Research from Water Tower Research, Water Tower Research

Water Tower Research

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.

Equity Research Firm

Equity Bottom-Up

<div><ul><li>We are updating our earnings and adjusted EBITDA estimates to reflect actual 3QFY26 oil and natural gas benchmark prices and along with changes to our forward oil and gas price estimates. </li><li>Our benchmark oil and gas prices averaged $72.67/Bbl and $3.47/MMBtu in 3QFY26, respectively. </li><li>Our 4QFY26 estimates are based on benchmark prices of $90/Bbl for oil and $2.80/MMBtu for gas.</li></ul></div>

We are updating our earnings and adjusted EBITDA estimates to reflect actual 3QFY26 oil and natural gas benchmark prices and along with changes to our forward oil and gas price estimates. Our benchmark oil and gas prices averaged $72.67/Bbl and $3.47/MMBtu in 3QFY26, respectively. Our 4QFY26 estimates are based on benchmark prices of $90/Bbl for oil and $2.80/MMBtu for gas.

<div><ul><li>Mineral/royalty acquisitions have added high-margin production to Evolution’s diverse asset base. </li><li>In August 2025, the company closed a $17-million acquisition of mineral and royalty interests in the SCOOP/STACK play in central Oklahoma.</li><li> In late December 2025 and early January 2026, Evolution closed four mineral and royalty acquisitions in the Haynesville-Bossier Shale play in Louisiana for $4.5 million.</li></ul></div>

Mineral/royalty acquisitions have added high-margin production to Evolution’s diverse asset base. In August 2025, the company closed a $17-million acquisition of mineral and royalty interests in the SCOOP/STACK play in central Oklahoma. In late December 2025 and early January 2026, Evolution closed four mineral and royalty acquisitions in the Haynesville-Bossier Shale play in Louisiana for $4.5 million.

EPM: Minerals Acquisitions Strategy Supports Dividend Goals

<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

Thematic (Sector/Industry)

<ul><li>Still minimal oil flowing through the Strait. As talks between the US and Iran ended last weekend in Pakistan without resolution, the US announced Sunday that it would now block the Strait of Hormuz from all shipping traffic.</li><li>This news sent oil prices back above $100/bbl on Monday, with Brent and WTI both up 7% prior to each closing ~$98/bbl after President Trump commented Monday that Iran had reached out with respect to a potential war-ending proposal.</li><li>Oil front-month contract prices have now declined into the low $90s on hopes that US-Iran war-ending negotiations will resume. </li></ul>

Still minimal oil flowing through the Strait. As talks between the US and Iran ended last weekend in Pakistan without resolution, the US announced Sunday that it would now block the Strait of Hormuz from all shipping traffic.This news sent oil prices back above $100/bbl on Monday, with Brent and WTI both up 7% prior to each closing ~$98/bbl after President Trump commented Monday that Iran had reached out with respect to a potential war-ending proposal.Oil front-month contract prices have now declined into the low $90s on hopes that US-Iran war-ending negotiations will resume. 

Energy Roundup : Topsy-Turvy Oil Markets Continue to Be Driven by Strait of Hormuz News

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Evolution Petroleum (EPM US)

EPM: Estimate Update

We are updating our earnings and adjusted EBITDA estimates to reflect actual 3QFY26 oil and natural gas benchmark prices and along with changes to...

Water Tower Research

EPM: Minerals Acquisitions Strategy Supports Dividend Goals

In August 2025, the company closed a $17-million acquisition of mineral and royalty interests in the SCOOP/STACK play in central Oklahoma.

Water Tower Research

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

Energy Roundup : Topsy-Turvy Oil Markets Continue to Be Driven by Strait of Hormuz News

Oil front-month contract prices have now declined into the low $90s on hopes that US-Iran war-ending negotiations will resume.

Water Tower Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)