- Earnings call transcript Q1 2023

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Operator

Good day, and welcome to the Evolution Petroleum First Quarter Fiscal Year 2023 Earnings Release Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Ryan Stash, Evolution's Chief Financial Officer. ahead. go Please

Ryan Stash

good for and Welcome our to Thank first afternoon, quarter call the of earnings you, everyone. fiscal XXXX.

then is Officer will and to of Kelly highlights along Joining we and then provide forward-looking your will accurate statements, After some may review, return a today date. more that Kelly our before up review recently the a detailed me not key will named later closing I Chief cover Executive Board operational and our information member are with Kelly note open Please and it and provided a take financial of Directors. questions. comments be Loyd, President statements results. time-sensitive a provide any at today and I

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

affect note readily numbers call and focus primarily moving being earnings yesterday's this release, as detailed everyone how in Please conference recorded. available will As our and these results as forward. key call strategy financial that well operational this on to us is are

Kelly. to If I that, With today's call, call you will by replay webcast the turn listen wish website. to company's it over going to of a will to be the available

Kelly Loyd

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

full at very remarks, Interim was I'm CEO. to gotten Board naming CEO I truly and for June. aligned as accretive leading in move begin here named allocation this I've my disciplined group the Evolution make company's goal And prepared progress the know with management we in me achieving and of chapter. talented maximizing in Before the of like I'd fully I lead since the goals. this thank am returns. professionals to our to I capital excited well to President I committed financial continue the Evolution strategy to next ultimately and of forward long-term total with shareholder towards and Board and forward executing a look team

marked first by hard to thank fiscal pleased our of on capital strong since and by another our down with dedication. of team operations, to their of by We all decrease I flow solid reduce for than pay we and XXXX. want spending, quarter members significant amount a use period continue The made XX. June to which work fund borrowings a credit to for on shareholder to and million, debt. period, results which generation, our reducing facility, start highlighted of was a continued XX% free we more commitment to cash We're $X dividends debt delivered the commitment a overall that

Our share paid fund payment the strong our was $X.XX fiscal during the of flow was per of than generated quarter share, cash first XX% XXXX. the quarterly of during fourth quarter also $X.XX higher which that used dividend common per the was to cash

price of say December who program consistently small-cap time companies fiscal XXXX. length of quarter began for are they very dividend of EMP consecutive This dividend this There mark XXth the second that several the cycles. will XXXX by in a the throughout for we capital dividend cash since per cash a of paid few declared company can $X.XX Board Our paid commodity return share. have quarterly tumultuous

or paid to shareholders. say past proud share are $X.XX $XX Evolution our back the per years, million to over X We that over has

X, the with term, payment growing have quarterly and return support strong benefiting of ultimately September priority. XXXX. immediate long low-decline In top the long-life shareholders, XX, common of sustainable on cash We a shareholders December repurchase up through a to share quarterly dividend to our our million authorized a Maintaining stock $XX of for assets support that the our of our steady remains Board and will a continue capital. further program of dividend and

first net X% of higher quarter BOE that fiscal of we In now which Turning per X,XXX was X,XXX we in day, produced the XXXX, per operations. than BOE XXXX. net produced fiscal fourth to quarter the day the

first trend of encouraged additional versus been fiscal upward support oil which as by 'XX. offset NGL Having benefited higher the pricing gas second the see from generation to said XXXX. fiscal The quarter and well NGL fourth and in and natural that, This we will have NGL as quarter quarter oil pricing was natural an production cash recently, in gas lower of higher pricing.

cash natural flow. most other natural our is our to was XXX first acquisition for gas or The cubic of gas. quarter XX% significant assets generate included in Field per is that BOE detail. production first Net by XXX at quarter Field Jonah MBoe more million similar our and the feet results long-life This and Jonah Looking reserves X,XXX day. recent or low-decline highlighted at

In gas where addition, favorable the access to pricing. to natural also attractive transaction markets see continue Western provides we

for per approximately Basin oil. was XX% increased of or to day, production properties MBoe our which net quarter First XX Williston XXX BOE

to continue work recompletes sidetrack workovers, Energy We Management and with high-grading drilling closely on Foundation operator, the expense opportunities.

drilling per natural XXX capital very and approximately which assess increased BOE XX% for per months X,XXX active net XXX Pronghorn XX diversified Energy's the MBoe production gas. operator for day. X% increased to a workover underway Hamilton has Dome production to of of was Barnett remain result ago. to been evaluations field technical slightly is program, becoming or properties since BOE This Net or Mboe and our Forks our locations. addition, Shale day, quarter first In Three which XX

upgrades conformance the XXX at Field approximately the projects. in to will shut-in to support MBoe wells, volumes their to at efforts water and field, maintenance to continuing locations production production continue targeted other execute per BOE Denbury Net previously the and workovers is Delhi restore Merit Delhi operator X,XXX or they're day. to We operator, Energy adjust slightly increased on injection facilities. and at and perform

our I I our corporate our details turn hands-on Environmental recently proud efforts am oversight, I'd Board's the sustainability commitment over transparent to to by stewards are plans operators learn our and cornerstones call our to our that, who and financial produce our Ryan, where over high-quality, Board's point and We committed Sustainability will which values demonstrated Committee. to third-party core to to governance as sound invite to good ESG posted report corporate out work and energy website and report like XXXX our our discuss together. and that the the sustainability comprehensive to now With stewardship, about of Before commitment responsibly we you which is employees' our our and contributing with resources of formed disclosures. are employees our more review newly sustainability communities to share our efforts we to we our the I to call turn positively work to environmental Ryan continue highlights. culture. being to

Ryan Stash

Thanks, Kelly.

solid quarter fourth generation the during Adjusted of XXXX. basis. of EBITDA the information continued quarter and financial our between $XX.XX highlight yesterday our the million primarily was first results. a results fiscal comments XXXX mentioned for press first please highlights additional $XX which of A from the per release our concerning was earlier, XXXX period. included on quarter of and key focus fiscal As adjusted to EBITDA, quarter will afternoon BOE on comparative first refer My today fiscal

per paid our of to importance cash capital payable record of while we operational by increased the the remain quarter of and We paying on quarter, flow shareholders $X returning out outlook, dividend first and on continued XX the dividend a fiscal of quarter clearly debt. an million and our continuity as second Supported share expenditures value to During to operating of strategic $X.XX development share declared program. fund this also in cash the dividends first focused down we $X.XX XX. of per for operations, and of December the in solid December shareholders recognize of our XXXX flow

of through to $XX Kelly discussed, share XX, September, program our a December Board As up in million XXXX. repurchase authorized

expect returns operating We incur and fund program a our working view tax-efficient to to expect our to means as repurchase debt. and any the repurchase enhance We capital flows do program the cash shareholders. to not with

have reasons to X provide years our management. a we is capital return of past the conservative been to due long-term over the of on shareholders program execute consistent to to key our financial able One that our

focused remain ensuring maintain we balance such, on squarely strong we As sheet. a

XX, to XX% $XX.X we grew equivalents, As the million. of cash quarter. cash capital the September end increase and XXXX, We liquidity $XX.X debt of had million a million and $XX.X of our million, $X.X fourth of since of working

hedges down pay we remain below $X.X remaining enter down in discussed, calendar did threshold we additional quarter. Since quarter, the we $X We Kelly year. add million first us in of pay the our paid million down to hedges. the any end disclosed additional by of an balance beyond previously what of expect the not end to and any facility and debt to last have was credit incremental quarter pleased into that As our requires the in the were the

quarter Looking more detail. financials at in the first

million revenue realized BOE was pricing lower $XX.XX commodity Delhi in offsetting volumes increase well quarter X% the lower which was expense lower due of the due factors, realized transportation lease XX% quarter. reduction primarily from the Lower for quarter. compared Williston decrease to oil in gas costs revenue revenue, primarily combination and higher by total due was the an periods. gas increase a Field oil $XX.X in the and Our XX% workover Partially revenue including other was a prior partially prices as to the primarily associated The production a BOE the was to lease contributing Shale of lower volume in Basin. in in $XX.X The On million in decrease costs due increase and in associated revenue volumes sales contributing was the crude to result expenses in per X% higher the X% sales expenses first decrease $XX.X X% at a first prior NGL with to overall operating in realized Lease pricing. with than $XX.XX. in in a increased and $XX.XX quarter quarter NGL the as to to from were pricing. natural to in fourth pricing. increase million estimates of COX operating operating price Also per the a decrease the from a and changes Barnett X% expenses was increased oil to fourth increase higher fourth quarter. basis, gathering, realized natural offset X% average

and $XXX,XXX share impacted a result reduction cost, increased Adjusted and expenses discussed. income recurring million $X.XX previously $XX.X general than million administrative quarter. diluted in to the more directly diluted per forfeiture for impacted share and the sequential quarter. of of $X.XX oil. in prior or administrative lower by $X.XX quarter $X.X first to costs was at transaction a COX higher or and or $X.X share oil price income was the $XX.X quarter our lower in million General to the non per quarter. in compensation lower $X.X the reminder, Net was was expenses per Therefore, fourth $X.XX prices versus per Field lease million for severance or decrease Contributing and related included the cost. stock-based operating by As diluted $XX.X shares. for first the Delhi share the prices versus are The noncash COX unvested positively current quarter I a little also million the $XX.X and overall fourth million in reasons from quarter fourth million commodity diluted net the

capital million maintenance quarter, and first development we invested the expenditures. During $X in

expenditures over million. $X.X we and of the drilling of projects opportunities Shale XXXX, and $X.X capital the upgrades development and development locations. million includes Pronghorn Field the fiscal Jonah expect Hamilton field, to low-risk This to Field, the continue Williston Forks facility, the work Delhi the in Dome the For total to and excluding central estimate Basin, Barnett sidetrack development Three

with may partners, our our conversations commodity pricing considerations. spending outlook operating and As in depending change on the other past,

to remarks. over that, I with his the will back turn for Kelly closing call So

Kelly Loyd

Ryan. Thanks,

base are exceeded the in half asset combination follow from transactions completed the playbook Evolution X years, purchase. an key diversification over our cash provided and of X seeing acquisitions of reserve We and X with expectations overall accretive these multiple executed commodity X fiscal past U.S. categories expanded the acquisition proven time across geographic of both product mix flow plays. we The benefits the have by acquisitions diversified clearly by has the immediately footprint geographically enhanced much onshore the a These our from afforded in with providing larger XXXX, mix. second which and our

align The able of to quarter gas of We mix continue our pricing impact opportunistic value sales the significantly quarter production survey for on growth in to was our that display and company's compared enhanced as natural fourth prices the market fiscal of full first intrinsic strategy. lower with to oil higher acquisitions offset the the XXXX. were

significant Our strategic for source us supports return and enhanced XXXX. asset further cash targeted growth move provides our we as opportunities a well-established capital visible that for fiscal places strong future provides funding program flow base generation shareholder in position through a of

invest. to continue total Our position a us to our execute dollar shareholder returns of remain maintain steadfast and in to disciplined management in to balance capital focused commitment optimizing and that strategic our we maximizing on puts every strong conservative sheet a plan

payout and, clearly a consistent our return efforts. We long appreciate on ongoing committed Our and cash their investment. to their value over dividend substantive the support Board with remains recognize the of tangible our as providing appropriate, We increasing our term. of shareholders staunchly truly maintaining

As comprehensive time we our securities other opportunistically shares part pleased to open repurchase time federal transactions, recently the to by transactions repurchase accordance us through shareholder place market of a share allows privately put negotiated our meaningful return that with to were program in laws. also from the in means or strategy,

to to risk-adjusted we cycle. We we value initiatives pursue where depending maximize designed in optimizing basis on invest on shareholder return continue are by of will dollar every the total the a

payments a to many to benefit served to has and capable supporting our years targeted well Our the us for continue over shareholders reserves past approach of decade base building cash PDP of of will shareholders asset come.

the our assets additional on also investment shareholders. dilution. tangible in must not our through that thesis material the long-standing their closely are our capitalizing in our of provide established grow will acquisition significant we legally evaluate total transaction to on proven the and do a are accretive, for consistent we of meaningful shareholders to opportunities forward provide opportunities take We needs of the past, strategy and strategically base As shareholders. squarely questions. ready on open while look to continue for on of continuing and line long-term With focusing execute expand immediately profitably that, questions. with production, providing targeted Any result support Operator, a business to our our to return and return please

Operator

Instructions]. [Operator

Northland comes question first Capital Our from Donovan from Markets. Schafer

Donovan Schafer

more start other and want details excluding asking by taxes. out operating of expenses off of I just the on some to kind for lease LOEs, the injection the COX alarm

like seems some transportation oil. commodity of the in LOs pricing. skewing COX because commodity So to a drove more the that, natural the BOE some LOEs of through excluding understand is then to think that of linked basis? guess Shale. lower impacted And sense it high price I contract the Barnett of I tend is that Ryan gas increases, a pricing I'd like sort But still be there of get Barnett curious to talked the what in on gathering, I details often production, kind Shale.

just us more was specifics So give on some if going what you on can kind of there. curious

Ryan Stash

happy your to, Yes. support and for thanks Yes. And thanks Don. the for question. No,

So for a that's a itself little so Barnett marketing Shale, the bit the to that hub. there in natural the tied has gas, is contract component

the go obviously at piece other well. inflation on as a level it So we've field that going seen is some there's thing to But as tied prices that there up. is of that's the

in in about a And that about actual if arrears. X player we've non-op so costs Barnett, and think you the months too, got being come

from commodity catch-up which seen prices. quarters this some bit also kind quarter gathering what's I the of and does fee really, little as prior costs a of in So in this going increase what level impact expenses the we've is call, on cost.

is So we level quarters. going would see the and cost little out forward, and I think what bit think really, to to in hope that a next coming

to range, kind $XX number the So for barrel the a of we of normalized somewhere think we per think, more kind kind around think currently, forward. going -- we is of Barnett $XX

Donovan Schafer

an I That before trying as guys as of And helpful. written that I'm I hedge you makes like try through then little who's are of follow. of exposure, someone Okay. like possible. management. also you makes vehicle almost you sense. but to that think, wanting to kind a interesting portfolio have commodity to It price sort guys, for curious like have That's kind I prudent

the of pricing, all -- by refiners an of tight sells that Gulf being kind like just crude -- But winter. you're and you've Delhi refine positive premium. Coast in me Northeast have don't been that's whatever if So obviously and if the have like hedging I and a selling not product. the the -- for does Coast know, captured selling the what's to that distillates diesel. seems about on the does some just the benefit of does flow at the all any middle a thing but about about refiners through? there you inventories because pricing. it -- with does refineries? lot gas to natural towards you going that that a then -- product Europe you the But kind Does of Those And reports and that through into, it's talked you you're the not finished little skew you're have they're I a Field does a of that distillates? Or also sort in or -- And get development. have know kind make sell Jonah West side guess, And nuggets that does market exposure general, you think on outlook sort West curious got for similar for both on see outlook, oil I and

Kelly Loyd

regard to is due to that the right? specifically it Delhi, We our of paid type Donovan, thanks. get where also with that I Yes. is. located and the would say crude crude

price that makes purchase, already the if sense. that made be So would received for in the at up we

Ryan Stash

Yes. are more that relatively fixed mean to for to are I is that really, in going charges some and There WTI. be the how translates there. just LLS impact pricing transportation

So for the driven markets how impact the in say of what's Delhi of as the to really specifically. going international by most as part, rent that's is know, kind which, you would and LLS are, I other. moves, sort

Donovan Schafer

products. they You don't or That like in refined historic based changes spread product see don't changes changes from on don't.

Kelly Loyd

could It would longer-term be But right? be eventually, a thing. that

Ryan Stash

thing reaching out see just the Yes. and or some there. is obviously, big right, there, in kind -- our mean, the for benefit whatnot, be could and flows. uplift those some they a of I to barrel, we this if going components of The for have Delhi, on that's blending are cash used NGL driver only but that heavier not

Donovan Schafer

gas, then ahead. Okay, okay. yes. And natural the Go

Ryan Stash

-- Yes. of the you've a that range. prices I up going natural seen It almost average well, was the call And X-year pretty to a X current ago middle say, year become of happens, front, gas catch we're catch gas more storage to going to be Obviously, weeks' to when to. up seems there like and given the weather. quickly next on

of it's get not of That of over was in a X considerable as winter situation. we really last has volatile than it say more be think at -- of But so you a -- going or the or it year norms trading a years. this been. past deficit weeks really at so, significant tightness. moment, there to as into been past. has in give I X you're And line the exact discount, couple past to when year to back worth so, currently, with it's cold weeks it tight And isn't

natural prices yes, some on I gas see think to you're near-term for volatility sure. So going

Ryan Stash

little Ship of basis. Obviously, has bit kind a given here Channel recently, online. Permian [indiscernible] production the on struggled Houston just coming

actual, least and all I that sort pretty look the of good, hope forward, at at those looking Coast the if going the mean, West out, we on this Now year. of actually Northwest or you're early differentials right, winter for kind next Pipeline,

of out kind see we're we're that strong pricing continue hopeful to to Jonah. of So going

Kelly Loyd

just half to track a back I for second. wanted

where to that what know job expect forward. is to I little the So thorough back as LOE on of replace at pull did we -- Ryan to Williston, lot We the go whatever operators don't it and piece often those issues. elevated you a the -- levels of well. more we Foundation couple do through completing the it again. run you'll A tubing, going with there What operator, then Barnett. joints was a was done, did we of just of was had lot a of this walked or that And workovers see our you'll Williston LOE, quarter string the a see have have these. and very back one them there

to time allow fewer this So of us forward. the of in period a effect upfront LOE should Williston workovers longer going have for

So have that into as well. a forward bit little we this quarter, benefits longer-term should but of pushed cost that

Donovan Schafer

remember you really Okay, about okay. in on uplift decline this that, get But workovers. too. a and could sort thing But there's a Barnett think mean, And then and flood. downhole what like the in or been Jonah Delhi. could I down of ones, if waterflood something on necessitates failure kind sort water that of a over, maybe remember, Williston you When actual with mechanical more you're CapEx, those you're Field depends in the if maybe something rate think or work like that like to something can't come ties is or Hamilton in it. stem doing I --it and I workovers do of same trying I I is sustained can't you in in

speaking, investing you're -- it is declines? could that out the that the broadly Is million traditional flattening production? something so the cap more more non-Shale to those in like plays add largely some $X.X like just million of in. incremental any capital $X.X And that expenditures Or

Ryan Stash

Yes.

and the that specifically they've working they and that program. in I flattening speaking, out some through brought in decline. were broadly back were So that the online, wells there recompletion would been it's But we shut say, opportunities some do Barnett, have

really old zones as some But reserves. to anything. it or incremental add books. potential projects few do up was to a where additional as is of have So be a of back on production we production much would it potential And put recompleted those the new

Donovan Schafer

okay, And price do the in the frameworks? share mental are it strip share. when pull something dividend, sort is when the make for now to frameworks we paying do if point and a increase I'm options trigger at the or at, of decision lot down can that can disposal. per instead kind of buybacks, what it? the a you some Like curious allocation kind the you're value of steady buyback have And okay, -- The you PV-XX of increase sort What of is what are then to be using? And trying you one, turn dividends, question capital buyback dividend between the about decision, your use and of is framework to Okay. Or there are what you the to kind levers because when lot your upside the on right you or do okay, give us something what we we on kind have do But debt, Is time of when that you framework. growing. where there's at for Williston for where again, the do a to drilling there. then options, alternatively, you framework with on or program. of a going at. in things using turn look

Kelly Loyd

Okay. Sure.

repurchases. got you've you've got got dividends, really, mean, acquisitions, I yes, So share potential you've

we on You've think at just make And repayment, change to, that we quite use for got near return competing forward got what of But we Those decision can quickly. investors dollar. are we the the tell can projects it's to look project that at just to we And of based all And most and drilling, of it capital think debt complex, term mean, highest and it decision, best our often capital. right? very the there's time that and you yes, care dollars. for -- you've I'll I is the do the the that uses we dynamic. at this, try we decision Donovan, lots do and accretive is what best time. And going make

on any be it'd of to this metrics give point. So tough that sort at you specific

Donovan Schafer

All right. ahead. just then Okay. And my -- go last

Kelly Loyd

been that going raise was every at on least have at it, able for to elevated Again, hold quarters. will to say, it I I X level there or we've it say dividend. time raised we the

raising the take It's something when -- we it, So dividend do is not we means something something. it lightly.

Ryan Stash

mean Yes. Donovan. from just real buyback, quick, And I a

be from looking market acquisitions, for right? going that to where always Obviously, we're a it's going standpoint, to do least, almost I mean be it's we So buyback/acquisition at be at we're hopeful to a and for going think attractive we're here into acquisitions us.

and we an we own our buy -- that, shares, acquisition So can balance market. buy we either returning standpoint, buyback from think the well, also go want to shareholders do a right with in to capital something to having the ability liquidity we and of

do it's our dynamic, shares can we kind of of right? sort what -- we're market. buy what get the in we So values think evaluating should we versus for. We're

the that more are of Kelly -- -- value to more certainly not it's but they intrinsic at as going it's shares, we said, look So a than our just factor.

Donovan Schafer

And restate shareholders and be it's you to amount, your I might gee, shares could an it at hypothetically, then look low attractive some find too looks not maybe us opportunistic situation like and in having the -- you return a a significant down in give Right. buy thinking more it "Well, came mean, for you situation say, but and a that if also far savvy if might I might very ability shares, us by buying but say, where yourself back in to make to that, back it acquisition. shares

buybacks. trade-off And of to pre-committing okay, do the where here's so we're the to, price going

it of seeing transactions conversations the to of because -- terms are having And what's hands going kind things happening. around you're terms pre-commit your where in to be M&A. If private you that, ties happening of in -- in

have where you'll sense there. so about things And some trending are

and right? that scale. there it trend attractive you bigger kind the -- something even is do maybe to is of And that opportunity a on even so Is and more allows

Kelly Loyd

Yes. That we at decisions is them definitely over it. directions in how And a you've true regularly, our time. and very seen we weigh different That's look statement. and time, they lean over

Donovan Schafer

Yes.

phase There's just sort to trying of course, could these they're the been "Hey, start exchanger one guys initiatives. conversations that on. We know, to curious you so be heat the elaborate feel want now. one. the just to think of Delhi when makes out to question as let now. we that I'm Hamilton, come sorts I'm sense. to the at applies There's and other though have becoming of think really But a one now. of additional so and there like kind on like trying kind it's in you that potential on do here of any has is operator not -- I know yes. this -- And if to of adding. to of even like incremental lot free we I that many want is somehow incremental these in going thereabouts, feel Anything this start last some hunt an then you Delhi example Delhi assets phases, and that's that. new say, That do stands other going the Jonah, me of But to I ways initiative were interested line assets, Okay. program, all of -- to But if something there's of Field, think Delhi the some field, And

Kelly Loyd

Okay.

So I'll to speak Delhi.

really are. Delhi, to about with great doing job other think excited committed mentioned work don't a asset. they they regular of been do vigor it's or to conversations think just their know there. they're of think sort personnel, of with at I -- it's if their that. with I -- corporate. Denbury encouraged something the they've a they portfolio. also been that the And projects renewed overall But piece we I just the I've go they've It's We have conformance they're And forward I and to team a have and small want with if sense are that like

doubt do believes that really about that be you'll hear it. team have very more think asset the can them corporate I But that on it with and So they good much. presentation I there done asset a talking there's their

I along don't conformance to I you're been a that I to side. -- lines. a doing think say have various good considering -- really options those have firm AFE. we anything excited But on you the project the and So job gives do want enhance they're hope some and

So.

Donovan Schafer

Okay.

one you in is different multiple people in too, -- the sense some think in tertiary seem whatever that the Shale world, all can is economic, find of of as Bakken you will recovery my free then one stacked of especially can say, and a like through case understanding mind Forks with in that my "Oh, ways, conventional you that appealing. that's or stuff phases. sense, of secondary and and the be get kind in think if Three and another really and at these I almost But been go money the always bought some this layer pay kind I if it

spot upfront more not those then a like least has do to capital time, just and One scheduled you in can't it. month this of and commitment time at will one planned those sometimes stop so where be you well require well, this it be can't it types so location this through you're of at and or programmatic well and in ahead on And just things. well like, this another go month and

of commodity a to to we're outlook But to sustained of and in. interesting get headed of technically a buy has they're be sort distal that for for if context and starch capital this environment layers you higher it so that it price interesting. in kind that it's use that they that if And just not time way, of in be if some or that kind have becomes in quality

be appreciate in your future. at I'm commentary. about guys I So I'll you that asking other the points sure

take to of job that, the But offline. So on my questions if there's rest otherwise, on anything I'll guys. set add but quarter, feel the yes, good you want free,

Kelly Loyd

and really you happy out. to Thanks, I up you to Yes, with it, Donovan. further appreciate follow help

So.

Operator

White The comes next question from ROTH Capital. from John

John White

recent everybody. I'd congratulations like offer to my on as afternoon, appointment Kelly, CEO. Good And your

Kelly Loyd

really John. that. appreciate you, I Thank

John White

board number years. been a you've of on Well, the

industry. within well, the the company very got successful record your you've So track you know own and

So to I'm glad see it.

Kelly Loyd

-- mean, with Board truly Yes, terrific. capacity. continue -- Well, talented terrific. we're a this a and of the look, It's the it different with to I here work team opportunity working professionals was from

very you thank So wonderful spot. excited. much. I It's a really am

John White

Special Well, there's a a I good. -- the bullet Slide presentation. September presentation under I may that's believe point, in be a little that X, a to addition heading the new line late right? Capital, your Of in noticing Dividends. on this. Return Is But

Kelly Loyd

about And that -- we've honestly, Board something the was Yes. level. at talked it's

not on the hopefully, of we is have, effect, of X consider. our in shareholders We doing trigger effective lasting return it definitely options was longer-term in to that most the it the but capital best it, pulled have a way will way calculus the to what's

John White

And and if pay I the give CapEx are to things and special might on the suppose you employed flexibility be front that dividend? quiet acquisition a

Kelly Loyd

along would that those along be But say lines, for the that sure, that attractive. things to would of that a take would more thinking kinds would there have I factors Yes. those number make be lines, place. of

John White

Okay. the Well, today detailed. release press and the were comments very

I and I'll questions, don't pass further have on. any So it

Kelly Loyd

enjoy yes, calling. great. I appreciate it. for always to Well, really talking I thanks do you. John,

Ryan Stash

Yes. Thanks, John.

Operator

comes question next Robertson Water from from The Tower Research. Jeff

Jeffrey Robertson

as you rest through about referenced impact fiscal the rest this For $X.X of the might that to can how million progress you program Ryan, or Kelly 'XX of year? capital fiscal million year? and talk that production you $X.X for

Kelly Loyd

came to production most sort consistent the keep chances of some bump for of a that's levels at projects line. with will say number out. the it some of And matter that just on would planned our part, from already reserve that the of along few where I flat. hold see the We But It's a we've that. production really midpoint sort I to mean may Sure. report. be

think it decline I really that. corporate change doesn't we have, the it that So

do We a couple of recompletions. have to chances

chances of part, sort most But it's would incremental. for be the have tracks. in sort there. to We of side some Those do steady as goes she

Ryan Stash

I Yes. Yes. think All I mean wouldn't right.

drilling, I everyone to flat. I a but -- question trying maintenance gotten would the that program keep out, to bit. in production be other -- of this an on expect would little wouldn't certainly a we know right, the the I to hope increase And production, right? decline it capital we areas we've little could kind maintenance some there. true is capital, figure the potentially of program some bit with just mean Just see add a Williston, maybe stem

Kelly Loyd

Yes.

will much facilities that in help. Jonah, in heat us with compression some like help so with cost anything going else could OpEx, the That will the as in And there's help like central just improve exchanger LOE. Delhi, lower

some affects So well. not it's as it of costs production, all

Jeffrey Robertson

they those of costs flow will are the Or some Are true LOE costs? line? through and workovers capital

Kelly Loyd

capital. be These would

Ryan Stash

Yes.

with or I -- think we of AFEs capital Jeff, see when probably mix mix as that. we'll see we the probably get a if probably we'll it's see we'll but determination workover, obviously, make both. history, a expense a of a

Jeffrey Robertson

XXXX? deciding of into Forks And start -- capital Williston, program Pronghorn for and Three evaluation that the those whether not and Kelly, your of your on guess, foundation engineering technical in the might matter are on how have fit to all inventory along I you far in and, you the wells some or

Kelly Loyd

Okay.

cost a ready level study answer it. now right We're you're to level the the And this side, now. So is it's on different input -- running dynamic, output forward I'll going basin-wide foundation There would that. we're we so say like we're lot evaluating go of to we're this you're XD doing at and still right end both model. how and kind I a road, say with going not along nor it's yet. on Obviously, where and side program work to a into a are say going a so change, it. down to We're geographic of not the are point at -- the and or you? prices at

helps. I We're yes, specific hope a and with But not that a a we've on So I forward. more done give wish more but tell just moving anyway, there's Foundation, we're you, I lot, timing. listen, looked we've still mean, could lot. we're ball do. And -- at to working there I you And the just I'd yet. answer

Jeffrey Robertson

The dividend? of the revolver your quarter does. question allocation. I competes uses It authorization million was share Can on on debt the revolver quarter. with Last having the the at probably million, capital $X just repayment down you or capital think, about compares end the talk come of balance, $XX.X in -- how around repurchase the and for

Ryan Stash

Yes.

press put prepared think in release. of the this we out kind and So I our comments

$X.X paid million another we the quarter down So end. after

a expect towards this on to consistent sort repurchase kind before Currently, we of debt share what really right? that and is just So under we're we've off year, paid calendar $X one end of million drawn to we have to say been want of think look the have that our I buyback. share at the

really how outlook of kind at obviously, versus trading. depending kind is M&A so talked program is the the where And as off with soon Donovan, start depending paid going of for -- on debt about potentially we feel our would using right, Board about our on that's how just where stock we the to earlier, looking be we to and

down kind done. paying we're much We've that's for debt of of a pretty dividend, a say pay the down, made always Now little the the and I'd of right? independent priority right, debt,

So hasn't of of drawn, dividend about really still sort little how the raising that. Board that would like raising felt think the a felt we us bit outlook the impacted dividend with necessarily like we if we debt do warranted

So versa, not vice we're we look, of and our last we raise than debt, debt even that. often may the dividend, sort down right? volatility of a pricing given raise at kind is that that dynamic pay in the more do once It's look to down right don't our I we wouldn't every and -- quarter people I week. want to we're going outlook Paying going think something think to the all dividend on that,

Operator

from comes John Bair Wealth next Ascend Advisors. from question Our

John Bair

to I'd add Kelly on congratulations like appointment. And. the your to

Kelly Loyd

you. Thank appreciate it. Really

John Bair

we've lot given but quite debt the quick here I them a number take have of the constraints of but forth. time and so a of ones. couple talked try about payoff the offline, questions, a Kind to of

hedges And calendar rolling year, probably off this be of you'll debt end the at be will So free. quickly. pretty your

have lot opposed So talk considered you the my appropriate? like initiated that. a regards as dividend the to, to special Have a companies of so deemed idea -- the were you that question have is, say, other with dividend, variable about if many of onetime

Kelly Loyd

Yes.

And a considered a consistent in and at add consider this board the -- more to have variable. to really point I shareholders. value We time, dividend

John Bair

they base mean, you seen, variable cash or component I about what Well, have and based whatever. if base, talk dividend fixed on when the flow from a then I companies mean, a had variable a I've the is

dividend I'll might your have your quarter that how kind on so much decide And of of then at that concept. flow to a you say, cash okay, want so base pay variable, a $X.XX as and that now right additional context, in -- you out

Kelly Loyd

continue pay I for just consider. I understand a sure. out your to rate you you will what that x mean than right. and of something true we variable, percent we've understand. rather Yes, considered it's

a we asset lot having debt. can without whole mean, that in right You meaningful in also parameters, we the have given base a I take to to of find keep way it mind, an that grow to acquisitions can have on

front right to have always mind. going for be something the acquisition the we on want to acquisition, in So that's

on hand, -- look, cash that some always we So don't if to do with I well. want helps all and have debt. mean as -- we

So.

Ryan Stash

non-recurring. They've too, John percent And wanted -- standpoint, get of work this. analysis something would the Diamondback, dividend -- dividend would would certainly to variable mean, you of dividend. kind They've what and in out flow, additional what you companies to properties. opinion, of more We and It's probably on if have, special mentioned that effectively and that -- a with. is know will. a have question the got to doesn't strategy that very strategy and at a a based dividend we buy but variable producers buyback small-cap of them my value toolbox, you The for don't your don't opinion, I But a people point, a don't think that credit on to cash a market if onetime lot lot on our done are I a in done I at large employing don't a that's dividend. But pioneer, I we're that and program say, you looking got you a go you look see just really say, really often cash John, in do place. it's in to from tool White market, Yes. base little if want that we've the special that a brought get they what

them And variable so build they don't have this up -- so dividend makes a a balance, for cash lot to they want of a sense.

to able For to asset the us, acquisition. reserve and flow opportunistic grow we cash some do be cash be and want base. to via

Kelly Loyd

above mean something make to sort big saying a I a meaningful which enough portion we'd flow, and numbers, use base an right? can to make to onesies us, of difference. -- us. acquisitions make them, for that of we to just and cash enough able further the twosies acquisition, find guys, do really difference of Yes. it's big is for hard For what Whereas find go of that the it's Ryan to is it's of be sort for law those mean, I kind

So.

John Bair

back enough. operating of forth. going to this so expenses and lease of Fair Okay. Kind some CapEx and

a heads seeing ongoing to or requiring equipment equipment emissions operating Given producing mitigate forth expenses? and and and new lot on expenses? Is forth. gas is help forth. of a being leakage reducing much so that the need being meaningful these that your Or big operating well part so effort put and on paid you your How greenhouse push of towards attention are of so

Kelly Loyd

that making get have right? those it associated what -- gas, wells -- The a we're we gas. and we in. I not I mean, guys, for most ourselves And might Well, and do, sell it, waste. we're normal they're again, I to Look, do that flare. so core something sort most right? I capture of companies yes, huge a if not but had So that would bad energy the that of a trying have But dilemma to we're and the mean, make part, time, a look, bunch get and where in, meaningful some to gas, to if and are it's you most to no. not I we they cost places rap. you for go that the some extraordinary inventing stuff. want oil do not That's say be companies to had mean, historically, But know equipment, really obviously, of trying just sell in can't we've

don't there's anything really I been wouldn't -- extraordinary. I So think

Ryan Stash

-- add, No. couple a kind look examples so I you you. would of just mean I if just for of

actually gas for they're they big in what So any for they instance, on call equipment asset we that. after the Jonah, put responsibly needed sourced bought that Luckily,

LOE solar-powered Any compression, things to see impact to talked of It's to mean ongoing So large push a like from would in we've compressors, on we up. slower our general, you'd right? they we're that have really haven't we for looking seen put expense, or put I big minimal. the financials I in capital a diversified. a is hope but So side, we that. say, sort which part capital. that nothing we anything expansion. that electricity really -- capital instance, not see any I didn't In seeing there's the a savings would seen more some Barnett, of they are at like for

John Bair

money and an there I equipment they're new that -- I not equipment fields, that older maybe fallacy to I having if either company get operational a would trying is monitoring to but. at I stuff, thinks to on it's was mean right? standpoint, of mean it's that forth older was flare monitor sized some you're gas regulatory-wise any that think more put I kind or oil want so Yes, guess from anybody what but Yes. to any gas? burning and

Kelly Loyd

No, understand. nothing hope Sure. say that different helps. I substantially new Okay. And really there's I or would I

Ryan Stash

going lot as CCUS monitoring mentioned, to definitely a Yes. said, certified at already that's needed. equipment. In put here. I is I as look right? right, So things movement mean, it's like a Barnett, of that I I the has like forefront get Delhi, carbon sort diversified And think, field, the John in trying they're of replace to sequestration the of

Some incredibly XX so standards are of wells not the years call lot oil a old. of are drilled, gas that been ago, and have it, or them but by some of

really they're think I things up. looking mean comes potentially I So placing at as it just

John Bair

have Well, get questions, a Okay. more I then. off-line to but range you with I'll

Kelly Loyd

Yes. we'll to you the Listen, happy base be for and with touch great. Thanks anytime like. call,

John Bair

make the or I'll be week in in next Will -- drop so. actually Houston down.

Okay.

So you.

Kelly Loyd

That's Thank you. great.

Operator

Kelly There Loyd question-and-answer are for over concludes no I more questions turn any in the the queue. like closing This our conference remarks. to back session. would to

Kelly Loyd

Thanks for and of listen the today's taking everyone continued to appreciate really Thank participate in efforts. support your you, our do Jason. time again We call. for

always, XXXX look when As to any have us contact free formally report second feel fiscal we to in February. our please speaking We for again. questions. again additional you forward quarter Thanks if

Operator

attending concluded. Thank Conference has for now presentation. you today's

now disconnect. may You

Evolution Petroleum (EPM) 10 Nov 222023 Q1 Earnings call transcript