Evolution Petroleum Corp 10-Q for FY2024 Q1

About this 10-Q

Headline figures

Evolution Petroleum Corp (EPM)

10-Q 2023-11-08 For: 2023-09-30

Added on April 08, 2026

Evolution Petroleum Corp filed this 10-Q on November 8, 2023, covering the quarter ended September 30, 2023 (FY2024 Q1).

Fiscal Year

First quarter ended September 30,

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $20.6M; down 48.2% from $39.8M a year earlier
Net income: $1.47M; down 86.2% from net income of $10.71M a year earlier
Diluted EPS: $0.04; down 87.5% from $0.32 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Title of Each Class	Trading Symbol(s)	Name of Each Exchange On Which Registered
Common Stock, $0.001 par value	EPM	NYSE American



Large accelerated filer	☐	Accelerated filer	☒	Non-accelerated filer	☐	Smaller reporting company	☒
						Emerging growth company	☐


Forward-Looking Statements		2
PART I.	FINANCIAL INFORMATION	4
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2023 and June 30, 2023	4
	Condensed Consolidated Statements of Operations (Unaudited) for the three months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the three months ended September 30, 2023 and 2022	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risks	30
Item 4.	Controls and Procedures	31
PART II. OTHER INFORMATION		31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signatures	34


	September 30, 2023		June 30, 2023
Assets
Current assets
Cash and cash equivalents	$	9,413	$	11,034
Receivables from crude oil, natural gas, and natural gas liquids revenues		10,555		7,884
Prepaid expenses and other current assets		2,122		2,277
Total current assets		22,090		21,195
Property and equipment, net of depletion, depreciation, and impairment
Oil and natural gas properties—full-cost method of accounting:
Oil and natural gas properties, subject to amortization, net		103,384		105,781
Oil and natural gas properties, not subject to amortization		398		—
Total property and equipment, net		103,782		105,781

Other assets		1,328		1,341
Total assets	$	127,200	$	128,317
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	7,117	$	5,891
Accrued liabilities and other		5,204		6,027
State and federal taxes payable		753		365
Total current liabilities		13,074		12,283
Long term liabilities
Deferred income taxes		6,728		6,803
Asset retirement obligations		17,364		17,012
Operating lease liability		112		125
Total liabilities		37,278		36,223
Commitments and contingencies (Note 9)
Stockholders' equity
Common stock; par value $0.001; 100,000,000 shares authorized: issued and
outstanding 33,440,195 and 33,247,523 shares as of September 30, 2023
and June 30, 2023, respectively		33		33
Additional paid-in capital		40,465		40,098
Retained earnings		49,424		51,963
Total stockholders' equity		89,922		92,094
Total liabilities and stockholders' equity	$	127,200	$	128,317


	Three Months Ended
	September 30,
	2023		2022
Revenues
Crude oil	$	12,616	$	15,163
Natural gas		5,552		19,848
Natural gas liquids		2,433		4,786
Total revenues		20,601		39,797
Operating costs
Lease operating costs		11,883		19,116
Depletion, depreciation, and accretion		4,262		3,598
General and administrative expenses		2,603		2,472
Total operating costs		18,748		25,186
Income (loss) from operations		1,853		14,611
Other income (expense)
Net gain (loss) on derivative contracts		—		(603)
Interest and other income		116		6
Interest expense		(32)		(243)
Income (loss) before income taxes		1,937		13,771
Income tax (expense) benefit		(463)		(3,064)
Net income (loss)	$	1,474	$	10,707
Net income (loss) per common share:
Basic	$	0.04	$	0.32
Diluted	$	0.04	$	0.32
Weighted average number of common shares outstanding:
Basic		32,663		33,134
Diluted		32,984		33,319


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	1,474	$	10,707
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation, and accretion		4,262		3,598
Stock-based compensation		472		208
Settlement of asset retirement obligations		—		(7)
Deferred income taxes		(75)		(36)
Unrealized (gain) loss on derivative contracts		—		(1,119)
Accrued settlements on derivative contracts		—		(220)
Other		—		(8)
Changes in operating assets and liabilities:
Receivables from crude oil, natural gas, and natural gas liquids revenues		(2,686)		6,804
Prepaid expenses and other current assets		169		33
Accounts payable and accrued liabilities		320		(5,173)
State and federal income taxes payable		388		2,578
Net cash provided by operating activities		4,324		17,365
Cash flows from investing activities:
Acquisition of oil and natural gas properties		—		(31)
Capital expenditures for oil and natural gas properties		(1,827)		(1,848)
Net cash used in investing activities		(1,827)		(1,879)
Cash flows from financing activities:
Common stock dividends paid		(4,013)		(4,026)
Common stock repurchases, including stock surrendered for tax withholding		(105)		(26)
Repayments of senior secured credit facility		—		(9,000)
Net cash (used in) provided by financing activities		(4,118)		(13,052)
Net increase (decrease) in cash and cash equivalents		(1,621)		2,434
Cash and cash equivalents, beginning of period		11,034		8,280
Cash and cash equivalents, end of period	$	9,413	$	10,714

Supplemental disclosures of cash flow information:
Non-cash investing and financing transactions:
Increase (decrease) in accrued capital expenditures for oil and natural gas properties	$	(83)	$	(872)


				Additional						Total
	Common Stock			Paid-in		Retained		Treasury		Stockholders'
	Shares	Par Value		Capital		Earnings		Stock		Equity
For the Three Months Ended September 30, 2023
Balances at June 30, 2023	33,248	$	33	$	40,098	$	51,963	$	—	$	92,094
Issuance of restricted common stock	204		—		—		—		—		—
Common stock repurchases, including stock surrendered for tax withholding	—		—		—		—		(105)		(105)
Retirements of treasury stock	(12)		—		(105)		—		105		—
Stock-based compensation	—		—		472		—		—		472
Net income (loss)	—		—		—		1,474		—		1,474
Common stock dividends paid	—		—		—		(4,013)		—		(4,013)
Balances at September 30, 2023	33,440	$	33	$	40,465	$	49,424	$	—	$	89,922

For the Three Months Ended September 30, 2022
Balances at June 30, 2022	33,471	$	33	$	42,629	$	32,852	$	—	$	75,514
Issuance of restricted common stock	79		—		—		—		—		—
Common stock repurchases, including stock surrendered for tax withholding	—		—		—		—		(26)		(26)
Retirements of treasury stock	(4)		—		(26)		—		26		—
Stock-based compensation	—		—		208		—		—		208
Net income (loss)	—		—		—		10,707		—		10,707
Common stock dividends paid	—		—		—		(4,026)		—		(4,026)
Balances at September 30, 2022	33,546	$	33	$	42,811	$	39,533	$	—	$	82,377


	September 30, 2023		June 30, 2023
Oil and natural gas properties
Property costs subject to amortization	$	198,562	$	197,049
Property costs not subject to amortization		398		—
Less: Accumulated depletion, depreciation, and impairment		(95,178)		(91,268)
Oil and natural gas properties, net	$	103,782	$	105,781


Derivatives not designated	Location of gain (loss)	Three Months Ended
as hedging contracts	recognized in income on	September 30,
under ASC 815	derivative contracts	2023		2022
Commodity contracts:
Realized gain (loss) on derivative contracts	Other income and expenses - net gain (loss) on derivative contracts	$	—	$	(1,722)
Unrealized gain (loss) on derivative contracts	Other income and expenses - net gain (loss) on derivative contracts		—		1,119
Total net gain (loss) on derivative contracts		$	—	$	(603)


	September 30, 2023
Asset retirement obligations — beginning of period	$	17,067
Accretion of discount		352
Asset retirement obligations — end of period		17,419
Less: current asset retirement obligations		(55)
Long-term portion of asset retirement obligations	$	17,364


		Weighted
	Number of	Average
	Restricted	Grant-Date
Award Type	Shares	Fair Value
Time-vested awards	489,066	$	6.64
Performance-based awards	278,688		5.46
Unvested at September 30, 2023	767,754	$	6.21


						Weighted
		Weighted		Unamortized		Average
	Number of	Average		Compensation		Remaining
	Restricted	Grant-Date		Expense		Amortization
	Shares	Fair Value		(In thousands)		Period (Years)
Unvested at June 30, 2023	595,414		6.48	$	2,827	2.4
Time-vested shares granted	68,157		6.47
Performance-based shares granted	136,315		4.80
Vested	(32,132)		5.80
Unvested at September 30, 2023	767,754	$	6.21	$	3,480	2.4


	September 30, 2023		June 30, 2023
Prepaid expenses and other current assets:
Other receivables	$	32	$	18
Prepaid insurance		582		727
Prepaid federal and state income taxes		805		805
Carryback of EOR tax credit		347		347
Prepaid other		356		380
Total prepaid expenses and other current assets	$	2,122	$	2,277

Other assets:
Deposit	$	1,158	$	1,158
Right of use asset under operating lease		170		183
Total other assets	$	1,328	$	1,341

Accrued liabilities and other:
Accrued payables	$	2,937	$	3,005
Accrued capital expenditures		31		167
Accrued incentive and other compensation		390		941
Accrued royalties payable		726		977
Accrued taxes other than federal and state income tax		971		739
Accrued severance		—		81
Operating lease liability		59		59
Asset retirement obligations due within one year		55		55
Accrued - other		35		3
Total accrued liabilities and other	$	5,204	$	6,027


	Three Months Ended
	September 30,
(in thousands, except per unit and per BOE amounts)	2023		2022		Variance		Variance %
Net income (loss)	$	1,474	$	10,707	$	(9,233)	(86.2)	%
Revenues:
Crude oil		12,616		15,163		(2,547)	(16.8)	%
Natural gas		5,552		19,848		(14,296)	(72.0)	%
Natural gas liquids		2,433		4,786		(2,353)	(49.2)	%
Total revenues		20,601		39,797		(19,196)	(48.2)	%
Operating costs:
Lease operating costs:
CO₂ costs		1,578		2,199		(621)	(28.2)	%
Ad valorem and production taxes		1,278		3,263		(1,985)	(60.8)	%
Other lease operating costs		9,027		13,654		(4,627)	(33.9)	%
Depletion, depreciation, and accretion:
Depletion of full cost proved oil and natural gas properties		3,910		3,322		588	17.7	%
Accretion of asset retirement obligations		352		276		76	27.5	%
General and administrative expenses:
General and administrative		2,131		2,264		(133)	(5.9)	%
Stock-based compensation		472		208		264	126.9	%
Other income (expense):
Net gain (loss) on derivative contracts		—		(603)		603	(100.0)	%
Interest and other income		116		6		110	1,833.3	%
Interest expense		(32)		(243)		211	(86.8)	%
Income tax (expense) benefit		(463)		(3,064)		2,601	(84.9)	%

Production:
Crude oil (MBBL)		161		168		(7)	(4.2)	%
Natural gas (MMCF)		2,025		2,494		(469)	(18.8)	%
Natural gas liquids (MBBL)		95		115		(20)	(17.4)	%
Equivalent (MBOE)⁽¹⁾		594		699		(105)	(15.0)	%
Average daily production (BOEPD)⁽¹⁾		6,457		7,598		(1,141)	(15.0)	%

Average price per unit⁽²⁾:
Crude oil (BBL)	$	78.36	$	90.26	$	(11.90)	(13.2)	%
Natural gas (MCF)		2.74		7.96		(5.22)	(65.6)	%
Natural Gas Liquids (BBL)		25.61		41.62		(16.01)	(38.5)	%
Equivalent (BOE)⁽¹⁾		34.68		56.93		(22.25)	(39.1)	%

Average cost per unit:
Operating costs:
Lease operating costs:
CO₂ costs	$	2.66	$	3.15		(0.49)	(15.6)	%
Ad valorem and production taxes		2.15		4.67		(2.52)	(54.0)	%
Other lease operating costs		15.20		19.53		(4.33)	(22.2)	%
Depletion of full cost proved oil and natural gas properties		6.58		4.75		1.83	38.5	%
General and administrative expenses:
General and administrative		3.59		3.24		0.35	10.8	%
Stock-based compensation		0.79		0.30		0.49	163.3	%


				(c) Total number	(d) Maximum dollar value
	(a) Total number			of shares	of shares that may yet be
	of shares			purchased as part	purchased under the
	purchased and	(b) Average price		of public announced	plans or programs
Period	received ⁽¹⁾	paid per share ⁽¹⁾		plans or programs⁽²⁾	(in thousands)⁽²⁾
July 2023	—	$	—	—	$	21,152
August 2023	—		—	—		21,152
September 2023	11,800		8.89	—		21,152









3.1		Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of our Quarterly Report on Form 10-Q filed February 8, 2023).
3.3		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 of our Annual Report on Form 10- filed September 13, 2023)
31.1**		Certification of Principal Executive Officer Pursuant to Rule 15D-14 of the Securities Exchange Act of 1934, as Amended as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2**		Certification of Principal Financial Officer Pursuant to Rule 15D-14 of the Securities Exchange Act of 1934, as Amended as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	Evolution Petroleum Corporation
Date: November 8, 2023	By:	/s/ KELLY W. LOYD
		Kelly W. Loyd President and Chief Executive Officer (Principal Executive Officer) and Director
	By:	/s/ RYAN STASH
		Ryan Stash Senior Vice President and Chief Financial Officer (Principal Financial Officer) and Treasurer


Dated: November 8, 2023	/s/ KELLY W. LOYD
	Kelly W. Loyd
	President and Chief Executive Officer (Principal Executive Officer) and Director


Dated: November 8, 2023	/s/ RYAN STASH
	Ryan Stash
	Senior Vice President, Chief Financial Officer (Principal Financial Officer) and Treasurer