Evolution Petroleum at LD Micro Main Event: Strategic Growth Insights

On Tuesday, 21 October 2025, Evolution Petroleum Corporation (NYSE:EPM) presented at the LD Micro Main Event XIX Investor Conference. The company emphasized its strategy of delivering shareholder returns through a robust dividend model supported by diversified oil and gas assets. Despite fluctuating commodity prices, Evolution Petroleum remains focused on strategic acquisitions and operational efficiency, highlighting both opportunities and challenges in the current market landscape.

Key Takeaways

• Evolution Petroleum’s strategy centers on generating shareholder returns through dividends.
• The company has expanded from a single asset to eight operational areas.
• Evolution Petroleum maintains a strong balance sheet with low leverage.
• The acquisition program has delivered over a 100% rate of return.
• Future demand for natural gas is anticipated to rise significantly.

Company Overview and Strategy

• Evolution Petroleum focuses on total shareholder returns, leveraging a dividend model.
• The company has diversified from one asset in Louisiana to eight operational areas, including the Delhi Field and Barnett Shale.
• Operating with a non-op model, Evolution Petroleum relies on external operators for field personnel.
• The company’s enterprise value is approximately $200 million, with an EBITDA of $30 million at the last fiscal year end.
• The current dividend yield stands at over 10%, with organic growth focused on the Chavaroo field in New Mexico.

Acquisition Strategy

• Evolution Petroleum seeks the best incremental rate of return through strategic acquisitions.
• The focus is on assets with long-life, low-decline wells and undeveloped growth potential.
• The company has executed eight transactions in the past six years, tripling its daily production rate.
• The acquisition strategy is expected to generate a three times multiple on invested capital by September 2025.

Dividend Model

• The dividend was reduced during COVID due to reliance on oil but has since recovered.
• Evolution Petroleum’s diversified asset base has supported maintaining dividends despite commodity price fluctuations.
• The company aims to create a cycle-proof asset base to sustain future dividends.

Future Outlook

• Management is optimistic about increased natural gas demand driven by data centers, power generation, and LNG exports.
• US LNG exports have grown from zero in 2016 to 15 billion cubic feet per day in 2023, with expectations to double by 2030.
• Incremental natural gas demand could rise by 20-30 billion cubic feet per day, necessitating higher production levels.

Conclusion

For a more in-depth understanding of Evolution Petroleum’s strategic insights and future plans, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - LD Micro Main Event XIX Investor Conference:

Kelly Lloyd, President and CEO, LR: Good morning, LR. I’m Kelly Lloyd, the President and CEO. This is Peter Pham, our Director of Operations and Engineering. Also with us, we have Brandi Hudson, who is the Head of our Investor Relations. So if you have any more questions after the fact, Brandi is a great person to go through.

So who is Evolution? What do we do? Who are we? We are a non op company focused on total shareholder returns. How do we focus on total shareholder returns?

It’s our dividend model. So what we try to do, we’re oil and gas and natural gas liquids, long life, low decline, cash flow producing assets is our main bailiwick. Our footprint. We started off as a one asset company with the Delhi Field. And now, as you can see, we’ve got over eight different operating areas where we are.

Enterprise value, this is all as of quarter end, is about $200,000,000 Our EBITDA at the last fiscal year end was $30,000,000 And our yield is a little over 10% right now. Again, this is what we live to do is to pay our dividends is what all of our acquisitions, which Peter will get into. We have a terrific track record of buying accretive acquisitions and they feed our dividend for years to come. Our catalyst for growth, again, we have our organic and our inorganic. Now our organic, we’ll get into that a little bit, is a field called Chavaroo, which in 02/2022, prices were really good, and it was not a great time to go make acquisitions.

So we very intentionally wanted to get a set of assets where we could put money in the ground because sometimes oil is cheaper in the ground than it is on the street. So we went out and made sure we had some really good drilling opportunities. We also have some of that in our Williston Basin, and we’ll get into that a little bit more in the future. So when I say non op model, some of you guys will know what it is, some of you all won’t have a clue. So what it is, there is an operator out there.

They have all the field personnel, all the individuals out there that need to go do everything. We have the accounting staff, we have the engineers, we have the back office and we make really good investment decisions, that’s what we’re really good at. They’ve got all the field personnel, they have to do it. So how does that help, right? Why would you do it?

There’s a few companies out there like us that do it and happen to think we’re the best one, But it’s a simple structure, right? So again, we started with one asset, the Delhi Field in Louisiana. Louisiana gets cold. People don’t know that. It also gets hot, but mostly it has hurricanes.

There are disruptions. You don’t want to be there. So we needed to diversify but we didn’t want to have to go hire 20 people to go somewhere. So we kept the non op model and we moved on from there. It allows us to leverage our G and A, right?

We have 10 professionals in the company and again, we have eight different fields where we operate. Kind of be impossible to do. You’d have to have 150 people if we were to be operators. So it allows us to scale up quickly, use the operators, right? You need scale to operate efficiently.

That’s great. Let them do that. We’re the non op. It works for us and I honestly think it’s the best way to go about this business. So here’s our footprint, right?

We’ll get into it. We started off, like I said, Louisiana, only oil. Eventually, there was an NGL plant, so it’s oil in NGLs. Now it’s operated by Exxon. Again, hurricanes, disruptions, every kind of weather event you could imagine we lived through.

So we said we’ve got to do something else. We’ve got to diversify geographically. So the first acquisition we made was in Wyoming, in Hamilton Dome Field. This has been producing for north of seventy five years. Really long life, low decline, very low decline.

It declines like 2% a year. Super stable asset. Love to have that. That’s our first big step out and that was in 2019. From there, we said, okay, that’s great.

We need to get some natural gas too. So we moved into the Barnett Shale, which is kind of the granddaddy of the shale gas plays. If you’ve heard of it, twenty years ago, it was really well drilled out. And so the shale wells come on super steep, decline a lot, and by the end, out at the tail where we bought it, they declined 6%, 8% a year. And that’s perfect if you’re trying to put together an asset that will produce cash flow that will pay your dividend for many years to come.

So that’s what we did. And then from there, we moved into another gas field, the Jonah Field, which sells gas west out here, honestly, the Kern River pipeline and the Northwest pipeline. If you recall in 2022, there was actually a cold winter up here, which allowed us to pay for that asset, which declines, I don’t know, 8%, 9% a year. We paid that off in eight, nine months. Intentionally got a non correlated gas market.

We wanted to have that exposure. Sometimes it’s great, sometimes it’s not. Let’s see, from there, we’ve gone to Williston Basin, the Bakken, you’ve all heard of that, right? So we have a bunch of acreage in the Bakken. We bought it for the PDP side, the proved developed producing wells, the stuff that’s already making oil and gas.

But it has a bunch of great acreage and sort of wait and see. We could we don’t want to be the pioneers going out there drilling, neither does our partner or the operator. So we’re letting that sort of come to us. It’s starting to get kind of exciting. We’re actually pretty excited about what could come there in the hopefully near future.

Latest thing we did, we bought a couple of assets in New Mexico. We did the partnership in our Chavaroo field, is we’re super creative, that stands for Chavez And Roosevelt Counties, New Mexico. That’s where we’re drilling wells. We’ve now drilled with our partner, 50% partner there, seven wells. All of them have come on above our type curve.

So when you pre drill, you come up with what you think it’s going to do. They’ve all exceeded that. So we’re very happy with that. I will say right now, with oil at 57, we have, and we’ve announced this, we’re pushing back on some of the CapEx there, which is totally fine. That’s why you do it.

When prices are low, you don’t drill flush production, you slow down, right? And you look to make acquisitions or you look to shore up things. So we’re really excited about that as an upside, but it’s still producing. We’ve got seven wells producing very well. We also did the SCOOPSTACK deal.

SCOOPS stands for South Central Oklahoma Oil Play, STACK is Sooner Trend, Anadarko Canadian Kingfish. It’s Oklahoma. Right? And there’s a bunch of wells there that everybody’s been drilling for years and years, but recently they’ve gone in and started drilling horizontally, wine rack spacing, getting close, and it’s a terrific part. We have two to four average working interest there, really small, so when new drills get drilled there, we don’t have huge CapEx.

We don’t have to come out of pocket for very much. They’re small working interest. We also just bolstered that with minerals acreage there. Minerals interest. So royalties in minerals, you don’t pay anything for new drilling.

So we’ve got 500 plus locations that we’ll be a small part of and we don’t have to pay anything for. In addition, with the royalty side of the world, you don’t have to pay any lifting costs, so they’re much more economic and that fit perfectly. We knew Oklahoma well, we knew where we wanted to buy the minerals, and we just made a $17,000,000 really good purchase there. Also, Tex Mex. Again, because we’re so creative, Texas and New Mexico, even though it has a little bit of Louisiana, this is one we bought at about a PV 25 discount, meaning if you discount the prices of the commodities it’s going to produce at 25%, we bought it at that, which is a great interest rate.

I mean, again, we’re trading at, like I said, a little over 10% yield and we bought something at a 25 discount. We’ll do those all day long. Here you go. As I mentioned, all of the stuff we’ve done has led us to have this beautiful diversified both geographically and by commodity mix. So our fiscal reserves as of June 30, our fiscal year end for ’25, you can see not one piece has more than 25% of our reserves.

It’s really nice to have that security if something fouls up somewhere, you don’t get totally hosed, but if something goes great somewhere, we’ve got eight different spots where we’re going be in these little micro markets, so we’re extremely happy about that. Our production is actually slanted towards natural gas. I think people think of us more of an oil company, we do. We produce 52% natural gas overall. Again, really happy with this portfolio that we’ve put together.

So I mentioned 22, right? ’22 had really nice pricing for oil. I think if you guys forget, right now, obviously, oil is $57 a barrel. I don’t know if you know this. The last time oil averaged in the 50s, it was 2021.

The next year, it averaged in the 90s. You just can’t shut things down that quickly. Production is still going to go, so it doesn’t happen just in time. But the best cure for low oil prices is low oil prices. And demand is still climbing globally.

We’re still excited about oil. Again, it may not happen overnight, but we’re going to have a robust portfolio with all this stuff we put together now. Again, when 2022 happened, we did about $70,000,000 in EBITDA. With a much better portfolio now, with good pricing, I mean, it’s it’s set to do really, really well. I’ll say that.

And on natural gas, right, has heard data centers, power, you know, where’s it going to come from? Well, here you go. Natural gas right now is about 37 BCF a day of natural gas is used to make power in this country. The conservative estimates, I’ve read higher but I’m not going to use those, between now and 02/1930, just the power portion, that AI, crypto mining, further industrial, that’ll require anywhere from 10 to 20 additional BCF a day of natural gas demand. Now the LNG, right?

When when Biden took a little hiatus from approving new LNG products, okay, that was these became sort of theoretical. Now you’ve got FIDs coming in every day. I just read one this morning from a sixth LNG train from a company that’s sending it out. We’ve gone from zero LNG exports a day in 2016 to 15 ish by 2023, that’s nameplate. We’re expected to double that again by 02/1930.

What does all that mean? If you add it up, call it 20 to 30 BCF a day of incremental demand for natural gas. To put that in context, this last week, The US produced a 102.8 BCF a day of natural gas. So you’re talking a 25 to 30% increase in demand. Since the shale gas revolution started in, call it, 02/2001, to increase about a Bcf and a half a day, you need to have prices over $3.50 an Mcf.

We need to, if you just do the math, 20 BCF over five years, four BCF a day of incremental natural gas production. You cannot do that with prices not being consistently above, say, $3.75. So we’re really excited about our natural gas portfolio. Again, I want to reiterate. Who are we?

We’re asset based growth. We’re focused on total shareholder returns. We want to bring in cash flow per share accretive acquisitions that help us either extend our dividend runway throughout the entire commodity cycle or be able to increase our dividend. That’s what we’re set up to do, returning capital to shareholders. We try to do all of this with a very minimal amount of debt or no debt.

Prices go up, we’ll pay down debt. That’s who we are and how we do it. I’m going hand it over to Peter Pham to walk us through our acquisition strategy. Thank you.

Peter Pham, Director of Operations and Engineering, LR: Thank you, Kelly. So Evolution’s acquisition strategy is really what’s driving our growth here. We are really focused on finding the best incremental rate of return for our portfolio. So one of the key metrics that we look at is accretion to cash flow, which helps us support our dividend model. And because of that, most of our assets usually consist of a portion that is long life, low decline, low risk producing wells.

These low decline wells help provide us with a sustainable cash flow. Some of these acquisitions also include undeveloped potential, usually in the form of drilling locations or recompletions that with low CapEx, we’re able to develop and help sustain cash flow and potentially even grow that cash flow in the future. Part of building this portfolio too, we look at the diversification and as Kelly mentioned, geographically and with commodity mix that helps minimize the risks of these cash flows through one off events that might, you know, affect a certain area or commodity. And another thing we take into consideration is also the access to the markets and the regulatory environments. There are certain areas and certain states where they could pose potential risks to our future cash flows.

So kind of, you know, near term cash flow and future cash flows are really what drives our acquisition strategy here. So as Kelly mentioned, over the past six years we’ve made eight different transactions and each of these transactions build upon each other and stack and compound. And what we’re gonna show over the next couple of slides is how these acquisitions kind of enable us to fit our dividend model and our strategy as a company. Here on this chart we’re showing the cumulative cash flow from all our acquisitions in green, and in the blue shaded area is showing the amount of capital invested. As you can see here, as of 09/30/2025, our cumulative cash flow from all our acquisitions is higher and really even before that, higher than our amount of invested capital.

So we’ve demonstrated here that we were able to reinvest our cash flows from our acquisitions in order to help grow the company further. And the entire acquisition program as a whole has delivered us over a 100% rate of return and is expected to generate three times multiple on our invested capital. So with this growth too, we’ve also been able to grow materially without with minimizing our debt and without causing a lot of equity dilution. So what you can see here in the blue bars is actually our daily production over the past eight years. And over the past five years, since we’ve started this acquisition program, we’ve been able to triple our daily production rate.

And the green line here shows our number of outstanding shares which has been relatively flat during this whole time. And the light blue line at the bottom shows our net debt to EBITDA. So we’ve been able to grow this and sustain this growth while minimizing our leverage and diluting our shares. So how does that strategy tie into our dividend model? Well, here we’re showing our historical dividend by quarter over the past ten plus years.

And as you can see back in right during COVID, we had to drop the dividend. And back as Kelly mentioned, we were pretty much 100 oil, maybe a little bit of NGLs during that time and we just didn’t have that diversified portfolio that was able to help us generate the cash needed during that time to sustain that. But since COVID, we’ve been able to utilize this acquisition strategy in order to grow our dividends and even increase our dividends above what we were at prior to COVID. And be able to sustain that dividend even through fluctuating commodity prices as we’re kind of seeing now. So with that said, I’ll turn it back over to Kelly to wrap it up.

Kelly Lloyd, President and CEO, LR: Yes. Thanks, Peter. And I just want to follow-up. If I get back to this slide real quick, actually. So the last two years, right, natural gas prices have really suffered.

And yet, we’ve been able to maintain that dividend. The whole idea is to put together sort of a cycle proof set of assets, right? In ’twenty two, sure, everything was great, everything worked. But we didn’t just sit there and hope for the best, we used that capital to pay down debt and make further acquisitions that could survive the next cycle which was going to turn down, which again, last two years, oil has been fine, natural gas has been poor. Now natural gas is finally starting to realize, hey, this AI stuff is real.

This incremental demand is real. LNG is actually happening. So natural gas is starting to trade really where it should. But oil, you’ve had a bunch of new production. I think that our current president would rather see less inflation.

So he’s talked the Saudis into putting some oil forward and that that’s fine. Again, like I said, best cure for low oil prices is low oil prices. So that’ll only lead to bigger and better stuff. So where does that leave us? Who are we?

High quality assets. We don’t want to buy anything. A lot of companies you see, they’ll talk about their production, they decline 35%, 40%. We want to buy low decline long life stuff, so that way if you do suffer through a period of low prices, it doesn’t matter, you haven’t lost 35%, 40% of your production. Attractive dividend.

Again, some companies out there like to just sort of pay a dividend if they can. We intentionally set up our assets on purpose to be able to fund our dividend both now and in the future. Again, we’re primed for additional growth. There’s tons of we look at, I don’t know, seventy, eighty transaction, potentially transactions a year, and we only pick out the best ones that are the most accretive for our shareholders. So financial flexibility, we’ve always maintained very low leverage and a great balance sheet.

So anyway guys, with that, I’ll wrap up for any questions. Perfect. We did such a good job, Peter. There’s no questions. Thank you all.

Appreciate it.

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