/EPM), UNOCAL Corp Steve Hicks – SVP of Engineering & Business Development, 21 years in A&D Ind
Slide 21: Opportunity for EPM
Opportunity for EPM We plan to maintain and grow EPM as a market-friendly platform to generate cash returns for shareholders We focus on assets that do not require high capital investment, long lead time to net cash flow, large scale efficiencies to be economic, or high dependency on near term c
Slide 22: Acquisition Criteria
Acquisition Criteria Large majority of value is generally attributable to proved developed producing cash flow Long-life Assets are in locations with reasonable access to markets and stable regulatory environments Transactions will provide a reasonable rate of return on a risk-adjusted basis
Slide 23: Value Proposition
Value Proposition High Quality, Long-lived Asset Base Substantial, low decline cash flow from Delhi field; 20+ years remaining life Potential production additions from continuing development Phase V scheduled for fiscal 2020 and 2021 Upside unquantified potential by extending CO2 flood to othe
Slide 24: Thank you for your interest in Evolution Petroleum Corp
Thank you for your interest in Evolution Petroleum Corp (NYSE: EPM) Company Contacts: Jason Brown, jbrown@EvolutionPetroleum.com David Joe, djoe@EvolutionPetroleum.com (713) 935-1022 24