Evolution Petroleum Corporation, Inc. · AMEX:EPM
Evolution Petroleum — MWIC 2020
27 slides from Evolution Petroleum's conference presentation, August 2020
Slide 1: Jason Brown, President & Chief Executive Officer, August 2020
Jason Brown President & Chief Executive Officer August 2020
Slide 2: Disclaimer
Disclaimer NYSE American: EPM 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 adm
Slide 3: Company Overview
Company Overview NYSE American: EPM High Quality Long-Lived Assets Overview New York Stock Exchange EPM Shares Outstanding 33.0M Share Price (8/13/2020) $2.84 Market Capitalization (8/13/2020) $94M Common Dividend (Annualized Rate) $0.10 per share Dividend Yield (8/13/2020) 3.5% EPM Net Liquids Prod
Slide 4: Investment Highlights
Investment Highlights NYSE American: EPM ➢ High Quality, Low Risk, Long-lived Asset Base ➢ Low production decline and positive cash flow; 20+ years remaining life,100% Oil and NGLs ➢ Delhi Field potential by extending CO2 flood to other reservoirs utilizing existing facilities ➢ Attractive Dividend
Slide 5: Disciplined Growth: M&A Strategy
Disciplined Growth: M&A Strategy NYSE American: EPM ▪ Long-lived reserves with value dominated by proved developed producing cash flow ▪ Appropriate for the size and capabilities of Evolution ▪ Assets in locations with reasonable market access and a stable regulatory environment ▪ Focus on assets th
Slide 6: Our Response to COVID-19
Our Response to COVID-19 NYSE American: EPM ➢ Entered into protective near-term hedges for a significant portion of our oil production in 2020. ➢ Temporarily lowered annual dividend payout by 75%, while maintaining a yield of ~3.5%. ➢ Initiated dialogue with operators to temporarily curtail and shut
Slide 7: Delhi Field
Delhi Field IKEVOLUTION Petroleum Corporation 7
Slide 8: Delhi Field EOR CO2 Flood
Multiple High Quality, Low Risk, Long-lived Low Base Asset Decline CO2 Flood NYSE American: EPM Delhi NGL Plant Delhi Field EOR CO2 Flood • ~6,000 Gross BOE per day • ~85% Louisiana Light Sweet (LLS) oil, connected by pipeline to market • Rich mix of heavier NGLs, or 60% C4 + C5 8
Slide 9: Delhi Field Enhanced Oil Recovery Project
Multiple High Quality, Low Risk, Exceptional Long-lived Resource Asset Base NYSE American: EPM Delhi Field Enhanced Oil Recovery (“EOR”) Project 2010 2009 2012-13 Town of Delhi Phase V Phase IV Phase I Phase II Unquantified Future Phase III Unquantified future expansion in Proved downdip thinner res
Slide 10: Minimal Ongoing Capital Expenditures
Multiple High Quality, Low Risk, Long-lived Minimal Asset BaseOngoing Capital Expenditures NYSE American: EPM Delhi Field Net Capital Expenditures $8,000 $7,000 $6,000 $5,359 $5,430 $5,200 $5,000 $’s in 000’s $4,000 $3,000 $2,397 $2,292 $2,000 $1,300 $1,000 $0 FY2015 FY2016 FY2017 FY2018 FY2019 FYTD
Slide 11: Hamilton Dome Field
Hamilton Dome Field IKEVOLUTION Petroleum Corporation 11
Slide 12: Hamilton Dome Field: Low Decline Oil Acquisition
Multiple High Quality, Low Risk, Long-lived Long-Life Asset Base Low Decline Oil Acquisition NYSE American: EPM Conventional Oil Hamilton Dome Field Key Advantages Hamilton Dome Field ▪ 23.51% Non-operated working interest and 19.70% revenue interest (83.79% revenue interest to 8/8ths) ▪ Long life r
Slide 13: Hamilton Dome Historical Net Production
Multiple High Quality, Low Risk, Long-lived Hamilton Asset Base Dome Historical Net Production NYSE American: EPM Hamilton Dome Historical Production Net to Acquired Interest 10,000 ~3.4% Yearly Decline Since 1974 BOE per Day 1,000 ~0.8% Decline Since 2016 100 1983 2003 1974 1975 1976 1978 1979 1981
Slide 14: Company Performance
Company Performance IKEVOLUTION Petroleum Corporation 14
Slide 15: Low Decline and Acquisitive Growth
Multiple High Quality, Low Risk, Long-lived Low Base Asset Decline and Acquisitive Growth NYSE American: EPM EPM Historical Net Production Acquisition of 2,500 Hamilton Dome 2,000 BOE per Day 1,500 1,000 Planned facility downtime 500 Working interest reversion 0 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Se
Slide 16: Non-Operated Interests
Multiple High Quality, Low Risk, Long-lived Non-Operated Asset Base Interests NYSE American: EPM Delhi Field Interests Metric Costs Revenues Working Interest 23.9% 19.0% Royalty Interests - 7.2% Combined Interests 23.9% 26.2% Hamilton Dome Field Interests Metric Costs Revenues Working Interest 23.5%
Slide 17: Dependable Dividend Payment
Multiple High Quality, Low Risk, Long-lived Dependable Asset Base Dividend Payment NYSE American: EPM $0.12 $120 Dividend for Sept 30 quarter declared at $0.025 $0.10 $100 Quarterly Dividend per Share WTI Average Oil Price $0.08 $80 $0.06 $60 $0.04 $40 $0.02 $20 $0.00 $- Common Stock Dividends WTI O
Slide 18: Eight Years of High Growth
Multiple High Quality, Low Risk, Long-lived EightBase Asset Years of High Growth NYSE American: EPM $50 +13.4% CAGR $45 FY2012 to FY2019 $40 $35 $30 $ in Millions $25 +19.2% CAGR $20 FY2012 to FY2019 $15 $10 $5 $0 FY2012 FY2013 FY2014 FY2015 FY2016(1) FY2017 FY2018(2) FY2019 FYTD2020(3) Revenues Adj
Slide 19: Returning 50% of Operating Cash Flow
Multiple High Quality, Low Risk, Long-lived Consistent Base Track Returning Asset OverRecord 50% ofofCash Operating Flow Cash Flow NYSE American: EPM $30 Cash Flow From Operations Where is our operational cash flow going? $25 ▪ Dividends to shareholders $20 28% 18% ▪ Retained cash to redeploy into a
Slide 20: High Margins Through the Cycle
Multiple High Quality, Low Risk, Long-lived HighBase Asset Margins Through the Cycle NYSE American: EPM Delhi Field Revenue and Margin per BOE $70 $60 $50 $ per BOE $40 69% 68% 71% 65% $30 69% 65% $20 $10 $0 FY2015 FY2016 FY2017 FY2018 FY2019 FYTD 2020 LOE CO2 Field Margin Notes: LOEs are Lease Oper
Slide 21: Highly Developed Resource Base
Multiple High Quality, Low Risk, Long-lived Highly Asset Developed Resource Base Base NYSE American: EPM FY2020 Proved Reserves: 10.2 million Barrels BOE Key Metrics ▪ Addition of Probable and Possible 82% Developed Reserves significantly increases 17% the reserve base 65% ▪ Proved Reserves are base
Slide 22: Delhi Reserves
Multiple High Quality, Low Risk, Long-lived DelhiBase Asset Reserves NYSE American: EPM 20% 18% 3P 18.0% 16% 2P 16.4% 14% 1P 14.0% Oil Recovered (%OOIP) 12% 10% 8% 6% 4% 2% 0% 0.0 1.0 2.0 3.0 4.0 5.0 CO2 Injected (Hydrocarbon Pore Volume) Total Delhi Field 2020 YE PROV 2020 YE PROB 2020 YE POSS ✓ 2P
Slide 23: Solid Financial Position
Solid Financial Position NYSE American: EPM Balance Sheet as of 3Q20 Income Statement as of 3Q20 Cash $ 20,693 O&G Revenues $ 26,246 Other Current Assets 5,526 Lease Operating Expenses 11,220 Property and Equipment, net 67,688 DD&A and Accretion 4,310 Other Assets 312 G&A Expenses 4,240 Total Assets
Slide 24: Hedging Position
Hedging Position NYSE American: EPM EPM does not typically place hedges on commodity prices. (EPM’s last hedge was in 2015) ➢ Evolution’s primary asset (Delhi Field) already has a natural hedge in place with the largest cost of production, purchased CO2, which is tied directly to the price of oil. I
Slide 25: Seasoned Leadership
Seasoned Leadership NYSE American: EPM Management Team Jason Brown | President & CEO, Founder of LongBow Energy, Co-founder of Halcon Resources, RBC Richardson Barr, Petrohawk David Joe | Senior Vice President & CFO, UNOCAL Corp. Board of Directors Robert Herlin | Evolution Petroleum Chairman & Co-f
Slide 26: Investment Highlights
Investment Highlights NYSE American: EPM ➢ High Quality, Low Risk, Long-lived Asset Base ➢ Low production decline and positive cash flow; 20+ years remaining life,100% Oil and NGLs ➢ Delhi Field potential by extending CO2 flood to other reservoirs utilizing existing facilities ➢ Attractive Dividend
Slide 27: Contact Information
Contact Information NYSE American: EPM Thank you for your interest in Evolution Petroleum Corp (NYSE: EPM) Company Contacts: Jason Brown | (713) 935-0122 | [email protected] David Joe | (713) 935-0122 | [email protected] Investor Relations Contacts: Three Part Advisors Steven H