Evolution Petroleum Corporation Corporate Presentation August 2017 Corporate Presentation August 2017 1
Forward Looking Statements This presentation contains forward-looking statements. Such statements may relate to capital expenditures, drilling and exploitation activities, production efforts and sales volumes, Proved, Probable, and Possible reserves, operating and administrative costs, future operating or financial results, cash flow and anticipated liquidity, business strategy and potential property acquisitions. These forward-looking statements are generally accompanied by words such as estimated, projected, potential, anticipated, forecasted or other words that convey the uncertainty of future events or outcomes. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. These statements are based on our current plans and assumptions and are subject to a number of risks and uncertainties as further outlined in our most recent Forms 10-K and 10-Q. Therefore, the actual results may differ materially from the expectations, estimates or assumptions expressed in or implied by any forward-looking statement and we undertake no obligation to update these estimates for events after this presentation. Cautionary Note regarding Oil and Gas Reserves SEC rules allow oil and gas companies to disclose not only Proved reserves, but also Probable and Possible reserves that meet the SEC s definitions of such terms. We disclose Proved, Probable and Possible reserves in our filings with the SEC and this presentation. Estimates of Probable and Possible reserves are by their nature more speculative than estimates of Proved reserves and are subject to greater uncertainties, and accordingly the likelihood of recovering those reserves is subject to substantially greater risk. Our reserves as of June 30, 2016 were estimated by DeGolyer & MacNaughton ( D&M ), an independent petroleum engineering firm. 2
Texas / Gulf Coast Focus Overview (Quarter Ended March 31, 2017) New York Stock Exchange Shares Outstanding EPM 33.1 MM Delhi Field Fully Diluted Shares 33.2 MM Share Price (8/7/2017) $7.85 Total Equity Value (8/7/2017) Common Stock Dividend (Annual Rate) $260 MM $0.30 per share Houston Headquarters Evolution Petroleum Founded in 2003 Delhi Field Acquired in 2003; Operated by Denbury Resources, Inc. (DNR) Delhi Gross Oil Production (3/31/2017) Delhi Gross NGL Production (3/31/2017) Avg Net Production (3/31/2017) Proved Reserves (6/30/2016) Net Working Capital (3/31/2017) Debt ($10 MM Avail Capacity) 7,786 BOPD 830 BOEPD 2,260 BOEPD 10.8 MMBOE $21.5 MM None 3
Summary Financial Statements March 31, 2017 Amounts in $000 s, except EPS Balance Sheet Cash $ 20,220 Other current assets 4,117 Property and equipment 62,817 Other assets 313 Total assets $ 87,467 Current liabilities $ 2,859 Long-term debt - Deferred taxes and ARO 15,626 Stockholders equity 68,982 Income Statement Delhi field revenues $ 9,525 Lease operating expenses 2,811 DD&A and accretion 1,537 G&A expenses and other 1,240 Income before income taxes $ 3,937 Income tax provision 1,518 Net income $ 2,419 Earnings per share (fully diluted) $ 0.07 Total liabilities and equity $ 87,467 4
Recent Developments Dividend Increased to $0.30 per Year Rate up 50% Since September 2016 NGL Plant Complete and Online $27.5MM Litigation Settlement Proceeds Greatly Improves Financial Strength Removes Uncertainty and Continuing Legal Costs Redemption of all Preferred Stock New $50MM Credit Agreement April 2016 5
Investment Considerations High Quality Asset Base w/ Near-Term Growth Catalysts Extremely Long-Lived Production (25 Year Life; Much Longer with Higher Oil Prices) Debt-Free Balance Sheet with Solid Working Capital Position Positive Net Income reported in the last Five Fiscal Years Attractive Dividend Yield (~3.6%) Directors and Employees Aligned with Shareholders through Significant Stock Ownership Insiders own ~9% Well-Positioned for New Opportunities 6
Delhi Field Recycle Facility and NGL Plant Foundation Cash Flow Asset for Evolution Petroleum 7
Delhi Field EOR Project Development Exceptional resource: 418 MMBO of gross original oil in place 323 MMBO OOIP in proved flood area 195 MMBO production prior to EOR 13.9 MMBO since CO2 flood began Other advantages: No LA oil severance taxes (12.5%) until financial payout of the project Oil transported by pipeline Delhi crude sells at LLS pricing 8
Gross BOPD 10,000 Delhi Field Daily Oil Production Gross and Net BOPD Net BOPD 4,000 9,000 8,000 7,000 6,000 3,500 3,000 2,500 5,000 2,000 4,000 3,000 2,000 1,000 Reversion of Working Interest Nov 2014 1,500 1,000 500 - - Gross BOPD Total Net BOPD 9
Delhi Field - Net Daily Oil Production 2,200 2,000 25% Production Increase since reversion 2,042 1,800 1,600 1,640 1,400 1,200 1,000 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Average Net Delhi Production by Quarter (BOPD) 10
EPM Interests in the Delhi Field Costs Revenues Working Interest (a) 23.9% 19.0% Royalty Interests None 7.2% Combined Interests 23.9% 26.2% (a) Field Payout and Reversion of Working Interest to EPM Occurred Effective November 1, 2014 (Working Interest in the Mengel Sand also 23.9%) 11
Delhi Operating Costs per BOE $24.00 NGL Opex 140 CO2 Purchases & Transp $20.00 $16.00 $12.00 $18.15 $16.41 $13.53 $13.13 Electricity R&M/Labor/Chemicals Purchased CO2 MMcf/d $13.14 $12.54 $11.72 $13.82 120 100 80 $8.00 60 $4.00 40 $0.00 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 20 12
EPM Delhi Reserves Three Cases (MBOE 6/30/16) 20,000 15,000 10,000 5,000-10,823 13.8% 15,320 18.0% 18,034 Proved 2P (a) 3P (b) 20.5% Proved Reserves assume 13.8% Incremental CO2 Recovery (Up from 13.0% in 2015) (a) 2P Combined Proved plus Incremental Probable assumes 18.0% incremental CO2 recovery (b) 3P Combined Proved, Probable and Possible assumes 20.5% incremental CO2 recovery Undeveloped Reserves: PUD Reserves for NGL Plant are now Developed and Producing Future Dev Costs for Test Site 5 are approx $11.5MM - $8.12 per Bbl Oil - Developed Producing Oil - Undeveloped NGL (Now Producing) 13
$450 $400 $350 $300 Oil Price and Discount Rate Sensitivities Combined Values as of June 30, 2016 ($MM) Three Important Variables: 1) Oil Price Expectations 2) Ultimate Reserve Recovery 3) Appropriate Discount Rate Net present value, discounted at: 10% 8% 6% $250 $200 $150 $100 $50 $42.91 Price Case $50 WTI Case $60 WTI Case $70 WTI Case $0 PV-10% PV-8% PV-6% PV-10% PV-8% PV-6% PV-10% PV-8% PV-6% PV-10% PV-8% PV-6% $42.91 (SEC) Price Case $50 WTI Price Case $60 WTI Price Case $70 WTI Price Case Cash Proved Reserves 50% of Probable Balance of Probable Note: The amounts in the chart above are not intended to represent the fair market value of EPM or its assets. They do not conform to GAAP and are presented solely to illustrate the effects of varying assumptions about oil prices, ultimate reserve recoveries and discount rates on the discounted future net revenues of the Company. There is no comparable GAAP measure for comparison of these amounts, which are presented on a pre-tax basis. 14
Delhi NGL Plant Photo Taken in October 2016 15
Delhi NGL Storage Tanks 2,000 Bbl+ Capacity Each 16
Inside General Electric LM-2500 Turbine Approx 25 Megawatt Max Capacity 17
Multiple Projects To Build Long-Term Value Increase Production & Improve EOR Efficiency through Conformance Projects Infill Drilling program; Expand CO2 Flood to Eastern Part of Delhi Field (Price Dependent) Expand CO2 Flood to Mengel Sand and Additional Thinner Intervals (Price Dependent) 18
Key Financial Matters 19
Delhi Capital Spending by Quarter $7,500 $5,000 Cum Capex Mar 2017 NGL Plant - $26.3 MM Conformance - $5.6 MM (Post Mar 2015) $2,500 Forecast $0 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17e Sep-17e Dec-17e NGL Plant Conformance and Other Forecast 20
Credit Agreement Strengthens Financial Flexibility $50MM Reserve-Based Credit Agreement with MidFirst Bank Financially Strong Private Bank Initially Elected Borrowing Base of $10MM Attractive Rate Structure: Mid-3% Range All-in 25 Basis Points on Undrawn Borrowing Base Standard 3X EBITDA and Other Covenants Significant Improvement Over Prior Facility Provides Additional Capacity for Future Growth 21
Defensive Hedging Strategy Goals for Hedging Program: Protect Dividends and Cap Ex Obligations Retain Long-term Commodity Price Upside Policy allows Hedging of Maximum 70% of Estimated Production not to exceed one year forward Started Program in 2H 2015 Realized gains of $3.4MM Added $5 per barrel to FY 2016 net realized oil price ($40) Company is Cautious on Short-term Oil Prices Recent Collars expired May 31 in the money and thus Unhedged as of June 1, 2017 22
EPM Dividend History vs WTI Oil Prices $0.12 $120 $0.11 $0.10 $0.09 Cumulative Payout Dec 2013 thru Jun 2017: $34.6 MM ($1.06 per share) $100 Quarterly Dividend Rate per Share $0.08 $0.07 $0.06 $0.05 $0.04 Sept-17 Dividend set at $0.075 $80 $60 $40 WTI Avg Oil Prices (Bloomberg) $0.03 $0.02 $20 $0.01 $0.00 $- Common Stock Dividends WTI Oil Prices (Qtr Avg) 23
Opportunities for EPM We see an Improving Market for Acquisitions Price and Value Expectations more Reasonable Excess Capital Available; Competition Still a Factor Over time, we expect to see a continuing rationalization of mature conventional cash flow properties by large entities We are patiently seeking opportunities which are: Accretive to Value and Cash Flow; and Support Increasing Long-term Returns to Shareholders 24
Value Proposition Summary Accretive Growth Delhi Field Production Increasing from CO2 Flood Enhancements Low-Cost Reserves Additions and Upgrades Start up of the NGL Plant at Delhi Field Underlying Value Long-Lived Cash Flow from Very Large Delhi Field Resource Solid Balance Sheet Ability to Weather the Cycle & Fund Growth Capital Expenditures Well-Positioned to Capitalize on New Growth Opportunities Returning Cash to Shareholders Increased Dividend Rate for QE Sept 30, 2017 - Potential For Future Increases Flexible Share Repurchase Program Available 25