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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>Evolution’s business strategy is built upon three key pillars, including growing the asset base through accretive producing property acquisitions and low-risk organic development, distributing cash to shareholders through common stock dividends, and maintaining a conservative balance sheet.</li><li>Our FY26 free cash flow estimate implies a dividend coverage ratio of 1.3x.</li><li>On September 30, 2025, Evolution paid its 48th consecutive quarterly dividend in the amount of $0.12 per share. </li></ul>

Evolution’s business strategy is built upon three key pillars, including growing the asset base through accretive producing property acquisitions and low-risk organic development, distributing cash to shareholders through common stock dividends, and maintaining a conservative balance sheet.Our FY26 free cash flow estimate implies a dividend coverage ratio of 1.3x.On September 30, 2025, Evolution paid its 48th consecutive quarterly dividend in the amount of $0.12 per share. 

Evolution Petroleum Corp: Free Cash Flow Supports Dividend

<ul><li>The SCOOP/STACK mineral and royalty acquisition added high-margin production and future development potential with zero incremental capex.</li><li>Net production was ~420 Boe/d (54% natural gas, 15% oil, and 31% NGLs) as of the transaction’s effective date on May 1, 2025.</li><li>Importantly, the only incremental lifting costs associated with the production are gathering and processing fees associated with some of the leases.</li></ul>

The SCOOP/STACK mineral and royalty acquisition added high-margin production and future development potential with zero incremental capex.Net production was ~420 Boe/d (54% natural gas, 15% oil, and 31% NGLs) as of the transaction’s effective date on May 1, 2025.Importantly, the only incremental lifting costs associated with the production are gathering and processing fees associated with some of the leases.

EPM: Latest SCOOP/STACK Acquisition Supports Consistent Dividend Philosophy

<ul><li>Evolution closed the $9-million TexMex acquisition on April 14, 2025.</li><li>The transaction added producing properties primarily located in Lea, Eddy, and Chaves, Counties in New Mexico and Stephens County, Texas.</li><li>The assets include an average working interest of 42.2% and an average net revenue interest of 35.2% in ~600 wells. </li></ul>

Evolution closed the $9-million TexMex acquisition on April 14, 2025.The transaction added producing properties primarily located in Lea, Eddy, and Chaves, Counties in New Mexico and Stephens County, Texas.The assets include an average working interest of 42.2% and an average net revenue interest of 35.2% in ~600 wells. 

Evolution Petroleum Corp: Estimate Update

<ul><li>Evolution’s framework is focused on marrying acquisitions of long-lived shallow decline producing assets complemented by organic growth opportunities to grow the underlying business and support its dividend.</li><li>The company’s 45th consecutive quarterly dividend is scheduled to be paid on December 31, 2024, in the amount of $0.12/share. The current yield is 8.2%.</li><li>Ongoing development in the Chaveroo oilfield in the Permian Basin is expected to contribute incremental oil volumes in Evolution’s fiscal fourth quarter (June).</li></ul>

Evolution’s framework is focused on marrying acquisitions of long-lived shallow decline producing assets complemented by organic growth opportunities to grow the underlying business and support its dividend.The company’s 45th consecutive quarterly dividend is scheduled to be paid on December 31, 2024, in the amount of $0.12/share. The current yield is 8.2%.Ongoing development in the Chaveroo oilfield in the Permian Basin is expected to contribute incremental oil volumes in Evolution’s fiscal fourth quarter (June).

Evolution Petroleum Corp. - Organic Investment Opportunities Support Dividend Strategy

<ul><li>We are updating our 4QFY24 (June FYE) estimates to reflect average NYMEX prices of $80.66/bbl for oil and $2.32/MMBtu for natural gas.</li><li>Our updated adjusted EBITDA estimate is $8.0 million based on a total production estimate of <span style="font-size: var(--content-font-size);">7,000 BOE/d (31% oil). </span></li><li><span style="font-size: var(--content-font-size);">Oil represents 68% of our 4QFY24 total </span>revenue estimate. </li></ul>

We are updating our 4QFY24 (June FYE) estimates to reflect average NYMEX prices of $80.66/bbl for oil and $2.32/MMBtu for natural gas.Our updated adjusted EBITDA estimate is $8.0 million based on a total production estimate of 7,000 BOE/d (31% oil). Oil represents 68% of our 4QFY24 total revenue estimate. 

Evolution Petroleum Corp. - Estimate Update

United States

Evolution Petroleum Corporation explores for and produces oil and gas.  The Company focuses on acquiring established oil and gas fields and applying specialized technology to increase production rates.

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Evolution Petroleum (EPM US)

Evolution Petroleum Corp: Free Cash Flow Supports Dividend

Evolution’s business strategy is built upon three key pillars, including growing the asset base through accretive producing property acquisitions...

Water Tower Research

EPM: Latest SCOOP/STACK Acquisition Supports Consistent Dividend Philosophy

The SCOOP/STACK mineral and royalty acquisition added high-margin production and future development potential with zero incremental capex.

Water Tower Research

Evolution Petroleum Corp: Estimate Update

Evolution closed the $9-million TexMex acquisition on April 14, 2025. The transaction added producing properties primarily located in Lea, Eddy,...

Water Tower Research

Evolution Petroleum Corp. - Organic Investment Opportunities Support Dividend Strategy

The company’s 45th consecutive quarterly dividend is scheduled to be paid on December 31, 2024, in the amount of $0.12/share. The current yield is...

Water Tower Research

Evolution Petroleum Corp. - Estimate Update

We are updating our 4QFY24 (June FYE) estimates to reflect average NYMEX prices of $80.66/bbl for oil and $2.32/MMBtu for natural gas.

Water Tower Research

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