Evolution Petroleum (US:EPM)2021-11-11 00:18Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $8.5 million, representing an over 80% increase from the fourth quarter of fiscal 2021 [10][24] - Net income for the first quarter was $5.2 million or $0.16 per diluted share, compared to $2.2 million or $0.07 per diluted share in the previous quarter [34] - Total revenue grew by 38% from the prior quarter, primarily due to a full quarter of production from Barnett Shale and a 2% increase in realized commodity prices [31] Business Line Data and Key Metrics Changes - The company produced 5,843 net BOE per day, which is about 33% higher than the fourth quarter of fiscal 2021, mainly due to the Barnett Shale assets acquisition [9] - Net production at Delhi was 118,228 BOEs, about 1,285 BOEs per day, showing a slight decrease of around 3% compared to the prior quarter [12] - Production from Barnett Shale assets was 382,115 BOEs or 4,153 BOEs per day, a 59% increase compared to the fourth quarter of fiscal 2021 [16] Market Data and Key Metrics Changes - The company benefited significantly from higher commodity pricing as it remained unhedged during the first quarter [10] - The acquisition of Barnett Shale has increased the company's exposure to natural gas, coinciding with a sharp increase in natural gas prices [19] Company Strategy and Development Direction - The company aims to operate within cash flow while maintaining and potentially increasing cash dividends to shareholders [20] - The focus remains on evaluating additional accretive opportunities for long-term growth and shareholder benefit [20] - The company plans to continue its commitment to sustainable business practices and ESG initiatives as part of its growth strategy [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate cash flow and provide meaningful returns to shareholders through dividends and acquisitions [38] - The company is optimistic about future growth opportunities and plans to assess a variety of transactions [42] - Management noted the importance of maintaining a prudent approach to dividend increases due to market volatility [58][59] Other Important Information - The company declared a dividend of $0.075 per common share, a 50% increase over the prior quarter, and plans to pay this dividend on December 31, 2021 [21][23] - The company expects to pay off its $4 million drawn from its credit facility during the fiscal second quarter [26] Q&A Session Summary Question: Are there more Hamilton Dome workovers coming in the next quarter? - Management indicated that while there may be some additional workovers, the current quarter's expenses were higher than normal due to maintenance and reactivation efforts [44][46] Question: What is involved in the final settlement with Tokyo Gas? - The final settlement involves reconciling cash flows received from January 1 to the closing date, which is expected to be a positive cash inflow for the company [50][52] Question: Why did the board not increase the dividend despite strong cash generation? - Management explained that the board is cautious about increasing dividends too aggressively to avoid future reductions, emphasizing a long-term view on dividend policy [57][58]