Evolution Petroleum (EPM) Q4 Results - Feb 14

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Evolution Petroleum (EPM) Q4 Results - Feb 14

Post by dan_s »

EPM's dividends will stay at $0.10/quarter. This company has no debt, lots of free cash flow from operations and production will increase this year and next because of a recent acquisition. First Call's price target of $7.10 is reasonable.

Highlights for the Quarter:

Acquired oil producing assets in Hamilton Dome Field in Wyoming for $9.3 million of cash, net of a $0.2 million post-closing adjustment.

Paid 25th consecutive quarterly cash dividend on common shares and declared the next dividend payment of $0.10 per share, payable on March 31, 2020.

Generated total revenues of $9.4 million for the quarter, up 2.5% from the prior quarter.

Reported net income of $1.8 million, marking the 17th consecutive quarter of positive reported net income.

Ended the quarter with $20.9 million in cash; the Company has a $40 million undrawn credit facility and notably remains debt free.

"We successfully closed the acquisition of the Hamilton Dome field on November 1, 2019 and seamlessly incorporated the interests into our overall operations, with minimal disruptions or costs" said Jason Brown, President and CEO. "This was a solid first step in the Company's strategy to diversify and grow our asset base. Hamilton Dome is meeting our projections of production, price realization and cash flow without a material increase in our overhead. Similar to other oil and gas producers, our overall performance during the quarter was impacted by lower price realizations, and further impacted in our case by the short-term effect of repairs to the oil sales pipeline from Delhi, which more than offset increased volumes. This is a good example of why we are pleased with the Hamilton Dome acquisition as a second source of cash flow and are committed to further acquisitions that will support our dividend. The current weakness in oil and gas prices presents an opportunity to acquire long-life production with upside potential at a very attractive price per BOE and validates our decision over the recent years to retain substantial liquidity with no debt. I am proud that we continue to generate earnings and positive cash flow during low commodity price environments as demonstrated by twenty-five consecutive quarterly dividends and seventeen consecutive quarters of positive earnings."
Dan Steffens
Energy Prospectus Group
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