EPM - Earnings call transcript Q3 2022 | Evolution Petroleum Corporation

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Operator

Good day, ladies and gentlemen. And welcome to the Evolution Petroleum Third Quarter Fiscal Year 2022 Earnings Release Conference Call [Operator Instructions]. It now my pleasure to turn flow over to your host, Ryan Stash. Sir, the floor is yours.

Ryan Stash

Thank you, and good afternoon, everyone. earnings third our year of to XXXX. welcome call quarter for fiscal And Chief Officer. Ryan Financial I'm Stash,

Joining provided and is Jason And After I'll depth I highlights me financial Executive with will provide that then cover open not Chief today along a the take and Jason return Brown, up review. to Please forward-looking more operational at finally, statements, date. some our note will provide key and we review results. President a in time-sensitive Jason your statements any today be accurate information and it may closing comments are questions. later before Officer.

risks Our in may based discussion available statements differ the information. filings statements of will to are expected. forward-looking forward-looking with results on uncertainties and listed management's and beliefs our SEC. that described currently materially contain and Actual These those assumptions subject from today are

being available recorded. a will this of the I’ll well that, to focus the available in to numbers affect detail everyone call yesterday's to Please And over to us since operational wish moving call key as it replay our to or call, Jason. company’s X, if release, earnings by going site via and XXXX. With listen be on this financial forward. Web and today’s are how Now is recorded replay conference that results these August primarily you will strategy, readily note call until now turn as

Jason Brown

and today's call. afternoon, Good for everyone Ryan. thanks for you, us joining Thank

part or investment of and of your effort company giving portfolio. as we your appreciate always, As part consideration time and potential our

This team pre-pandemic cash team. were proud valuing, of a our that of staff they our to a enter rising themselves dividends extremely by highlighted close definitive quarter our assets our few free per in We results capable to third managing key do Sublet pleased bit to assets the consistent and return for levels weighted Our pay very on execute fiscal flow and for allows of County, I'm of April Jonah were watershed and able of oil us purchase $X.XX our as a North Basin price commodity highlight third which share small dividend of moment acquisition in in on Wyoming. the from sourcing, has third a Field, upgrade located quarter XXth. key the January transacting in cash acquisition, to shareholders. been our dividend shareholders. oil-weighted in work was substantive our prove environment. a closed third to agreements be payment We Dakota, and A of closing that Xst, to interest and properties. gas into with the gas hires, Williston was the able ongoing to all generation, acquisition, our natural with fourth a was meaningful on quarter, of were an the the and quarter the overall we in continued And

position from fiscal beyond. to acquisitions will and of 'XX, 'XX period two into fourth a As benefit to fiscal a in such, for great we and solid and see should financial which in full places operational end quarter, moving our continued drive help success the

the per the quarter. That BOE day. the higher produced about net produced in third per day we During BOE X,XXX that than was quarter, XX% second we X,XXX net

million. than and EBITDA of XX% quarter of can well increased our also pricing. quarter. is continued control, commodity the on pricing, production The about adjusted resulted third combination benefited This overall focus higher from we Our managing $XX.X as as higher costs second in

XXth expenditures, we quarter, excess which quarterly consecutive in dividend capital flow cash generated XXst. of development of our cash third operating March on payment once again, the supported During the

Additionally, have of are we June. share quarter per pleased to declare to to strength common and per cash our Evolution dividend the fourth dividends, $XX share on dividend, million out of quarter business, stockholders the paid dividend due inception as $X.XX $X.XX December XXXX. With end to or will back approximately our of be growth since our of XX, fourth continued a program paid at the

little or BOE X% attributed results maintenance quarter. at interrupted the pressure the during of of calendar to repairs continues the day. Now diligently let’s pre to production that in consistent supply from pipeline. as to our This per due of And to nine the XXXX reservoir grew restore purchase lower by levels. increase the impacted about be and time following third plant the the to suspension quarter, third look discussed, BOE result second COX Delhi XXXX during in the previously Net worked second turbine purchases operating the quarter Delhi operations NGL has approximately a in Oil X,XXX at more production been to the for quarter is run month of detail. XXX,XXX

addition Just that incur the cost. and in Evolution pipeline production as seen operates any Denbury pipeline field COX owning repair the and effort XXXX we have Denbury’s some able since been results purchase of volumes. of a increase and to reminder, volumes December in to operating of COX not did

long to a reservoir pressure. However, go restoring we still ways in have

to cash flow. favorable the Barnett improvements X% X,XXX grew to or months. monitor day. to mix XX next XXX,XXX to the adjust operating the and for decision prices the the and This third maximize overall over assets to field continue fiscal Shale We quarter BOE per most XX commodity ‘XX for BOE will capture production production the includes Net anticipate in the

so but to becoming the projects pleased in volumes shareholders. one that barrels. will last essentially production Dome the efforts quarter attractive net work slightly calendar Diversified fewer is were We At flat rig the less, forward throughout for was ROI with Diversified have a look we provide XXXX, same. participating running XX,XXX them an the Hamilton essentially October. been operator our are with There on days it's since Energy's over and continuously of

wells Our operating including injection, partners, strategic remains previously to maintenance of volumes. and shut-in adjustments restoration on and water Merit, focused projects, location continued

earlier, we're pleased of for approximately XX,XXX production Basin mentioned partial was oil. Net certain in quarter Williston BOE, acquisitions the January. which mid I XX% was to our third close As assets

As is XXX per reported, BOE this day.

in However, representative ended remember assess the assets. drilling quarter more going forward. locations that in represents that and grade at high levels that a as well underway anticipated day asset production as the the evaluations up are our XXX daily own quarter we period. and potential to a Williston the of XX which around the Technical is per XX rate We day, little a days of BOE

beginning the economics reservoir discuss our in plans. capital investments With and will and financial that, turn analysis highlights. the We let and geomechanical drilling now anticipate inform those development Ryan We fiscal XXXX. sometime I'll call our over to subsequent to

Ryan Stash

our Jason. highlights some results quarter from XXXX. now I’ll third Thank share fiscal you, strong for

As to in fiscal additional I our EBITDA of some for information include,a increasing yesterday but the the mentioned, please XXXX. highlights from XX% refer key djusted from second to details, press of $XX.X million release quarter million afternoon $XX.X

X% per Third quarter was $XX.XX second the quarter. adjusted BOE, higher which was than EBITDA

of maintained dividends and and we XXst. with million funded sheet mentioned, as cash we of our $XX.X on operations, Jason of strong debt March capital once development cash of operating $XX balance out again As all million flow hand

cash paid solid XXth dividend third one million, the mentioned, and operational end as quarter shareholders and our supported share $X.XX just was of $XX.X payable in flow XXth. availability. third June of of of fourth $XX.X a the we'll mentioned XXXX, fiscal million in of of June At record cash outlook, the $XX quarter that was will including million per $XX.X Now working as to pay be the capital million, we liquidity I Jason the by quarter, on of

down we Xst robust able bringing Field debt. on rapidly as on the remaining early $XX $X.XX pay expect this we based April, our total Now, price be have acquisition, to million. current to paid closed amount commodity million, our million. in to outlook, we and Since outstanding on the April borrowed announced And down a closing acquisition subsequently we Jonah $XX

of result the under value closing facility defined to was Jonah increased collateral acquisition, margin a credit $XXX further As the is million.

rolling into collateral this any when minimum And to time. a required enter margin threshold of value. below at borrowings exceed not of XX%, XX% into the enter additional the month As on to this a we're company basis since reminder, required is hedges hedges XX we’re

However, costless consistent collars, will on prices. XXXX. expected April exposure March Xst, the our existing commodity XX% natural strategy we of with our of the did of utilized through Jonah retaining enter into is from XX-Q be of of hedges in for Details all hedges We which available production to gas filing. our acquisition incremental

is grew of revenue closing the $XX.X from XX% to sales acquisition January little a quarter. in financials well XXth, X% to quarter third second realized quarter. call, additional result in we in earnings for field. in included second the ethane the as volumes periods And in Barnett as in the prior gas the to $X.X rejection of the primarily $XX.X due the a which an more quarter total pricing. Basin increased We $X.X that increased million the revenue revenue at result adjustment the a million in Williston from million, the Natural natural XX% as reflect volumes, last Oil detail. as million decreased to discussed higher to second of occurred gas Looking increase

decline would've related due Barnett quarter in $X.X of million. increased a the from revenue revenue the adjustments made was adjustments, XX% result prior to rejection lower contributing quarter in to these been of natural I just a $X.X last revenue volumes million the ethane the Excluding decline Also mentioned. to the second NGL as in gas. quarter that approximately realized to price in the NGL

quarter, Contributing in quarter. run As maximize a the reject a quarter. operating $XX.X per million volumes decrease income expenses our Williston legal NGL excluding increased at for Basin second unrealized Adjusted NGL was per second reconciliation stream $XX.XX. operator in million COX from was net Delhi derivative into third oil. in to non-GAAP time quarter in General million million consistent and to quarter for Contributing cash to COX as mentioned to $X.XX share than quarter. for environment to third result a the loss XXX,XXX compensation lease quarter, Net was was Lease the costs flow. diluted due items, million in to $X.X MCF prices. leading cost of were overall per of Delhi COX versus increase of in at overall NGL BOE, in closing in selected to which price acquisition the quarter third offset the to million costs, Total expenses volumes $X.X $X.X as third production at prior in in was Also recorded see by or higher in of gas to we and operations, the expenses the lease income natural increase our or third lower Delhi. XX% income is revenues ethane just due in $X.X this before came Please based favorable higher the consulting, the contributing on was operating to press share. per to There higher quarter, per at decides the price reminder, was more diluted our higher on quarter. administrative the million X% in decreased million diluted $X.XX the primarily the $XX.X the prior for or COX which for which is -- the a increase gas commodity pricing January. increase income plant release net $X.X higher primarily capitalize $X.X $X.XX costs the from attributable volumes third operating to of contracts measures. higher higher decrease other the and the The was $X share and the increased compared primarily a purchase

activity as expenditures incur conformance Jason quarter, one third had likely we additional workover Shale as see the in to was we from calendar nice mentioned capital rig that economics we the that strong. And AFEs our actually our fourth remain projects quarter. Jonah two This asset, Barnett of any that continue $XXX,XXX invested the didn't for recompletes oil expect in newest Jonah base the maintenance our as Energy will any for fiscal prices conformance of we projects. us Jonah. expect XXXX. Field, capital scheduled and For And running our operator expenditures throughout continues for are a surprise on acquisition and operators recently received We at currently

to environment. At XXXX. work quarter first planning scheduled of some that development see projects advantage of the in to partner do Basin the our properties, So it's is recompletes nice operating Williston are to Energy foundation to looking Jonah pricing begin take and some our fiscal

the Now for $XXX,XXX to our of the anticipate capital year, we remainder in total fiscal million. range spending of $X

any preliminary any potential XXXX $X at to budget Basin Now fiscal include And does year the set I million not Williston is with that closing over activity at that, or we note call would for really $X And drilling to that for Jason million. remarks. not Jonah time. this in more for the have this back at incremental as his I'll turn budgeted

Jason Brown

Thanks Ryan.

past quarterly the for meaningful our through increased dividend progress capital continued significant providing made and further months, Evolution several shareholder Over visibility we have success, return long-term for program. positioning in cash of

additional prolific acquisitions have diversified basins our and and our product onshore two footprint in expanded mix further Williston US. into producing Our Field Basin Jonah

to opportunities, optionality risk growing operating with partners. and invest low maintaining production the added and have also while drilling in development organic our We

we our forward As of Williston today, the a from in and fourth the results, third period acquisition impact full clearly we to positive we quarter saw results quarter. Basin discussed look during

benefit recent begin transactions strategic the in fourth from and and long-term represent Our late our success our of will the through the the our our shareholders assets strategic mix. for of also geographic efforts quarter increase footprint expansion results These XXXX targeted Jonah acquisition. and to operating of of generation to cash production Field immediate two latest benefit have

shareholders in incremental return the support below to allow dividend a our constant million generation accomplished debt And well years. of cash our outstanding value to that debt free transactions, we reduction our continue material over without shareholder to $XX will times and to from two we increase flow continued significant debt our estimate rapid or EBITDA. importantly, we have will remain dilution onerous eight the strategy. X An annualized through value dividend past debt. growth have We With most creation as

on-track Our reduce our corporate And have to business I EBITDA. grown we goal barrel expected per in is year. down are would G&A increases fiscal keep is times these note our annualized leverage overhead, dramatically with within well associated which currently debt we strategically acquisitions minimal outstanding our also with to metrics. below two that X pay the to the cost

addition ownership we US now a in gas the ownership from five that With in a our Field, the plays. single field transformed in Williston Basin key to and natural oil company XXXX of in having have interest has one Jonah and the presence

have with operating of now We and expanded other partners their as working also are stakeholders. operators base with respected business term and long partner their ensuring our that focused are we working five proven sustainability operations on and closely squarely

common As priority. in we dividend ultimately growing remains stock maintaining discussed past, our and our top the have

and our us to return scale shareholders. consistently and Jonah our of Basin mix. increased Williston dividend the visibility while generation areas cash and flow diversifying asset to our size Field next we and has acquisitions, product This allowed With decade have fund the enhance our for the to value

that to our long continue production value to for that, open life both accretive opportunities, and questions. of and evaluate opportunities shareholders. questions. support disciplined we're requirements our for With will look the of please take acquisition meet Operator, for which growth ready creation line established We

Operator

Instructions] first Capital. Your White at is [Operator from question coming John ROTH

John White

what of give talked Denbury's more I what's bit drilling it some opening know on Delhi about wells the us in remarks. and thinking about Denbury in But you rates, could a about more terms injection little there? you your thinking is

Jason Brown

-- call at develop our they're that month were asset is doing as fiscal their looking side, dive their ‘XX already COX them. which dive workover kind ago, and heat a a they're this We're how there -- and for we've of efforts on remaining to site, feel got technically projects calendar They same a year, the expert further a our Well, on of a focused kind now. deep the And team reassessment. a on in own doing would and a we focused right on doing field. a we of ‘XX, with deep of their we're doing conformance reported like doing what we -- here. basically about exchange the We're they

really going that's a summertime both big -- -- the to repaired That of in the December the didn't wintertime, excited able extra and be we're what it call That's John, hot, able October more up weren't really maintain they too just help too to and consistent sometime volumes delivery delivering would They’ve above of of when it's much very was volumes to until priority to possible. deal to lower this those pretty right have line -- cold as to the going as ‘XX, now sometimes COX Now about COX we in we to that. temperature's kick and the COX. the is of in but have it's is ‘XX. freezes, what is needed

or months. good a response is over years, the just a XX well five and seen always rock to is So We've great pressure. sort very has The of which news flattening last turn. even responded the the last already four

like said, that to going to months. I XX be XX the we're So monitoring next over

is of more additional think best on we COX, aligned going and to with is point they're which thing at do they this consistent pressure, increase that. the can delivery than So wells us that

John White

and Williston, all drills? And those there's no new the additional Jonah AFEs at are workovers,

Jason Brown

doing Yes, a acre and of very much XX in that's right. down right kind technically Williston the to a a But that's reservoir. now. populated it's deep and X,XXX foot Basin We're spacing dive also Jonah, drilled of

that's really west we're of even before. as quite strong do. there's we've part AFEs of there. a we've work pitched work think over this And got discussed are to that headed country in happen the very a Gas of excited bit and prices stronger about I which to going opportunities So any week, couple

we So there technical we March again they're I'm with late the with Basin. and team. some [with] with met team studies had on we’re relationship doing very We happy that of We Williston with in that's Denver met about And happy say, and geomechanical the our foundation, there. their up cooperation partner very reservoir some engineers anything meetings we're in with excited took there -- with that what up in up great pleased kind Very, happy and to very operator our got working that. do I've the to far. so whole see,

anticipate in advance everybody anticipate So and of of let I up early know -- but terms our ‘XX. at there fiscal in that, starting until we'll ’XX, beyond well I second probably calendar wouldn't half least the anything wouldn't workovers of

John White

activity of and the production… bring you kind up like that's Well, CapEx some increased keep on

Jason Brown

with many workover that Diversified do have years. That's the after asset years, the the same probably as wanting took but Barnett a thing great, rig Their the with this. to whole team for well. of many work have that they've got do been that asset running just taking to We team for which capital the meet in there just And Diversified there operating they ops October, with out over didn't have team capital support. to providing been is it's

we're to So and appreciative they're it getting that. of

Operator

with is Advisors. next John from coming Your Ascend question Wealth Bair

John Bair

circle while here, for a and/or kind has was specifically, you've regards areas back some kind I I’ve a at in wondering Mingo the past the the want anything doing of to been Delhi. phase internally with couple on decks. Denbury five slide looking you unit are of to had books all More of that I or that got if questions to

Jason Brown

starts August. or Mingo capital We units, in discussed the program haven't process budgeting their

we're that John, which even now is higher that the seem that. same think before considered. a I So -- which of We're come what that propose, in of great. dive The I say unit doing kind we to would cooperation, about higher some reserves guess, on like started a They was to concludes we're way best time. environment price now. our to Delhi clearly And price a up Mingo is specifically, had environment express I deep process in going through with and said, we kind

But that that's to I now. discussed we So -- the back want it up about bring table. wouldn't been nothing's something on right

and projects but phase of they they're terms as want well, say through went I In most re-look a be got guess, cliffed five, of projects restructuring reproposed I at of sort much need process, doing that of of part got, their those to set when internally. those their aside to restructuring

parallel their So that process is and study fall. hopefully right our in program on their side going side next to now into that and submitted get

the Speakers]… in So [Multiple fall

John Bair

fall of is you’re You meaning… said that ‘XX,

Jason Brown

No, for this fall the process… next budgeting

John Bair

okay… coming This fall,

Jason Brown

It said a had probably to just that was pushed years. got ‘XX. off potentially basically couple be going that ‘XX, We

have large at So to and them But areas, the in I schedule non their we on still it the it's we a company think to table, so take we've competition they that. harder can little see doing we we if bit and capital can all op what -- do, are asked are person, are look and asset different make a but let's further. a say

John Bair

was Ryan not the drilling next for year million any rather $X Is workovers. and I new million, CapEx $X guess would maybe that right? guess, that on my -- include your than to proposals, addressed

Ryan Stash

workover for right. expect really what That's It's projects really and our each of conformance type in John. asset. we

John Bair

or estimate that prior including to from you receiving two that of just was Jonah is recently got kind And that the AFEs that?

Ryan Stash

from It to that Jonah. was prior receiving

look if budget up take So quarter. every at a activity we obviously, that picks there,

there So see obviously, had there will range need considered we Jonah really we'll but put to year some won't, hadn't together. have had we things is take another we certainly when at so if we look But that a it. end some to things yes, update activity happen, to

John Bair

CapEx for then And bump said million to fourth in press prepared the $X.X that release, you up, quarter. in $X your million

just you? costs million might to so How in you service much that $X okay, so and that on four How and time So In of costs? is material get much attributable and I million rig $X be downside hitting of, higher workover up. forth. words, the that's kind said, maybe other

Jason Brown

Diversified, and pretty about John, been like now. a teaming what a stuff. They are pulling last transfer of but that great have saved are lot everyone doing areas being got in XX%, with pretty A they in filthy building they company of together. lot money, other and forever. they won't are are We That's

Jonah. -- to now, But I'd not general, than talked XX% So $XXX,XXX flatten If probably kind in quarter going million, of about, inclusive that are different a each we we be of fourth these CapEx of number. $X think on best I small of I maintenance in the end workover one it's say were on think, we we’re of saying of to can. the the or of production we amount remember as plays as to sort upper

John Bair

Very questions… thanks good. the Well, for taking

Ryan Stash

on haven't and crunch, specifically, that little John, that to and Permian a things to just massive has answer people in the particularly jammed some led up exorbitant prices. and all the supply more the and We seen fracs chain the tubulars

things over we out So of those we get are but of course are will that a year. anticipating hopefully kind some the worked also to the XX%, building next in XX% of

John Bair

M&A. M&A prices and not question because properties landscape higher to What's more willing or or being proud are last is to people them projects their Given of now? of One really activity trade for real offering about there the the sell up off, you prices? right

Jason Brown

things people done of it’s to John is it get both. kind curve The making Well, can where still. backwardated actually

in think is I that's market priced in. an there the instability

just people quite aren't comfortable So long-term.

is everything's probably now to a believe prices get forward, and point the end back and the it's As go within more distance. there's But more untenable. going to curve go raise lot the that the still whole people think get more in going and expensive, forward striking we of comfortable

Our it choosy appetite more we as is little be was, can not a quite now. as so aggressive

seeing there companies to months. with six market that So assets a a pretty they backed portfolio be might some if they're quite now, sell that pull are we and seeing equity few don't we next can are sell? failed over And get when still we're something in the We that little going deals feel to starting private therapy. they hopeful

Operator

Research. Robertson, Water coming Tower is question Jeff next Your from

Jeff Robertson

you A the how Delhi, production as pressure months view for reservoir think question you opinion XX think XX the injection. said a COX on have as to you I responds? behave to or to to increased Do respond an will reservoir

Jason Brown

but I that doing do, it's dive this informed being now. deeper we're by

it's prior the longer best going back to on think were My to to it of months, going spring of XXXX. would we haul hope that. where probably in be XX even is decline with a guess off that I at we be

doesn't it would back rate. we be to So that mean that

think I production [X,XXX] it was time. at the

we there. think, if of now to months curve. expect annually was in wouldn't or I just to be back But we'd that get normal , X% that to off roll XX its X% do

quicker. always going they're cubic that's reserves and would to pump my that rocks I to like not run think little said best per hard. a If And XXX responded to a longer The million going them. could before, guess. It's take day, pressure. the feet lot It's just we just are probably there we'll I get now. something that get to

it's So a they've we're just right months and last take million a now feet seeing Jeff. XX been couple day this but cubic around for while, averaging the to going softening,

Jeff Robertson

going and back are looking is trying at any just going they they're in, patterns, Are repressure the injection areas lost? it's the as that of they way the or they changing the doing they they any to -- know are

Jason Brown

are projects to where and Yes, COX, doing of here us experience that process. done with We're conformance working that's on everythings we've so us. that's for them. deep open deep of that's the addition They're thing and actually someone and And reserves different XX like zones going real our doing out. there. analysis who's years haven't propose team a of There's also help had been to we gas part to got feel that Hopefully, generally inform start before doing dive. is this constantly over the pattern a same that's kind as part

not those So they're zones put and the gased out. that they rework in it

So they're and that's returned anything. didn't the because was two needed, constantly have they and they field working conformance projects years do very, there very been

feel next we and We're I all of really it that's the a dive have over in say. deep to like doing months. So a we're couple can better understanding going

Jeff Robertson

two Jason workover opportunistic for you've trying all you fiscal on projects you pleasantly from might your if are AFEs ‘XX? gotten successful, those said that of are prices they surprised the to are, projects Jonah, where they a Are gas with or just in lead that Energy. additional Jonah couple

Jason Brown

there do believe be Yes. We will more.

I very the the were together, that kind team company's too. excited that participate expressed been and the been think or and teams asset they've other forthcoming of the and that together ops teams a great to on been focused they of with have to they've areas partner got really that's sort We've wanted -- information. ops

it's non to So lower guys participant. they it at there's active are I to bit surprised, op us I'm -- very which price just that it for a And attractive wanted pretty that be relationship fairly with these developed, areas quite a few because proactive a with is an pursue environments, make didn't sense guess but now. starts little important and before

roll We it very did for excited that PDP for about bought we So so would not be bank the unquantified off upside us. so it on that. just

Jeff Robertson

a mix from but fiscal Ryan, Williston, quarter question, might little fourth say shed quarter light from also with full different that LOE a And can a assets Jonah? now full you a you'll have of on look how quarter

Ryan Stash

-- short saw only itself, So a XX We're full the you LOE almost was Williston days. quarter. about

we're because the per bit a a what little talking barrel range. hope see would kind cost, we really is lower being bit, in Jonah $XX it $XX to obviously, So little to lowering of

our be kind basis, on we to this that roughly would when least quarter. reduce hope That performer to Jeff. be of bit $XX would in -- expectation a that add from we we would are little right a at now, the LOE able So at certainly

Operator

is [Indiscernible] Your from Investments. next coming [David question Locke]

Unidentified Analyst

dividends year, you on door. you've for million said CapEx what yet $X for next quarter the CapEx got commitments based about together, So out add the about and a cash of

You're in of heck it door faster than lot obviously a bringing the that. a

that sort the of cash of me So what describe the can waterfall excess you uses of for is?

Jason Brown

a situation I where I still locations a problem But what we've potential. we just M&A I've good figure and to it's optionality probably tightening, of David, these a got it, do to the is described out environment think, with and problem, it’s the guess. got no,

as you're and are to would straight become stocks use you the little So at up, can prices of prices continue our transaction things our our a a as now deals if pay starts a we deals prices still just up to where of -- sense shares their It are as of difficult cash to to that part for or because increase. can kind deal, you up make two some a in deal. both there we're looking relative well. some more if up starting consider We're smaller three potentially

cash know, the work down, So year. middle and that I don't paid some probably hopeful put the market right something we'll to debt season, towards is pull holiday the something And think, by definitely the we're calendar that in the else in as can of. M&A have am I we I end our of

when have over that in gives you some never So are us parallel in bit. drilling a optionality drill bringing oil we are a before. had locations to this we development, you that cash that oil if go have quite XXX we're other going is ever you working at the the got bucks wells time. potential And But thing same can and drill is

we definitely two if we is hope now wide, If -- work going capital be on pull are you And the make will going over an there. some have a some to trigger ask optionality that too the not to are we we to to hearing then shown decades So have there. are we we disciplined acquisition, which to little there. I potential put that hopeful bid have a I'm that,

So that's next look the XX like. what probably months

Unidentified Analyst

now did would is Jonah Williston and the to when the market expensive you roughly more relative you A&D say deals? much How

Jason Brown

terms in -- guide things about acquisition think pricing. flat I of terms is actual an of in

right and XXX gets five at something years around something So current XX-ish, starts if down that. like now over the strip or to

XX of years look So a long. I for it more it's as year assets kind think XX, five of that and average we are

of generally at a fifth kind look out year XX can you flat. year the but hold we So

average, XX in year XX XX be closer be a somewhere to So it's is range. look at the range. A going year if going you five range, to to XX

we in that deal I we the -- first Williston, negotiating, was started we the when were range bought think more flat. XX XX, when

X, three, XX going you five, look it's the XX. years anywhere oil, last in be If about average to

than going But this a a super producing assets, Williston. that's has somewhere point, But depends were. you that you Hamilton a we little XX in our that's we like did But flat, range. been this the and transacting dividend. It's could to XX percentage more can higher in Obviously, price we range near-term, wise, something clearly going environment the of to it's higher Dome XX%-ish it's production we than forward, with on at years. are get are XXX the flat. longer-term we where all in tenable the that's So probably the support something still probably quality still a pay got for within just because gettable

on business that. little us I a strategy Ryan, be lets deals So lens, have guess like anything? wider our

Ryan Stash

on back agree question, I that. for your cash. up use with No, kind of did circle of I though on want proceeds David,

we dividend, the did dividend know at that looks thing every mentioned You one quarter. is obviously, Board

not And the on so table how increase the is the certainly and depending perform. dividend off assets outlook

every you As and one capital table. and and we looking is at new looks certainly, Board are Jason above do, certainly to the can dividend as deals beyond pay at mentioned, current things returning the spectrum the something we on shareholders, debt quarter. of down, it's at look But even

Unidentified Analyst

is one the which a to bid-ask ask wider are How slightly does including probably the market I you in in more, you that gap? the transaction just stock an under-priced question, maybe And what could be so liking. spread M&A is, help close are if if to finding annoying little than

Jason Brown

understands group combination that additional the has going be It be likely is the stock stronger. that value assets of to in a with to

premium they're our helps But more a combination benefit, get the uptick. stock the where for and this and then like assets them, way looks of to that's that price. so sticker And and wanting what the it's into get us assets the those reasonable currently a the from market's not the that giving they then they get

month little So that volatile a felt are a a ago. Things now. right little better

target. also with of we're are The that mentioned who are trying a moving I'm people to that's bid you and out lot strip just seeing a ask So it's of the deals earlier, too. [failed] constantly there expansive take not too price, I advantage which there's disagreeing

-- going parties. spot a it's to both to So for us work is going for in not we really be perfect we're the a be about right it's able answer acceptable it, really And an but it's because now… good environment set good feel know to right and to

Ryan Stash

do But go necessarily something two cash more and to more Not issue between of And I strategic that talking us right the I add assets. our to cash if they a beat looking potentially mean, what give about sort go and PVXX you're some us would not we're Jason's What going worth it transact that we you're asset would appreciate, for we part could going death. to on. value to it stock. -- potentially probably is a now thing PDP the go is buy buy it's at value the decline first, that PDP of see a with shareholders is only stock companies. deal if potential is think in where relative potential stock the would sort issue just of to not

Unidentified Analyst

Williston. started that take capital of I wouldn't or you that into just turned going work? production that. the would Would you And risk have guys putting to some it's expected significant and around then hedge early the some if you

Jason Brown

a we take to I it some like call at And But that hedging balance to away got We're We would stay much have depends the working bank. it. so a look sheet the option. we to be generally we at it, time. on as it the of endure don't to I'd our as we look revolver, know… the at want can. We feel like from

Ryan Stash

think would I we it. consider

also a scenarios. drilling -- really is could even we on to other at price also hedging could drilling we more price really try thing returns such projects only analyses engaging or feel way sensitivity we think, mean, we it would pricing the do cycle do the in but we mid one environment. look to a such what flat in look I call what it that economics the I look at and in good That's look do is a pricing. XX about would potential on, running like and at lock at we is return on lower

when evaluate everything those So I think opportunities. we at probably we look

Jason Brown

do like that's the And that dividend, well. to table lots is the from other of up increased with the There's The David can don't thing the there's back cash. an we always we on for potential dividend. as things

-- going term So that. to support want long a if we're we of

to stock additional the to of return value shareholders how things are all to return assets of to out So figure are grow increased these the on table dividend, table. sort through capital and on price at shareholders, an all

Operator

Your ROTH question White from John of coming Capital. next is

John White

multiples, comment you deal last believe pretty low the price on. heard Jonah I but trades the the closed tables, words According to to at some my of I responding is nice Just stock. Evolution comp onto -- my questions.

you have ownership or land operations any or So the anything position. expecting are any surprises surprises? seen wondering weren't or you been I'm there that Have that you now on

Jason Brown

do only with -- to the they the With very work, some that. Jonah, actually surprise no, pleased want were we surprise that

So than very, been small really other no, no, piece that but They prepped But pleased a that's with good. we little very we're that. reported it.

John White

to big, negatives the as failed No, color I but or mentioned why they wasn't wanted you failed pull were small? were deals. on your more on Any have trying In of I been to they there that they M&A answer you, question, some out just ask. recently

Jason Brown

on it's that do, deals spring. prices anytime pretty things several hold we're whole range. we would to It's things No, kind some smaller it's hard they together. been the focused We move really a $XX range, And kind the little in the over volatile. million there's been ones, to bigger. of $XX of of way But consider kind

specifically. that So the I about things might Williston have we've coming a asked to Basin, you around, chance but back wanted me of any say seen a on surprises the on Jonah. couple also nothing

our of our very had an was that but week, very, everything, Basin, we actually with were there. go pretty our I offsite was board up were travel diligence Williston last well just to the up due able there really it to operation and and pretty is, meeting did Williston where photographs And On thorough take Field met and partner in able to to foundation, board And the we run were happy. how I We great we impressed. environmental them wow, we a see the person.

and very the board so operation, pleased production meet personnel to and was was surprise. get superintendents a bit the HSE with I little was whatnot. a that their performance think and it impressive to their And

John White

in and it's the to Williston spring… hear go it, to to good Glad

Jason Brown

Yes.

Operator

question Pancratz is DRZ. at next coming from Zach Your

Zach Pancratz

got other a competitive these side. from And nailed historically yield a Actually now mine you only Evolution companies, Would of sheet look the as and strong balance are The at and the yield. thing non-op than pure add maybe regards has I be a been companies variable its of getting that a attractive comments. royalty all more you E&Ps is two today, ago even an for considering higher dividend cash you smaller it's flow of standpoint. The some would reason lot your on kind base option here? caller ask dividend I with to is plus

So trying maybe that methodology of kind dividend to looks what just understand like.

Ryan Stash

this traditionally periods $X.XX I of back then been has which mean, and been up. I historically, quarter has stress, had think per paid of kind obviously there it's obviously we of loaded have dividend kind

thoughtful going forward, Board spectrum. be long and a likes look the to think I out on

the As we Jason's five, at in things XX kind so past, of basis. look on mentioned year

using have for multi pay can will, a that if and are base analogy least you dividend, want we So support if to years. we at you that

We at companies really an look plus on have variable. hard that to really base I'm yield annualized on yield that credit Personally, convinced a that yet at the a to that market board pays not piece, kind that about a gives for of looking on discussions the to the at sort stock variable basis buy variable. of level or it's basis had

a that certainly period. the at we what support can But Jason over So have on there know sure I that we dividend piece. yet a you… to I'm are wanting look longer-term base variable not we don't

Jason Brown

the on all It's table.

probably get think I just think -- it. we for general want I recognition in to

want that's entire too have can something back in to something we our have want up don't what we from, sustainable. not that what's I think history. displayed we and that's deliver to So and We reactive, be

So a I do the and it variable market share, for you really credit price don’t in dividend, know. the share and get the market

say would people no, but we most probably see. think will I

are and… of not afraid We raising the dividend

Ryan Stash

I It anymore, sounds E&P mean, recent or on, I a of the aren't as XXXX in aren't mean, even lot there consistent like when we point. you a keep make our as are going started a that a year to outside two ago, dividend. valid a eye which we of dividend it and companies paying around -- really was really MLPs pay

because starting investors it. are demand that see to You

certainly keeping that something on. watch our are it's So we

Jason Brown

to focused where which have that the start and to poor of we on to kind that's sustainable meet increasing oil treadmill supplying getting particularly and making MLPs just try dividend inventory buying an some yield, of ever not the decisions a on things just are trap into. We got on is gas not

Zach Pancratz

good it's it. Well, to have, so appreciate a problem

Operator

you. Thank

Partners. of Charles EFW Your next question Finnie is from coming

Charles Finnie

a of at the buying of are big cetera. of you every even nobody paying class that. in paying high stock, in of mentioned acquisitions look that options array have front of back how -- and this day. front has of decisions I then sort referenced have now, of I down dividend, you you Maybe debt, you As et just array you that wonder course that part

kinds you deals or M&A are from little what's a and it any salary, -- shed of Is find bonuses it decisions you myself by aside better that these that entirely share question. for getting if whatsoever? my well, wondering, motivated I are other to trade you offs, doing asking guys Can Is mind you on management. motivating how light don't try price or things? personally make I As understand you

Jason Brown

Our base salaries. comp have committee, we

have incentive incentive. we to compared a short modest pretty long a they're but think our peer term and -- groups, I term

array metrics are that proxy. are of So those driven each -- one we our with in a of whole

little to to it of a a double three size third is group the percent but acquisition a or full could of And -- a the certain XX% was I the rank in investor target. it think then we've don't the think I variety of giving term management digit kind the we think get certain things a chunk focus of earning got of happen, just a percentage year last things that a we been it and is full in terms peer a quarter incentive throughout cash much that more decides I more analyst times was of maybe to to hurdle amount. some coverage where want maybe return shares bonus double a a their share my kind or return or -- our over as that's of was base, job Then years I they So those peer free year. on like, where our an my based then of of a certain out our difficult. make board of there's thirds know, and whatnot, that terms a I long salary and And go on certain on vests also some and salary, then or this relations of that two be base are dollar total and whatnot, to a year, think price get it as And time try on period, had it. one a decent this whatever of of of it's in conferences top flow then per of of time group it's for in period shareholder

it's all So that in the -- proxy. be will

of kind combination. it's a So

company. management of owns X% about think the I

Our the about the Board Chairman owns or X.X management. largest held rest is by of management rest a who whatever. and shareholder I’m so is our the X.X,

motivate have all portion us. of some we So shares that

owners. all So we're

Ryan Stash

would shareholder we're, focused I on Jason say mean, total I as we're mentioned, return.

big So that's a driver.

So piece one dividend yes. of price, is share shareholder the But obviously, return.

as and the for perform to our shareholders. both at we ourselves look try comp we as group to So peer we pieces

Operator

closing appear have in the to [Operator queue. any further finish with? you'd comments Sir, be Instructions] Do to questions you like no there

Jason Brown

our team again, you everyone's for ‘XX their I long our of Once our and we and look fourth our support want year strong in and speaking behalf earnings. strategic we when September appreciate quarter time report today, and board, full full fiscal our term to thank On and shareholders to efforts. forward continued

feel please contact other with good day. questions comments. us free always a to Have As any or

Operator

conclude and ladies today's This call. you, Thank does gentlemen. conference

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

Evolution Petroleum (EPM) 12 May 222022 Q3 Earnings call transcript