Evolution Petroleum (EPM) reported fiscal 2026 revenue of $86.3 million and adjusted EBITDA of $23.4 million, with fourth-quarter revenue rising 20% sequentially and gross profit margins holding near 42%, during a presentation at Water Tower Research’s Virtual Insights Conference on Tuesday.
Shares of the company traded at $3.74, up 5.06% from a prior close of $3.56, within a 52-week range of $3.19 to $5.10. The stock carries a dividend yield of roughly 13% and has paid consecutive dividends for 14 years. Analysts see room for appreciation, with price targets ranging from $4.25 to $6.00, implying about 39% upside from current levels.
Chief Executive Officer Kelly Loyd said the company’s blend of working interest and mineral assets is designed to sustain cash flow through cycles. "Diversity doesn’t remove all the risks, but it certainly does make our cash flow more resilient through the cycle," Loyd said. Working interest holdings provide long-life base production and opportunities for value-add development, while the royalty and mineral side delivers higher-margin cash flow funded entirely by operators, he added.
Since February 2024, Evolution Petroleum has completed $91 million in transactions, including $39 million in royalty acquisitions since closing its first deal in August 2025. A $60 million Midland Basin mineral acquisition closed in August 2025 added approximately 3,400 net royalty acres and brought 832 producing wells, 40 wells in progress and 27 active drilling permits onto the portfolio. Since closing, 20 wells have been converted to proved developed producing status, 20 remain in progress and eight rigs are currently active on the acreage. Management identified more than 1,200 additional upside locations.
On the working interest side, fiscal 2026 saw 10 well conversions in the SCOOP/STACK play and 21 on the mineral side. The Haynesville-Bossier Shale portfolio includes more than 90 producing wells with 40 to 50 additional wells in progress or permitted, while six drilling permits were secured at Chaveroo.
Fiscal 2026 production came in at slightly above 7,000 barrels of oil equivalent per day, totaling 2.6 million BOE annually, with reserve replacement exceeding 100% of production.
The revolving credit facility was increased from $65 million to $73 million by lenders, with an upcoming fall redetermination expected in October. Management is targeting a leverage ratio between one and two times.
Looking ahead, the company projected fiscal 2027 earnings per share of $0.05 and indicated confidence in sustaining its dividend. Loyd noted that even without additional acquisitions, the current portfolio is comfortably positioned to cover the dividend.
Director of Operations and Engineering Peter Pham highlighted the appeal of the Midland Basin, citing its exceptional rock quality, multiple productive benches and high activity levels. He stressed that operator reputation matters significantly when evaluating non-operating mineral packages.
