Evolution Petroleum Corporation, Inc. · AMEX:EPM
Evolution Petroleum — Investor Presentation (October 2016)
24 slides from Evolution Petroleum's investor presentation, October 2016
Slide 1: Corporate Presentation October 2016
Corporate Presentation fh EVOLUTION October 2016 Petroleum Corporation
Slide 2: Forward-Looking Statement
2 NYSE MKT: EPM Forward-Looking Statement 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 administrative cos
Slide 3: Company Profile
3 Company Profile NYSE MKT: EPM Vital Statistics Texas / Gulf Coast Focus Overview (FiscalYear End June 30) NewYork Stock Exchange EPM Shares Outstanding (6/30/2016) 33.0 MM Fully Diluted Shares (6/30/2016) 33.1 MM Share Price (10/21/2016) $7.72 Total Equity Value (10/21/2016) $255 MM Delhi Field Co
Slide 4: Summary Financial Statements
4 Summary Financial Statements NYSE MKT: EPM Balance Sheet (as of June 30, 2016 - $000’s) Income Statement (YE June 30, 2016 - $000’s) Cash (1) $34,077 Delhi Field oil revenues & other $26,350 Other current assets 3,009 Lease operating expenses 9,062 PP & E 59,999 DD&A and accretion of P&A costs 5,2
Slide 5: Key Update Highlights
5 NYSE MKT: EPM Key Update Highlights Litigation Settlement Greatly Improves Financial Strength Removes Uncertainty and Continuing Legal Costs NGL Plant Substantially Complete Expected Near-term Increase in Cash Flow New Credit Agreement Redemption of Preferred Stock GARP Separation Completed
Slide 6: Settlement of Litigation
6 Settlement of Litigation NYSE MKT: EPM Improved Relationship with Operator Litigation with Delhi Operator Settled in June 2016 In a comprehensive resolution of all issues, Evolution received: Cash Payment of $27.5MM 23.9% Working Interest in Mengel Sand in Delhi Field that is expected to ultim
Slide 7: New Credit Agreement
7 New Credit Agreement NYSE MKT: EPM Strengthens Financial Flexibility $50MM Reserve-Based Credit Agreement with MidFirst Bank – Financially Strong Private Bank Initial Borrowing Base of $10MM Based on Max EPM Needs Attractive Rate Structure: Low-3% Range All-in 25 Basis Point on Undrawn Borro
Slide 8: Separation of GARP
8 Separation of GARP® NYSE MKT: EPM Artificial Lift Technology Operations 2015 BOD Decision to Separate GARP® Operations into Independent Well Lift, Inc. Majority Owned by GARP® Employees EPM Retains Minority Interest With Convertible Preferred for Upside EPM Receives 5% Royalty Payment for Us
Slide 9: Investment Considerations
9 Investment Considerations NYSE MKT: EPM Financially Strong and Shareholder Friendly High Quality Asset Base w/ Near-Term Growth Catalysts Extremely Long-Lived Production (25 Year Life; Much Longer with Higher Oil Prices) Debt-Free Balance Sheet with Solid Working Capital Position Positive
Slide 10: Long-Lived Foundation Oil Resource
Long-Lived Foundation Oil Resource
Slide 11: Delhi Field
11 Delhi Field NYSE MKT: EPM CO2 Enhanced Oil Recovery Asset Huge Resource Delhi Field EOR Project Development 323 MMBO of Gross Original Oil In Place 195 MMBO Production Prior to EOR Project, 11.8 MMBO Since Prior Quarter Production 1,856 net (6,964 gross) BOPD Growth Catalysts NGL Plan
Slide 12: High Value Interests
12 High Value Interests NYSE MKT: EPM Delhi Field Interest Profile 7.2%* • 7.2%* of gross revenues Royalty • No CapEx Interest or OpEx…ever 26.2% Net Revenue Interest • Reversion 23.9% occurred Working Nov-2014 Interest • Bears 23.9% of CapEx and OpEx 19.0% NRI * reduced from 7.4% effective 7/1/16 i
Slide 13: Delhi EOR Production Profile
13 Delhi EOR Production Profile NYSE MKT: EPM 10,000 Delhi Field Oil and NGL Production 1,000 Gross BODP - Since Reversion Barrels Per Day 8,000 7,500 7,000 6,500 100 Reversion of Working Interest (Nov-2014) 6,000 5,500 5,000 10 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 G
Slide 14: Delhi Operating Costs per BOE
14 Delhi Operating Costs per BOE $24.00 $22.00 CO2 Purchases & Transp $19.19 $19.22 R&M/Labor/Chemicals $20.00 $18.00 Electricity $16.37 $16.00 $13.44 $13.13 $14.00 $11.72 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Purchased CO2 Declined from >100MMcf/d to
Slide 15: High-Quality Reserves
15 High-Quality Reserves NYSE MKT: EPM High Developed Content & Low Cost Development Reserve Value Price Sensitivity Cases (MBOE) 20,000 18,034 SEC Case $50 Case $60 Case 15,320 NYMEX WTI Reference Price $ 42.91 $ 50.00 $ 60.00 Estimated Net Realized Price 40.91 47.94 57.86 15,000 PV-10 Values ($MM)
Slide 16: NGL Recovery Plant
16 NGL Recovery Plant NYSE MKT: EPM Major Growth Catalyst Construction of the NGL Plant is Approx 90% Complete Technical Completion Date Projected for November 1, 2016 Production of 2,000 Gross Bbls NGL / Day Expected Jan 2017 Increase CO2 Efficiency and Expected Gross Oil by 500 BOPD Meth
Slide 17: NGL Recovery Plant: Construction in Progress
17 NGL Recovery Plant NYSE MKT: EPM Construction in Progress
Slide 18: Continuing Expansion: Delhi Field Development Plan
18 Continuing Expansion NYSE MKT: EPM Delhi Field Development Plan Multiple Projects To Build Expand CO2 Flood to Long-Term Additional Thinner Value Expand CO2 Intervals Flood to (Price Dependent) Eastern Half of Delhi Field Install NGL (Price Dependent) Plant, Increase Production & Improve EOR Effi
Slide 19: Well-Positioned to Endure and Capitalize
Well-Positioned to Endure and Capitalize
Slide 20: Liquidity and Investment
20 Liquidity and Investment NYSE MKT: EPM Shareholder Friendly Common • $0.20 Per $38.6 MM Liquidity Dividends Common Share (Jun 30, 2016) $27.8 MM Returned Preferred Dividends • $674 M per Year (To be Retired) to Common Secured Revolver, Shareholders $10.0 MM Working Capital, $28.6 Since FY 2014(a)
Slide 21: Strong Balance Sheet Debt-Free
7.0x 3.0x 5.0x 0.0x 1.0x 4.0x 8.0x 2.0x 6.0x 9.0x XCO WTI EXXI SFY SN HK LGCY REN WRES TPLM NYSE MKT: EPM MHR PVA CWEI CRK Chapter 11 the list filed 8 Companies REXX on this end of SGY SM GST EPE OAS EOX CRZO RRC BBEP BCEI APC JONE LPI BBG WLL NFX NFG CPE RICE DNR AR ERN CXO AXAS Peer Group Debt to
Slide 22: Hedging Program
22 Hedging Program NYSE MKT: EPM Protection of Capital Program/Dividends BOD Decision in Late Spring of 2015 to Enter Into Price Risk Management Strategy Primarily Defensive to Assure Funds for $25MM Capex on NGL Plant Up to 70% of Production; Term Less than Twelve Months Initially Used Coll
Slide 23: Looking Forward
Looking Forward EVOLUTION Petroleum Corporation
Slide 24: Summary
24 Summary NYSE MKT: EPM Recovering More, Generating Returns Accretive Growth Delhi Field Production Increasing From Ongoing CO2 Flood Development Low-Cost Reserves Additions and Upgrades Installation of NGL Plant at Delhi Field Underlying Value Long-Lived Cash Flow from Very Large Delhi
Evolution Petroleum — Investor Presentation (October 2016) on 6ix