Evolution Petroleum (EPM) 17th Annual LD Micro Main Event Conference summary

Business model and strategy

• Focuses on acquiring long-life, low-decline oil and gas assets, primarily as a non-operator, enabling lean operations and geographic diversification.

• Prioritizes returning capital to shareholders through dividends and share buybacks, with over $122.5 million returned in dividends and $10 million in buybacks over the past decade.

• Maintains a conservative approach to leverage, using a revolving credit facility for acquisitions and paying down debt with asset cash flows.

• Diversifies by commodity and geography, reducing exposure to single-asset or market risks.

• Core pillars include asset-based growth, capital returns, and balanced, risk-averse growth.

Asset portfolio and acquisitions

• Expanded from a single asset to seven core operating areas since 2019, including oil and gas fields in Louisiana, Wyoming, Texas, North Dakota, Oklahoma, and New Mexico.

• Recent acquisitions include the SCOOP/STACK in Oklahoma and Chaveroo in New Mexico, both offering low CapEx and upside potential.

• Acquisitions are typically structured for four- to five-year payback periods, with several assets outperforming expectations and paying out ahead of schedule.

• Portfolio now consists of 41% natural gas, 37% oil, and 22% NGLs, with no single area exceeding 25% of reserves.

• Recent deals have included upside from undeveloped drilling locations, but with small working interests to limit capital exposure.

Market outlook and risk management

• Bullish long-term on oil due to global decline rates and limited new supply, despite short-term volatility from geopolitical events.

• Expects significant growth in domestic natural gas demand from LNG exports and power generation, especially from AI and data centers.

• Natural gas prices are currently low, but higher prices are anticipated to meet future demand.

• Diversification strategy mitigates risks from regional disruptions like hurricanes or extreme weather.

• Focuses on assets with stable cash flows that support dividends across commodity cycles.