Evolution Petroleum (US:EPM)2025-02-12 21:15Production and Revenue - Crude oil, natural gas, and NGL production increased by 13% during the six months ended December 31, 2024, compared to the year-ago period [124]. - Revenues from crude oil, natural gas, and NGL had a modest increase of 1% over the same period despite increased production volumes due to declines in commodity prices [124]. - Average daily production increased by 832 BOEPD, or 13.0%, from the prior year period, reaching 6,935 BOEPD [148]. - Total revenues for the three months ended December 31, 2024, were $20.3 million, a decrease of $0.7 million, or 3.6%, compared to $21.0 million in the same period of 2023 [154]. - Total revenues for the six months ended December 31, 2024, were $42.2 million, a slight increase of 1.3% from $41.6 million in the same period of 2023 [170]. Financial Performance - Net loss for the three months ended December 31, 2024, was $1.8 million, compared to a net income of $1.1 million for the same period in 2023 [152]. - Net income for the six months ended December 31, 2024, was $0.2 million, a decrease of 90.6% from $2.6 million in the same period of 2023 [167]. - Cash flows from operating activities for the six months ended December 31, 2024, increased by $4.0 million to $15.3 million compared to the same period in 2023, primarily due to increased revenues [148]. Expenses - Lease operating costs decreased by 10%, or $2.13 per BOE, compared to the year-ago period [124]. - General and administrative expenses for the three months ended December 31, 2024, were $2.0 million, compared to $1.9 million in 2023 [159]. - General and administrative expenses decreased to $4.0 million for the six months ended December 31, 2024, from $4.1 million in the prior year [175]. - Depletion expense increased by $0.8 million, or 18.5%, to $5.0 million for the three months ended December 31, 2024, due to an increase in the depletion rate [158]. - Depletion expense increased by $2.2 million, or 27.0%, to $10.3 million for the six months ended December 31, 2024, due to an increase in depletable assets [174]. - Stock-based compensation expense increased by $0.1 million to $0.7 million for the three months ended December 31, 2024, compared to $0.6 million for the same period last year [161]. - Stock-based compensation expense increased by $0.2 million to $1.2 million for the six months ended December 31, 2024, compared to $1.0 million for the same period last year [176]. Cash and Capital Expenditures - As of December 31, 2024, cash and cash equivalents were $11.7 million, up from $6.4 million at June 30, 2024 [134]. - Working capital increased to $10.5 million as of December 31, 2024, from $5.9 million as of June 30, 2024 [134]. - The company incurred $2.2 million on development capital expenditures during the six months ending December 31, 2024 [145]. - For fiscal year 2025, budgeted capital expenditures are expected to be between $12.5 million and $14.5 million, excluding potential acquisitions [146]. - Cash used in investing activities decreased by $1.9 million to $3.8 million for the six months ended December 31, 2024, compared to the same period in 2023 [149]. - Net cash flows used in financing activities decreased by $2.0 million to $6.3 million for the six months ended December 31, 2024, primarily due to proceeds from the sale of common stock [150]. Debt and Interest - The Senior Secured Credit Facility has a maximum capacity of $50.0 million, with $39.5 million drawn as of December 31, 2024 [135]. - Interest expense increased by $0.7 million for the three months ended December 31, 2024, primarily due to borrowings on the Senior Secured Credit Facility [164]. - Interest expense increased by $1.5 million for the six months ended December 31, 2024, primarily due to borrowings on the Senior Secured Credit Facility [179]. - The weighted average interest rate on borrowings was 7.80% for the six months ended December 31, 2024 [179]. Tax and Derivative Contracts - Income tax expense was $0.1 million on net income before income taxes of $0.4 million for the six months ended December 31, 2024, with an effective tax rate of 31.4% [180]. - The effective tax rate increased from 28.5% in the prior year to 31.4% in the current period due to higher projected state income taxes [180]. - The company reported a net loss of $1.2 million on derivative contracts for the three months ended December 31, 2024, with an unrealized loss of $1.4 million [163]. - The company had $1.3 million in derivative assets as of December 31, 2024, with $1.1 million classified as current [177]. - The company expects energy prices to remain volatile and will monitor commodity prices to determine the need for derivative financial instruments [183]. - The company did not enter into derivative contracts for speculative trading purposes, focusing instead on risk management [183].