HOUSTON, Sept. 16 /PRNewswire-FirstCall/ -- Evolution Petroleum
Corporation (NYSE Amex : EPM) today reported financial and
operating results for the three month and twelve month periods
ended June 30, 2009, the Company's fourth quarter ("Q4-09") and
fiscal year-end ("FY-09"). Fourth Quarter Results Oil and gas
volumes for Q4-09 increased 17% to 31,639 barrels of oil equivalent
("BOE"), or 347.7 BOE per day, compared to the three months ended
June 30, 2008 ("Q4-08"). Oil and gas revenues for Q4-09 were $1.0
million compared to $2.4 million for Q4-08, due to a 64% decline in
blended oil and gas prices from $86.97 per BOE to $31.10 per BOE.
The increase in volumes was the result of drilling and work-over
operations in the Giddings Field in central Texas. Sequentially,
volumes were 26% lower and revenues were 16% lower for Q4-09
compared to Q3-09, partly due to mechanical problems with the gas
purchaser's compressor for the company's most significant well,
which has been corrected, as well as normal production declines.
The sequential revenue reduction was partially offset by a 14%
improvement in the average sales price per BOE during Q4-09 due to
higher oil prices, partially offset by lower natural gas prices.
Net loss in Q4-09 was $0.7 million, or $(0.03) per share, compared
to net income in Q4-08 of $0.4 million, or $0.01 per diluted share.
Results for both periods included $0.55 million and $0.53 million,
respectively, in non-cash depreciation, depletion and amortization,
plus non-cash stock-based compensation expense of approximately
$0.76 million and $0.48 million charged in Q4-09 and Q4-08,
respectively. For Q4-09, Adjusted EBITDA (a non-GAAP measure
including net interest income, but excluding non-cash items as
reconciled below) was $0.2 million compared to $1.2 million in
Q4-08. Working capital remained steady at $7.6 million on June 30,
2009, as compared to $7.5 million at March 31, 2009. Working
capital at the end of Q4-09 included $6.0 million of cash, cash
equivalents and short-term certificates of deposit, in addition to
$2.1 million of income taxes recoverable arising from current year
tax losses being carried back to a prior tax year. The company
ended the year with no outstanding debt, and all capital
expenditures during the year were funded from working capital.
During the quarter ended June 30, 2009, the company incurred
capital expenditures of $0.8 million for the acquisition and
development of its oil and gas properties. Robert Herlin, President
and Chief Executive Officer, commented, "With natural gas prices
remaining low, we have shifted focus to our oil development project
in South Texas, the Neptune infill drilling program. We plan to
begin drilling our first two producers and one water injection well
by the end of September. Thus far, we have invested approximately
$0.6 million in Neptune, primarily to acquire leases in this field,
which was fully plugged and abandoned years before the run-up in
oil price in 2004. Our independent reserves engineer assigned 541
MBO of proved, probable and possible oil reserves with pre-tax
PV-10 of $8.1 million associated with the first 25 proved and
probable infill drilling locations, and we have identified an
additional 79 prospective infill drilling locations on our leases.
We believe the Neptune project is one more example of how we
efficiently create value through low risk, low cost and repeatable
drilling." Mr. Herlin further stated, "As previously announced, we
are limiting our 2010 capital spending to a portion of our cash on
hand and cash from operations. We expect to see cash flows from the
Delhi Field in fiscal 2011 and should be positioned to increase our
activity without having to substantially dilute our shareholders or
take on risky, high cost debt. We believe that our portfolio of
high-quality, low-cost projects allows us to create value for our
shareholders without undue risk." Production Volumes and Prices:
Net volumes for Q4-09 were 17,471 barrels ("Bbl") of oil,
condensate and natural gas liquids ("NGL") and 85.0 million cubic
feet of natural gas ("MMCF"), or 31,639 BOE. This is an increase of
17% over volumes for Q4-08 of 18,237 Bbls of oil, condensate and
NGLs and 53.1 MMCF of natural gas, or 27,095 BOE. The average price
of our oil fell 56% to $57.02 per barrel in Q4-09 from $130.69 per
barrel in Q4-08, while the average price of our NGLs fell 57% in
Q4-09 to $27.55 per barrel from $64.62 per barrel in Q4-08. The
average price of our natural gas fell 67% to $3.42 per Mcf in Q4-09
versus $10.24 per Mcf in Q4-08. On a BOE basis, the blended
effective price received declined 64% to $31.10 in Q4-09 from
$86.97 in Q4-08, due in part to Q4-09 sales including a higher
portion of natural gas. Costs and Expenses Lease operating
expenses, including production severance taxes, for Q4-09 were
$0.40 million ($12.59 per BOE) compared to $0.33 million ($12.11
per BOE) for Q4-08, due primarily to higher water disposal costs
associated with the company's best well and reduced volumes due to
third party-related downtime of that well. Depreciation, Depletion
& Amortization Expense ("DD&A") was $0.55 million ($17.45
per BOE) for Q4-09 compared to $0.53 million ($19.58 per BOE) in
Q4-08, due primarily to a reduction in projected capital
expenditures associated with proved undeveloped locations. General
and administrative ("G&A") expenses declined to $1.17 million
for Q4-09, as compared to $1.43 million for Q4-08, due primarily to
reduced year-end bonuses paid in company stock and reduced staff,
offset by higher legal costs related to settlement of the Delhi
litigation. Non-cash stock-based compensation expense was $0.76
million (65% of total G&A) and $0.48 million (33% of total
G&A) for Q4-09 and Q4-08, respectively. G&A for the quarter
ended June 30, 2009, includes the reversal of accrued bonuses of
$0.51 million ($16.12 per BOE of production), and a charge of $0.37
million ($11.71 per BOE of production), related to the payment of
2009 bonuses through the issuance of common stock in lieu of cash.
Fiscal Year Results Revenues for FY-09 increased 43% over fiscal
year 2008 ("FY-08") to $6.1 million on a 160% increase in
production, offset by a 45% decrease in blended oil and gas prices
received. Net loss in FY-09 was $2.6 million, or $(0.10) per share,
compared to net loss for FY-08 of $1.6 million, or $(0.06) per
share. The fiscal year results included non-cash stock-based
compensation expense of $2.4 million in 2009 and $1.8 million in
2008. For FY-09, Adjusted EBITDA was $1.3 million compared to $0.06
million for the same period in 2008. Capital expenditures incurred
during the year ended June 30, 2009 were $8.6 million for the
acquisition and development of oil and gas properties, with an
additional $0.5 million related to recognition of asset retirement
obligations. Conference Call Evolution Petroleum will host a
conference call today at 11:00 a.m. Eastern Time (10:00 a.m.
Central) to discuss its fiscal fourth quarter 2009 results. To
access the call, please dial 480-629-9819 and ask for the Evolution
Petroleum call at least 10 minutes prior to the start time. The
conference call will also be broadcast live via the Internet and
can be accessed through the investor relations section of
Evolution's corporate website, http://www.evolutionpetroleum.com/,
where it will also be archived for replay. A telephonic replay of
the conference call will be available until September 23, 2009 and
may be accessed by calling 303-590-3030 and using the pass code
4159937#. For more information, please contact Donna Washburn at
DRG&E at (713) 529-6000 or email at . About Evolution Petroleum
Evolution Petroleum Corporation
(http://www.evolutionpetroleum.com/) acquires known, onshore oil
and gas resources and applies conventional and specialized
technology to accelerate production and develop incremental
reserves and value. The Company is well positioned to continue its
development projects in CO2 based EOR, bypassed resources and low
cost shale gas. Principal assets as of July 1, 2009 include 3.9
MMBOE of proved and probable reserves in the Giddings Field of
Central Texas, 0.5 MMBO of proved and unproved reserves with 79
additional locations in South Texas, 13.6 MMBO of probable reserves
in the Delhi CO2-EOR project in northeast Louisiana, 17,600 net
acres of leases in shallow gas shale in Eastern Oklahoma and our
proprietary artificial lift technology. Additional information,
including the Company's annual report on Form 10-K and its
quarterly reports on Form 10-Q, can be accessed on its website.
Cautionary Statement All statements contained in this press release
regarding potential results and future plans and objectives of the
Company are forward-looking statements that involve various risks
and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements.
The Company undertakes no obligation to update or review any
forward-looking statement, whether as a result of new information,
future events, or otherwise. Important factors that could cause
actual results to differ materially from our expectations include,
but are not limited to, those factors that are disclosed under the
heading "Risk Factors" and elsewhere in our documents filed from
time to time with the United States Securities and Exchange
Commission and other regulatory authorities. Statements regarding
our ability to complete transactions, successfully apply technology
applications in the re-development of oil and gas fields, realize
future volumes, realize success in our drilling and development
activity, prices, future revenues and income and cash flows and
other statements that are not historical facts contain predictions,
estimates and other forward- looking statements. Although the
Company believes that its expectations are based on reasonable
assumptions, it can give no assurance that its goals will be
achieved and these statements will prove to be accurate. Important
factors could cause actual results to differ materially from those
included in the forward-looking statements. Reconciliation of net
loss to Adjusted EBITDA, a non-GAAP measure, for the year ended
June 30, 2009 and 2008 is as follows: 2009 2008 Net loss
$(2,601,593) $(1,570,974) Add back: Income tax benefit (1,016,864)
(1,085,454) Depreciation, depletion and amortization 2,461,162
903,214 Stock-based compensation 2,405,900 1,791,486 Accretion on
asset retirement obligations 37,601 20,196 Adjusted EBITDA
$1,286,206 $58,468 ========== ======= Reconciliation of net (loss)
income to Adjusted EBITDA, a non-GAAP measure, for the Q4-09 and
Q4-08 is as follows: 2009 2008 Net (loss) income $(709,642)
$377,249 Add back: Income tax benefit (420,627) (236,493)
Depreciation, depletion and amortization 552,153 530,569
Stock-based compensation 760,365 480,043 Accretion on asset
retirement obligations 13,149 3,540 Adjusted EBITDA $195,398
$1,154,908 ======== ========== Company Contact: Sterling McDonald,
VP & CFO (713) 935-0122 Lisa Elliott / Jack Lascar / DRG&E
/ 713-529-6600 - Tables to Follow - Evolution Petroleum Corporation
and Subsidiaries Consolidated Statements of Operations (Unaudited)
Three Months Ended Year Ended June 30 June 30 ------- ------- 2009
2008 2009 2008 ---- ---- ---- ---- Revenues Oil sales $409,546
$1,253,479 $2,747,494 $2,918,127 Natural gas liquids 283,434
558,735 1,625,063 670,434 Natural gas sales 290,971 544,290
1,722,626 667,567 Price risk management activities - - - - --- ---
--- --- Total revenues 983,951 2,356,504 6,095,183 4,256,128
------- --------- --------- --------- Operating Expense: Lease
operating expenses 376,969 284,099 1,281,989 1,255,787 Production
taxes 21,272 44,021 158,794 90,252 Depreciation, depletion and
amortization 552,153 530,569 2,461,162 903,214 Accretion of asset
retirement obligation 13,149 3,540 37,601 20,196 General and
administrative 1,173,497 1,434,814 5,896,366 5,497,237 ---------
--------- --------- --------- Total operating expenses 2,137,040
2,297,043 9,835,912 7,766,686 --------- --------- ---------
--------- (Loss) income from operations (1,153,089) 59,461
(3,740,729) (3,510,558) Other income: Interest income 22,820 81,295
122,272 854,130 ------ ------ ------- ------- Net (loss) income
before income taxes (1,130,269) 140,756 (3,618,457) (2,656,428)
Income tax benefit (420,627) (236,493) (1,016,864) (1,085,454)
-------- -------- ---------- ---------- Net loss (709,642) 377,249
(2,601,593) (1,570,974) ======== ======= ========== ==========
Earnings per share: Basic and diluted $(0.03) $0.01 $(0.10) $(0.06)
Weighted average number of common shares outstanding: Basic and
diluted 26,133,023 26,807,214 26,366,677 26,786,270 Evolution
Petroleum Corporation and Subsidiaries Consolidated Balance Sheets
(Unaudited) June 30, June 30, 2009 2008 ---- ---- Assets Current
assets Cash and cash equivalents $3,891,764 $11,272,280
Certificates of deposit 2,059,147 - Receivables Oil and natural gas
sales 532,318 2,066,300 Income taxes - 478,599 Other 172,314 86,966
Income taxes recoverable 2,055,802 3,625,987 Prepaid expenses and
other current assets 162,441 270,938 ------- ------- Total current
assets 8,873,786 17,801,070 --------- ---------- Property and
equipment, net of depreciation, depletion, and amortization Oil and
natural gas properties - full-cost method of accounting, of which
$9,819,465 and $8,754,429 at June 30, 2009 and 2008, respectively,
were excluded from amortization. 28,751,178 22,047,233 Other
property and equipment 150,697 161,027 ------- ------- Total
property and equipment 28,901,875 22,208,260 ---------- ----------
Other assets 53,162 356,518 ------ ------- Total assets $37,828,823
$40,365,848 =========== =========== Liabilities and Stockholders'
Equity Current liabilities Accounts payable $690,639 $2,892,459
Accrued payroll 51,318 772,559 Royalties payable 218,477 473,327
Other current liabilities 257,361 32,703 ------- ------ Total
current liabilities 1,217,795 4,171,048 Long term liabilities
Deferred income taxes 3,721,317 2,901,929 Asset retirement
obligations 664,710 215,056 Deferred rent 77,858 74,081 ------
------ Total liabilities 5,681,680 7,362,114 --------- ---------
Commitments and contingencies (Note 12) Stockholders' equity
Preferred stock, par value $0.001; 5,000,000 shares authorized; no
shares issued or outstanding - - Common stock; par value $0.001;
100,000,000 shares authorized; issued 27,318,517 shares;
outstanding 26,530,317 shares and 26,870,439 shares as of June 30,
2009 and 2008, respectively. 27,318 26,870 Additional paid-in
capital 16,815,417 14,188,841 Retained earnings 16,186,430
18,788,023 ---------- ---------- 33,029,165 33,003,734 Treasury
stock, at cost, 788,200 shares at June 30, 2009. (882,022) -
-------- --- Total stockholders' equity 32,147,143 33,003,734
---------- ---------- Total liabilities and stockholders' equity
$37,828,823 $40,365,848 =========== =========== Evolution Petroleum
Corporation and Subsidiaries Consolidated Statements of Cash Flow
(Unaudited) Year Ended June 30, 2009 2008 ---- ---- Cash flows from
operating activities Net loss ($2,601,593) ($1,570,974) Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities: Depreciation, depletion and amortization 2,461,162
903,214 Stock-based compensation 2,426,009 1,791,486 Issuance of
common stock for charitable donation 28,600 - Accretion of asset
retirement obligations 37,601 20,196 Settlement of asset retirement
obligations (90,761) - Deferred income taxes 819,388 2,563,928
Deferred rent 3,777 26,792 Other assets 6,236 6,236 Changes in
operating assets and liabilities: Receivables from oil and natural
gas sales 1,533,982 (1,876,090) Receivables from income taxes and
other 1,963,436 (3,747,852) Prepaid expenses and other current
assets 108,497 90,902 Accounts payable and accrued expenses
(486,706) 468,866 Royalties payable (254,850) 466,496 --------
------- Net cash provided by (used in) operating activities
5,954,778 (856,800) --------- -------- Cash flows from investing
activities Net proceeds from the sale of the Tullos Assets -
4,420,868 Proceeds from other asset sales - 31,582 Development of
oil and natural gas properties (8,063,465) (11,187,291)
Acquisitions of oil and natural gas properties (2,603,098)
(8,789,501) Capital expenditures for other equipment (28,635)
(87,544) Purchases of certificates of deposit (1,757,312) - Other
assets (4,715) (6,052) ------ ------ Net cash used in investing
activities (12,457,225) (15,617,938) ----------- ----------- Cash
flows from financing activities Proceeds from issuance of
restricted stock 130 76 Purchase of treasury stock (882,022) -
Other 3,823 - ----- --- Net cash provided by (used in) financing
activities (878,069) 76 -------- --- Net decrease in cash and cash
equivalents (7,380,516) (16,474,662) Cash and cash equivalents,
beginning of period 11,272,280 27,746,942 ---------- -----------
Cash and cash equivalents, end of period $3,891,764 $11,272,280
========== =========== Evolution Petroleum Corporation and
Subsidiaries Condensed Operating Data (Unaudited) Year Ended June
30 -------- % 2009 2008 Variance change ---- ---- -------- ------
Volumes, net to the Company: Crude oil (Bbl) 36,026 29,466 6,560
22% NGLs (Bbl) 44,125 10,639 33,486 315% Natural gas (Mcf) 323,301
69,051 254,250 368% ------- ------ ------- --- Crude oil, NGLs and
natural gas (BOE) 134,035 51,614 82,421 160% Revenue data: Crude
oil $2,747,494 $2,918,127 $(170,633) (6)% NGLs 1,625,063 670,434
954,629 142% Natural gas 1,722,626 667,567 1,055,059 158% ---------
------- --------- --- Total revenues $6,095,183 $4,256,128
$1,839,055 43% Average price: Crude oil (per Bbl) $76.26 $99.03
$(22.77) (23)% NGLs (per Bbl) 36.83 63.02 (26.19) (42)% Natural gas
(per Mcf) 5.33 9.67 (4.34) (45)% ---- ---- ----- --- Crude oil,
NGLs and natural gas (per BOE) $45.47 $82.46 $(36.99) (45)%
Expenses (per BOE) Lease operating expenses and production taxes
$10.69 $25.39 $(14.70) (58)% Depletion expense on oil and natural
gas properties $18.07 $16.44 $1.63 10% DATASOURCE: Evolution
Petroleum Corporation CONTACT: Sterling McDonald, VP & CFO of
Evolution Petroleum Corporation, +1-713-935-0122, ; or Lisa
Elliott, , or Jack Lascar, , both of DRG&E, +1-713-529-6600,
for Evolution Petroleum Corporation Web Site:
http://www.evolutionpetroleum.com/
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