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IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp.

Evolution Petroleum Corp. · Sep 24, 2012 · 35 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 1
    IPAA Oil and Gas Investor Symposium September 24, 2012 San Francisco, CA 1
  2. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 2
    Four Factors for Repeating Success and Building Value per Share Every Day Innovative Engineering Redeploying Internal Cashflows Building Value per Share Staff Fully Aligned with Shareholders Known Oil Fields 3
  3. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 3
    Name/Title Background Achievements Robert Herlin Co-founded EPM in 2003, based on 30 years leadership experience in M&A, CEO & Chairman 8.3 MM in total common equity development, operations and finance in public capital raised during…
  4. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 4
    Transformed 8.3 MM Investment into 446 MM Proved PV10 + 174 MM Probable PV10 + WC 700 632 MM 72 MM 600 103 MM 500 36 MM 409 MM 400 MM 300 200 100 12 MM 0 Initial 6/30/12 W/C Proved Delhi Proved Other Probable…
  5. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 5
    2P Reserves Revenue MMBoe (Fiscal years ended June 30) M 30 20,000 18,000 25 16,000 14,000 20 12,000 15 10,000 8,000 10 6,000 5 4,000 2,000 0 0 PD PUD Probable 6
  6. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 6
    Ms Lime Drilling Began May 2012 45% in JV spanning 38 sections (5,400 net acres) 2 wells & 1 SWDW drilled to date, fracs pending 112 gross drilling locations (24 net to EPM) 6.4 MMBOE Probable (57% oil, 43% rich gas) GARPTM…
  7. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 7
    13.4 MMBOE SEC Pretax PV10 Proved Reserves as of 6/30/2012 10% MM Proved Probable 4% 500 446 450 86% 400 375 350 Oil NGL Natural Gas 300 266 250 12.7 MMBOE Probable Reserves as of 6/30/2012 200 174 150 22% 100 64 77 50…
  8. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 8
    Application of Strengths to Grow Production, Reserves and Value
  9. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 9
    Phase 4: Consistent Growth Phase 3: Ongoing development Invest for Growth drilling to grow Delhi and Giddings cash production, reserves flow reinvested into new and cash flow. Phase 2: oil projects and GARP Positioning for…
  10. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 10
    Oil Weighted Onshore US Engineering Driven HZ Drilling Potential Repeatable Results Known Oil & Gas Fields Grow Value Per-Share 11
  11. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 11
    Our Foundation Asset CO2 Enhanced Oil Recovery
  12. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 12
    Cash Annuity to Fund Growth Gross cum production 192 MMBO Delhi Jackson Dome Current production 5,274 gross BOPD (qtr ended 6/30) 6/30/2012 Reserves 11.0 MMBO Proved (PV10: 409MM) 5.8 MMBO Probable (PV10 103MM) 61% of 2P is…
  13. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 13
    EPM owns 7.4% of gross revenues No Cap Ex or Op Exever 7.4% Exempt from state severance tax until project payout of all actual Royalty costs plus capital cost (mid-FY2017) Interest Royalty interest = 29% of EPMs Delhi reserves…
  14. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 14
    Denbury has already spent most of 2012 planned investment of 64 MM. Developing three patterns and building additional facilities. 2012E Activity 2013 Projected Activity 2009 Activity 2010 Activity 2011 Activity 2011 Activity…
  15. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 15
    Reversionary WI Royalty (000) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Cal Year Note: Based on report from independent reserve…
  16. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 16
    (000) Cumulative Pretax NCF Rem'g NPV10 1,200,000 Peak 2P 1,000,000 PV10 800,000 600,000 400,000 9/14/12 Stock Price 200,000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Cal Year Notes: Residual PV10 is…
  17. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 17
    Louisiana Light Sweet (LLS) Oil Price Impact on Delhi 2P PV10 per Fully Diluted Share / Fully-Diluted Share 18 16 PV-10* vs LLS Oil Price 14 EPM 8.50 LLS 116.17 12 9/14/12 10 8 6 4 2 - 60 70 80 90 100 110 120 130 * From…
  18. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 18
    Total 2P PV10 Heavily Driven by Proved Reserves Production MBO/month 1,000 Delhi Gross Production Forecast as of 6/30/2012 Probable 100 Proved 10 Forecasted production over first 16 years of 36+ year life 7/1/2012…
  19. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 19
    Growing Per-Share Value
  20. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 20
    Fits selection criteria: Oil-prone, horizontal drilling, onshore U.S., IRR(e) 30%, known oil field, accessible, running room, repeatable Kay County, Oklahoma oily region of play JV holds 12,000 net acres in 38 sections (24,320…
  21. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 21
    Joint venture acreage in oil-prone area, east of the Nemaha ridge. Multi-year visible growth potential for reinvesting early Delhi free cash flow. SD, PQ Spyglass, Vitruvian, Orion, Century D Devon, Calyx, Pablo, CHK, E EPM…
  22. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 22
    Mississippian Lime is well defined by old vertical wells Vitruvian Bowling 2-32H o Numerous vertical logs show IP 500+ Bopd thick, continuous pay o Interpretation of well data and Spyglass Bird Creek 1A-15H logs shows geologic…
  23. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 23
    Estimated Mississippian Lime Type Curves by Operator Assumptions: Range 485 MBOE SDR 450 MBOE EPM JV 268 MBOE 350 EUR: 268 MBOE (75% oil) 300 250 3.2 MM drilling and completion 200 BOEPD cost (our 1st two at 3.1MM) 150 100…
  24. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 24
    Previously waterflooded field plugged out in the 1990s at low oil price EPM developing 10-20 BOPD per well of long life, low decline production at a cost of 550K, or 35K to 70K per net BOPD 1st producer drilled in FY12 averaging…
  25. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 25
    8,154 net acres Net production 189 BOEPD average for fiscal 2012 Proved undeveloped reserves in 9 drilling locations Reserves in Georgetown, Austin Chalk and Buda formations Exposure to new Woodbine oil play in retained 1,100 net…
  26. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 26
    Innovation for Increasing Recovery
  27. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 27
    Industry at risk of losing vast quantities of reserves and production as mature horizontal wells encounter liquid loading Our technology re-establishes economic production of the Tail reserves at risk due to the liquid loading, as…
  28. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 28
    BEFORE: Conventional Rod Pump AFTER: GARP Either fluid level eventually drops Adds substantial new reserves to a level where at low cost rod pump or gas lift are Benefit = up to 25% incremental no longer effective, or recovery…
  29. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 29
    Selected Lands 2 w/GARP BOPD Daily Rate versus Time Pre-GARP BOPD 100 Downtime for repairs of inherited equipment BOPD Installed GARP 10 1 2/1/2012 3/1/2012 4/1/2012 5/1/2012 6/1/2012 7/1/2012 8/1/2012 9/1/2012 Selected…
  30. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 30
    Conservative, Strong and Aligned
  31. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 31
    Debt to Market Cap Liquidity Sources & Uses (as of 9/17/12) MM 120% 18 + FY2013 CFFO 4 FQFQCFFO 105% 16 100% 97% Credit 14 Line 80% 12 67% 69% + expansions 10 60% 43% 44% 8 6/30/12 40% 38% Working 6 Capital 4 20% 2 0% 0%…
  32. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 32
    2012 Other Projects 2013 Free Cash Flows Mississippian Lime 2014 to be Oil Project Redeployed 2015 GARP 33
  33. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 33
    700 632 MM 600 500 396 MM Total Value, MM Gap to 400 2P NAV 300 236 MM 200 100 0 Investment W/C Proved Probable Proved Probable Total Market PV10 PV10 PV10 PV10 Value Cap -100 Delhi (1) Delhi (1) Other (2) Ms…
  34. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 34
    20 19.04 Total Per Fully Diluted Share 16 10.54 12 Gap to NAV 8.50 8 4 0 Investment W/C Proved Probable Proved Probable Total Share PV10 PV10 PV10 PV10 Value Price Delhi Delhi Other Ms Lime (9/14/12) Note:…
  35. IPAA OIL GAS INVESTMENT SYMPOSIUM – Evolution Petroleum Corp. – slide 35
    Cash flow Annuity & debt free = continued growth w/o shareholder dilution 390+ MM gap between intrinsic and market value (excluding GARP) Premium oil focused reserves (84% oil on Gulf Coast, mostly LLS priced) New exposure to oily…

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