Evolution Petroleum Corporation Corporate Presentation March 2018 Corporate Presentation March 2018 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, 2017 were estimated by DeGolyer and MacNaughton ( D&M ), an independent petroleum engineering firm. 2
Texas / Gulf Coast Focus Overview (Quarter ended December 31, 2017) New York Stock Exchange Shares Outstanding EPM 33.1 MM Delhi Field Share Price (2/13/2018) $8.00 Total Equity Value (2/13/2018) $265 MM Common Stock Dividend (Annual Rate) $0.40 per share Houston Headquarters Dividend Yield (2/13/2018) 5.0% Delhi Gross Oil Production (87% Oil) 7,370 BOPD Evolution Petroleum Founded in 2003 by Bob Herlin, Chairman Delhi Field Acquired in 2003 Delhi Gross NGL Production EPM Avg Net Production (26.2% NRI) Proved Reserves (6/30/2017) Net Working Capital Debt ($40 MM+ Avail Capacity) 1,079 BOEPD 2,215 BOEPD 10.1 MMBOE $27.6 MM None 3
Core Principles and Objectives Distribute 40%+ of Cash Flow as Dividends Tax Reform makes C-Corp s much more Tax-Efficient Reserve 40%+ of Cash Flow for Value-Driven Reinvestment in Portfolio Diversify Asset Base with Acquisitions Seeking Geologic and Product Mix Diversity Maintain Solid Financial Position Increase Scale for Public Market 4
EPM Dividend History vs WTI Oil Prices $0.14 $0.12 $0.10 Cumulative Payout Dec 2013 thru Dec 2017: $39.5 MM ($1.205 per share) Mar-18 Dividend $0.10 $140 $120 $100 Quarterly Dividend Rate per Share $0.08 $0.06 $80 $60 WTI Avg Oil Prices (Bloomberg) $0.04 $40 $0.02 $20 $0.00 $- Common Stock Dividends WTI Oil Prices (Qtr Avg) 5
Summary Financial Statements December 31, 2017 Amounts in $000 s, except EPS Balance Sheet Cash $ 25,744 Other current assets 4,902 Property and equipment 60,126 Other assets 260 Total assets $ 91,032 Current liabilities $ 3,061 Long-term debt -- Deferred taxes and ARO 11,877 Stockholders equity 76,094 Total liabilities and equity $ 91,032 Income Statement (Six Months Fiscal YTD) Delhi field revenues $ 19,605 Lease operating expenses 5,806 DD&A and accretion 3,197 G&A expenses and other 3,247 Income before income taxes $ 7,355 Income tax (benefit) (4,662) Net income $ 12,017 Earnings per share (fully diluted) $ 0.36 6
Revenues & Net Income ($MM) $40 $35 $30 $25 $20 $15 $10 $5 $0 (a) Includes Litigation Settlement (b) Includes Tax Reform Six + Years of Increasing Revenues and Positive Net Income 2012 2013 2014 2015 2016 2017 2018 Revenues Net Income (a) (b) Fiscal YTD 2 Quarters 7
Delhi Field Recycle Facility and NGL Plant Foundation Cash Flow Asset for Evolution Petroleum 8
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 16.0 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 9
Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Corporate Presentation March 2018 Gross BOEPD 10,000 Delhi Field Daily Production (Tertiary) Gross and Net BOE per Day Net BOEPD 4,000 9,000 8,000 7,000 6,000 5,000 Combined Interests 3,500 3,000 2,500 2,000 4,000 1,500 3,000 2,000 Royalty Interests Only Reversion of Working Interest Nov 2014 1,000 1,000 500 - - Gross BOEPD Total Net BOEPD 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
$70 $60 $50 $40 $30 $20 Delhi Revenue and Field Operating Margin per BOE (YE June 30) Rev / BOE $61.52 (69% of Rev) $39.71 (65% of Rev) $44.88 (69% of Rev) $49.53 (70% of Rev) $10 $- YE Jun 2015 YE Jun 2016 YE Jun 2017 FYTD Dec 2017 LOE CO2 Costs Field Operating Margin Field Operating Margins of $42.52 (2015), $25.95 (2016), $30.78 (2017) and $34.86 (YTD Dec 2017), respectively 12
Delhi Capital Spending by Year ($000 s) $8,000 $7,000 $6,000 $5,359 Cum Capex Dec 2017 NGL Plant - $26.6MM * Other Spending - $10.9MM (Post Reversion Nov 2014) $5,500 $5,000 $4,000 Forecast $3,000 $2,292 $2,397 $2,000 $1,000 $901 $1,500 Forecast $0 FY 2015 FY 2016 FY 2017 1H 2018 2H 2018e 1H 2019e Well Integrity Field Enhancement Facilities/Other New Drilling * Above Chart Excludes NGL Plant $26.6 MM Field Enhancement ~ $4MM 13
Proved Reserves - June 30, 2017 10,058.4 MBOE Proved Reserves assume 14.3% Incremental CO2 Recovery (Up from 13.0% in 2015) 6,617.4 Positive Revisions to PDP Oil 652.5 MBOE (~10%) Since 2015 1,332.8 Reserve Reports Prepared by DeGolyer and MacNaughton 79% Developed and Producing 83% Crude Oil 353.4 PDP-Oil PDP-NGL PUD-Oil PUD-NGL 1,754.8 Undeveloped Reserves: Infill Drilling Program $4.7MM 12 Wells (8 Wells in Jun 2017 PUD) Future Dev Costs for Phase 5 (of 6) are approx $10.9MM - $6.97 per Bbl 14
Delhi NGL Plant Currently Producing ~1,150 Bbls NGL s per day NGL Plant Online Dec 2016 Engineered Solution to CO2 Inlet Processing Installed Aug 2017 Operating at Effective Capacity GE Turbine also at Capacity NGL Avg Net Price ~52% WTI Very Rich NGL Mix (ITD): NGL Component % of Stream Ethane 2.9% Propane 26.0% Butanes (ISO + Normal) 33.1% Pentanes Plus (C5+) 38.0% Total 100.0% 15
Multiple Projects To Build Long-Term Value Increase Production & Improve EOR Efficiency through Conformance Projects & NGL Plant Modifications Infill Drilling program; Expand CO2 Flood to Eastern Part of Field (Test Site 5) Expand CO2 Flood to Test Site 6, Mengel Sands and Additional Intervals (Price Dependent) 16
Management and Directors (Average BOD Tenure 12 Years / Insiders Own ~9%) Bob Herlin, Chairman, Founder, Former CEO Randy Keys, CEO, Adobe, Norcen; EPM 4 Years David Joe, CFO, Unocal; EPM 12 Years Independent Directors: Jed DiPaolo Halliburton; Growth Capital Partners Bill Dozier Amoco; Santa Fe Minerals; Vintage Kelly Loyd JVL Advisors Marran Ogilvie Ferro Corp, LSB Industries, & Others Gene Stoever Former KPMG Audit Partner 17
Opportunities for EPM We see an Improving Market for Acquisitions Price and Value Expectations more Reasonable Competition is Strong; Capital is Still Plentiful Over time, we expect continuing divestitures of mature conventional cash flow properties by larger entities We have Financial and Operational Capacity to Execute $40MM+ Potential under Credit Facility plus $26MM Cash We are patiently seeking opportunities which are: Accretive to Value and Cash Flow; and Support Increasing Long-term Returns to Shareholders 18
Value Proposition Summary High Quality, Long-lived Asset Base Steady Cash Flow from Very Large Delhi Field Resource Potential Production Increases from Continuing Development 12 well Infill Drilling Program Planned to Start March 2018 Solid Financial Position Debt Free Balance Sheet w/ Substantial Working Capital Position Provides Stability to Weather Industry Cycles Well-Positioned to Capitalize on New Growth Opportunities Attractive Dividend Yield of 5.0% Flexible Share Repurchase Program Available 19