EPM - Earnings call transcript Q1 2022 | Evolution Petroleum Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to the Evolution Petroleum First Quarter Fiscal Year 2022 Earnings Release Conference Call. At this time, all participants have been placed on a listen-only mode. And the floor will be open questions and comments after presentation. It is now my pleasure to turn the floor over to your host, Ryan Stash, Chief Financial Officer. yours. is floor the Sir,

Ryan Stash

Thank you, Petroleum's fiscal welcome Evolution everyone. XXXX. Good call for afternoon, earnings of And our to Kate. first year quarter

Joining along I to in-depth cover Chief forward-looking statements, then President Ryan Jason return review provide Chief operational the us financial key results. will and will highlights Stash, After more Officer; our review. myself, and Officer. Financial Jason today is with a Executive Brown, I

questions. your closing comments before Finally, Jason will take provide some we

As wish will may replay available a at company's a you Please of any and today's replay by date. the note later a reminder, listen to XXXX. statements recorded information if to to December be via call, be website and provided not accurate XX, that time-sensitive until today it or going are

described and available today results affect and everyone Please numbers readily discussion currently on subject information. Our Jason. management's recorded. I of are contain that that may release, Since the the over statements on operational turn our how call yesterday's differ uncertainties this and strategy this assumptions to to as earnings from are our to call will us beliefs those statements detailed key as materially based and and going expected. primarily SEC. Actual These in are is being will these risks well filings call in forward. results conference forward-looking with focus available forward-looking note financial will now listed

Jason Brown

call. Evolution's everyone. for for us XXXX thanks joining earnings And quarter Thank Good first afternoon, you, Ryan. today fiscal

supports of an within performance over the strong and cash represented flow quarter consistently years. cash continued do X been our to ongoing to cash shareholders, dividend meaningful of first paying our Our which able that operating past generation and period strategy long-term we've financial another

updated website. to found any develop shareholders be And sustainability I'm team would In accomplished hear the regard. to recently our work would excited the can on report. our be It feedback able of to and performance, was to corporate that team our care publish our financial give. has successfully this that addition the inaugural in proud for

quarter, that team material the XX% Shale of This to any who our During quarter on to seamlessly Barnett quarter produced a into our the BOE fiscal was than was higher assets first we of I'm per with X,XXX production assets about additions. Barnett were pleased G&A is fourth primarily X. able acquired That XXXX. systems integrate day. the our due May net without ongoing full from

significantly remain in of as the first quarter last allowed to efforts $X.X higher combined benefited increase pricing more the of We million. field cost an flow operating continue factors XX% of from again EBITDA adjusted pay than was from consecutive structures third-party also fourth generated resulted we efficient to XXnd to of year. cash expenditures, commodity dividend. We cash which us quarterly the operators, quarter. our excess unhedged our once leverage in This capital with during These

$X million to quarter cash a addition, our higher In XX% at XX, than June position grow of our which to were end, able XXXX. cash we is balance

X,XXX looking impacted from X% pressure purchases production by the the around XXX,XXX preventative due prior decreased suspension pipeline maintenance. the COX of July their Now day. XX production to of reservoir at Net for quarter. first operating decrease for XX August detail. through BOEs results slight to compared Oil quarter That's was Delhi Delhi more a our at BOEs. at was That's about in per

per of owned next flowing volumes. the to XXX million the and August pipeline completed approximately was and pipeline to about During resumed about a and with And day cubic XX, in is The typical million day. injection to Denbury. elevated the the purchase repair, recycle feet by scheduled the providing the increase during order cubic rate as pipeline feet and The continue operated operated to COX on maintenance anticipates of XX along usual, the COX throughout facilities COX XX% per to reservoir to able quarter hopes the up winter rates be rate the pressure spring, increase operator operator. to support at

increased the first This operator is closing X. production on fourth XXXX focused and due a of to failure We This as field. saw reservoir Net day. some XXXX. the Hamilton was than In about days of full to the fiscal the BOEs locations to sequential in XX,XXX wells, subsequent reactivation COX remain production Dome, purchase a barrels are 'XX XXX production Shale temporary volumes quarter prior the on oil mostly additional primarily merits adjustments being and of quarterly production due continued to the previously of higher due hopeful for result the X% that this quarter to of will to shut-in assets that of injection help the field of as maintenance, lost we is volumes our day. associated of assets XX% X,XXX the increase or optimizing XXX,XXX strategic the these quarter reestablish BOEs production of per and in the pressure barrels or quarter per projects XX water pipeline compared to fiscal Barnett restoring in fiscal May

finalized As Barnett wells. the of of in to already from look plans July providing reactivation water We well received assets production sold future our And in we've to of Blackbeard the salt energy XXXX. plans will period. which diversified detail operating our for of interest the pleased disposal operator are their more a allow call, their and workover primary although on expected Barnett we forward offset the transition operational we of diversified the for company at assets discussed last them, the Shale return CapEx upon completion has once the

from that can return with participate anticipate work we those diversified, on is them this and are high assets. of exactly other So about that we we projects of excited the rate kind

Our We're a With been for per that asset. maintaining excited and to life Barnett materially of back be consistent natural dividend our by has acquisition what potentially quarter on company December Despite exposure $X.XXX we meaningful does return the share since $XX the Shale business spec continuing million along to dividend our another that evaluate shareholders that acquisition low increase environment, achieving our gas expand $X.XX Ryan call of over about increased of decline paid moving and of shareholders our additional to our It's dividend for paid discuss pay common acquisition shareholders our with XX priorities remain we And acquisitions through highlights. I'll XXXX, long was $XX to accretive shareholders past ultimately key sharp per flow continued the our with moving our -- This increase will our to the XX. But particularly natural we'll declare will to that accretive through improvement to prices long-term we time. a dividend months. dividends program. and in to Consistent over second out strategy, of the continued successful supported we XXXX, paid These gas and we cash this have shareholders. December that, economic to commitment well support our cash was proud pleased forward. of we've over benefit seen purchase our stock, record includes evolution as in operate of cash our dividend This growing timed, challenges appreciate continue value to forward. and recent shareholders increasing disciplined are shareholders. turn our business long-term accretive opportunities through or million efforts now within the quarter focus as to in financial our considering to have dividends as of of support maintain to and fiscal share first 'XX growth our September. on our

Ryan Stash

Thanks, Jason. results fiscal first for of share regarding now financial quarter more some the XXXX. I'll details our

to press mentioned information yesterday release I for our refer earlier, As and additional details. please from

our increase And mentioned Jason mentioned, the for that's dividend upcoming payable going consecutive quarter $X.XXX, $X.XXX the quarter, be December that to key we a quarter. some paid we over first And Jason as as dividend the on had of highlights also is this which quarterly a are, XX, declared XX% just prior XXnd of in XXXX.

Our balance fiscal quarter. drawn million May from dividends as to cash We're due quarter sheet September improved to the operations, adjusted $X XXXX. out from as as as strategy And Shale on fourth due closed these to relative to remain $X.X really production hand flow resulting Jason unhedged. also more maintained our to $X in and that million $X XX% EBITDA cash quarter prices commodity well increased fully benefit strong commodity CapEx prices prior than of a the in the million from of Barnett of this We development, is of million a position able XX. mentioned, our operating net and of and cash increased with of funded all to full

over expect do to of in the diversified. happen invoices to is million fiscal assets set this $XX.X capital quarter revenue this $X to this due this Barnett lag off as to have pay and that quarter. million receipts to operator assets $X.X sell this we expect a second Working with month. And say by during really Gas increased we'll settlement the our we from Tokyo the our to Now million we're quarter, final

months now complete So expect and had have And second we and with of be in to do the we would has settlement expect this lags our mentioned, begun corrected seller. these expenses take more final to during payables. receivables we as as over diversified fiscal We operations. currently than to the quarter also, timing usually I revenues expect

approximately which have assets. of in Going forward, typical X expect capital our is receivables would of month working payables accounts, we one months for to and non-operated

determination a finalized from which our November amendment acquired $XX We assets million, eighth result The base the to that $XX Barnett increase of borrowing X. new a million and facility. the prior our amendment of our was at incorporated of Turning a was borrowing $XX million. was on credit recent base

hit reach $XX million resulting amendment have we as of I the requiring based currently million as does of More XX% production commitment specifically, would our to upside commodity amount once retaining that and we to prices, to the our covenant maintain will note the exposure has percentages $XX the once PDP certain be million hedging drawn, we're our to going to XX-month required we hit to we we However, XX% required rolling hedges in of for XX% hedge to this into availability increases mentioned. borrowing still it future current us enter XX%. $X I us a a of XX%, on continue under And elected of facility. XX%. increases which on production say recently. on do have add borrowing utilization, a utilization that again we benefited I a base base credit strategy utilization Once basis.

have we production from and ensure potential feel borrow. we've past handle how look debt way as a a consistent to that mentioned of potential in being pay would we the and of any the we're down like in we However, return may in and portion hedge acquisitions talked lock to would the about a acquisition quick that we

the natural at first at with of offsetting increased July a as previously quarter was in August and the as the XX basis. activity a in quarter, grew of XX workover maintenance. to for expenses G&A again associated $X.X company's a an little full COX revenue Barnett primarily the volumes XXXX. a Shale BOE LOE combination due the from $X.X which lower was was the benefit necessary share our the to Eargo quarter to Net now increase Now some this initial prices prior for realized with quarter higher We primarily the commodity costs retirement a BOE and the due total increase for quarter fees of perform Barnett looking was prices quarter from per to Accounting gas quarter, first of the lower increased this first the XX% Barnett the of from increase to costs resulted million in which report. development at primarily of of X% the from commodity $XX.XX production with increase by income the was mentioned million cost more the sustainability and financials Partially professional our per compared $X.XX diluted of the $X.X share acquisition associated purchases the compared due fourth Dome. well quarter, million in a Delhi Shale quarter Shale in of or suspension wells $X.X COX or of -- for prior the first quarter. Shale. primarily quarter, per cost LOE Barnett and to driven overall lower Again, full LOE operating the XX% in decrease previous with and million first the $X.X on Chief production This higher Officer, by corporate pipeline Barnett to detail. in million to $X.XX purchase from were for Hamilton overall onetime nature diluted

strong. the activities. workover months maintenance capital additional We Dell continue will we and primarily Delhi is X as XX, at the expenditures likely in expect which maintenance with For that Delhi September $XXX,XXX oil invested remain ended associated Hamilton incur currently conformance Field will CapEx capital operators projects prices and

for continue with expected a the $X million, $X conformance capital see commodity Hamilton Also, been established return the production projects workover based on primarily of expect as maintenance year and capital and the not Delhi CapEx consisting price as be Jason Ian are outlook. fiscal to For to program given and has range to additional would in to proposed spending total for the of operators, to is and our Dome Barnett workovers mentioned, but see yet million projects XXXX, projects. beginning mentioned to we shale, also, discussions

the call over for turn I'll his that, closing with to Now Jason back remarks.

Jason Brown

our values, we've We're momentum with the flow Ryan. acquisitions. our fiscal additional a cash very investment through through of with on which 'XX. Thanks, on and remain accretive and meaningful their include providing quarter first shareholders return focused the on dividends cash executing generating pleased core We that built

manage providing this, our job our transact on those that the ongoing strategy. is said The successfully only I business sustainable an and we've to on ability efforts ability team their believe owned. on that support As supporting they're return cash once our with confidence last equally our a shareholders I and in call, assets organization, great commitment important our demonstrated this which continuing integrate source to opportunities outlook of practices. our activities And has the value done those increases of is investment with to to

Corporate do and released interest, environmental, auto Sustainability which earlier currently governance I or week, As last assets And we into operate have mentioned we ownership in we our social Report. not while the our we view ESG to key in future and ESG evolution evaluate to consideration opportunities programs grow and will as strategy reserves. now a base be further our initiatives to accretive we differentiate is our both and the future. asset

both Shale feel Barnett in eager to size remain we execute and for Following our well acquisition, to opportunities continue the business. right we're our scale grow to on that and in positioned

Ladies through provide And and will 'XX. is from ready ROTH and continue we value now today be that, open assess we're wide of transactions. question I to SPXX Certainly. questions. to source you. We please Instructions] Thank able additional shareholder We're you. questions. our the negotiated line think our take variety and of Partners. fiscal coming marketed optimistic in that is gentlemen, business and first to targeted [Operator at questions. grow opportunities if expansion for a Operator, John White for open you'll Thank Capital the floor With

line Your live. is now

begin. may You

John White

the Thank Good And see on all was and Jason you, around. the congratulations results Ryan. operator. strong base. afternoon, to borrowing really I increased glad the way

Are LOE. so? there of included the coming more were Hamilton in Dome in next So quarter the or those some workovers of

Jason Brown

no those pulled there project. guys to new not anything. -- up new XXXX, any they going During during on really are There's drilling capital basically down hardly it sharp really or

they workers production that about that immediately a to expense they saltwater pulled deal. was items the few on. XX%. things over the injector on. down back there able they've are last of that year, last off more are that that back final This turn things pumps took And those There's wells So workovers sort now set were well

kind There workovers up, make that going there the consider some which more or maintenance. be some going that allow around more may what to down be was And we One, reasons. we expect in this of environments. up in bit two been than from be consistently time extra to time would next just the So There to lower quarter. injected to little pumps to quarter whatnot normal a high. is It two, things water off they had for get price in injector putting to field. fourth are

$XX So low the our back barrel. put going yes, maybe to cost higher more ease answer I about think But up than the is would a to bit normal. to XXs. that anticipate that short little it We was a lifting that's

more even I of the thing. an maybe better that, before think and than we're in $XX.XX ongoing

next quarter Does middle. the Although the John? make be sense, somewhere in that slightly might it

John White

does. of [ph]. Thanks that. gas natural for a the on it that effect Yes, Barnett sure And boy positive LO out has

you saltwater of as any Are of disposal still plans. one at Diversified finalizing mentioned kind planned. You Barnett? is said well And workovers informal their the you indication getting

Jason Brown

No.

they're think transition this agreement month. finalizing with I Bear Black services their

-- turn excited So new we that have able well, this able we pretty with them, saltwater we reactivation from few No, just it’s the we we of that have just before the surprised we’re -- previously weeks. a of we the them not disposal anticipate call. actually that to being AFP an meeting anticipate to allowed and about. were producing. that drilling us -- would would to It’s then which weren't well didn't formal the over in get one But have next

day. wells making four XXX we’re about that think I a these

So that’s to not just going gas that make. we’re

by John. there This of bit activities types an those it’s well new we of. operator anticipate main quite for. X.XX% interest. a It’s say But the assets will other operators have we think piece is on diversifies operated got AFP about that also I other have the out we I there that a of drill small are minor few So some -- a one we

one this other of so And the is ones.

are up for some a So rigs might be locations those in it interest see the Barnett as of At us. well. is significant there thing to to But point stemming wasn’t some value people a them. which

to be looking at the going we’re quarter over So next that well. as

John White

Looks acquisitions pass Very for out like very it And working you. good. on. well the I’ll

Jason Brown

Thanks, John.

Operator

you. Thank

from question today Grand at is coming next Slam. Our Volfing Erik

Your is line live.

may You begin.

Erik Volfing

on and made Congratulations good a quarter the a on very guys. such having Shale. nice really acquisition with Hi, Barnett congratulations

the final to What’s mentioned towards that? that look Gas. Tokyo You you’re settlement with involved starting in

Jason Brown

So yeah.

it over with kind the lot the a with working of But line think If of deal Japanese so the this you the -- before this took to I year. recall, of effective January was transaction about talked finish actual get date us the counterparty. X the we

So and when a little received May. receive finally. months' couple over. flow get March what period a cash it it closed of a while we we things of took is it’s kind have in there between prior worth bit more to flows we the May, is when block portion operator in the And those we to of cash of which expect closed call the Gas Tokyo May of actually remainder transitioned even as probably -- But taken receive

So amount they when the from -- receive a that up there all on received X the settlement decent we probably we to basically will close final which revenue truing here is now. January is to expect that every

Erik Volfing

pay money? So, them owe a basically positive. It’s them expecting not you It’s you so to money. we’re anymore that extra those be

Jason Brown

Correct.

Erik Volfing

they that be that or also is transferred any there -- just is that immediately had that were think of a maybe were there of this And question wells of whether first few that completely still didn’t about had right I think because -- some were dead? part -- that Is I refusal. Okay. somebody there

Jason Brown

assume dead. should at it’s point that we think this I

was and to it refusal, was actually despite They a ahead We’re of the not of also and chose first certainly diversify. go That to [Indiscernible] it. backed right to was a open lawsuit. because the operator was off lawsuit there selling just close

lot would that. also we want I go forward. more fined from like think So complication whole got of If be remedied, it we stayed to from them it. have run we kind of of away the But probably

this So this assume to take let’s at point. But back would not sure I pretty if I’m we at -- clear safe it. we it comes will point that would a it think some swing not at at probably and buy point, around

Erik Volfing

from cash. Okay. And a some from tremendous settlement. to it you’re generate final guess cash you’re of I -- looks this amount obviously going And generating more here like

June, sort thinking board $X cash out pay the bit before the will couple chose had that all some quarters, And at Any then of could So increase that to of have. end probably the of considering a dividend this stay go amount you time of it that surprised little the I up acquisition, way back of you I here. just million actually the the of looking is by the off amount be you to was have. guess the not thoughts you to prices there? last what cash on if board's that

Jason Brown

Well, being and it's very board reputation earned has and a disciplined fiscally long from thoughtful pretty prudent. the

raise forward. our So go collapsed We aggressive did like the We lower of to only during kind lowered wanting XXXX moving again. and they dividend. it it around. twice I well real to think not reticence really reputation prices XXXX too the is -- here in when in feel when time a pay each measuredly built then what dividend as commodity you're is feeling We've to

there, and stability and think guess, we're But could more we our what COVID we're months. bit seeing about have economic XX little bit been $X.XX. more course, the environment went runway, think situation of back certainly And our and quite right overall cash So volatility else. feeling to the I I I But have in -- there's of flows everything a last of comfortable a

Ryan Stash

quick. dividend would had just discussions X-plus we when mean we policy. add on look mean, I I out. mean I I real years

X looking know, if dated. strip and probably you're highly X, is And backward years as the so you at

different. look things a little So

the for as so dividend And setting alluded Jason I long-term. to, rate mean, a we're

acquisition in available prudent some that we frankly it, keeping we the felt backwardation And, And raised we more of opportunities prices. so as while powder being kind could see. quite given have

Erik Volfing

of leads my guess, sort Okay. And actually, I question if I may. to last that

front, kind Just we've that with on making harder big the source it prices. deals? to had run the Is of acquisition on commodity

Jason Brown

what expectations. though, Well, is some market, just the said, that's The Ryan source just that deals a pretty strip backward There's know on thing not is of of with dated. them interesting the what he out deals. definitely to ton unrealistic is

pricing interesting to the quickly. their about can though, because is strip pay The because future Now now. we're curve might and I backwardation, couple back but pretty thing of a get you're to closer long-term to general, willing almost that, happen transactions fairly are strip is bullish or confident that, if that people to on to But prices, them, in right quite buying actually it assets of bit $X, reasonably evidenced you pricing closer enabling the is is. is a pretty back is dated. the uncertainty to mean by $XX backward high meaning is whatever strip people market, prices years it's if out be gas oil so for the

us, priced For long X-X-XX right If that there. out those are getting for sense. years looking we're barrels now. looking for way makes down And that things tail. We're

we're on that I We're also to right. think like your said -- the able the and And there. few else So something hopeful -- I Ryan's months transact in we'll hopeful dividend. will next support be in pretty pretty

Erik Volfing

Excellent. Thanks, again.

Operator

the turn Instructions] management Thank closing at further no in for questions now floor have over you. to will back We comments. I this any [Operator queue time.

Jason Brown

quarter opportunities comments. us you targeted free today. contact business that forward your second from Thank growth call have if again. will other everyone thanks earnings in on and participation questions and our with providing early appreciate And ‘XX the for potential feel updates We to to further Thanks February. on look our any continued support shareholders you. or be our fiscal Well,

Operator

conclude Thank and gentlemen, you. event. Ladies today's this does

We You your at day. have participation. a time, for and this may thank you disconnect wonderful

Evolution Petroleum (EPM) 11 Nov 212022 Q1 Earnings call transcript