Current EPM Stock Info

Evolution looking for opportunities as the market continues to improve

Evolution Petroleum (ticker: EPM) continues to see growth in its Delhi Field assets, and is looking for opportunities to grow through acquisition, David Joe, the company’s CFO, told Angie Austin at EnerCom’s The Oil & Gas Conference 21 in Denver.

The Houston-based exploration and production non-operator, in partnership with the operator of the Delhi Field, applies conventional and specialized technology to known oil and gas plays. The Delhi Field is a CO2-EOR project with 22.8 MMBoe of 2P reserves, 79% of which are oil.

The Delhi Field has 418 million barrels of gross oil in place, with 192 million barrels having been produced prior to the start of the enhanced oil recovery project. The first quarter 2016 net oil production was 1,835 barrels of oil per day. When asked about the performance of the field at the conference, Joe said the field was producing 7 MBOEPD gross during the most recent quarter, with output expected to rise further and produce for another two or more decades.

Along with the long-life production Evolution sees from Delhi, the company has been debt-free since 2006, which has left it in a strong position to acquire new assets as the oil price downturn persists. During his interview, Joe said the company has been exploring acquisition opportunities for the last 12 to 16 months, and that “deal flow has improved dramatically over the last nine months.”

Interview questions

  • Evolution just keeps producing oil and cranking out cash flow and paying dividends from the Delhi field asset in Louisiana. The asset was discovered in the 1940s by Sun and Murphy Oil; Evolution acquired the working interests in 2003. Could you bring us up to speed on the current production from the field, and bring us up to speed on current activity there?
  • In June Evolution reached a settlement of a long-term contract dispute with Denbury; what was the outcome and what does this do for the project going forward?
  • Can you give us an update on Evolution’s NGL plant at the Delhi field. How close is the plant to being online and what are projected volumes? How will this add to the overall cash flow?
  • Evolution has been debt free since 2006; what’s the company’s cash position now and what credit facilities do you have in place?
  • With your clean balance sheet and continuing cash flow from Delhi, do you look at potential asset acquisitions, or participating with another company to develop a different asset?

Legal Notice