Evolution Petroleum (EPM) Q2 2026 earnings summary

Executive summary

• Net income improved to $1.1 million from a $1.8 million loss year-over-year, with adjusted EBITDA up 41% to $8.0 million, driven by higher natural gas prices, increased production, and derivative gains despite lower oil prices.

• Production rose 6% year-over-year to 7,380 BOEPD, with gains across oil, natural gas, and NGLs, supported by recent mineral and royalty acquisitions in SCOOP/STACK and Haynesville-Bossier.

• Strategy emphasizes a resilient, diversified portfolio with balanced oil and gas assets, low base decline, modest capital requirements, and disciplined capital allocation for sustainable shareholder returns.

• Focuses on maximizing shareholder returns through a non-operated business model, leveraging large-scale operators, and maintaining low G&A costs.

• Maintains a consistent return of capital to shareholders, highlighted by a 10.5% dividend yield and a 10+ year dividend history.

Financial highlights

• Revenues for Q2 FY2026 were $20.7 million, up 2% year-over-year, with average daily production of 7,380 BOE/d and a 22% increase in realized natural gas prices offsetting lower oil and NGL prices.

• Net income was $1.1 million ($0.03 per diluted share), compared to a net loss of $1.8 million in the prior year.

• Adjusted EBITDA rose 41% year-over-year to $8.0 million, with margin improving to 39% from 28% year-over-year.

• Lease operating expenses improved to $11.5 million ($16.96 per BOE), down from $20.05 per BOE year-over-year.

• Paid $4.2 million in dividends during the quarter; quarterly cash dividend of $0.12 per share declared.

Outlook and guidance

• Expect meaningful contributions from newly acquired Haynesville-Bossier Shale mineral and royalty assets and ongoing activity in SCOOP/STACK.

• FY2026 capital expenditures expected in the range of $4.0–$6.0 million, focused on SCOOP/STACK drilling and Chaveroo Field permitting.

• Management targets minimal net leverage, sustainable dividends, and opportunistic share buybacks, with a focus on assets with durable cash flow and attractive risk-adjusted returns.

• Anticipate continued improvement in lease operating expenses as royalty assets grow and workover activity normalizes.

• Positioned for continued execution with ample liquidity and attractive drilling inventory in key basins.