Evolution Petroleum (US:EPM)2025-11-12 21:16Financial Performance - Total revenues for the three months ended September 30, 2025, were $21,288,000, a decrease of 2.8% compared to $21,896,000 for the same period in 2024[17] - Net income for the three months ended September 30, 2025, was $824,000, down from $2,065,000 in the same period of 2024, representing a decline of 60%[17] - The company’s operating costs for the three months ended September 30, 2025, were $21,373,000, an increase of 6.6% from $20,042,000 in the same period of 2024[17] - Basic earnings per share for the three months ended September 30, 2025, was $0.02, down from $0.06 in the same period of 2024[102] Cash Flow and Liquidity - Cash and cash equivalents decreased to $714,000 as of September 30, 2025, from $2,507,000 at the end of June 2025, indicating a significant cash outflow[15] - The company reported a net cash provided by operating activities of $7,805,000 for the three months ended September 30, 2025, compared to $7,614,000 for the same period in 2024[20] - The Company paid $4,157,000 in common stock dividends during the three months ended September 30, 2025, compared to $4,033,000 in the same period of 2024[20] Assets and Liabilities - Total assets increased to $169,131,000 as of September 30, 2025, compared to $160,252,000 as of June 30, 2025, reflecting growth in property and equipment[15] - The total stockholders' equity decreased to $69,131,000 as of September 30, 2025, from $71,813,000 as of June 30, 2025, reflecting a decline in retained earnings[15] - Total prepaid expenses and other current assets decreased from $2,287,000 on June 30, 2025, to $1,235,000 on September 30, 2025[105] - Total accrued liabilities and other decreased from $6,909,000 on June 30, 2025, to $5,443,000 on September 30, 2025[105] Capital Expenditures and Investments - The company incurred capital expenditures of $3,819,000 for oil and natural gas properties during the three months ended September 30, 2025, compared to $2,740,000 in the same period of 2024[20] - Development capital expenditures for the three months ended September 30, 2025, were $1.9 million, up from $1.0 million in 2024, indicating a 90% increase[50] - The Company completed the acquisition of mineral and royalty interests in the SCOOP and STACK plays for approximately $16.9 million, funded by $15.0 million in borrowings and cash on hand[44] - The TexMex Acquisition involved non-operated working interests in wells for a total purchase price of approximately $9.0 million, with an average working interest of 42%[45] Debt and Borrowing - The senior secured credit facility increased to $53,000,000 as of September 30, 2025, from $37,500,000 as of June 30, 2025, indicating increased borrowing[15] - The Company had $53.0 million in borrowings outstanding under its Senior Secured Credit Facility as of September 30, 2025, with an available borrowing capacity of $11.2 million[56] - The weighted average interest on borrowings under the Senior Secured Credit Facility was 7.12% for the three months ended September 30, 2025, down from 8.09% in 2024[56] - The Senior Secured Credit Facility has a maximum total leverage ratio requirement of not more than 3.00 to 1.00, and as of September 30, 2025, the Company was in compliance with all covenants[56] Derivative Contracts - The total derivative contract assets amounted to $2,477,000, compared to $1,975,000 as of June 30, 2025, reflecting an increase of approximately 25.4%[69] - The total derivative contract liabilities were $2,559,000 as of September 30, 2025, down from $3,360,000 as of June 30, 2025, indicating a decrease of about 23.8%[69] - The realized gain on derivative contracts for the three months ended September 30, 2025, was $878,000, a significant improvement from a loss of $70,000 in the same period of 2024[70] - The unrealized gain on derivative contracts for the same period was $1,303,000, compared to $1,868,000 in 2024, showing a decrease of approximately 30.3%[70] Stock and Equity - The Company sold approximately 57 thousand shares under the At-the-Market equity Sales Agreement for net proceeds of approximately $246 thousand during the three months ended September 30, 2025[87] - The average cost per share for treasury stock acquired during the three months ended September 30, 2025 was $5.16, totaling $132 thousand for 26 shares[90] - The Company recognized $0.5 million in stock-based compensation expense during the three months ended September 30, 2025, compared to $0.6 million in the same period of 2024[93] - The Company has approximately 2.2 million shares remaining available for grant under the Amended and Restated 2016 Equity Incentive Plan as of September 30, 2025[92] Tax and Compliance - The Company recognized an income tax expense of $0.4 million for the three months ended September 30, 2025, with an effective tax rate of 30.7%, compared to $0.8 million and 28.4% in 2024[62] - The company is required to hedge a portion of its production due to recent acquisitions and borrowings under its Senior Secured Credit Facility[157] - The company has not entered into interest rate derivative instruments to manage exposure to interest rate changes[159]