Evolution Petroleum (US:EPM)2026-02-10 21:35Financial Performance - Evolution Petroleum reported a net income of $1.1 million, or $0.03 per diluted share, compared to a net loss of $1.8 million, or $(0.06) per share, in the same quarter last year[16]. - Adjusted EBITDA increased by 41% to $8.0 million, driven by higher realized natural gas prices and improved operational efficiency[6][16]. - Total revenues for Q2 2026 rose by 2% to $20.7 million, primarily due to a 6% increase in production and a 22% increase in realized natural gas prices[12]. - Total revenues for the three months ended December 31, 2025, were $20,679,000, a slight increase from $20,275,000 in the previous quarter[31]. - Net income for the three months ended December 31, 2025, was $1,065,000, compared to a net loss of $1,825,000 in the same period last year[31]. - Adjusted EBITDA increased to $7,994,000 for the three months ended December 31, 2025, up from $5,688,000 in the previous year, reflecting a growth of 40.7%[38]. - Total revenues for the three months ended December 31, 2025, were $20,679,000, slightly up from $20,275,000 in the same period of 2024, indicating a year-over-year increase of 2.0%[44]. Production and Operational Efficiency - Average production for Q2 2026 was 7,380 BOEPD, a 6% increase year-over-year, with oil production up 8% and natural gas liquids up 7%[6][17]. - Average daily production for the three months ended December 31, 2025, was 7,380 BOEPD, an increase from 6,935 BOEPD in the same period of 2024, representing a growth of 6.4%[44]. - The company reported a significant increase in production from the Delhi Field, with crude oil production at 48 MBBL and an average price of $61.78 per barrel for the latest quarter[47]. - Natural gas production reached 2,241 MMCF with an average price of $3.32 per MCF, up from 2,125 MMCF at $2.73 per MCF in the prior quarter[47]. Costs and Expenses - Lease operating costs improved to $11.5 million, with a per-unit cost of $16.96 per BOE, down from $20.05 per BOE in the prior year[13]. - Operating costs for the three months ended December 31, 2025, were $20,021,000, a decrease from $20,880,000 in the previous quarter[31]. - Total lease operating costs for the three months ended December 31, 2025, were $11,510,000, a decrease from $12,793,000 in the same period of 2024, indicating a reduction of 10.0%[44]. - The average production cost for the SCOOP/STACK region was $7.72 per BOE for the three months ended December 31, 2025, compared to $9.97 in the previous quarter[50]. - The Barnett Shale region showed a production cost of $13.98 per BOE, reflecting a decrease from $18.03 in the previous quarter[50]. Shareholder Returns - The company returned approximately $4.2 million to shareholders in cash dividends during fiscal Q2[6]. - The company declared a cash dividend of $0.12 per share, marking its 50th consecutive quarterly cash dividend payment[26]. - The company paid $4,195,000 in common stock dividends during the three months ended December 31, 2025[34]. Liquidity and Financial Position - Total liquidity as of December 31, 2025, was $13.5 million, with cash and cash equivalents of $3.8 million and outstanding borrowings of $54.5 million[24]. - Cash and cash equivalents increased to $3,762,000 as of December 31, 2025, from $2,507,000 at the end of June 2025[33]. - Total assets rose to $169,265,000 as of December 31, 2025, up from $160,252,000 at the end of June 2025[33]. - Senior secured credit facility borrowings increased to $54,500,000 as of December 31, 2025, from $37,500,000 at the end of June 2025[33]. Market and Pricing - The average realized price for natural gas increased by 22% to $3.32 per MCF, while crude oil prices decreased by 16% to $55.42 per barrel[17][19]. - The average price per barrel of crude oil for the three months ended December 31, 2025, was $55.42, down from $65.72 in 2024, reflecting a decrease of 15.5%[44]. - Crude oil revenues decreased to $10,696,000 for the three months ended December 31, 2025, down from $11,763,000 in 2024, a decline of 9.1%[44]. - Natural gas revenues increased to $7,441,000 for the three months ended December 31, 2025, compared to $5,793,000 in 2024, marking a growth of 28.5%[44]. Derivative Contracts and Hedging - The company reported an unrealized loss on derivative contracts of $1,443,000 for the three months ended December 31, 2025, compared to a gain of $1,368,000 in 2024[40]. - The company has open crude oil derivative contracts with a total volume of 195,836 BBLS at a weighted average price of $60.27 for January 2026 to September 2026[51]. - Natural gas fixed-price swaps total 2,954,267 MMBTU at an average price of $3.62 for January 2026 to December 2026[51]. - The company is actively managing its hedging strategy with various contracts in place to mitigate price volatility in crude oil and natural gas markets[51].