Latest Update on Hot Stock: Evolution Petroleum Corporation (NYSE: EPM)

On 03 Jan 2019, Evolution Petroleum Corporation (NYSE: EPM) spotted trading -32.92% off 52-week high price. On the other end, the stock has been noted 7.94% away from the low price over the last 52-weeks. The stock changed 0.93% to recent value of $5.44. The stock transacted 153263 shares during most recent day however it has an average volume of 112.05K shares. The company has 32.63M of outstanding shares and 30.23M shares were floated in the market.

Evolution Petroleum (EPM) recently stated financial and operating highlights for its fiscal first quarter ended September 30, 2019 (its first fiscal quarter of 2020), with comparisons to the fiscal fourth quarter ended June 30, 2019 (the “previous quarter”) and the quarter ended September 30, 2018 (the “year-before quarter”).

Financial Results for the Quarter Ended September 30, 2019

Operating revenues were $9.2M for the quarter, based on an average realized oil price of $59.32 per barrel and an average realized NGL price of $11.54 per BOE, which generated $3.3M in income from operations. In the year-before quarter, operating revenues were $12.3M with income from operations of $6.0M, based on an average realized oil price of $71.72 per barrel and an average realized NGL price of $37.28 per BOE. The decrease in oil revenue is primarily Because of the 17.3% decrease in realized oil price together with a 6.2% decline in oil production to 149,107 barrels. NGL revenue also reduced Because of a price decline of 69.0%, offset with an 8.7% production increase to 26,516 barrels of oil equivalent per day (“BOEPD”). Net total production volumes were 1,910 BOEPD, slightly down from the 1,992 BOEPD from the year-before quarter. Net income for the quarter was $2.8M, or $0.08 per diluted share, contrast to $3.3M, or $0.10 per diluted share, in the previous quarter and $5.8M, or $0.17 per diluted share in the year-before quarter.

Depreciation, Depletion & Amortization (“DD&A”) expense for quarter reduced $0.1M contrast to the previous quarter Because of a 6.1% decrease in volumes, and reduced $0.1M from the year-before quarter Because of a 2.5% decrease in our DDA rate to $8.07 per BOE and a 4.2% decline in total volumes.

General and administrative (”G&A”) expenses were $1.3M for the current quarter, a 2% increase contrast to the previous quarter. G&A expenses increased 2% from the year-before quarter primarily Because of increased non-cash stock compensation expense. The Company continues to monitor and prudently manage G&A expenses to maximize cash flow from operations and funds accessible for our dividend strategy and potential growth opportunities.

Delhi Operations and Capital Spending

Gross production at Delhi averaged about 7,281 BOEPD during the quarter, a 7.2% decrease from the previous quarter and a decrease of 4.2% from the year-before quarter. Oil production was influenced by seasonal high ambient temperatures during the quarter causing limited CO2 recycle capacity. This resulted in limited capacity to produce high gas/oil ratio wells. Facility modifications resulting in NGL volume uplift in the spring were not sustained Because of complications caused by the separation of rich gas to a dedicated facility. The operator is reviewing solutions to return to the higher rates seen in the past quarters.

During the current quarter, we incurred $0.6M on capital projects consisting of $0.1M for capital maintenance and $0.5M for remaining water curtain completion costs for an injection well and a water source well in preparation for Phase V expansion of the CO2 flood into the eastern side of the unit. The current expectation for net capital spending for the remainder of fiscal 2020 is about $3.0M, which includes $0.4M for the NGL plant filter/separator project, $0.7M for maintenance capital and $1.9M budgeted for continuing the development of the field through Phase V later in our fiscal year. We believe that the operator will continue this development and have also budgeted $3.0M for Phase V completion in fiscal 2021.

 Its earnings per share (EPS) expected to touch remained 13.50% for this year. EPM has a gross margin of 65.30% and an operating margin of 37.30% while its profit margin remained 30.90% for the last 12 months. According to the most recent quarter its current ratio was 11.3 that represents company’s ability to meet its current financial obligations. The price moved ahead of -1.09% from the mean of 20 days, -1.30% from mean of 50 days SMA and performed -11.49% from mean of 200 days price. Company’s performance for the week was -3.72%, 6.04% for month and YTD performance remained -0.55%.

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