In This Article:
Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Evolution Petroleum Corp (EPM) reported a 16% year-over-year increase in total production, reaching 7,478 net barrels of oil equivalent per day.
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The company achieved a 6% increase in revenue for the quarter, supported by record oil production at the Scoop Stack.
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Net income for the first quarter increased by 40% to $2.1 million compared to the prior year period.
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Adjusted EBITDA increased by 21% to $8.1 million, primarily due to increased revenue and reduced operating costs.
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Evolution Petroleum Corp (EPM) announced its 45th consecutive dividend payment, highlighting its commitment to returning value to shareholders.
Negative Points
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The company faced challenges due to volatile natural gas prices, impacting overall revenue.
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Production at Delhi was affected by the replacement of a CO2 recycle compressor and a CO2 purchase pipeline shutdown for preventive maintenance.
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The Barnett field experienced production declines in previous quarters, although it showed improvement this quarter.
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The company has $39.5 million in borrowings outstanding under its revolving credit facility, used to fund acquisitions.
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Despite strong performance, the company remains cautious about future commodity price fluctuations and their potential impact on financial results.
Q & A Highlights
Q: Can you provide more details on the performance of the seven gross scoop stack wells brought online this quarter and your expectations for the next batch of wells? A: The wells performed about as expected according to our type curve, and we anticipate similar results from the new wells starting in January. The first 10 wells have exceeded expectations by approximately 65% above our acquisition type curve. We have three wells already drilled and five more planned, with additional wells expected throughout the fiscal year. (Unidentified_4, COO)
Q: What factors contributed to the wells exceeding the acquisition type curve by 65%? A: The geology in the scoop stack can vary, making type curves challenging. We aimed for conservative estimates during acquisition, and the wells have performed better than expected. Gulfport's wells, for example, are achieving higher results than anticipated. (Unidentified_4, COO)
Q: Can you provide an update on the CO2 purchases at Delhi and the expected impact on production? A: We expect to see production improvements within a month as CO2 injection rates increase. The recycle compressor and CO2 purchase pipeline issues have been resolved, and we anticipate a positive production response over time. (Unidentified_4, COO)