News Oil & Gas

Oil & Gas Producer Sees 145% Rise in FY22 Production


Shares of Evolution Petroleum Corp. traded 19% higher after the U.S. onshore oil and gas producer reported that during FY/22 it increased production by 145% YoY and achieved a 233% increase in annual revenue. The company advised that it is raising its quarterly cash dividend by 20% and is initiating a $25 million share buyback program.


After U.S. markets closed for trading yesterday, independent energy firm Evolution Petroleum Corp. (EPM:NYSE), which is engaged in the development and production of onshore oil and natural gas in the U.S., announced financial and operating results for its fourth quarter and full-year of 2022 ended June 30, 2022.

The company listed that in Q4/22, production increased by 34% sequentially to 7,451 net boe/d (barrels of oil equivalent per day), and for FY/22 rose 145% to 5,953 boe/d, compared to 2,430 boe/d in FY/21.

 

 

 

 

The company listed that in Q4/22, production increased by 34% sequentially to 7,451 net boe/d (barrels of oil equivalent per day), and for FY/22 rose 145% to 5,953 boe/d, compared to 2,430 boe/d in FY/21.

The firm noted that during FY/22, it increased year-end proved reserves by 55% to 36.2 Mboe (million barrels of oil equivalent) and was successful in replacing reserves by greater than 550% of FY/22 production.

The company’s Interim President and CEO, Loyd, stated, “FY/22 was an exceptional year for Evolution. On the strength of two completed, accretive acquisitions and disciplined capital management, we enter FY/23 with a much larger and diversified asset base, a balance sheet that remains very conservative with minimal net debt, and a strategic plan which continues to focus on maximizing total shareholder returns … During FY/22 and Q4/22, there were substantial increases in production, revenue, net income, and adjusted EBITDA.”

Loyd added, “We have a positive outlook for FY/23, supported by our diverse portfolio of oil and natural gas properties located in key onshore regions of the U.S. Our decision to diversify our product mix into natural gas was timely as natural gas prices have risen dramatically since those acquisitions and natural gas revenues grew to 44% of our Q4/24 revenue.”

The company advised that its board of directors approved an increase in the cash dividend from $0.10 to $0.12 per share, payable to stockholders of record as of September 21, 2022. In addition, the board granted authorization for a share repurchase program for up to $25 million of its coon stock through December 31, 2024.

The company reported that in Q4/22, it produced an average of 7,451 boe/d, including 1,890 bpd (barrels per day) of oil, 1,142 boe of NGLs (natural gas liquids), and 26.516 Mcf (million cubic feet), or 4,419 boe of natural gas.

The firm stated that in Q4/22, oil production increased to 1,890 bop/d, up from 1,811 bop/d in Q3/22, and net natural gas production increased by 67% from 15.878 Mcf/d to 26.516 Mcf due to the completion of the Jonah Field acquisition by the company on April 1, 2022.

The company added that NGL production also increased significantly from 1,121 boe/d in Q3/22 to 4,419 boe/d in Q4/22.

Evolution Petroleum advised that in Q4/22, total revenue increased by 207% year-over-year to $42.0 million, compared to $13.7 million in Q4/21. The firm listed that for Q4/22, its average realized price was $61.98/boe, which was up by 21% from $51.17/boe in Q3/22, and noted that it attributed the increase to higher realized prices for oil and natural gas.

The company stated that for Q4/22, it earned a net income of $14.9 million, or $0.44 per diluted share, compared to $2.2 million, or $0.07 per diluted share, in Q4/21.

For FY/22, the company indicated that total revenues increased by 233% y-o-y to $108.9 million, compared to $32.7 million in FY/21. The firm explained that the increase was mostly due to its success in increasing the average daily equivalent by 145% due to its acquisitions of the Jonah Field, Williston Basin, and Barnett Shale properties and also benefited from higher market prices.

The company reported that for FY/22, it registered a net income of $32.6 million, or $0.96 per diluted share, versus a net loss of $16.4 million, or a net loss of $0.50 per diluted share in FY/21.

Evolution Petroleum is an independent energy firm based in Houston, Texas. The company invests in, develops, and produces oil and natural gas from assets in the U.S., utilizing conventional onshore methods and technology. Evolution’s assets include non-operated interests in the Barnett Shale in North Texas, two enhanced oil recovery projects in Louisiana and Wyoming, and recently acquired properties in the Williston Basin in North Dakota.

Evolution Petroleum began the day with a market cap of around $229.11 million, with approximately 33.74 million shares outstanding. EPM shares opened more than 5% higher today at $7.15 (+$0.36, +5.30%) over yesterday’s $6.79 closing price. The stock traded today between $7.15 and $8.27 per share and closed for trading at $8.10 (+$1.31, +19.29%).


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