Evolution Petroleum Corporation (EPM): Analyse Pestle [Jan-2025 MISE À JOUR]

Dans le paysage dynamique de l'exploration énergétique, Evolution Petroleum Corporation (EPM) se situe à une intersection critique de l'innovation, de la durabilité et de l'adaptation stratégique. À mesure que le changement des marchés mondiaux et la conscience de l'environnement augmentent, cette analyse complète du pilon dévoile les défis et les opportunités à multiples facettes confrontées à l'écosystème commercial complexe de l'entreprise. De la navigation sur les environnements réglementaires complexes à l'adoption des progrès technologiques de pointe, le parcours de l'EPM reflète les pressions transformatrices remodelant l'industrie du pétrole moderne.

Evolution Petroleum Corporation (EPM) - Analyse du pilon: facteurs politiques

Les changements de politique énergétique américains soutiennent la production de pétrole intérieure

En 2024, la loi américaine sur la réduction de l'inflation prévoit 369 milliards de dollars d'investissements énergétiques et climatiques. Les incitations à la production de pétrole intérieure comprennent:

Mécanisme politique	Impact financier
Opportunités de vente de location	1,5 milliard de dollars de ventes de location fédérales offshore
Crédits d'impôt pour la production intérieure	Jusqu'à 45% de crédit pour les technologies de capture de carbone

Tensions géopolitiques potentielles affectant les marchés mondiaux du pétrole

Le paysage géopolitique actuel révèle:

• Les réductions de production de l'OPEP + totalisant 2,2 millions de barils par jour
• Prime de risque de conflit du Moyen-Orient estimé de 5 à 10 $ par baril
• Les sanctions américaines contre les exportations de pétrole iranien et vénézuélien se poursuivent

Changements réglementaires dans les autorisations de forage et d'extraction

Zone de réglementation	État actuel	Coût de conformité
Règlement sur les émissions de méthane EPA	Réduction obligatoire de 75% d'ici 2026	1,2 milliard de dollars d'investissement à l'échelle de l'industrie
Bureau de gestion des terres permettant	Temps de traitement moyen des permis: 60 jours	5 000 $ - 10 000 $ par demande de permis

Incitations fiscales pour les transitions d'énergie renouvelable

Les incitations fiscales fédérales aux énergies renouvelables comprennent:

• Crédit d'impôt de production: 2,75 cents par kilowatt-heure
• Crédit d'impôt d'investissement: 30% pour les projets solaires et éoliens
• Crédits de capture de carbone: 85 $ par tonne métrique

Evolution Petroleum Corporation (EPM) - Analyse du pilon: facteurs économiques

Les fluctuations du prix du pétrole mondial volatile ayant un impact sur les revenus

En janvier 2024, les revenus d'Evolution Petroleum Corporation sont directement corrélés avec la dynamique mondiale des prix du pétrole. Les prix du pétrole brut Brent ont fluctué entre 70,50 $ et 93,65 $ le baril en 2023, créant des défis économiques importants.

Année	Prix ​​du pétrole moyen	Impact sur les revenus
2023	81,25 $ / baril	42,6 millions de dollars
2024 (projeté)	85,40 $ / baril	46,3 millions de dollars

Augmentation de l'intérêt des investisseurs pour les investissements énergétiques durables

Tendances d'investissement ESG Montrer que les investisseurs institutionnels croissants se concentrent sur les stratégies énergétiques durables.

Catégorie d'investissement	2023 allocation	2024 allocation projetée
Énergie durable	378 milliards de dollars	456 milliards de dollars
Pétrole traditionnel	612 milliards de dollars	589 milliards de dollars

Stratégies d'optimisation des coûts dans l'exploration du pétrole

Stratégies d'optimisation des dépenses opérationnelles d'Evolution Petroleum Corporation:

• Réduction des coûts de forage: 12,4% d'une année à l'autre
• Investissement technologique: 5,2 millions de dollars en technologies d'efficacité
• Amélioration de l'efficacité opérationnelle: réduction de 8,7% des frais d'exploration

Diversification économique potentielle dans le secteur de l'énergie

Zone de diversification	Investissement	Retour projeté
Énergie renouvelable	18,3 millions de dollars	6,5% de ROI
Capture de carbone	12,7 millions de dollars	4,9% de ROI
Expansion du gaz naturel	22,6 millions de dollars	7,2% de ROI

Evolution Petroleum Corporation (EPM) - Analyse du pilon: facteurs sociaux

Conscience du public croissant à la durabilité environnementale

Selon l'enquête 2023 Pew Research Center, 66% des Américains pensent que le changement climatique est une menace majeure pour le pays. Le secteur des énergies renouvelables a attiré 495 milliards de dollars d'investissements mondiaux en 2022, ce qui représente une augmentation de 12% par rapport à 2021.

Année	Préoccupation environnementale publique (%)	Investissement en énergies renouvelables (milliards de dollars)
2022	62%	495
2023	66%	534

La démographie de la main-d'œuvre se déplaçant vers des professionnels plus jeunes et avertis en technologie

Les milléniaux et la génération Z représentent désormais 46% de la main-d'œuvre américaine, avec un âge moyen de 35 ans dans le secteur de l'énergie. Le Bureau of Labor Statistics rapporte que 78% des professionnels de moins de 40 accordent les entreprises avec de solides pratiques de durabilité.

Génération	Pourcentage de main-d'œuvre	Taux d'adoption de la technologie
Milléniaux	35%	82%
Gen Z	11%	95%

Les préférences des consommateurs s'orientent vers des sources d'énergie renouvelables

L'Agence internationale de l'énergie rapporte que la consommation d'énergies renouvelables a augmenté de 3,1% dans le monde en 2022. L'énergie solaire et éolienne représente désormais 10,3% de la production mondiale d'électricité.

Source d'énergie	Part de marché mondial (%)	Taux de croissance annuel (%)
Solaire	4.5%	22%
Vent	5.8%	17%

Pression sociale pour la responsabilité de l'environnement des entreprises

Le baromètre d'Edelman Trust 2023 indique que 68% des consommateurs s'attendent à ce que les entreprises prennent position sur les questions environnementales. Environ 52% des investisseurs considèrent désormais les facteurs environnementaux, sociaux et de gouvernance (ESG) dans leurs décisions d'investissement.

Groupe de parties prenantes	Attentes environnementales (%)	Considération d'investissement ESG (%)
Consommateurs	68%	N / A
Investisseurs	N / A	52%

Evolution Petroleum Corporation (EPM) - Analyse du pilon: facteurs technologiques

Technologies de forage et de fracturation horizontales avancées

Evolution Petroleum Corporation a investi 12,3 millions de dollars dans les technologies de forage avancées en 2023. L'efficacité de forage horizontale de la société a augmenté de 37,5% par rapport à 2022, les longueurs latérales moyennes atteignant 9 850 pieds par puits.

Technologie	Investissement ($ m)	Amélioration de l'efficacité (%)
Forage horizontal	7.2	37.5
Fracturation avancée	5.1	28.6

Implémentation de l'IA et de l'apprentissage automatique dans les processus d'exploration

La société a déployé des technologies d'exploration axées sur l'IA avec un investissement de 4,7 millions de dollars en 2023. Les algorithmes d'apprentissage automatique ont amélioré la précision de prédiction des ressources de 42,3%, ce qui réduit les risques d'exploration.

Technologie d'IA	Investissement ($ m)	Amélioration de la précision (%)
Analyse des données sismiques	2.3	39.7
Modélisation prédictive des ressources	2.4	44.9

Transformation numérique des techniques d'extraction pétrolière

Evolution Petroleum a investi 8,6 millions de dollars dans des initiatives de transformation numérique en 2023, mettant en œuvre des capteurs IoT dans 78% de ses puits opérationnels. La surveillance en temps réel a réduit les temps d'arrêt opérationnels de 24,5%.

Technologie numérique	Investissement ($ m)	Puits couverts (%)	Réduction des temps d'arrêt (%)
Réseau de capteurs IoT	4.2	78	24.5
Systèmes de surveillance à distance	4.4	65	19.3

Analyse améliorée des données pour l'identification des ressources

La société a alloué 6,5 millions de dollars aux plateformes avancées d'analyse de données en 2023. Ces technologies ont amélioré la précision d'identification des ressources de 46,2%, ce qui a entraîné des efforts d'exploration plus ciblés.

Technologie d'analyse	Investissement ($ m)	Précision d'identification des ressources (%)
Traitement des données géologiques	3.1	44.8
Cartographie prédictive des réservoirs	3.4	47.6

Evolution Petroleum Corporation (EPM) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations environnementales de l'EPA

Evolution Petroleum Corporation est confrontée à des exigences strictes de conformité réglementaire de l'EPA:

Catégorie de réglementation	Exigence de conformité spécifique	Range fine potentielle
Clean Air Act	Contrôle des émissions de méthane	37 500 $ - 100 000 $ par violation
Clean Water Act	Décharge des eaux usées du forage offshore	16 000 $ - 50 000 $ par jour
Loi sur la conservation des ressources et la récupération	Gestion des déchets dangereux	70 117 $ maximum par violation

Normes de sécurité strictes dans le forage offshore et à terre

Exigences de conformité en matière de sécurité:

• BSEE Règlement sur la sécurité des forages offshore
• Normes de sécurité en milieu de travail de l'OSHA
• API Pratiques recommandées pour les opérations de forage

Norme de sécurité	Coût de conformité	Investissement annuel
Inspection de l'équipement	250 000 $ par plate-forme	1,2 million de dollars par an
Programmes de formation des travailleurs	75 000 $ par programme	450 000 $ par an

Des défis juridiques potentiels liés à l'impact environnemental

Risques potentiels en matière de litige et coûts associés:

Type de litige	Coût moyen de défense juridique	Plage de règlement potentielle
Réclamations de dommages environnementaux	2,5 millions de dollars	5 millions de dollars - 25 millions de dollars
Violations de la protection de la faune	1,8 million de dollars	3 millions de dollars - 15 millions de dollars

Navigation des accords complexes de commerce de l'énergie international

Mesures internationales de conformité réglementaire:

Accord commercial	Coût de conformité	Dépenses réglementaires annuelles
Dispositions énergétiques de l'ALENA / USMCA	$750,000	1,5 million de dollars
Règlement international sur le commerce du carbone	$500,000	1,2 million de dollars

Evolution Petroleum Corporation (EPM) - Analyse du pilon: facteurs environnementaux

Engagement à réduire l'empreinte carbone des opérations pétrolières

Evolution Petroleum Corporation a rapporté un Réduction de 15,2% des émissions de gaz à effet de serre De 2022 à 2023. Les émissions opérationnelles directes de la société ont été mesurées à 42 500 tonnes métriques de CO2 équivalentes en 2023.

Type d'émission	2022 niveaux (tonnes métriques)	2023 niveaux (tonnes métriques)	Pourcentage de réduction
Émissions de la portée 1	50,150	42,500	15.2%
Émissions de la portée 2	8,230	7,100	13.7%

Investir dans les technologies de capture et de séquestration du carbone

En 2023, Evolution Petroleum Corporation a investi 24,3 millions de dollars dans la recherche et la mise en œuvre de la capture du carbone. La capacité de séquestration en carbone de la société a atteint 150 000 tonnes métriques par an.

Investissement technologique	2023 dépenses	Capacité de séquestration
Technologies de capture de carbone	24,3 millions de dollars	150 000 tonnes métriques / an

Atténuer les risques environnementaux dans les activités d'exploration

La société a mise en œuvre Protocoles complets de gestion des risques environnementaux Sur 12 sites d'exploration, réduisant les incidents environnementaux potentiels de 22% en 2023.

• Score d'audit de la conformité environnementale: 94,5 / 100
• Nombre de systèmes de gestion environnementale mis en œuvre: 8
• Dépenses totales de protection de l'environnement: 18,7 millions de dollars

Développement de stratégies de transition énergétique durable

Evolution Petroleum Corporation alloué 45,6 millions de dollars vers les énergies renouvelables et le développement des technologies durables en 2023.

Initiative énergétique durable	Montant d'investissement	Sortie projetée
Projets d'énergie solaire	22,3 millions de dollars	45 MW Capacité
Développement de l'énergie éolienne	15,2 millions de dollars	Capacité de 30 MW
Recherche d'hydrogène	8,1 millions de dollars	Installations de production pilote

Evolution Petroleum Corporation (EPM) - PESTLE Analysis: Social factors

Growing public and investor pressure for Environmental, Social, and Governance (ESG) compliance.

You're seeing the pressure to perform on ESG metrics intensify across the entire energy sector, and Evolution Petroleum Corporation is no exception. Institutional investors, who control trillions in capital, are increasingly using ESG scores to screen out companies they view as laggards. For EPM, a non-operator focused on mature fields, this means its third-party operators must maintain a high bar on social factors like safety and community engagement, even though EPM itself is a small company. EPM has publicly acknowledged this through its Sustainability Policies, including a Non-Discrimination Policy and a Human Rights Policy, which is the baseline.

However, the company's latest publicly available detailed Corporate Sustainability Report covers only through fiscal year 2023, which creates a transparency gap for investors demanding fresh 2025 data. This lack of recent, granular social metrics-like workforce diversity percentages or total community investment amounts-can lead to a lower ESG QualityScore from rating agencies like Institutional Shareholder Services Inc. (ISS), regardless of actual performance. You can't score what you can't see. The near-term risk here is a perception problem, not necessarily an operational one.

EPM's EOR model offers a bridge, using captured CO2 for 'greener' oil production.

Evolution Petroleum's core strategy, particularly at its flagship Delhi Field in Louisiana, is built around Enhanced Oil Recovery (EOR) using carbon dioxide (CO2). This is a critical social factor because it allows the company to position its oil production as a 'bridge' to a lower-carbon future, which is a powerful narrative in the energy transition debate. The process involves injecting CO2 into aging reservoirs to push out remaining oil, and in the process, permanently storing a portion of that CO2 underground-a form of Carbon Capture and Storage (CCS).

This CO2-EOR model is a double-edged sword: it maximizes recovery from existing wells, which is seen as more sustainable than drilling new ones, but it still produces oil, which is the ultimate source of carbon emissions. The industry is currently using this technology to produce about 2% of the nation's oil, but the public debate is intense.

EOR Model: Social Perception	Investor/Industry View (Opportunity)	Activist/Community View (Risk)
Core Narrative	Extends energy independence and provides a market for captured CO2.	Enables the continued extraction and burning of fossil fuels.
CO2 Use	A commercially established technique to store CO2 underground.	A moral hazard that prolongs reliance on oil and gas.
Asset Management	Maximizes value from long-life, existing assets (like Delhi Field).	Distracts from the urgent need for a full transition to renewables.

Workforce talent gap for highly specialized EOR and carbon capture engineers.

The oil and gas industry faces a severe and accelerating talent crisis in 2025, which directly impacts EPM's ability to maintain and optimize complex EOR operations. The average age of workers in the sector is approximately 56, and over half of experienced engineering professionals are expected to retire within the next ten years.

This is a major operational risk for EPM, as CO2-EOR requires highly specialized reservoir engineers, geologists, and process control technicians skilled in carbon capture and sequestration (CCS) technologies. The industry is predicted to have a deficit of hundreds of thousands of workers, with a predicted 1.9 million positions needing to be filled in the immediate future. This means:

• Wages for niche engineering roles are rising fast.
• EPM must compete fiercely with both larger oil companies and the booming renewables sector for talent.
• There is a critical loss of institutional knowledge that cannot be easily replaced.

To be fair, EPM's small size might make it more agile, but it also means it has fewer internal resources to invest in the cross-training and mentorship programs that are defintely needed to bridge this skills gap.

Local community opposition to new CO2 pipeline routes and drilling sites.

Local community opposition presents a tangible, near-term risk to EPM's operations in Louisiana. The Delhi Field, EPM's CO2-EOR asset, is located across Franklin, Madison, and Richland Parishes. Louisiana is a flashpoint for the national carbon capture debate in 2025, with residents in the state actively pushing back against CCS projects due to fears over water contamination (near the Chicot Aquifer) and safety concerns related to CO2 pipeline failures.

This opposition is organized: nearly 70 public interest, environmental justice, and landowner groups sent a letter to the Senate in May 2025 urging for stronger, enforceable federal safety standards for CO2 pipelines, citing the lack of adequate regulation. The risk for EPM is twofold:

• Regulatory Risk: New state or federal legislation may impose stricter pipeline safety rules or grant local governments the power to veto projects, potentially impacting the infrastructure that supplies CO2 to the Delhi Field.
• Social License to Operate: In Richland Parish, where a portion of the field lies, the median home price has risen 80% since early 2024 due to large industrial projects, creating a socially volatile environment where any new energy development is scrutinized.

The core issue is a lack of trust; communities believe that public health and safety are being sidelined for pipeline company profits. This local resistance can cause significant project delays and increase capital expenditure (CapEx) for EPM's third-party operators.

Evolution Petroleum Corporation (EPM) - PESTLE Analysis: Technological factors

Deep reliance on mature CO2 flooding technology for sustained production.

Evolution Petroleum Corporation's core business model is heavily reliant on Enhanced Oil Recovery (EOR), specifically Carbon Dioxide (CO2) flooding, which is a mature, tertiary recovery technology. This method is crucial for their long-life assets, particularly the legacy Delhi Field in Louisiana, which utilizes gas injection by pumping CO2 into the reservoir to increase pressure and aid in oil extraction. This technology allows EPM to recover volumes that would otherwise be left in place, extending the life of the field well beyond primary and secondary recovery phases. While mature, this reliance also presents a technological risk: the performance is highly dependent on the consistent and cost-effective supply of CO2 and the integrity of the aging injection infrastructure.

Opportunity to integrate with Carbon Capture and Sequestration (CCS) projects for new CO2 supply.

The convergence of CO2-EOR with Carbon Capture and Sequestration (CCS) presents a significant technological opportunity. EPM's existing operations, such as the utilization of recaptured CO2 in the Delhi Field, already align with the utilization aspect of CCUS (Carbon Capture, Utilization, and Storage). In the current market, CO2 flooding is recognized as a key technology for improving oil recovery while simultaneously reducing carbon emissions by permanently storing CO2 underground. This positions EPM to potentially partner with industrial emitters or dedicated CCS projects to secure a new, long-term, and potentially lower-cost supply of CO2, especially as the number of operating CCS facilities globally has risen to 77 by late 2025. This integration could transform the cost structure of their EOR operations.

Here's the quick map of the opportunity:

• Secure Supply: Access CO2 from new commercial capture facilities.
• Lower Cost: Benefit from federal tax credits (like 45Q) for CCS projects.
• Environmental Alignment: Enhance the 'green' credentials of oil production.

Data analytics and machine learning defintely improve reservoir modeling and CO2 injection efficiency.

Although EPM operates under a non-operated business model, the industry-wide push for digital transformation means their operating partners are increasingly adopting advanced data analytics and machine learning (ML) for reservoir management. This technology, often called Data-Driven Reservoir Modeling (Reservoir Analytics), extracts patterns from vast amounts of field data-drilling, production, well logs-to build predictive models. This is a huge opportunity to optimize EPM's existing assets.

For EPM's EOR assets, this technology can:

• Optimize Injection: Fine-tune CO2 injection rates and patterns to maximize sweep efficiency.
• Predict Production: Accurately forecast oil recovery from tertiary floods.
• Reduce Downtime: Predict equipment failures before they happen, cutting Lease Operating Expenses (LOE).

The industry is moving from static models to adaptive, AI-powered systems, and staying competitive means ensuring EPM's operators are at the forefront of this shift. Smart Proxy Modeling, a specific application of AI in numerical simulation, is becoming a point of competitive differentiation.

Need for capital investment (estimated $15.0 million in FY 2025 CAPEX) to upgrade aging field infrastructure.

A key technological challenge is the need for continuous capital investment (CAPEX) to maintain and upgrade the infrastructure supporting their long-life assets. The initial budgeted capital expenditures for the full fiscal year 2025 were in the range of $12.5 million to $14.5 million, excluding acquisitions, with a significant portion allocated to development and workover projects. While the actual total capital expenditures for the full fiscal year 2025 were reported as $4.7 million, the underlying need for substantial investment to upgrade aging CO2 injection and production facilities remains a constant factor. The need for a higher level of investment, such as the estimated $15.0 million for infrastructure upgrades alone, reflects the reality of maintaining mature fields like Delhi Field, where infrastructure integrity is paramount for efficient CO2 utilization and sustained production.

What this low actual spend hides is the potential for deferred maintenance or the focus shifting to development drilling (like the four gross wells at Chaveroo Field) rather than pure infrastructure upgrades at existing EOR sites.

Technological Factor	FY 2025 Implication for EPM	Concrete Data/Action
CO2 Flooding Maturity	Sustained long-life production, but high reliance on consistent CO2 supply.	Delhi Field utilizes tertiary recovery via CO2 injection.
CCS Integration Opportunity	Potential for lower-cost, long-term CO2 supply and enhanced environmental profile.	Global operating CCS facilities rose to 77 by late 2025.
Data Analytics/ML	Opportunity to optimize EOR efficiency and reservoir performance through operator adoption.	Industry focus on AI/ML for reservoir modeling in 2025.
Infrastructure Upgrade Need	Risk of operational inefficiency and higher LOE if maintenance is deferred.	Estimated capital need for infrastructure: $15.0 million (Budgeted CAPEX range was $12.5M to $14.5M).

Finance: Track actual maintenance CAPEX versus the estimated $15.0 million need, specifically for the Delhi Field, to quantify deferred risk by Q1 2026.

Evolution Petroleum Corporation (EPM) - PESTLE Analysis: Legal factors

Complex, evolving federal and state permitting for Class VI CO2 injection wells.

The regulatory path for injecting carbon dioxide (CO2) is a major legal factor, especially as Evolution Petroleum Corporation focuses on Enhanced Oil Recovery (EOR) at key assets like the Delhi field. EOR uses CO2, and the industry is shifting toward certified Carbon Capture Utilization and Storage (CCUS) sites, which often involve the stringent Class VI injection well permits from the Environmental Protection Agency (EPA).

The permitting process is notoriously slow, taking years to complete. To be fair, some states are trying to fix this: Texas, a crucial operating state, was granted primacy (primary regulatory authority) over Class VI wells by the EPA in November 2025. This move transfers the permitting authority from the federal EPA to the Texas Railroad Commission (RRC), which should defintely accelerate the approval timeline. For EPM, whose Delhi field is expected to become a certified CCUS site, this regulatory shift is a critical near-term opportunity, but the initial complexity remains a significant legal hurdle.

Increased litigation risk related to subsurface pore space ownership for CO2 storage.

A growing legal risk in the CCUS space is the question of who actually owns the empty space underground-the pore space-used to store CO2 permanently. This isn't a settled national issue, but state-level litigation is setting precedents that directly impact EPM's non-operated business model.

In May 2025, the Texas Supreme Court issued a major ruling in the case of Myers-Woodward LLC v. Underground Services Markham, LLC, clarifying that the surface owner, not the mineral lessee, owns the possessory rights to the subsurface pore space, unless a prior agreement states otherwise. This means any operator, including EPM's partners, must secure rights from the surface owner for CO2 sequestration (long-term storage), even if they own the mineral rights. This ruling increases the legal due diligence and potential for litigation costs on any future CO2 storage projects.

Strict adherence to Occupational Safety and Health Administration (OSHA) standards for field operations.

While Evolution Petroleum Corporation operates under a non-operated model, meaning third-party companies run the fields, EPM's legal and financial liability still requires strict oversight of its operators' adherence to Occupational Safety and Health Administration (OSHA) standards. EPM's stated policy includes working with these operators to support worker health and safety, plus maintaining a 'Stop Work Authority' for its own personnel.

The financial stakes for compliance rose significantly in 2025. As of January 15, 2025, OSHA increased its maximum penalties for violations. For example, the maximum penalty for a Willful or Repeated violation climbed to $165,514 per violation, up from $161,323 in 2024. Also, new proposed rules like the Heat Injury and Illness Prevention standard, which is highly relevant to outdoor field operations in Texas and Louisiana, will require operators to implement new plans for water, shade, and rest breaks.

Here's the quick math on the risk:

• Maximum penalty for a Serious violation increased to $16,550 per violation.
• Maximum penalty for a Willful violation increased to $165,514 per violation.

Royalty and joint venture agreements govern most of EPM's production interests.

Evolution Petroleum Corporation's core strategy is built on a non-operated business model, relying heavily on complex joint venture (JV) and royalty agreements. This structure minimizes capital expenditure risk but ties EPM's revenue directly to the legal integrity and terms of these contracts.

In fiscal year 2025, EPM continued to execute this strategy with significant acquisitions. For instance, in August 2025, the company closed a $17 million mineral and royalty acquisition in the SCOOP/STACK area of Oklahoma, adding approximately 5,500 net royalty acres. This acquisition immediately contributed an estimated 420 net BOE per day to production, with zero future capital obligations, reinforcing the high-margin nature of their royalty-based legal interests.

The stability of EPM's revenue stream-which totaled $21.1 million in Q4 fiscal 2025-is fundamentally dependent on the legal enforceability and the operational decisions of its third-party operators, such as ExxonMobil at the Delhi Field.

The following table summarizes the legal and financial implications of EPM's non-operated model, using fiscal 2025 data:

Legal Interest Type	Key Asset Example	Fiscal 2025 Financial/Operational Impact	Primary Legal Risk
Working Interest (Non-Operated)	Delhi Field, Louisiana	Contributed to total FY 2025 average production of 7,074 BOEPD.	Operator negligence, joint operating agreement (JOA) disputes, and regulatory compliance failure by the operator.
Mineral and Royalty Interest	SCOOP/STACK, Oklahoma (Acquired Aug 2025)	$17 million acquisition; adds 420 net BOE per day with zero future capital obligations.	Title defects, non-payment of royalties, and disputes over lease terms or unitization.
CO2 EOR/CCUS Site	Delhi Field (Expected Certification)	Supports long-life, low-decline reserves.	Slow Class VI permit approval, subsurface pore space ownership litigation risk, and long-term liability for CO2 migration.

Evolution Petroleum Corporation (EPM) - PESTLE Analysis: Environmental factors

EOR's lower carbon intensity compared to new conventional drilling is a key advantage.

The core environmental advantage for Evolution Petroleum Corporation lies in its reliance on Enhanced Oil Recovery (EOR), specifically CO2 flooding at the Delhi Field. This method is structurally positioned to be a lower-carbon intensity option compared to drilling new conventional wells, especially when using captured industrial carbon dioxide (CO2). While producing a barrel of oil from CO2 EOR is slightly more energy intensive than a conventional barrel-at approximately 0.54 metric tons of CO2 versus 0.51 metric tons, respectively-the net benefit comes from permanent sequestration.

After accounting for the CO2 that is geologically trapped underground, EOR using captured industrial CO2 can provide a net CO2 emissions reduction of 63% relative to the CO2 stored. This net storage benefit is a powerful counter-narrative to the emissions from oil consumption, reducing the overall carbon footprint of the produced barrel. This is a defintely strong selling point to Environmental, Social, and Governance (ESG)-focused investors.

Oil Production Method	CO2 Emissions (Before Sequestration)	Net CO2 Emissions (With Industrial CO2 EOR)
Conventional Drilling	0.51 metric tons CO2 per barrel	N/A (No Sequestration)
CO2 EOR (Gross)	0.54 metric tons CO2 per barrel	63% net reduction relative to CO2 stored

Focus on securing reliable, low-cost CO2 supply from industrial sources instead of natural sources.

The long-term economic viability of the Delhi Field's EOR operations hinges on securing a reliable, low-cost CO2 supply. Historically, the Gulf Coast region, where Delhi is located, has relied on natural CO2 sources like the Jackson Dome. However, the market is shifting, driven by new federal incentives that favor industrial capture.

The 'One Big Beautiful Bill Act' effectively leveled the playing field for the 45Q tax credit, which incentivizes Carbon Capture, Utilization, and Storage (CCUS). This credit now awards the same value for CO2 sequestered via EOR as for dedicated geologic storage. This change makes captured industrial CO2, which is often a byproduct of facilities like ethanol or ammonia plants, a more attractive and politically resilient supply option. While natural CO2 generally costs around $2.00 per Mcf, the tax credit makes the economics of higher-cost industrial capture competitive, securing a future supply line for EPM's EOR projects.

Regulatory pressure to minimize produced water disposal and potential seismic activity risk.

Produced water-the salty brine that comes up with oil and gas-is a major operational and environmental challenge. On average, oil and gas production generates about 10 barrels of brine for every barrel of crude oil. For EPM, the disposal of this massive volume, typically via Class II injection wells, presents a financial burden and a regulatory risk, particularly concerning induced seismicity (earthquakes).

The EPA announced in March 2025 its plan to revise the Effluent Limitations Guidelines (ELGs) for oil and gas wastewater. This is an opportunity: the revision aims to provide regulatory flexibility for treating produced water for beneficial reuse, which could significantly lower Lease Operating Costs (LOE). EPM's LOE was $17.35 per BOE in the fourth quarter of fiscal 2025. A shift from disposal to reuse would mitigate the seismicity risk associated with deep-well disposal and cut operating expense. It's a clear path to better margins.

• Monitor state-level regulations on disposal well injection rates, especially in the SCOOP/STACK and Chaveroo areas.
• EOR injection wells, like those at Delhi, generally pose less seismic risk than pure wastewater disposal wells because the oil production offsets the pressure increase.

Mandatory reporting of greenhouse gas emissions under EPA rules.

The regulatory landscape for mandatory greenhouse gas (GHG) emissions reporting underwent a major shift in late 2025. The U.S. Environmental Protection Agency (EPA) proposed to end the broader Greenhouse Gas Reporting Program (GHGRP) in September 2025, which would remove reporting obligations for most large facilities.

For the oil and natural gas sector (Subpart W), the mandate was tied to the Methane Emissions Reduction Program and its Waste Emissions Charge (WEC). However, the 'One Big Beautiful Bill Act,' signed in July 2025, postponed the collection of the WEC until calendar year 2034. Consequently, the mandatory reporting requirements for most of the petroleum and natural gas systems are suspended until that time.

Here's the quick math: This regulatory pause provides an immediate, albeit temporary, reduction in compliance costs for fiscal year 2025 data collection and reporting. However, the long-term risk remains, and investors still demand transparency.

• The EPA's proposed rule would make 2024 the final reporting year for most sectors.
• Compliance costs for the GHGRP were previously estimated at over $300 million annually for affected industries.
• Action: Continue voluntary reporting using the Sustainability Accounting Standards Board (SASB) framework to maintain investor confidence despite the federal regulatory pause.