EPM will start paying dividends in Dec.
Posted: Fri Nov 15, 2013 7:06 pm
I attended the Denbury Resources "Analyst Day" in Houston on Monday. The CEO was asked when Delhi Field would reach "Payout". He said "by the end of 2014 without any insurance settlement and much earlier if the insurance companies pays their claim for damages related to the recent spill." - Dan
HOUSTON, Nov. 11, 2013 /PRNewswire/ -- Evolution Petroleum Corporation (NYSE MKT: EPM) today announced that the Company's Board of Directors approved a new growth initiative, a new common stock dividend policy and declared the initial common stock quarterly dividend. [Management owns a lot of stock, so this is big quarterly paydays for them.]
Highlights include:
•Initiation of a new quarterly cash dividend of $0.10 per common share beginning December 27, 2013 to shareholders of record as of December 6, 2013
•Rationalization and redeployment of resources into focused growth projects incorporating the Delhi Field and the Company's GARP® artificial lift business
•Restructuring of staff to reflect the redeployment of resources and to reduce recurring overhead
Current oil production at the Delhi Field, the Company's primary producing asset, is generating substantial free cash flow. Based on the June 2013 independent reserves report, projected increases in field production and reversion of our 24% working interest are expected to increase our free cash flows from Delhi by more than 400% within the next four years. Consequently, dividend growth over the next four years is a reasonable expectation. Management also believes that its GARP® artificial lift business, based on proprietary patented technology, layers in a new and visible growth catalyst to complement increasing production and cash flows from Delhi. The new dividend on common shares will directly reward shareholders with cash distributions that can be reinvested in accordance with their individual risk profiles.
Evolution Petroleum has established GARP® proof of concept with six commercial installations, giving new life to older wells by increasing oil and gas recoveries and generating material incremental cash flow at minimal cost using existing infrastructure. Management believes it can leverage the success of its initial GARP® installations in the Giddings Field in Texas by expanding into other mature fields to extend the life of wells at or near their economic limits. In addition to legacy horizontal wells, other applications of GARP® include vertical wells either too deep for conventional artificial lift or having thick or multiple pay zones. The low cost per BOE of installing GARP® offers the potential of another step change in the Company's per share value as acceptance of the technology grows.
As part of the new growth initiative, Company staff is being reduced to lower overhead and restructured to reflect the operational, sales and marketing functions necessary for successful commercialization of GARP®.
Robert Herlin, President and Chief Executive Officer, said: "Responsible and careful capital allocation, combined with operational success and growing industry acceptance of GARP®, has put Evolution in the enviable position of generating free cash flow in excess of the Company's needs for the foreseeable future. While we believe that operational cash flow will be sufficient to fund production growth and a growing dividend, we are also planning to improve liquidity by expanding the borrowing base on our revolving credit facility in order to fund any lumpy capital expenditures at Delhi.
"As major shareholders, the interests of staff and directors are fully aligned with the interests of other shareholders, and we will continue to pursue all options for increasing and unlocking long-term value."
HOUSTON, Nov. 11, 2013 /PRNewswire/ -- Evolution Petroleum Corporation (NYSE MKT: EPM) today announced that the Company's Board of Directors approved a new growth initiative, a new common stock dividend policy and declared the initial common stock quarterly dividend. [Management owns a lot of stock, so this is big quarterly paydays for them.]
Highlights include:
•Initiation of a new quarterly cash dividend of $0.10 per common share beginning December 27, 2013 to shareholders of record as of December 6, 2013
•Rationalization and redeployment of resources into focused growth projects incorporating the Delhi Field and the Company's GARP® artificial lift business
•Restructuring of staff to reflect the redeployment of resources and to reduce recurring overhead
Current oil production at the Delhi Field, the Company's primary producing asset, is generating substantial free cash flow. Based on the June 2013 independent reserves report, projected increases in field production and reversion of our 24% working interest are expected to increase our free cash flows from Delhi by more than 400% within the next four years. Consequently, dividend growth over the next four years is a reasonable expectation. Management also believes that its GARP® artificial lift business, based on proprietary patented technology, layers in a new and visible growth catalyst to complement increasing production and cash flows from Delhi. The new dividend on common shares will directly reward shareholders with cash distributions that can be reinvested in accordance with their individual risk profiles.
Evolution Petroleum has established GARP® proof of concept with six commercial installations, giving new life to older wells by increasing oil and gas recoveries and generating material incremental cash flow at minimal cost using existing infrastructure. Management believes it can leverage the success of its initial GARP® installations in the Giddings Field in Texas by expanding into other mature fields to extend the life of wells at or near their economic limits. In addition to legacy horizontal wells, other applications of GARP® include vertical wells either too deep for conventional artificial lift or having thick or multiple pay zones. The low cost per BOE of installing GARP® offers the potential of another step change in the Company's per share value as acceptance of the technology grows.
As part of the new growth initiative, Company staff is being reduced to lower overhead and restructured to reflect the operational, sales and marketing functions necessary for successful commercialization of GARP®.
Robert Herlin, President and Chief Executive Officer, said: "Responsible and careful capital allocation, combined with operational success and growing industry acceptance of GARP®, has put Evolution in the enviable position of generating free cash flow in excess of the Company's needs for the foreseeable future. While we believe that operational cash flow will be sufficient to fund production growth and a growing dividend, we are also planning to improve liquidity by expanding the borrowing base on our revolving credit facility in order to fund any lumpy capital expenditures at Delhi.
"As major shareholders, the interests of staff and directors are fully aligned with the interests of other shareholders, and we will continue to pursue all options for increasing and unlocking long-term value."