10-Q · May 13, 2026
Evolution Petroleum's Q3 2026 results revealed a decline in revenue to $20.2 million, a 10.6% drop from the prior year, and a diluted EPS of -$0.09, missing analyst expectations. Management highlighted challenges…
Earnings analysis · 10-K
EPM earnings analysis
Filed September 16, 2026 · Our reading of the company's report
The latest report
Evolution Petroleum is executing an acquisition-led, diversified non-operated strategy, adding SCOOP/STACK and Louisiana minerals and, after year-end, $16.0 million of Midland Basin royalty interests. However, fiscal…
Read full summary
Evolution Petroleum is executing an acquisition-led, diversified non-operated strategy, adding SCOOP/STACK and Louisiana minerals and, after year-end, $16.0 million of Midland Basin royalty interests. However, fiscal 2026 profitability weakened to a $2.429 million net loss despite revenue rising 0.6%, while debt increased to $56.5 million and borrowing headroom narrowed to $7.7 million. Stable reserves, positive operating cash flow, continued dividends, and a $4.0 million-$6.0 million fiscal 2027 development budget provide support, but commodity volatility, derivative losses, and financing exposure keep the outlook balanced.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.08
- Operating margin
- 4.0%
- Segment
- Single reportable segment: U.S. onshore oil and natural gas properties; revenue of $86.343 million, comprising crude oil $50.556 million, natural gas $25.038 million, and NGLs $10.749 million.
What stood out
-
Diversified reserves base held broadly stable
The company is pursuing a diversified, non-operated strategy across multiple basins and ownership types. Proved reserves increased 0.4% to 27.2 MMBOE, while the standardized measure rose 0.8% to $156.4 million.
-
Acquisition-led portfolio expansion
Growth investment accelerated through mineral acquisitions: fiscal 2026 acquisitions totaled $22.988 million, including $16.3 million for SCOOP/STACK minerals and $6.2 million for Louisiana minerals. Subsequent to year-end, the company acquired 3,420 net royalty acres in the Midland Basin for $16.0 million.
-
Visible near-term development program
Management expects fiscal 2027 development capital expenditures of $4.0 million to $6.0 million and approximately 10 gross SCOOP/STACK wells to come online, compared with 10 gross SCOOP/STACK wells brought online in fiscal 2026.
-
Revenue was resilient despite flat production
Revenue increased 0.6% to $86.343 million from $85.840 million, with natural gas revenue up 6.5% to $25.038 million. Average daily production was broadly stable at 7,077 BOEPD versus 7,074 BOEPD.
-
Dividend commitment maintained
The company maintained its shareholder-return policy, paying $16.943 million in dividends during fiscal 2026 and declaring another $0.12-per-share quarterly dividend. This extended the record to 51 consecutive quarterly dividends.
-
Operating cash flow funded core investment
Cash provided by operations remained positive at $23.518 million, and development capital expenditures declined to $5.5 million from $13.2 million in fiscal 2025, although acquisition spending increased substantially.
What to watch
-
Higher debt and limited borrowing headroom
Liquidity and leverage weakened: senior secured borrowings rose to $56.5 million from $37.5 million, leaving only $7.7 million of available capacity against a $65.0 million borrowing base at June 30, 2026. The borrowing base was temporarily increased to $73.0 million through October 20, 2026, but is subject to a fall redetermination.
-
Commodity and hedge volatility
Commodity volatility materially affected earnings and cash flow. WTI fell below $56 per barrel in December 2025 and later exceeded $100 per barrel in March 2026; derivative contracts generated a $2.850 million net loss, including $3.752 million of realized losses, while the company was required to hedge 75% of crude oil and natural gas production after the SCOOP/STACK acquisition.
-
Return to annual net loss
Underlying profitability deteriorated despite nearly flat revenue: the company reported a $2.429 million net loss and diluted EPS of $(0.08), versus net income of $1.473 million and diluted EPS of $0.03 in fiscal 2025. Interest expense increased 29.6% to $3.849 million as debt-funded acquisitions raised financing costs.
-
Third-party operator concentration
The portfolio depends heavily on third-party operators over which the company has limited control. Three operators—Diversified, Denbury/ExxonMobil, and Foundation—collectively represented approximately 46% of fiscal 2026 revenue, and operator decisions determine capital spending and development timing.
-
Reserve valuation and impairment risk
A prolonged commodity-price decline could trigger a full-cost ceiling impairment. Although no impairment was recorded at June 30, 2026 using WTI of $72.93 per barrel and gas of $3.62 per MMBtu, the filing warns that a substantial and sustained decline could materially reduce the valuation ceiling.
Management's outlook
No numeric revenue or EPS guidance was provided. Management expects fiscal 2027 capital expenditures of $4.0 million to $6.0 million, excluding the Permian Minerals Acquisition, potential acquisitions, and Chaveroo drilling; approximately 10 gross SCOOP/STACK wells are expected online.
Earlier filings 4
10-Q · February 11, 2026
Evolution reported mixed Q2 results: total revenues of $20,679,000 and net income of $1,065,000 (diluted EPS $0.03), an improvement versus the prior-year quarter. Natural gas revenues drove product mix gains while…
10-Q · November 12, 2025
Evolution reported total revenues of $21,288,000 for the three months ended September 30, 2025, down $608,000 versus $21,896,000 a year earlier, while net income fell to $824,000 (diluted EPS $0.02) from $2,065,000…
10-K · September 17, 2025
Evolution (EPM) continues its conservative, dividend-focused E&P strategy while growing via targeted non‑operated acquisitions: the filing discloses a $17.0 million SCOOP/STACK minerals purchase (effective May 1, 2025)…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.