Energy Prospectus

EPM has a fiscal year that ends June 30, so the quarter ending December 31 is their 2nd quarter.

Q2 results were in-line with our forecast model.

HOUSTON, Feb. 8, 2012 /PRNewswire/ -- Evolution Petroleum Corporation (NYSE Amex: EPM) today reported results for the second fiscal quarter ended December 31, 2011 ("Q2-12" or the "current quarter"), with comparisons to the three months ended September 30, 2011 (the "prior quarter") and the three months ended December 31, 2010 (the "year-ago quarter").

Q2-12 net income was $1.3 million, or $0.04 per diluted share attributable to common stockholders ($0.05 basic). This compares to $1.0 million, or $0.03 per diluted share attributable to common stockholders ($0.04 basic), in the prior quarter and a net loss of $0.5 million, or $(0.02) in the year-ago quarter.

The 24% increase from the prior quarter's net income to common stockholders was due to a $0.8 million, or 20%, improvement in oil and gas revenue, partially offset by a $0.3 million increase in total operating costs, a $0.1 million increase in income tax expense and a negligible increase in preferred stock dividends. The $1.7 million increase from the year-ago quarter's loss was due to a $3.5 million, or 294%, increase in oil and gas revenue, partially offset by a $0.5 million increase in operating expense, $1.1 million increase in income tax expense and a $0.2 million increase in preferred stock dividends. All comparable periods included approximately $0.4 million of non-cash stock-based compensation expense.

Oil and gas revenues in Q2-12 increased 20% to $4.6 million compared to prior quarter's $3.9 million and 294% compared to the year-ago quarter's $1.2 million. The revenue increase in the current quarter over both comparative periods was due primarily to increased sales volumes of higher valued Delhi crude oil products.

Net oil and gas volumes for Q2-12 were 52,306 barrels of oil equivalent (569 BOE per day), a 12% increase from the prior quarter's 46,800 BOE (509 BOE per day) and a 136% increase over the year-ago quarterly sales volumes of 22,119 BOE (240 BOE per day). Total volumes in Q2-12 were 72% crude oil and 78% total liquids, compared to 42% crude oil and 65% total liquids in the year-ago quarter.

Our blended oil and gas price in Q2-12 averaged $88.84 per BOE compared to $83.01 per BOE in the prior quarter and $53.32 per BOE in the year-ago quarter. The improvement over both periods was due to an oilier blend of sales volumes and higher oil and NGL prices, partially offset by lower natural gas prices.

EPM is DEBT FREE and cash flows are accelerating. I like that combination. - Dan

Working capital increased to $13.9 million on December 31, 2011 compared to $4.1 million on June 30, 2011, and we remain debt free. The $9.8 million increase in working capital was due primarily to $6.9 million of net proceeds from sales of our preferred stock and $5.1 million provided by operations before changes in working capital, offset by $1.5 million of capital expenditures, $0.4 million of prior period payables related to capital expenditures and the payment of $0.3 million of preferred stock dividends.

Robert Herlin, President and Chief Executive Officer, commented, "As field development of the Delhi EOR project progresses into the second half of the field and performance continues to exceed original expectations, we are enjoying increased cash flows and confidence in the associated probable reserves and substantial upside potential at Delhi. The oil price we received in Q2-12 is 21%, or $20.26, higher than the $94.81 price in our June 30, 2011 reserves report for Delhi, thus correlating to a much higher equivalent PV-10 and potentially further accelerated payout date for our 24% reversionary working interest. As our cash flows continue to grow, we are increasingly focused on new projects that meet our criteria of high oil content, reasonable entry cost, low to moderate well cost and reasonable accessibility. We are actively evaluating several external opportunities while continuing to test the potential of the Lopez Field and our patented GARP™ technology."

An updated Net Income and Cash Flow Forecast model for Evolution Petroleum (EPM) has been posted under the Sweet 16 Tab.

For those of you looking for high yield, the EPM pfd is probably a very safe bet. These guys are ultra conservative and the company is debt free and generating lots of free cash flow. It pays dividends monthly and the current yield is about 7.6%.

HOUSTON, Feb. 6, 2012 /PRNewswire/ -- Evolution Petroleum Corporation (NYSE Amex: EPM) today declared a monthly cash dividend on its perpetual non-convertible 8.5% Series A Cumulative Preferred Stock.

The dividend is for the month of February 2012 and is payable on February 29, 2012 to holders of record at the close of business on February 17, 2012. The payment will be 1/12th of the 8.5% annualized amount, or approximately $0.177083 per share, based on the $25.00 per share liquidation preference.

The Series A Preferred Stock is listed on the NYSE AMEX and trades under the ticker symbol "EPM.PRA."

Dan
I am sure I am missing something, but I couldn't reconcile the updated CFPS and multiple to the estimated fair value for EPM on the most recently updated earnings/cash flow forecast.

If you download the spreadsheet to Excel and click on the cell you will see the formula.

It is (M44+O44)X9

(0.37 + 0.68) x 9

EPM is really a "one trick pony". It is all about the ORRI in the Delhi Field and the HUGE jump in revenues they will get when the field reaches Payout. They have a few minor assets and the new pump technology but that stuff in very minor compared to the convertible ORRI.

If their realized oil price stays over $100/bbl, the ORRI will reach Payout by the end of 2013.

IMO that override is worth more than the current market cap of the entire company.