Forward-Looking Statements and Risk Factors - The company emphasizes the importance of forward-looking statements and the associated risk factors that could lead to actual results differing materially from expectations[11]. - The company does not undertake to update forward-looking statements except as required by law, advising stakeholders to review periodic filings for further disclosures[12]. Financial Performance - Total revenues for the year ended June 30, 2020, were $29,599,296, a decrease of 31.5% compared to $43,229,621 for the year ended June 30, 2019[346]. - Net income attributable to common shareholders for the year ended June 30, 2020, was $5,937,072, down from $15,377,066 in the previous year, representing a decline of 61.4%[346]. - The company reported a basic and diluted earnings per share of $0.18 for the year ended June 30, 2020, compared to $0.46 for the year ended June 30, 2019[346]. - Net cash provided by operating activities decreased to $12,396,651 in 2020 from $24,057,900 in 2019, representing a decline of 48.6%[352]. - Revenues for the first quarter of fiscal 2020 were $9,152,215, compared to $12,307,079 in the first quarter of fiscal 2019, reflecting a decrease of approximately 25.5%[502]. - The net income attributable to common shareholders for the first quarter of fiscal 2020 was a loss of $2,786,164, compared to a profit of $5,795,801 in the first quarter of fiscal 2019[502]. - Basic earnings per common share for the first quarter of fiscal 2020 were $(0.07), compared to $0.18 in the first quarter of fiscal 2019[502]. Cash and Assets - Cash and cash equivalents decreased to $19,662,528 as of June 30, 2020, from $31,552,533 as of June 30, 2019, reflecting a decline of 37.7%[343]. - Total assets as of June 30, 2020, were $92,138,236, down from $95,761,844 as of June 30, 2019, indicating a decrease of 3.3%[343]. - The company’s retained earnings decreased to $32,800,080 as of June 30, 2020, from $37,603,762 as of June 30, 2019, reflecting a decline of 13.5%[343]. - The company’s prepaid expenses and other current assets increased to $491.686 million as of June 30, 2020, from $458.278 million in the previous year[408]. Liabilities and Debt - Total liabilities increased to $18,013,754 as of June 30, 2020, compared to $15,635,986 as of June 30, 2019, marking an increase of 15.2%[343]. - The company completed its spring redetermination of the credit facility on April 27, 2020, resulting in a decrease of the borrowing base to $27 million, with borrowings limited to approximately $8 million as of June 30, 2020[458]. - The company had no borrowings outstanding under the credit facility as of June 30, 2020, and was in compliance with all financial covenants[459]. Production and Costs - Production costs for the year ended June 30, 2020, were $13,505,502, a slight decrease from $14,266,784 in the previous year[346]. - Total costs incurred for oil and natural gas activities amounted to $11,768,226 for the year ended June 30, 2020, compared to $5,229,235 for the year ended June 30, 2019, representing a significant increase[486]. - Development costs incurred during the fiscal year were $1,431,444, down from $2,089,139 in the previous year[501]. Revenue Sources - Crude oil revenues decreased to $28,578,879 in 2020 from $40,779,052 in 2019, representing a decline of 30%[395]. - The company derived 87% of its net oil and natural gas revenues from Plains Marketing L.P. for the year ended June 30, 2020[467]. Derivative Instruments and Risk Management - The company entered into NYMEX WTI oil swaps covering approximately 42,000 barrels per month at a fixed swap price of $32.00 per barrel for the period of April 2020 through December 2020[332]. - The company did not post collateral under its derivative contracts as of June 30, 2020, indicating an uncollateralized trade[333]. - The company recorded a net gain of $1,383,204 on derivative contracts for the year ended June 30, 2020, with realized losses of $(528,139) and unrealized gains of $1,911,343[474]. Tax and Regulatory Matters - The company recognized an income tax benefit of $(2.2) million for the year ended June 30, 2020, reflecting an effective tax rate of (58.1)%[449]. - The company recorded a net tax benefit of $2.8 million during the current year, primarily due to Enhanced Oil Recovery credits[449]. Shareholder Activities - Common stock dividends paid decreased to $10,740,754 in 2020 from $13,272,058 in 2019, a reduction of 19.0%[355]. - Common share repurchases totaled $2,483,357 in 2020, significantly higher than $156,791 in 2019[355]. - The company repurchased 440,666 common shares at an average price of $5.51 per share under its share repurchase program during the year ended June 30, 2020[426]. Asset Retirement Obligations - The company recorded asset retirement obligations of $2.589 million as of June 30, 2020, an increase from $1.611 million in the previous year[419]. - Significant Level 3 inputs for asset retirement obligations include costs for plugging and abandoning wells and surface restoration[486]. Reserves and Future Cash Flows - Proved oil and natural gas reserves as of June 30, 2020, were estimated at 10,218,826 BOE, an increase from 8,980,492 BOE as of June 30, 2019[492]. - The standardized measure of discounted future net cash flows related to proved oil and natural gas reserves was $62,490,836 as of June 30, 2020, down from $126,732,042 as of June 30, 2019, indicating a decrease of approximately 50.7%[497]. - Future cash inflows for 2020 were estimated at $399,358,481, compared to $524,037,200 for 2019, reflecting a decrease of about 23.7%[497]. Employee Compensation and Benefits - The company has a 401(k) Retirement Plan with matching contributions totaling $41,127 for the year ended June 30, 2020[469]. - The total stock-based compensation expense recognized for the years ended June 30, 2020, and 2019 was $1,285,663 and $888,162, respectively[443].
Evolution Petroleum (EPM) - 2020 Q4 - Annual Report