Evolution Petroleum Corporation (EPM): BCG Matrix [Dec-2025 Updated]

You're looking at Evolution Petroleum Corporation's (EPM) capital map for late 2025, and honestly, it's a classic mix of high-potential bets and reliable income streams. We've got Stars, like the outperforming SCOOP/STACK wells and the Chaveroo development, pushing production up 4% to 7,074 BOEPD, while the Delhi Field Cash Cow keeps the $0.12 quarterly dividend steady. But, you can't ignore the drag from Dogs, which helped earnings fall 72.33%, or the Question Marks, like the $9.0 million TexMex buy, that need careful funding from the $30.0 million liquidity to hit their stride. Let's break down exactly where EPM needs to invest, hold, or divest right now.

Background of Evolution Petroleum Corporation (EPM)

You're looking at Evolution Petroleum Corporation (EPM) right as they've closed out their fiscal year 2025 and reported their first quarter of fiscal 2026, so we have some fresh numbers to work with. Evolution Petroleum Corporation is an independent energy company, founded back in 2003, that focuses on the development, production, ownership, and investment in onshore oil and gas properties across the United States. They are headquartered in Houston, Texas, and trade on the NYSE American under the ticker EPM. Honestly, they're a smaller player in the Energy Sector, specifically Oil & Gas Exploration & Production, with only 11 employees listed.

Looking at the full fiscal year 2025, which ended on June 30, 2025, Evolution Petroleum managed near-record total production, averaging 7,074 barrels of oil equivalent per day (BOEPD), which was a 4% bump from the prior year. Total revenues for that full year landed at $85.84 million, which was essentially flat compared to the year before, showing a tiny decrease of -0.04%. However, the bottom line took a hit; earnings for the full year were $1.11 million, representing a significant drop of -72.33% year-over-year. Still, they kept up their commitment to shareholders, returning $16.3 million in cash dividends throughout fiscal 2025.

The fourth quarter of fiscal 2025 showed some resilience amid commodity price swings. Q4 revenues were $21.108 million, just a 1% dip from Q4 2024. The real positive was the net income, which surged 176% to $3.412 million compared to $1.235 million the year prior, and Adjusted EBITDA also grew 7% to $8.572 million. Production in that quarter was steady at 7,198 BOEPD, and the revenue breakdown showed oil was the biggest contributor at 61%, followed by natural gas at 27%, and NGLs at 12%.

Leading into late 2025, Evolution Petroleum was active on the acquisition front, closing a $9 million TexMex deal in April 2025 that added about 440 net BOEPD, and then making their largest-ever minerals-only acquisition in the SCOOP/STACK area in August 2025. Financially, they bolstered their position in June 2025 by amending their credit facility to establish an initial borrowing base of $65 million under a $200 million revolver. As of September 30, 2025, the company had $0.7 million in cash, $53.0 million in outstanding borrowings, and total liquidity of $11.9 million.

The very latest data point we have is for the fiscal first quarter of 2026, which ended September 30, 2025. Production actually ticked up slightly quarter-over-quarter to 7,315 BOEPD. Revenues were $21.288 million, a 3% decline versus Q1 2025, and net income fell sharply by 60% to $0.824 million from $2.065 million the prior year. Despite the earnings pressure, Evolution declared its 49th consecutive quarterly cash dividend of $0.12 per share in November 2025. As of mid-November 2025, the market capitalization stood at $147.78M, with institutional ownership at 57.32%.

Evolution Petroleum Corporation (EPM) - BCG Matrix: Stars

The Stars quadrant in the Boston Consulting Group (BCG) Matrix represents Evolution Petroleum Corporation (EPM)'s business units or assets operating in high-growth markets with a high relative market share. These are the leaders that require significant investment to maintain their growth trajectory but are key to future cash cow status.

The primary drivers for Evolution Petroleum Corporation (EPM)'s Star positioning in fiscal year 2025 stem from its aggressive, yet disciplined, acquisition and development strategy focused on high-potential basins like the SCOOP/STACK and the ongoing organic growth at Chaveroo.

Production Growth from New Assets

The combined impact of new, high-performing assets helped Evolution Petroleum Corporation (EPM) achieve a notable operational milestone for the full fiscal year 2025. These new assets were instrumental in driving the average production to 7,074 barrels of oil equivalent per day (BOEPD), marking a 4% increase compared to the fiscal year 2024 average.

The key components contributing to this Star status include:

• SCOOP/STACK working interest wells outperforming type curves and driving production growth.
• Chaveroo oilfield development, with 300-plus estimated gross drilling locations for future organic growth.
• Recent $17 million SCOOP/STACK minerals acquisition, offering high-margin, no-cost production upside.
• These new assets helped drive a 4% increase in average BOEPD to 7,074 for fiscal year 2025.

SCOOP/STACK Minerals Acquisition: High-Margin Upside

The acquisition of mineral and royalty interests in the SCOOP/STACK area, which closed in August 2025 with an effective date of May 1, 2025, is a textbook Star move because it adds production with zero associated operating costs. Evolution Petroleum Corporation (EPM) funded this transaction with cash on hand and borrowings of $15.0 million under its existing credit facility, valuing the deal at approximately $17 million.

This royalty acquisition immediately added approximately 420 BOE/d at the effective date, with a commodity mix of 54% natural gas, 15% oil, and 31% natural gas liquids. The structure is inherently low-risk, as these royalty interests require no lifting costs and no future capital expenditures to develop the underlying reserves.

The scale of future potential from this single transaction is substantial, adding approximately 5,500 net royalty acres and providing visibility on over 650 drilling locations across roughly 140,000 gross acres.

Here's a quick look at the immediate production impact from the $17 million SCOOP/STACK minerals deal:

Chaveroo Organic Growth Engine

The Chaveroo oilfield development represents the organic growth component that feeds the Star quadrant. While the recent TexMex acquisition added approximately 440 net BOEPD (60% oil, 40% gas) in April 2025, Chaveroo is positioned for sustained, high-return drilling. Evolution Petroleum Corporation (EPM) has a strategic partnership here, with initial farm-ins covering 9 total drilling locations across the first two development blocks. The field itself is significant, with an estimated original oil in place (OOIP) of over 700 million barrels, of which less than 5% has been recovered to date. The company is advancing development, having brought four gross wells online under budget in fiscal year 2025, with early production running ahead of plan.

The company's overall financial capacity to support these Stars is underpinned by its credit structure. The amended and restated senior secured reserve-based credit facility established an initial borrowing base of $65 million under a $200 million revolver maturing on June 30, 2028. This financial flexibility is what allows Evolution Petroleum Corporation (EPM) to invest heavily in these high-growth Stars.

Evolution Petroleum Corporation (EPM) - BCG Matrix: Cash Cows

Cash Cows are market leaders in mature segments, generating more cash than they consume. Evolution Petroleum Corporation supports its shareholder returns through these stable, high-share assets.

The Delhi Field (Louisiana) CO2 Enhanced Oil Recovery (EOR) project is positioned as a long-life, low-decline asset. Evolution Petroleum Corporation holds approximately a 24% average net working interest, resulting in a total average net revenue interest of approximately 26% in the field, which encompasses about 14,000 gross unitized acres, or roughly 3,200 net acres. Operations at the Delhi Field experienced downtime during the quarter due to facility safety upgrades and seasonal effects limiting CO2 injection.

These stable, mature assets are the primary engine for the consistent cash distribution to shareholders. Evolution Petroleum Corporation declared a cash dividend of $0.12 per common share for fiscal Q1 2026, marking its 48th consecutive quarterly cash dividend payment since December 31, 2013. The company returned $4.1 million to shareholders in cash dividends during the fourth quarter alone.

For the fiscal fourth quarter ended June 30, 2025, Evolution Petroleum Corporation generated $10.5 million in net cash provided by operating activities. This cash flow supported capital returns, as the company paid $4.1 million in common stock dividends and invested $4.7 million in capital expenditures during the same quarter.

Low-decline, Proved Developed Producing (PDP) assets, such as the Hamilton Dome Field in Northwest Wyoming, contribute to the stable cash flow profile. The company's overall production for the fourth quarter of fiscal 2025 was 7,198 average barrels of oil equivalent per day (BOEPD). A recent acquisition, characterized by a sub-7% annual base decline, added approximately 440 net BOEPD to the portfolio.

The characteristics defining these Cash Cow assets include:

• Long-life, low-decline production profiles.
• Consistent quarterly cash dividend support.
• Net cash provided by operating activities of $10.5 million in Q4 2025.
• Hamilton Dome Field as a legacy asset example.
• Delhi Field CO2 EOR project structure.
• Total cumulative shareholder return via dividends of $134.8 million.

Evolution Petroleum Corporation (EPM) - BCG Matrix: Dogs

You're looking at the assets within Evolution Petroleum Corporation (EPM) that sit in the low market share, low growth quadrant of the matrix. These are the Dogs, units that tie up capital without generating significant returns, making divestiture a prime consideration.

The full-year 2025 results clearly show the drag these segments can create. For the fiscal year ended June 30, 2025, Evolution Petroleum's total Earnings were $1.11 million, representing a steep decline of -72.33% year-over-year from the prior year's earnings. Revenue for fiscal 2025 was $85.84 million, a marginal decrease of -0.04% from $85.88 million in the previous year. This suggests that while the core business maintained revenue levels, the profitability was significantly eroded by these lower-performing assets or higher costs associated with them.

Here's a look at the specific assets fitting this profile, based on their operational characteristics and mature basin status.

Asset Characteristics and Performance Indicators

The operational headwinds in Q4 2025 highlighted issues in specific, likely mature, fields. You see the impact of these issues in the production reporting.

• Jonah Field (Wyoming) faced pipeline balancing and allocation timing issues in Q4 2025.
• Downtime was also reported in the Delhi Field during Q4 2025 due to a turbine replacement at the NGL plant.
• The Barnett Shale assets are explicitly noted as being in mature, low-growth basins.

The proved reserves associated with some of these legacy areas as of June 30, 2025, give you a sense of the capital base tied up:

The Barnett Shale, acquired in May 2021, covers approximately 21,000 net acres and is primarily operated by Diversified Energy Company. An audit of joint interest expenses for the 2022-2023 period resulted in a preliminary agreement with Diversified for approximately $1.8 million owed back to Evolution, which was recognized as a reduction to lease operating expenses in the fiscal fourth quarter and full-year 2025 results. This adjustment positively impacted Adjusted EBITDA for fiscal 2025.

Cost Dilution and Expense Metrics

A key characteristic of Dogs is that they often carry higher operating costs, which newer, lower-cost acquisitions are meant to dilute. You can see the overall Lease Operating Expense (LOE) per BOE fluctuating, but specific asset issues drive spikes. For instance, in Q3 2025, total LOE increased 16% to $22.32 per BOE, driven by CO2 purchases at Delhi Field resuming in October 2024. Defintely, that's a cash drain.

By Q4 2025, the overall LOE had improved to $17.35 per BOE, flat compared to the year-ago quarter, but this masks the underlying cost structure of the legacy assets. The newer TexMex acquisition (April 2025) and integration efforts contributed to an elevated LOE of $19.45 per BOE in the subsequent Q1 2026, showing that integrating higher-cost assets can temporarily increase the blended expense before dilution takes full effect.

The contrast in per-unit costs is evident when comparing the overall Q4 2025 LOE of $17.35 per BOE against the G&A expense (excluding stock-based compensation) for the same period, which was $2.99 per BOE. These fixed and variable costs on low-growth production are what make these units cash traps.

Here's a comparison of the blended LOE figures around the fiscal year-end 2025 reporting period:

Evolution Petroleum Corporation (EPM) - BCG Matrix: Question Marks

You're looking at the Question Marks quadrant for Evolution Petroleum Corporation (EPM), which represents assets or ventures in high-growth markets but where the company currently holds a low relative market share. These are the cash consumers with high potential, needing significant investment to move toward Star status or risk becoming Dogs.

The $9.0 million TexMex acquisition, which closed on April 14, 2025, with an effective date of February 1, 2025, is a prime example of a Question Mark. This deal added approximately 440 net BOEPD to the production profile, with a commodity mix of 60% oil and 40% natural gas. While this asset has low-risk development upside, realizing that upside requires capital deployment, which is the classic dilemma for a Question Mark.

Here's a quick look at the initial economics of that specific venture:

Another area demanding capital to boost future returns is the development wells at Delhi Field, specifically the Test Site V project. This venture requires upfront capital investment for $\text{CO}_2$ injection to enhance production, which is a clear cash drain in the near term. You saw the impact of $\text{CO}_2$ operations on costs; for instance, higher total operating costs due to $\text{CO}_2$ purchases were noted in Fiscal Q3 2025. Furthermore, downtime from a turbine replacement at the Delhi NGL plant impacted the production figures for the first quarter of fiscal 2026.

The company's portfolio also includes any new, small-scale, non-operated working interests secured in highly competitive, high-growth basins where Evolution Petroleum's relative market share remains low. These are, by definition, Question Marks, as they are small bets in large, growing arenas, requiring management to decide quickly whether to commit more capital for scale or cut losses.

You must manage the company's total liquidity very carefully to fund these high-potential, high-cost ventures. As of June 30, 2025, the total liquidity stood at $30.0 million, with $2.5 million in cash and cash equivalents and $37.5 million in outstanding borrowings under the Senior Secured Credit Facility. However, by September 30, 2025, the cash position had tightened significantly, with cash and cash equivalents at just $0.7 million, outstanding borrowings at $53.0 million, and total liquidity reduced to $11.9 million. That's a rapid consumption of available cash and credit availability, defintely something to watch.

The strategic imperative here is clear, and it boils down to a few core actions for these Question Marks:

• Invest heavily in the TexMex upside and Delhi $\text{CO}_2$ project to rapidly gain market share or production uplift.
• Aggressively fund development wells where the return on invested capital is projected to be high.
• Monitor the cash burn rate, especially given the drop in total liquidity from $30.0 million at the fiscal year-end to $11.9 million three months later.
• Determine which small working interests lack the immediate potential to become Stars and should be divested to conserve cash.

Finance: draft a 13-week cash flow forecast incorporating the capital needs for Delhi and TexMex development by Friday.