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HOUSTON - Evolution Petroleum (NYSE:EPM) Corporation (NYSE American: EPM), a company known for maintaining dividend payments for 13 consecutive years with a current impressive yield of 9.88%, announced today its definitive agreement to acquire oil and natural gas assets in New Mexico, Texas, and Louisiana for a purchase price of $9.0 million, with potential for production growth and immediate financial accretion. According to InvestingPro data, the company operates with moderate debt levels and maintains strong liquidity, with a healthy current ratio of 1.64x.
The transaction, expected to close by the end of the company’s third fiscal quarter, will add approximately 440 net barrels of oil equivalent per day (BOEPD) to Evolution’s production, enhancing the company’s cash flow and strengthening its dividend sustainability. The assets are primarily low-decline, Proved Developed Producing (PDP) properties, with an annual base decline below 7%. This acquisition aligns with the company’s current financial profile, which InvestingPro analysis shows includes $86.42 million in trailing twelve-month revenue and strong dividend sustainability metrics. For deeper insights into EPM’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
President and CEO Kelly Loyd stated that the acquisition aligns with Evolution’s disciplined growth strategy and commitment to shareholder value, noting the transaction’s estimated 2.8x next twelve months (NTM) Adjusted EBITDA, which does not account for potential incremental cash flows from development opportunities.
The acquired portfolio includes roughly 254 gross producing wells and is expected to be managed by a top-tier private operator, which should ensure operational efficiency and value maximization. The company plans to finance the acquisition through cash on hand and borrowings under its existing credit facility.
Evolution Petroleum emphasizes its strategy of acquiring high-quality, long-life assets that enhance production while maintaining financial discipline. This approach is intended to reinforce the company’s strong balance sheet and consistent shareholder return through sustainable production and cash flow generation. The strategy appears effective, as InvestingPro analysis indicates the company maintains a debt-to-equity ratio of 0.52 and has consistently demonstrated its ability to generate profits, with analysts forecasting continued profitability for the current fiscal year.
The company’s use of non-GAAP financial measures such as Adjusted EBITDA and PV-10 is intended to provide additional information to investors, although these metrics may vary from similarly titled measures reported by other entities. Evolution Petroleum notes that it cannot provide a reconciliation of NTM Adjusted EBITDA without unreasonable efforts due to the unpredictability of significant items required for such reconciliation.
This announcement is based on a press release statement and provides a factual account of Evolution Petroleum’s strategic acquisition aimed at enhancing its asset portfolio and financial metrics.
In other recent news, Evolution Petroleum Corporation reported its fourth-quarter 2024 earnings, which fell short of analyst expectations. The company announced an earnings per share (EPS) of -$0.06, missing the forecasted $0.085, while revenue reached $20.28 million, below the anticipated $23.51 million. Despite a 10% increase in production volumes due to new acquisitions, the company experienced a 4% year-over-year revenue decline, attributed to lower realized commodity prices. Evolution Petroleum maintains a focus on acquiring high-quality, low-decline assets and is evaluating multiple acquisition opportunities. Analysts have noted the company’s strategic adaptability and disciplined acquisition strategy, emphasizing its commitment to shareholder returns. The company’s total liquidity stands at $22.2 million, with cash on hand at $11.7 million and credit facility borrowings of $39.5 million. Looking ahead, Evolution Petroleum has projected an EPS of $0.12 for fiscal year 2025 and $0.13 for fiscal year 2026. The company continues to prioritize organic growth alongside strategic acquisitions as part of its long-term strategy.
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