Evolution Petroleum Announces Acquisition of Non-operated Oil and Gas Assets
10 1월 2024 - 6:15AM
Evolution Petroleum Corporation (NYSE American: EPM) ("Evolution"
or the “Company”) announced today that it has entered into
definitive agreements to acquire non-operated oil and natural gas
assets in the SCOOP and STACK plays in central Oklahoma (the
"Acquisitions") from Red Sky Resources III, LLC, Red Sky Resources
IV, LLC, and Coriolis Energy Partners I, LLC. The combined purchase
price of the Acquisitions is $43.5 million in cash, subject to
customary closing adjustments, with an effective date of November
1, 2023, and an expected closing date in mid-February during the
Company’s third quarter of fiscal 2024. Evolution expects to fund
the acquisition with cash on hand and borrowings from EPM’s
revolving credit facility.
Acquisition Highlights
- Production of approximately 1,550
barrels of oil equivalent per day (“BOEPD”) and commodity mix of
42% oil, 15% natural gas liquids, and 43% natural gas as of the
effective date.
- Approximately 230 producing wells
(average working interest of ~3%) in the SCOOP and STACK plays of
the Anadarko Basin in Blaine, Canadian, Carter, Custer, Dewey,
Garvin, Grady, Kingfisher, McClain, and Stephens counties,
Oklahoma.
- Significant upside associated with
approximately 3,700 net acres in the SCOOP and STACK plays with
more than 300 gross undeveloped locations, with an average working
interest of approximately 3%.
- Highly accretive to key valuation
metrics, including TEV/EBITDA, EPS, and CFPS.
- Acquisitions and associated
development drilling expected to be self-funding and generate
incremental cash flow to further support the Company's quarterly
dividend while adding minimal additional overhead.
- As of the effective date, there
were 22 gross wells in process, 21 of which were drilled but
uncompleted (“DUC”) to be paid through completion by the Seller. As
of today, 13 of these DUCs have been completed and are
producing.
- Assets managed by best-in-class
operators, including Continental, Ovintiv, EOG, Marathon, and
Gulfport.
Management Comments
Kelly Loyd, President and Chief Executive
Officer, commented, “We are pleased to announce these Acquisitions,
which together equal the largest transaction in Evolution's
history. This is a significant achievement for our Company and
demonstrates our ability to successfully procure high-quality
assets in a core basin with best-in-class operating parties. The
strategic addition of these non-operated assets to our increasingly
diversified portfolio is a testament to our prudence in growing our
business for the long-term benefit of our shareholders. The asset's
high-quality, proved developed producing base (“PDP”) and
long-dated inventory have the potential to generate significant
free cash flow, contribute to higher per-share profits, and extend
and potentially enhance our dividend capacity. Evolution has a
proven track record of executing its strategy of buying long-life
production based on current commodity pricing during the downswings
with the potential for significant upside associated with an
upswing in the commodity price cycle.”
Mr. Loyd continued, “In addition to the roughly
1,550 BOEPD of production, these transactions further our strategy
of “making acquisitions through the drill bit” which was emphasized
in our Permian drilling partnership in Chaveroo. We view this as
crucial to enhancing our ability to accretively maintain or
increase production at an attractive rate of return outside of
making acquisitions. Importantly, these Acquisitions are more than
self-funding, meaning they are expected to generate sufficient free
cash flow to both participate in future wells and to contribute
excess free cash flow back to the Company to be used for dividends,
debt repayment, and other corporate uses.”
Mr. Loyd added, “These Acquisitions continue our
strategy to diversify our asset base within targeted areas and give
us exposure to another world-class producing basin with ample
takeaway and processing infrastructure and well-established end
sales markets. They also greatly diversify our portfolio
classification by adding not just PDP wells but also low working
interest exposure to more than 300 gross, high-quality undeveloped
locations. We are excited about the potential of these Acquisitions
and the opportunities they present for our continued growth and
success.”
Transaction Consideration and Capital
Available
Evolution expects to fund the transactions from
cash on hand and borrowings from the Company's senior credit
facility with MidFirst Bank. As of December 31, 2023, and prior to
the transaction, the Company had approximately $8 million in cash
on hand and had no outstanding borrowings under the credit
facility. The Company estimates that net debt after giving effect
to the Transaction will be within the Company's targeted leverage
ratio of one-times pro forma Adjusted EBITDA1.
Investor Presentation
Evolution plans to post a presentation
highlighting additional details of the Acquisitions on the
Company's website this evening: www.evolutionpetroleum.com.
About Evolution Petroleum
Evolution Petroleum Corporation is an
independent energy company focused on maximizing total shareholder
returns through the ownership of and investment in onshore oil and
natural gas properties in the U.S. The Company aims to build and
maintain a diversified portfolio of long-life oil and natural gas
properties through acquisitions, selective development
opportunities, production enhancements, and other exploitation
efforts. Properties include non-operated interests in the following
areas: the Chaveroo Oilfield located in Chaves and Roosevelt
Counties, New Mexico; the Jonah Field in Sublette County, Wyoming;
the Williston Basin in North Dakota; the Barnett Shale located in
North Texas; the Hamilton Dome Field located in Hot Springs County,
Wyoming; the Delhi Holt-Bryant Unit in the Delhi Field in Northeast
Louisiana; as well as small overriding royalty interests in four
onshore Texas wells. Visit www.evolutionpetroleum.com for
more information.
Cautionary Statement
All forward-looking statements contained in this
press release regarding the Company's current expectations,
potential results, and future plans and objectives involve a wide
range of risks and uncertainties. Statements herein using words
such as “believe,” “expect,” “plans,” “outlook,” “should,” “will,”
and words of similar meaning are forward-looking statements.
Although the Company’s expectations are based on business,
engineering, geological, financial, and operating assumptions that
it believes to be reasonable, many factors could cause actual
results to differ materially from its expectations and can give no
assurance that its goals will be achieved. These factors and others
are detailed under the heading "Risk Factors" and elsewhere in our
periodic documents filed with the Securities and Exchange
Commission. The Company undertakes no obligation to update any
forward-looking statement.
Investor Relations (713) 935-0122
info@evolutionpetroleum.com
1) Adjusted EBITDA is Earnings Before Interest,
Taxes, Depreciation, and Amortization and is a non-GAAP financial
measure. The Company defines Adjusted EBITDA as net income (loss)
plus interest expense, income tax expense (benefit), depreciation,
depletion and amortization (DD&A), stock-based compensation,
other amortization and accretion, ceiling test impairment and other
impairments, unrealized loss (gain) on change in fair value of
derivatives, and other non-cash expense (income) items.
Evolution Petroleum (AMEX:EPM)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Evolution Petroleum (AMEX:EPM)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024