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

<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 7,000 BOE/d (31% oil). Oil represents 68% of our 4QFY24 total revenue estimate.</li><li>We expect Evolution to report 4QFY24 financial and FY24 operating results in early September. Our updated estimates are detailed in Figures 1 to 3.</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.We expect Evolution to report 4QFY24 financial and FY24 operating results in early September. Our updated estimates are detailed in Figures 1 to 3.

Evolution Petroleum Corp. - EPM: Estimate Update

<ul><li>Encouraging initial results from both the Chaveroo Oilfield Strategic Partnership and the recently closed SCOOP/STACK acquisition point to the merits of adding an organic growth element to Evolution’s asset base.</li><li>The addition increases management’s capital allocation choices to balance reinvesting in the underlying asset base, reducing leverage, and returning cash to shareholders.</li><li>The first three horizontal wells in the Chaveroo field have met or exceeded pre-drill expectations.</li></ul>

Encouraging initial results from both the Chaveroo Oilfield Strategic Partnership and the recently closed SCOOP/STACK acquisition point to the merits of adding an organic growth element to Evolution’s asset base.The addition increases management’s capital allocation choices to balance reinvesting in the underlying asset base, reducing leverage, and returning cash to shareholders.The first three horizontal wells in the Chaveroo field have met or exceeded pre-drill expectations.

Evolution Petroleum Corp. - Organic Development Portfolio Creates Capital Allocation Choices

<ul><li>Evolution announced a $43.5 million acquisition of non- operated working interest in the SCOOP/STACK unconventional development play in central Oklahoma on January 9, 2024.</li><li>Our modeling suggests the accretive acquisition supports Evolution’s free cash flow profile and its dividend, which is a critical element of management’s total shareholder return strategy.</li><li>The properties include ~1,550 BOE/d of production from ~230 producing wells on ~3,700 net leasehold acres as of the November 1, 2023, effective date.</li></ul>

Evolution announced a $43.5 million acquisition of non- operated working interest in the SCOOP/STACK unconventional development play in central Oklahoma on January 9, 2024.Our modeling suggests the accretive acquisition supports Evolution’s free cash flow profile and its dividend, which is a critical element of management’s total shareholder return strategy.The properties include ~1,550 BOE/d of production from ~230 producing wells on ~3,700 net leasehold acres as of the November 1, 2023, effective date.

Evolution Petroleum Corp. -SCOOP/STACK Acquisition Supportive of Dividend Strategy

<ul><li>Evolution is committed to a strategy of maximizing total shareholder returns through a combination of acquisitions to scale the business and returning cash to shareholders through dividends and common stock repurchases.</li><li>The strategy is underpinned by a conservative financial posture.</li><li>The board declared a quarterly dividend of $0.12/share for 3QFY23, marking the 38th consecutive quarterly cash dividend.</li></ul>

Evolution is committed to a strategy of maximizing total shareholder returns through a combination of acquisitions to scale the business and returning cash to shareholders through dividends and common stock repurchases.The strategy is underpinned by a conservative financial posture.The board declared a quarterly dividend of $0.12/share for 3QFY23, marking the 38th consecutive quarterly cash dividend.

Singular Focus on Total Shareholder Return

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)

Evolution Petroleum Corp. - EPM: 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

Evolution Petroleum Corp. - Organic Development Portfolio Creates Capital Allocation Choices

The addition increases management’s capital allocation choices to balance reinvesting in the underlying asset base, reducing leverage, and...

Water Tower Research

Evolution Petroleum Corp. -SCOOP/STACK Acquisition Supportive of Dividend Strategy

Evolution announced a $43.5 million acquisition of non- operated working interest in the SCOOP/STACK unconventional development play in central...

Water Tower Research

Committed to Shareholder Returns

The board declared a quarterly dividend of $0.12/share for 3QFY23, marking the 38th consecutive quarterly cash dividend.

Water Tower Research

Singular Focus on Total Shareholder Return

KEY POINTS We hosted a fireside chat on November 29, 2022, with Kelly Loyd, President, Chief Executive Officer, and a Director of Evolution...

Water Tower Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)