Evolution Petroleum Corp. shares fell 8.9% in after-hours trading to $3.49 on Tuesday after the Houston-based independent energy company announced a $16 million acquisition of mineral and royalty interests in the Midland Basin, a core region of the Permian Basin.
The acquisition covers approximately 3,420 net royalty acres across five Texas counties and includes royalties on 832 producing wells. Evolution Petroleum estimated the deal’s expected next-twelve-month cash flow at roughly $3.9 million, implying an acquisition multiple of about 4x.
The company launched an underwritten public offering of common stock, though it did not disclose the number of shares or the expected offering price. Net proceeds from the offering will be used to partially fund the Midland Basin acquisition, with any remaining funds potentially allocated to repaying borrowings under the company’s senior secured revolving credit facility. Underwriters were granted a 30-day option to purchase additional shares.
The stock’s decline pushed its price closer to the lower end of its 52-week range of $3.19, reflecting investor caution following the acquisition announcement.
