Evolution Petroleum Burkenroad Report

November 12, 2014
EVOLUTION
PETROLEUM CORPORATION
EPM/NYSE

Continuing Coverage:
E&P with a Little Extra GARP®
Investment Rating: Market Perform

PRICE: $ 9.11 S&P 500: 2,038.26 DJIA: 17,613.74 RUSSELL 2000: 1,173.32

 Evolution operates in tertiary recovery niche of the upstream industry
 Firm’s success is dependent on oil prices
 Firm maintains conservative financial structure
 Continuous Delhi Field enhanced recovery production to drive growth
 Delhi field reaches payout status
 Future of GARP® has promising commercialization prospects
 Our 12‐month target price is $10.00.

Valuation
EPS
P/E
CFPS
P/CFPS
2014 A
$ 0.09
101.2x
$ 0.24
38.6x
2015 E
$ 0.63
14.4x
$ 0.61
15.0x
2016 E
$ 0.95
9.6x
$ 1.04
8.7x

Market Capitalization Stock Data
Equity Market Cap (MM): $ 297.74 52‐Week Range: $8.26 ‐ $13.60
Enterprise Value (MM): $ 276.37 12‐Month Stock Performance: ‐23.54%
Shares Outstanding (MM): 32.68 Dividend Yield: 4.39%
Estimated Float (MM): 17.79 Book Value Per Share: $ 1.54
6‐Mo. Avg. Daily Volume: 895,494 Beta: 0.90

Company Quick View:
Success is bubbling up at Evolution Petroleum. Evolution is an independent oil and gas
exploration and production company headquartered in Houston, Texas. The Company,
founded in 2003, primarily focuses on exploiting underdeveloped oil and natural gas
resources utilizing advanced proprietary technology. It primarily holds interests in the
Holt Bryant Unit Delhi Field in Northeast Louisiana and also holds interests in the
Giddings Field in Central Texas.
Company Website: www.evolutionpetroleum.com

Analysts: Investment Research Manager:
Avery Golombek Tolga Erman
Jonathan Afra
Aaron Mandel
Lambert Odeh
The BURKENROAD REPORTS are produced solely as a part of an educational program of Tulane University's
Freeman School of Business. The reports are not investment advice and you should not and may not rely on
them in making any investment decision. You should consult an investment professional and/or conduct your
own primary research regarding any potential investment.
Wall Street's Farm Team
BURKENROADREPORTS

Evolution Petroleum Corp. (EPM) BURKENROAD REPORTS (www.burkenroad.org) November 12, 2014
2
Figure 1: 5‐year Stock Price Performance

Source: Bloomberg November 16, 2014
INVESTMENT SUMMARY
We give Evolution Petroleum a rating of Market Perform with a 12‐month target price of
$10.00. To reach this target price we used the present value of estimated future oil and gas
returns, net of estimated direct expenses, discounted at an annual rate of 10%. Evolution is a
petroleum exploration and production (E&P) company that focuses on underdeveloped
onshore oil fields.
Evolution will continue to realize steady cash flows from the Delhi field, its sole significant
revenue producing asset. Delhi proved and probable reserve volumes have grown 8%, to 22.6
million barrels of oil and the field has a reserve life index of approximately 18 years. Future
strategy is to increase free cash flow from the Delhi Field, commercialize its Gas Assisted Rod
Pump (GARP®), and increase shareholder returns. The reversionary interest agreement with
Denbury Resources reached its payout during October, 2014.
Additionally, Evolution continues to focus business efforts on the commercialization of its
GARP® technology. After the Company’s divestment of most non‐GARP® operated properties,
Evolution underwent a substantial restructuring. Several management changes occurred,
including the appointment of top management to GARP® related positions and a reduction in
engineering staff. As such, Evolution’s unlevered financial structure, risk‐averse operations,
significant cash flow, and near‐maximum Delhi production make it an attractive option for
acquisition.

3
Table 1: Historical Burkenroad Ratings and Prices
Date Rating Price*
03/17/14 Market Perform $14.00
03/28/13 Market Outperform $13.00
*Price at time of report date
INVESTMENT THESIS
We have established a 12‐month target price of $10.00 and a rating of Market Perform.
Evolution operates in tertiary recovery niche of the upstream industry
Evolution Petroleum operates within a specific niche of the oil exploration and production
(E&P) industry. The Company focuses on tertiary oil production and does not engage in the
exploration of reservoirs, which requires large capital expenditures and can be highly
speculative. Specifically, Evolution’s operations utilize a highly specialized proprietary
technology to enable tertiary recovery. The Company implements horizontal drilling and
artificial lifts to increase the useful life of wells and enhance petroleum recovery from
previously productive yet underdeveloped formations.
Firm’s success is dependent on oil prices
Evolution’s financial success is largely dependent on the market price of oil. Energy prices can
be volatile in the short term because of geopolitical and economic uncertainties. This volatility
impacts Evolution’s market price because oil is the firm’s main generator of revenues.
Additionally, Evolution has refrained from implementing any hedges on its oil production,
making the firm even more vulnerable to a price drop in oil.
Continuous Delhi Field enhanced recovery production to drive growth
Currently, the Delhi Field is Evolution’s main asset. Purchased in 2003, the Delhi Field
encountered some stoppages around the end of 2013 but has since stabilized. Enhanced
recovery well production remains steady and recent annual performance has met
expectations.

4
Delhi proved and probable reserve volumes have grown 8%, to 22.6 million barrels of oil. The
Delhi field has a reserve life index of approximately 18 years. Evolution will rely heavily on the
continued success of the well for the next 18 years because the firm is not actively seeking new
projects.
Delhi Field reaches payout status
In 2006, Evolution Petroleum entered into an agreement with Denbury Resources to redevelop
the Delhi Field. The agreement dictated a revenue sharing arrangement where Evolution
assumes none of the cost and receives a portion of the revenue until Denbury receives its full
investment, plus any predetermined amount of return. Evolution received a 7.4% royalty
interest from all gross revenues and paid no capital or operating expenses. The terms of the
agreement are beneficial to Evolution because they allow the Company to generate significant
revenue, while Denbury maintains the well. Denbury pays the majority of costs for the Delhi
Field, resulting in expected post‐reversionary cash flows for Evolution considerably greater
than net capital expenditures. The 23.9% reversionary working interest in the field activated
during October, 2014. This revision is expected to result in an approximate 360% increase in
yearly revenue.
Future of GARP® has promising commercialization prospects
As of December 2013, management completed a corporate restructuring initiative, which
included: its divestment of all non‐Gas Assisted Rod Pump (GARP®) operated properties,
compensation for engineering‐related employees to leave the Company, and the appointment
of several C‐Suite members to lead the commercialization of GARP®. Evolution’s proprietary
and patented GARP® technology is at the forefront of Evolution’s business plan.
GARP® technology requires relatively minimal capital investment to commercialize and offers
considerable growth potential. Compared to the fourth quarter ended June 2013, revenue
from previous GARP® installations grew by 64% and daily sales volumes increased 201%.
Recently, Evolution has installed three GARP® wells, which will contribute to revenue growth in
2015. In recent commercialization efforts, management sought to educate industry
professionals about GARP® in an effort to increase implementation of the technology. As a
result of these efforts, two additional wells are scheduled to implement the technology in the
coming months.
Future cash flows structures from GARP® technology remain in the planning stages.
Management expects to provide forthcoming installations on a fee basis but is considering
alternative business structures. One consideration is assuming all capital expenditures for
GARP® installation on additional wells, in exchange for compensation on a production basis.

5
Firm maintains conservative financial structure
Evolution is an attractive company because of the firm’s unlevered financial structure, risk‐
averse operations, and significant cash flow. First, the Company’s capital structure of
maintaining zero‐debt minimizes bankruptcy risk. Furthermore, Evolution invests in projects
that do not involve large capital expenditures and evades speculative decisions. As a result,
Evolution is able to offer higher return on invested capital. Management built Evolution on this
platform, making the firm an attractive asset for other companies.
VALUATION
Our analyst team gives Evolution Petroleum a Market Perform rating. Our 12‐month target
stock price projection is $10.00. We used the present value of estimated future oil and gas
returns, net of estimated direct expenses, discounted at an annual rate of 10% over seven
years.
PV‐10
The PV‐10 model is a standard valuation measure for the exploration & production industry.
This model takes the present value of cash flows from production, net of operating expenses,
discounted at the annual 10% industry standard.
Our PV‐10 model uses two sources to determine projections of prices and productions. The
Burkenroad price deck is used to determine future prices of oil and production estimates are
calculated based upon information supplied by the Company. The Burkenroad price deck is
determined by the NYMEX West Texas Intermediate futures contract prices combined with the
U.S. Energy Information Administration (EIA) Short‐Term Outlook forecasts and the EIA Annual
Energy Outlook to derive long‐term prices of oil, natural gas, and natural gas liquids. After
calculating cash flows, we discounted by 10% to arrive at a rounded price of $10.00.
INDUSTRY ANALYSIS
Companies operating in the petroleum industry explore, extract, refine, and transport
petroleum products. The three main sectors in this industry are upstream, midstream, and
downstream. Upstream companies explore, extract, or produce oil and natural gas liquids
(NGL). Midstream companies transport, store, and serve as the middle man between upstream
and downstream companies. The downstream companies refine the products and sell them to
end users.

6
Major companies in the industry include Royal Dutch Shell, ExxonMobil, Chevron, and British
Petroleum. These companies are well‐integrated and operate in all three sectors. Evolution
Petroleum is an upstream company because the majority of its revenues come from
extraction.
Extraction & Production Industry
The U.S. oil drilling and gas extraction industry had revenues of $393.3 billion in 2013 and
analysts expect that figure to grow by 3.6 % to $407.7 billion in 2014. Expected growth rates
for crude oil and NGL production in 2014 are 13% and 10%, respectively. The International
Energy Agency forecasts that the U.S. will lead the world in oil production by 2017 and has the
potential to be a net oil exporter, dependent on the regulatory environment. Favorable sector
forecasts are a result of improvements in industry technology and techniques, a reduction in
U.S. dependence on foreign oil, and the generally positive movements of key industry drivers.
Key Drivers of the Oil and Gas industry:
• Price of crude oil
• Price of natural gas
• Regulations in the Petrochemical Manufacturing industry
• Total global vehicle miles
 • Trade‐weighted index
In October 2014, the International Monetary Fund forecasted the average 2015 price of oil to
be $99.36 per barrel. Similarly, the U.S. Department of Energy expects the price of NGLs to
increase an average of 2.6% annually through 2019. According to Bureau of Transportation
statistics, total global vehicle miles are projected to be 3.13 trillion in 2015. International crude
oil prices continued on a downward trajectory from September through November 2014,
falling under $100 per barrel (bbl) for the first time since June 2012. In October 2014, Goldman
Sachs forecasted oil prices would fall to $70 in 2015. The value and stock price of exploration
and production (E&P) companies are correlated with changing oil and NGL prices. Additionally,
the industry is subject to numerous Federal and state‐level regulations and changing laws
could significantly impact E&P companies in the future.
Macroeconomic Trends
Global economic and political factors affect product prices. An example is the Organization of
Petroleum Exporting Countries (OPEC) which consists of 12 countries holding substantial oil
exports. OPEC leverages political ties to control product prices. In October 1973, the
organization established a trade embargo which heavily impacted prices.

7
In October 2014, oil prices dropped to $80 per barrel, caused in part by OPEC selling their oil at
a discount and other global instabilities.
Natural Gas Prices Align with Supply and Weather
A boom in shale gas production is currently occurring in the U.S. as a result of recent
innovations in drilling methods. These drilling techniques have led to a great increase in
production of natural gas. The increase in supply has resulted in a decrease in price over the
past several months. The Energy Information Agency (EIA) expects that natural gas production
will grow by an annual rate of 5.3% in 2014.
Another determining component of natural gas prices are weather conditions. In January 2014,
a harsh winter led natural gas prices to exceed $5.00 per thousand cubic feet (Mcf). Goldman
Sachs recently reported a conservative outlook forecasting that Henry Hub gas prices will range
between $4.00‐$4.50/Million British Thermal Unit (MMBtu) through 2018.
Liquefied natural gas (LNG) exports may provide a solution to the current oversupply problem.
Potential consumers of LNG include South American countries. However, long‐distance
transportation would require substantial capital investments. The EIA expects the U.S. to be a
net exporter in 2015.
Developing Economies
In recent years, petroleum consumption in developing countries has increased. The figure
below illustrates how much of the growth in world energy use is expected to come from
countries outside of the Organization of Cooperation and Development (OCED). The OCED
includes 34 member countries that are considered, “advanced.” While energy consumption in
OECD nations is expected to remain stagnant over the next 25 years, consumption is expected
to continually increase in non‐OCED nations (see Figure 2).

8
Figure 2: Projected World Energy Consumption in Quadrillion Btus
Source: EIA, International Energy Outlook 2014
Oil Prices Are Dependent on Numerous Conditions
Volatility in oil prices stem from geopolitics, economic uncertainties, government action, and
climate. In the short term, prices may be volatile due to supply and demand disruptions. As of
August 2014, the EIA increased its forecasts for next year’s oil prices. The two primary
benchmarks for oil prices are West Texas Intermediate (WTI) and Brent. WTI oil forecasts for
2015 average $90.55, down from October’s estimate of $95.17. Brent oil is projected to rise
from $104.92 to $105.
In addition, Petroleum product prices face potential disruption when major suppliers are in
areas of political unrest. The Strait of Hormuz accounts for 20% of global oil flow on a daily
basis; the Strait processed about 17 million barrels per day (bbl/d) in 2011. This key
transportation hub faces security issues, which could impact the shipment of oil and influence
product prices.
Ever‐changing Regulatory Environment
Government regulations play an important role in the oil and natural gas industry. Laws and
regulations change over time due to a variety of factors including the political landscape and
environmental consequences of extraction and consumption of fossil fuels. Although future
regulations could threaten the profitability of E&P companies, the states which the Company
operates in, Texas and Louisiana, promote the growth of the oil and gas industry through
taxation incentives.

9
The legislative issue of most concern for E&P companies today is hydraulic fracturing. Recently,
the Environmental Protective Agency (EPA) ruled that hydraulically fractured gas wells may
continue to flare byproducts until January 1, 2015. Upon that date, companies must capture
95% of the volatile organic compounds emitted annually by their wells or face fines. This has a
significant impact on the daily operations of E&P companies.
Customers
The customer base of upstream companies is predominantly comprised of two groups:
midstream and downstream companies. E&P companies acts as the supplier of the raw
commodity. Midstream companies enable product transportation while downstream
companies facilitate the refining and finishing of petroleum products. Evolution’s customers
also include other E&P companies that lease out Evolution Petroleum’s proprietary Gas
Assisted Rod Pump (GARP®) technology.
Evolution receives an overwhelming majority of its revenue from a single customer. In fiscal
year 2014, Plains Marketing LP, a midstream company, accounted for 96% of Evolution
Petroleum’s revenues. However, Evolution’s business risk regarding Plain Marketing is minimal
since the Company’s main product offering, Louisiana Light Sweet Oil, is considered highly
desirable.
Competitors
Competitors within the oil and natural gas industry focus on two main tasks: the acquisition of
oil prospects and acreage, and the successful retrieval of oil and natural gas. Evolution
Petroleum competes with a large range of E&P companies spanning small market capitalization
firms to some of the largest companies in the world. Evolution Petroleum and companies of
similar size face a disadvantage to larger companies who have more extensive staffs and larger
capital resources. Larger companies with higher monetary and human capital can afford to do
more tasks in‐house and minimize outsourcing. Though outsourcing can minimize liabilities,
larger companies have the ability to increase efficiency by monitoring their operations more
closely. Furthermore, larger companies that conduct all their operations themselves can realize
additional revenues that they would otherwise have to share with partnered firms. Because of
its limited resources and conservative management approach, Evolution prefers to share
revenues with contracted partners.

10
Minimal Threat of New Entrants
The threat of companies entering the E&P industry is minimal. The largest barrier for potential
entrants is the high capital expenditures necessary to compete in the industry. Particularly,
entrants must fund the process of finding reserves, drilling profitable wells, buying licenses,
implementing advancing technology, and transporting the product. The capital‐intensive
environment and number of established firms make the threat of entry low.
On top of capital requirements, companies in the E&P industry must attract talented and
experienced human capital. Many firms have engineers, geophysicists, and other professionals
capable of providing field expertise and knowledge. Such experts are able to approximate the
expenditure and profitability of projects.
Bargaining Power of Suppliers
Suppliers for E&P companies provide field services and equipment for exploration activities.
The large amount of service providers for E&P weakens supplier bargaining power due to
competitive market pricing. Firms which focus on providing services for secondary and tertiary
recovery companies, such as Evolution, have higher bargaining power than suppliers for
regular E&P companies. Evolution uses horizontal drills and hydraulic fracturing machines.
These structures are more expensive and difficult to maintain than regular wells. Therefore,
these specialized suppliers have the capability to negotiate prices more than suppliers of
traditional E&P companies.
Bargaining Power of Buyers
Market prices for crude oil and natural gas determine the bargaining power of buyers. This
bargaining power is low because the market is independently volatile. However, quality of raw
product gives buyers some bargaining power. Oil density and sulfur content are the
determining factors of product quality. Oil that contains more sulfur and is more dense is less
favorable. Buyers will demand lower prices for lower quality to compensate for the capital
expenditures incurred during the refining process. Based on quality, Evolution receives a
premium on its Delhi Louisiana Light Sweet oil.
ABOUT EVOLUTION
Evolution Petroleum Corporation (EPM/NYSE) is a petroleum recovery and production
company focused on extracting oil and gas resources from underdeveloped onshore sites. The
Company maintains rights and operates in underdeveloped onshore fields in Texas, Louisiana,
and Oklahoma. Evolution Petroleum is headquartered in Houston, Texas and employs eleven
full‐time staff, not including contract personnel, and outsourced service providers.

11
History
In 2003, Evolution Petroleum incorporated under the name Natural Gas Systems (NGS). The
Company went public in 2004 through a reverse merger with Reality Interactive, a high‐
technology industrial company. Reality ceased operations and merged into a wholly owned
subsidiary with NGS. The Company changed its name to Evolution Petroleum Corporation in
July 2006 to convey its business model and to distinguish it from other companies traded on
the New York Stock Exchange.
Products Offered by Evolution
Evolution implements specialized technology to recover oil and natural gas products through
tertiary enhanced oil recovery (EOR).
Enhanced Oil Recovery
Evolution Petroleum implements EOR to maximize oil production from partially depleted wells.
The Company uses CO2 flood technology that injects CO2 into a reservoir. EOR seeks to
minimize viscosity and surface tension by flooding fossil fuels to the top of wells for simpler
recovery. This form of EOR is a common and inexpensive tertiary extraction method. The
Company’s main form of EOR is its Gas Assisted Rod Pump (GARP®) technology.
Invented by an Evolution employee, GARP® is an artificial lift technology which extends the
useful life of vertical and horizontal wells. The technology reestablishes economic production
by harvesting the additional reserves at the end of a horizontal well’s lifespan and increasing
pressure in the heel of the well. GARP®’s technique combines existing well rod pumps with the
injection of C02 gas at the bottom of the well to harvest product (see Figure 3).

12
Figure 3: GARP® Diagram

Source: GARP®lift.com
The technology offers an additional 15 to 35% of recovery production and limits costs to an
average of $25 per barrel of oil equivalent (BOE). The technology is being made available
through two pricing models, risk sharing or fixed fee models. The risk sharing model reduces
capital expenditure requirements but requires a split of production profits.
During fiscal 2014, Evolution entered a commercial agreement to install GARP®® technology in
a minimum of five wells. At the end of fiscal year 2014, three installations were increasing
production. The GARP® service agreement includes direct licensing of the technology, required
proprietary tools, and assistance in installation. The Company is in discussions with multiple
industry operators to expand the business to other fields during fiscal year 2015. Upon
continued success and industry acceptance, GARP® technology may be beneficial to a large
number of firms that hold late stage horizontal and vertical wells.
Locations of Operation
The Delhi Field
The Company’s most significant asset are mineral interests in the Delhi Field (see Figure 3). The
field, located in northeastern Louisiana, has produced approximately 190 million barrels of oil
through primary and secondary recovery operations since its discovery in the mid‐1940’s. The
Company purchased the field in 2003 for $2.8 million dollars amidst minimal production
coming from the field.

13
In 2006, Evolution entered into a reversionary interest agreement with Denbury Resources,
making them the sole operator in the field. The terms of this agreement state that Evolution
would maintain a 7.4% mineral royalty interest until Denbury received revenues of $200
million. At this point in time, Evolution’s royalty would increase to 26.5% while their working
interest would increase to 23.9%. This payout was anticipated to occur at an earlier point;
however, an environmental event in the well and subsequent lawsuit between the companies
have delayed the activation to late 2014.
Considering the revenue significance of this asset, the Company plans to further develop the
Delhi Field (see Figure 4). Evolution is installing a processing plant that recycles gas to recover
methane and natural gas liquids (NGLs). Evolution also has plans to develop the eastern half of
the Delhi Field. With a $47 million investment, the Company expects to increase barrel per day
production.
Figure 4: Delhi Field Expansion
Source: Independent Petroleum Association of America Oil & Gas Investment Symposium
Giddings Field
Evolution installed GARP® technology in wells within the Giddings Field with active success. The
Company installed the two wells in 2014 and will receive 25% of the profits from those wells.
There is a substantial portfolio of potential candidates for GARP® who may benefit from the
innovative technology and these two prospective wells are primary indicators of its potential.

14
Figure 5: Map of Evolution’s Properties
Source: Evolution Petroleum Investor Presentation
Strategy
Evolution maximizes the extraction of petroleum resources by applying innovative engineering
strategies and by generating free cash flow from the Delhi Field, its one foundational asset. The
staff is fully aligned with shareholders and hold a 27.85% financial stake in the Company.
Evolution continues to payout the earnings from the Delhi Field and seeks to build value per
share, demonstrated by a ten cent dividend yield for the past four quarters. Although currently
an insignificant percentage of revenues, the Company expects to expand GARP® into the
leading tertiary recovery service of the oil and gas industry (see Figure 5). Management’s
ultimate goal is to spin the technology off into a separate company.
Competitors
Evolution Petroleum’s main competition are independent on‐shore Exploration and Production
(E&P) companies with similar market capitalizations. The Company’s current direct competitors
are Approach Resources, Denbury Resources, Royale Energy, Saratoga Resources, and Yuma
Energy. A current focus among Evolution’s peers is to maximize the withdrawal of profitable oil
and gas reserves rather than exploring for new opportunities.

15
Latest Developments
GARP® Gains Recognition
A major development in the E&P industry, specifically related to Evolution, is the
implementation of GARP® technology in wells. This year, GARP® received the 2014 Exploration
and Production Special Meritorius Award for Engineering Innovation. The patented technology
was recognized as an innovative, sustainable, and practical solution to improving the efficiency
and profitability of tertiary recovery wells.
Delhi Leak and Litigation
In June 2013, Denbury resources discovered an underground fluid release in the Delhi Field.
Denbury suspended operational activities in the leak area, lowering pressure and oil
production in wells within affected areas. This impacted the predicted timing of the additional
royalty payout outlined in the reversionary agreement. Denbury disclosed a gross $120 million
of additional costs before insurance reimbursement. The combination of effects lowered
Evolution’s present value of proved reserves, subsequently increasing probable reserves. As a
result, the working interest change was delayed into late 2014. Evolution is currently entering
the discovery phases of a lawsuit against Denbury to enforce the agreement made in 2006.
October 2014 Oil Volatility
Current market conditions directly impact Evolution’s stock price because oil is the firm’s main
generator of revenue and the price of oil recently declined to four‐year lows. This decrease in
price was due to several factors, including Saudi Arabian producers selling product at a
discount. On October 27th, 2014, Goldman Sachs forecasted oil prices would fall further to $70
in 2015. With the value of oil products uncertain, Evolution’s market price dropped nearly 20%
within a six‐week span.
PEER ANALYSIS
Evolution Petroleum’s business strategy is unique within the upstream industry as the
Company solely focuses on production. Because Evolution only invests in previously developed
oil wells, the Company does not participate in speculative projects. The selection of peer
companies within the upstream sector shown in Table 2 is based on a combination of factors
including: market capitalization, business operations, geographic location, and petroleum
products.

16
Table 2: Peer Comparison
Company Ticker
Market
Capitalization
P/E P/BV
EV/
EBITDA
D/E ROE
Div.
Yield
Proved
Reserves
(MBOE)
Evolution
Petroleum
EPM 299.40MM 101.44 1.591 40.99 0% 6.7% 4.38% 13,289
Approach
Resources
AREX 549.20MM 22.6 1.65 7.07 35.19% 10.5% N/A 114,700
Denbury
Resources
DNR 5,110 MM 26.18 .98 8.58 63.02% 3.77% 1.7% 468,300
Royale Energy ROYL 43.44M 41.64 134.67 N/A 178.9% 4.3% N/A 652,371
Saratoga
Resources
SARA 32.85MM 0.23 1.591 7.62 62.06% 5.48% N/A 17,200
Yuma Energy YUMA 301.28MM 171.67 2.16 N/A 0% 1.45% N/A 449
Peer Average 1,207MM 52.46 28.21 7.76 68% 5.1% 1.7% 250,604
Source: Bloomberg October 2014
Evolution Petroleum has a price to earnings ratio of 104.44x and a return on equity of 6.7%,
the second highest among its peers in both categories. The high price to earnings (P/E) ratio is
testament to investor’s beliefs in the Company’s growth prospects. Evolution also has the
highest enterprise value to earnings before interest, taxes, depreciation, and amortization
(EBITDA) ratio and the highest dividend yield among its peers, 40.99x and 4.38%, respectively.
The majority of Evolution’s peers carry debt with an average debt‐to‐equity ratio of 68%, but
Evolution, like its peer Yuma, carries no debt.
Approach Resources Inc. (AREX/NASDAQ)
Approach Resources is a small cap energy company from Fort Worth, Texas. The company
engages in the acquisition, exploration, development, and production of unconventional oil
and gas reserves in west and east Texas. Similar to Evolution, Approach focuses on low‐cost,
unconventional techniques, which reduces risks and improves margins. With a market
capitalization of $549.18 million, Approach is approximately double the size of Evolution.
Unlike Evolution, Approach continues to explore by drilling 16 new wells during the second
fiscal quarter of 2014. Approach operates 741 producing wells.
Denbury Resources Inc. (DNR/NYSE)
Denbury Resources Inc. is an oil and natural gas company headquartered in Plano, Texas. The
firm operates in two areas: the Rocky Mountains and the Gulf Coast. In relation to Evolution,
Denbury is both a direct competitor and contracted operator. Similar to Evolution, Denbury
specializes in Enhanced Oil Recovery (EOR), which is a form of tertiary recovery. Furthermore,
EOR uses CO2 technology to extract undeveloped petroleum reserves. Denbury and Evolution
have a joint venture in the Delhi Field, Evolution’s main producing field.

17
Although Denbury and Evolution operate similarly, Denbury operates on a larger scale with a
market capitalization of $5.11 billion. On December 31, 2013, proved oil and natural gas
reserves were 468 million barrels of oil equivalent (MMBOE).
Royale Energy, Inc. (ROYL/NYSE)
Royale Energy, Inc. is an oil and natural gas producer headquartered in San Diego, California.
Compared to Evolution Petroleum, Royale has half as many outstanding shares with 14.9
million shares and one‐sixth the market capitalization at $38.85 million. At the end of 2013,
Royale had 19 full‐time employees. The Company engages in three lines of business: drilling of
exploratory wells, acquiring lease interests and proved reserves, and producing hydrocarbon
products for distribution. The company mainly focuses on primary and secondary recovery of
oil and natural gas. Operations are predominantly in Northern California but the Company also
pursues lease interests in Utah, Louisiana, Texas, Oklahoma, and Alaska. The company has
652,371 MMBOE in proved reserves.
Saratoga Resources Inc. (SARA/NYSE)
Saratoga Resources is an oil and natural gas company engaged in the acquisition, development,
exploitation, and production of natural gas and crude oil properties in southern Louisiana and
the Gulf of Mexico shelf. The Houston‐based company has a total 52,103 acres under leases
and engages in numerous low‐risk opportunities. The company has 86 total producing wells
but will increase production with a recent purchase of 20,000 acres in the Central Gulf of
Mexico.
Yuma Energy Inc. (YUMA/NYSE)
Yuma Energy is an oil and gas company headquartered in Houston, Texas with 27 employees.
Yuma focuses on exploration and development of unconventional and conventional oil and
gas, targeting the gulf coast and California. Yuma recently finalized a merger with Pyramid Oil
Company increasing projected cash flows and production. Unlike Evolution, Yuma uses 3‐D
seismic surveys to identify high‐impact, deep‐onshore prospects located beneath known
producing trends. This method classifies all of Yuma’s production as primary recovery. Yuma
has developing assets in the Bakken in North Dakota, an unconventional liquids rich resource
play.
MANAGEMENT PERFORMANCE AND BACKGROUND
Evolution Petroleum’s skilled management team has an average of 25 years’ experience in the
industry, specifically in petroleum engineering and energy financial management.

18
Management’s conservative style is demonstrated by the firm’s zero debt capital structure and
the Company’s commitment to projects with proven profitability. Evolution employees own
27.85% of shares outstanding in the Company. Evolution’s management are invested in the
Company’s future and are aligned with the interests of shareholders.
Return on Invested Capital
Return on Invested Capital (ROIC) is a measurement of how well a company uses capital to
generate returns. A lower ROIC means a company is not efficiently using its capital to generate
returns while a higher multiple shows a company is more profitable with its capital. When
analyzing ROIC, capital structure must be considered since a company’s financing can
significantly alter ROIC figures.
ROIC is often an ideal ratio for analyzing oil and gas companies that invest large amounts of
capital to fund new drilling efforts. Unlike its competitors, Evolution does not participate in
new drilling efforts. Instead, Evolution enters partnerships to minimize capital expenditures.
Thus, the Company’s ROIC is inflated. Table 3 compares Evolution’s ROIC to the ROIC of its
peers from years 2011 to 2013.
Table 3: Return On Invested Capital
Company 2013 ROIC 2012 ROIC 2011 ROIC
Evolution Petroleum 13.15% 12.85% (.74)%
Approach Resources 9.58% 1.51% 2.24%
Denbury Resources 6.06% 8.37% 9.52%
Royale Energy 274.65% (191.60)% (32.27)%
Saratoga Resources (5.80)% 4.08% 22.37%
Yuma Energy 1.45% 7.56% 11.72%
Peer Average 57.19% (42.90)% 2.72%
Source: Thomson One October 2014
Robert Herlin
Chairman of the Board, Chief Executive Officer (59)
Robert Herlin has served as Chief Executive Officer of Evolution Petroleum since 2003 and as
Chairman of the Board since 2010. With over 30 years in the petroleum industry, Mr. Herlin
has engineering, energy, and finance experience. He oversees all financial, strategic, and
operational activities. Herlin obtained his Masters of Business Administration (MBA) from
Harvard University after obtaining Bachelor of Science (BS) and Master of Engineering (ME)
degrees in chemical engineering from Rice University.

19
Randall Keys
President, Chief Accounting Officer, Chief Financial Officer (54)
Randall Keys has been with Evolution since January 2014 and became President in September
2014. Mr. Keys has 28 years of experience in financial management of small‐cap public
petroleum companies. He directs daily operations of the Company and manages marketing for
the NGS Technologies subsidiary that is commercializing the Company’s GARP® technology. He
obtained BS and ME degrees in chemical engineering from Rice University and an MBA from
Harvard University.
Daryl Mazzanti
Vice President of Operations (52)
Daryl Mazzanti joined Evolution in 2005 to administer its oil and gas field operations. Mazzanti
holds over 20 years of oil and gas operations experience and has managed operations for
several petroleum companies. Prior to Evolution, Mazzanti managed Andarko Petroleum’s U.S.
business development by overseeing operations at Andarko’s Austin Chalk site. Mazzanti takes
a leading position in Evolution’s lateral drilling and lifting by facilitating the commercialization
of GARP®. Mazzanti holds a BS degree in petroleum engineering from the University of
Oklahoma.
David Joe
Vice President, Chief Administrative Officer, Controller, Corporate Secretary (49)
David Joe became a part of Evolution in mid‐2005 to facilitate the reporting of Evolution’s
financial activity. Previously, Joe was a Client Manager for P2 Energy Solutions, providing
outsourced accounting services to the petroleum industry. Joe coordinates Evolution’s
accounting services, financial activity, and corporate audits. Joe holds over 20 years of
experience in oil and gas accounting. Joe received a Bachelor of Business Administration (BBA)
in accounting from the University of Texas at Austin and is a Certified Accredited Petroleum
Accountant.
Board of Directors
The current Evolution Petroleum board of directors holds over 100 years of combined
experience in the oil and gas industry. The five members have held leadership positions in
other petroleum firms and hold large equity stakes in the Company (see Table 4).

20
Table 4: Evolution’s Board of Directors
Board Member Board Position Professional Affiliation
Robert Herlin Chairman CEO of Evolution
Edward DiPaolo
Lead Director & Chairman of
Nominating/Governance
Senior Adviser for Duff
& Phelps Securities
Gene G. Stoever Chairman of Audit Committee
Retired Audit Partner
KPMG
William E. Dozier Chairman of Compensation Committee
Independent oil and
gas Consultant
Kelly Loyd
Member of the Compensation
Committee, Member of the Nominating
and Corporate Governance Committee
Manager at JVL
Advisors
Source: Thompson One October 12, 2014
SHAREHOLDER ANALYSIS
As of September 10, 2014, Evolution Petroleum had 32,793,414 shares outstanding.
Evolution’s shareholders are primarily value investors. Institutional investors held the majority
of Evolution stock, approximately 72%, as of October 10, 2014. Insider investors held the
remaining 27.85%.
Investor Analysis
The total number of shares held by the top‐ten investors is 17,997,139 shares outstanding, or a
54.99% equity stake in Evolution. JVL Advisors is the largest institutional holder with 10.4% of
outstanding shares. Eric McAfee, the second largest stockholder and a member of Evolution’s
board, owns 8.59% of outstanding shares.
The categorical breakdown of Evolution Petroleum owners, as of October 10, 2014, is as
follows (see Table 5): 64.41% are investment advisors, 26.84% are individual investors, and
7.70% are hedge fund managers. Table 5 shows the investment styles of the firms that own
Evolution Petroleum’s shares, with hedge funds comprising 21.1% and Growth at Reasonable
Price investors comprising 15.05%. Approximately 98% of Evolution’s investors are located in
the U.S.

21
Table 5 ‐ Investment Styles of Investors
Investment Style Investors Outstanding Shares Shares
Hedge Fund 21 21.10% 6,919,569
Growth at Reasonable Price 19 15.05% 4,935,903
Deep Value 9 11.47% 3,760,793
Core Value 15 10.58% 3,470,382
Core Growth 26 8.87% 2,910,403
Index 19 6.76% 2,215,674
Broker‐Dealer 14 1.79% 586,918
Aggressive Growth 3 0.36% 118,911
Source: Thompson One October 10, 2014
Institutional Holdings
Total institutional holdings have increased from 58% at the beginning of fiscal 2014 to 72% as
of October 2014. There have been eight self‐offs by institutional investors in the last 12
months; however, the ownership of institutional investors has increased. The largest sell offs
were 325,610 shares by Reinhart Partners and 315,633 shares by Nantahala Capital
Management. Table 6 shows the largest institutional shareholders as of March 27, 2014. JVL
Advisors is the largest institutional shareholder with 10.4% of shares outstanding. River Road
Asset Management is the second largest institutional shareholder with 5.57% of shares
outstanding.

22
Table 6 ‐ Top Institutional Holders
Top Institutional Holders Shares Outstanding Shares
JVL Advisors, L.L.C. 3,392,276 10.40%
River Road Asset Management, LLC 1,826,832 5.57%
Wellington Management, LLC 1,730,617 5.28%
Neuberger Berman Group, LLC 1,465,050 4.47%
Thomson Horstmann & Bryant, Inc. 1,024,421 3.14%
Brandywine Global Investment Management, LLC 920,762 2.82%
Kennedy Capital Management, Inc. 808,601 2.48%
Lazard Asset Management LLC 787,900 2.42%
Nantahala Capital Management, LLC 713,213 2.19%
Cortina Asset Management, LLC 626,797 1.92%
Source: Bloomberg October 10, 2014
Insider Holdings
Total insider holdings amount to 27.85% of shares outstanding as of October 10, 2014. Table 7
shows the largest insider shareholders ordered by total amount of shares. Eric McAfee is the
largest insider shareholder with 8.59% of all shares outstanding. Insider positions have
increased 2.25% over the last 12 months. The largest recent purchases by insiders were Scott
Bedford increasing his position by 400,000 shares in October of 2013, and Sterling McDonald
increasing his position by 350,175 shares in January of 2014.

23
Table 7 ‐ Top Insider Holders
Top Insider Holders Shares Outstanding Shares
McAfee, Eric A 2,816,902 8.59%
Bedford, Scott 2,369,510 7.23%
Herlin, Robert S 1,642,165 5.01%
McDonald, Sterling H 759,935 2.32%
Mazzanti, Daryl V 695,676 2.12%
Davidson, Joe 253,968 0.77%
DiPaolo, Edward 186,010 0.57%
Stoever, Gene 168,839 0.51%
Dozier, William E 111,397 0.34%
Keys, Randall D 99,394 0.30%
RISK ANALYSIS AND INVESTMENT CAVEATS
As a small Exploration and Production (E&P) company, Evolution Petroleum faces risks which
are common among companies in the oil and gas industry. The inherent operational, financial,
and regulatory risks can have significant impact on short‐term and long‐term capital
expenditures, production, cash, and revenues.
Operational Risks
Competition for Resources
E&P companies, such as Evolution, seek to grow operations by acquiring additional reserves.
The amount of production in a well decreases over its lifespan. Therefore, E&P companies
must obtain additional wells with proven reserves to grow production. Evolution faces growth
challenges since larger firms are able to allocate more capital towards expansion. Considering
Evolution’s is a small company with a capital structure of no debt, it may be challenging to
compete with firms that have more cash available.

24
Evolution’s Dependency on Key Personnel
Evolution is comprised of only nine highly‐skilled employees who contribute to the daily
functions of the corporation. Evolution’s management is responsible for facilitating deals,
guiding operations, and obtaining capital. The Company could face major operational
consequences from the loss of key personnel.
Present Risks of the Delhi Field
The Delhi Field, located in northern Louisiana, is Evolution’s most significant asset and accounts
for 90% of overall Firm production. Any unexpected issues within the Field could impact the
Firm significantly. An example of such an issue is the June 2013 fluids leak. Additionally,
Evolution’s current litigation with the Delhi Field operator could hinder future production and
disrupt the reversionary working interest agreement.
Similarly, Evolution is reliant on its operator, Denbury Resources. Because Denbury conducts all
processes in the field, Evolution does not manage the daily operations of its main source of
revenue. Considering Evolution’s lack of control and undiversified asset portfolio, the Firm is
left vulnerable.
Commodity Market Volatility
Oil and natural gas prices directly impact Evolution’s profitability. For oil and gas companies,
future revenues, cash flows, and growth rates are dependent on product prices. For E&P
companies to stay profitable, well economics must be efficient. A financially viable project
requires that extracted product values exceed production costs. In October 2014, the drop in
commodity prices directly impacted the stock price for many E&P companies. As of October 15,
2014, Evolution’s stock price had dropped by nearly 20% from the beginning of the month. E&P
companies can minimize this risk through hedging strategies. However, Evolution does not
hedge production, making the Company more vulnerable to price decreases than many of its
peers.
Minimal Customer Base
Evolution relies on product transporters to maintain established contracts. Product
transporters are midstream companies which deliver crude oil and natural gas to the
downstream portion of the business. Plains Marketing, a mid‐stream company, accounts for
90% of revenues and is Evolution’s primary customer. The continued partnership between
Plains Marketing and Evolution is important for stable future revenues.

25
Estimation of Reserves
For E&P companies, a primary concern is the calculation of crude oil and natural gas
production because production directly impacts company value. This estimation depends on
many variables, including the engineering methods, field geography, and surrounding field
performance. Consistent with industry practices, Evolution consults independent third parties
when selecting fields for operation. Forecasts from reservoir engineers are susceptible to error
and, as a result, actual production may be substantially different than projections.
Ongoing Concerns of Tertiary Recovery
Evolution acquires petroleum products through tertiary recovery. This method of recovery
harvests leftover product in partially depleted reservoirs. All E&P companies with tertiary
recovery face several uncontrollable risks, including weather conditions, changing reservoir
pressures, and other unfavorable drilling conditions. For example, the Delhi Field’s production
slowed in the summer of 2012 because of extremely high temperatures and the associated
cost of cooling the processing facility. All E&P companies face similar risks.
Uncertain Commercialization of GARP®
Evolution’s patented technology, Gas Assisted Rod Pump (GARP®), could potentially offer
extended life for many horizontal and vertical wells. The Company is attempting to
commercialize the technology. As such, Evolution has installed the technology in wells hoping
successful results will build industry reputability. However, the technology has not been
recognized as an industry‐wide form of tertiary recovery due to minimal trial runs and
uncertain results.
Regulatory Risks
Government Regulations Can Potentially Change
The political environment concerning oil and gas extraction and production is heavily
regulated. Various federal and state governments regulate Evolution’s business operations for
environmental, financial, and operational reasons. Changes in legislation could increase
operating costs, negatively impacting Evolution. Additionally, the Environmental Protection
Agency (EPA) requires E&P companies to monitor and report annual greenhouse emissions. As
such, stricter regulations and production limits could force Evolution to change its production
process.

26
EPA Regulations Provide Incentive to Innovate and Upgrade Technology
EPA policies frequently change as a result of evolving legislation. The E&P industry is heavily
regulated for the prevention of environmental damage. A recent policy change affecting E&P
companies is the requirement to reduce emissions from storage tanks, flares, and coking units.
Also, the EPA requires the active monitoring of benzene and is eliminating all emission limit
exemptions during periods of well startups, shutdowns, and malfunctions. The oil and gas
industry must continually comply with the EPA’s changing regulations and incur associated
costs.
Another regulation imposed by the EPA is for the necessary capture of volatile organic
compounds, air toxins, and methane from natural gas wells. After January 1, 2015, all
extraction companies will be required to trap and store these toxic gases. Companies will be
fined for failing to capture these gases, resulting in additional expenditures. In response to
these new requirements, Evolution has decided to construct a gas recycling plant to recover
methane, natural gas liquids (NGLs), and waterflood.
FINANCIAL RISKS
Leverage Risk Analysis
Leverage ratios measure a company’s debt in relation to its equity. These metrics show how
companies finance their operations and meet their financial obligations. Table 8 uses the debt‐
to‐equity ratio, debt ratio, and the interest coverage ratio to show the leverage comparison
between Evolution and its peer group. Companies that have a low debt‐to‐equity and debt
ratio are financed with less debt. A higher interest coverage ratio shows a company better
positioned to pay future interest payments. Evolution has a zero debt capital structure,
resulting in zero debt to equity and debt ratios. The Company’s interest coverage ratio is higher
than all of its peers because it is unlevered.

27
Table 8: Leverage Ratios Comparisons
Company Debt to Equity Ratio Debt Ratio Interest Coverage Ratio
Evolution Petroleum 0 0 98.728
Approach Resources 35.187 26.028 3.021
Denbury Resources 62.187 38.343 3.934
Royale Energy 151.192 60.189 (4.360)
Saratoga Resources 479.103 82.732 0.2796
Yuma Energy 0 0 0
Peer Average 145.53 41.46 .57
Liquidity Risk Analysis
A company’s liquidity ratio measures how quickly it can pay off its short‐term debts with its
current assets. The higher the liquidity, the greater a company’s ability to pay off its debt. In
Table 9, we use all three ratios to compare Evolution to its peer group. Evolution's liquidity
ratios surpass its peers since it is unlevered.
Table 9: Liquidity Ratios Comparisons
Company Current Ratio Quick Ratio Cash Ratio
Evolution Petroleum 8.77 8.47 7.98
Approach Resources 1.07 0.97 0.70
Denbury Resources 0.61 0.13 0.02
Royale Energy 0.66 0.57 0.43
Saratoga Resources 2.01 1.95 1.62
Yuma Energy 4.79 3.71 3.46
Peer Average 1.83 1.47 1.24

28
FINANCIAL PERFORMANCE AND PROJECTIONS
Evolution’s financial performance and projections are based on our team’s assumptions about
the volatile energy market and the Company’s future production from the Delhi Field. We
forecast Evolution’s 12‐month stock price to be $10.00. To arrive at this price, we accounted
for the recent significant drop in oil price in our energy forecast. We also assumed that
production from Delhi will remain consistent with typical tertiary well production and peak in
2023. Additionally, we accounted for an increase in revenues due to the reversionary working
interest activation in November, 2014. Lastly, considering the potential to commercialize its
Gas Assisted Rod Pump (GARP®) technology, we have forecasted a 20% increase in GARP®
revenues per year.
Commodity Prices
Our research team utilized publically available data from the NYMEX West Texas Intermediate
(WTI) futures contract prices as of October 13, 2014 combined with U.S. Energy Information
Administration (EIA) Short‐Term Outlook forecasts as of October 6, 2014, and the EIA Annual
Energy Outlook as of May 7, 2014 to derive long‐term prices of oil, natural gas, and natural gas
liquids (NGL). Using these 11‐year price curves, we forecast that the price of Evolution’s
Louisiana Light Sweet crude oil will rise from $88.28 to $131.78 in 2025. Additionally, we
forecasted that the spread between the WTI and Louisiana Light Sweet Crude will narrow to a
point where the difference is minimal by 2020. We expect natural gas prices to increase to
$6.45 by 2025 and NGL prices to increase to $46.86 by 2025.
Operating Activity
We predict that production from the Delhi Field will remain consistent with typical tertiary well
production. In 2023, we forecasted well production to peak at 730,000 barrels of oil (Bls) and
1,403,846 barrels of oil equivalent (boe). The reversionary working interest agreement with
Denbury came into effect in November 2014. The Company now receives 26.5% of operating
revenue from the well while incurring 23.9% of operating costs. Lastly, we forecasted revenues
from GARP® to increase 20% per year reaching $3.5 million in 2024.
Investing Activity
We believe Evolution’s management team will continue to take a conservative approach to
investing decisions. As such, we forecast Evolution’s cost of production to be $9 per boe at the
Delhi Field’s peak in 2023. Also, we predict investment activities in expanding GARP® will grow
alongside increasing revenues to $2.2 million for the year 2024.

29
Financing Activity
Management maintains a zero debt capital structure and our team is confident that this
conservative approach will persist into the future. We believe the Company will utilize internal
cash flows from the Delhi field to fund capital expenditures for the field as well as the
expansion of GARP®.
SITE VISIT
On October 24, 2014, our Burkenroad analyst team traveled to Evolution Petroleum’s
headquarters in Houston, Texas to meet with management. Randall Keys, Chief Financial
Officer, and David Joe, Controller, spoke with us about the Company’s restructuring of
operations, financial strategies, and near‐future goals. Mr. Keys emphasized that Evolution will
continue to payout a majority of its earnings from the Delhi field in the form of dividends.
Additionally, the Company intends on expanding Gas Assisted Rod Pump (GARP®) into the
leading tertiary recovery service of the oil and gas industry.
The recent drop in oil prices has slightly shifted the focus away from expanding projects to
harvesting current operations. This transition will contribute to GARP®’s potential as the
product enables efficient harvesting of fields. The slow‐to‐change oil and gas industry is
hesitant to fully integrate the technology. However, a prospective tipping point exists if a
Master Limited Partnership (MLP) implements GARP® on the majority of its wells. Evolution’s
management believes that many companies would integrate the technology after adoption by
an MLP. A large opportunity base for GARP® technology is the 15,000 domestic horizontal wells
drilled annually since 2010.
Management considers debt unnecessary and plans to maintain a conservative financial
structure. However, management does not hedge its product because of the cap hedging
places on profits. Given that Evolution Petroleum has no debt and limited capital expenditures,
we think that the Company can afford to remain unhedged in the long‐term.
Mr. Keys further explained that the Delhi Field and GARP® technology will remain Evolution’s
two core assets. Evolution’s break‐even price for oil production in the Delhi field is $25 per
barrel. The Company’s severance tax holiday for the Delhi field will exist until 2021,
contributing to the Company’s predominant source of revenue. Mr. Keys also discussed how
the recent drop in oil price may unearth potential availabilities of acquiring additional low risk
mineral interests; however, Evolution will likely not take advantage of such opportunities and
instead, continue turning free cash flows into increasing dividend yield.

30
We concluded our conversation by discussing the Company’s advertising techniques for
GARP®. Management has been actively attending industry tradeshows, outreaching to
prospective clients, and hosting “lunch and learns”.
Site Visit Photo

31
INDEPENDENT OUTSIDE RESEARCH
In order to complement our research on Evolution Petroleum, we spoke with exploration and
production (E&P) industry experts and analysts. The general consensus on Evolution has been
positive, though there are significant concerns related to the Company’s growth potential.
They believe that the Company’s small size, lack of oil hedge activity, and zero debt capital
structure limit its ability to grow and be more profitable.
Anas Bennisse, who covers Evolution Petroleum at Sidoti & Company, believes that Evolution’s
partnership with Denbury in the Delhi Field has contributed substantial business risk to
Evolution. Mr. Bennisse mentioned that the June 2013 Delhi fluids leak and subsequent
production decline was one of Denbury’s many undesirable well events. Due to the fluids leak,
Evolution’s total revenues decreased 20% in 2014 compared to the prior year. Evolution has
had minimal control and influence in the operations of the one well which essentially accounts
for total revenues. Still, Evolution will benefit from the activation of the reversionary working
interest agreement because management will have a much more active role in well operations.

Despite management’s shift towards Gas Assisted Rod Pump (GARP®) as its primary growth
focus, Anas classifies GARP® as a functional technology that is exclusively implemented in old
and unpredictable wells. This speculative venture has yet to prove to be a viable growth
strategy, with a slow industry adoption rate, costs upwards of $140,000, and a 50% chance of
commercial well production success.
Throughout our research we consulted SEC filings, Bloomberg, Thomson One, EDGAR filings,
Seeking Alpha, Evolution’s website, peer and competitor websites, investor presentations,
conference calls, the Energy Information Administration’s website, and other analyst reports.

32
ANOTHER WAY TO LOOK AT IT
ALTMAN Z‐SCORE
In 1968, Edward Altman, a finance professor at New York University Stern, developed a
metric called the Altman Z‐Score. This formula provides a standardized measurement used
to predict the probability that a firm will go bankrupt within the next two years. The analysis
evaluates corporate credit risk based on five financial ratios: working capital/total assets,
retained earnings/total assets, earnings before interest and taxes (EBIT)/total assets, market
value of equity/book value of total liabilities, and sales/total assets. Companies which score
less than 1.81 fall in the “distress” zone and have a high risk of bankruptcy. Scores between
1.81 and 2.99 are in the “grey” zone. An Altman Z‐Score greater than 2.99 indicates a
company is currently financially sound.
Evolution’s Z‐Score of 17.73 indicates the Company has an extremely low chance of
bankruptcy. Four of Evolution's five peers fall into the distressed range, and are in danger of
going bankrupt. Evolution's comparably high Z‐Score is attributable to its zero debt
structure.
Table 10: Z‐Score Comparison
Company Ticker Altman Z‐Score
Evolution Petroleum EPM 17.73
Yuma Energy YUMA 5.82
Approach Resources AREX 1.50
Denbury Resources DNR 1.26
Saratoga Resources SARA .32
Royale Energy ROYL (2.30)
Peer Average 1.32
Source: Bloomberg November 3, 2014

33
PETER LYNCH EARNINGS MULTIPLE VALUATION
In his best‐selling book, One Up On Wall Street, Peter Lynch writes about a powerful charting
tool which greatly simplified his investment decisions. Deemed the "Peter Lynch chart," the
graph plots the price of a stock against its "earnings line," a theoretical price equal to 15
times the company’s earnings per share.
When a stock traded well below the earnings line, he would buy. When it rose above it, he
would sell. The chart below demonstrates the earnings to price (EPS) relationship for
Evolution Petroleum over the past ten years.
At the current price of $9.14, Evolution is trading 114.25 times earnings, Peter lynch would
not invest in the company at this time.
Figure 6: Evolution’s 5‐Year Stock Price and 15 Times Multiple EPS

Source: Bloomberg November 2014

34
WWBD?
What Would Ben (Graham) Do?

Ben Graham, the father of value investing, invented a form of analysis which identifies stocks
undervalued by the market. His fundamental equity analysis requires a stock to pass eight
hurdles. The first six hurdles determine whether or not the stock is underpriced, while the
remaining two focus on potential growth of the stock. To be considered an attractive
investment to Graham, the stock must pass at least four of the eight hurdles.
Evolution Petroleum passes four of Ben Graham’s eight hurdles. The company has a dividend
yield which is higher than one half the current yield on a 10‐year Treasury note, total debt
less than book value, a current ratio higher than two, and a higher than 7% growth in
earnings over the past five years. Therefore, as shown in Figure 6, Ben Graham would
consider the possibility of investing in Evolution.
Figure 7: Ben Graham Analysis

35
Earnings per share (ttm) 0.08$ Price: 9.14$
Earnings to Price Yield 0.88%
10 Year Treasury (2X) 4.74%
P/E ratio as of 9/30/10 (64.4)
P/E ratio as of 9/30/11 170.5
P/E ratio as of 9/30/12 55.7
P/E ratio as of 9/30/13 54.4
P/E ratio as of 9/30/14 131.1
Current P/E Ratio 113.6
Dividends per share (ttm) 0.41$ Price: 9.14$
Dividend Yield 4.46%
1/2 Yield on 10 Year Treasury 1.19%
Stock Price 9.14$
Book Value per share as of 9/30/14 1.67$
150% of book Value per share as of 9/30/14 2.51$
Interest‐bearing debt as of 9/30/14 ‐$
Book value as of 9/30/14 62,075,853$
Current assets as of 9/30/14 62,075,853$
Current liabilities as of 9/30/14 11,792,070$
Current ratio as of 9/30/14 5.3
EPS for year ended 9/30/14 0.07$
EPS for year ended 9/30/10 (0.09)$
EPS for year ended 9/30/14 0.07$ ‐65%
EPS for year ended 9/30/13 0.20$ 43%
EPS for year ended 9/30/12 0.14$ 250%
EPS for year ended 9/30/11 0.04$ ‐144%
EPS for year ended 9/30/10 (0.09)$
Stock price data as of November 12, 2014
No
EVOLUTION PETROLEUM CORPORATION (EPM)
Ben Graham Analysis
Hurdle # 1: An Earnings to Price Yield of 2X the Yield on 10 Year Treasury
No
Hurdle # 2: A P/E Ratio Down to 1/2 of the Stocks Highest in 5 Yrs
No
Hurdle # 3: A Dividend Yield of 1/2 the Yield on 10 Year Treasury
Yes
Hurdle # 4: A Stock Price less than 1.5 BV
No
Hurdle # 5: Total Debt less than Book Value
Yes
Hurdle # 6: Current Ratio of Two or More
Yes
Hurdle # 7: Earnings Growth of 7% or Higher over past 5 years
Yes
Hurdle # 8: Stability in Growth of Earnings

Evolution Petroleum (EPM) BURKENROAD REPORTS (www.burkenroad.org) November 12, 2014
36
EVOLUTIONPETROLEUMCORPORATION(EPM)
AnnualandQuarterlyEarnings
Revenues:
Crudeoil
Artificallifttechnology
OtherProperties
Naturalgasliquids
2012A
13,729,147$
132,344
2,685,924
620,187
2013A
18,555,517$
375,063
1,755,821
253,167
2014A30‐SepA31‐DecE31‐MarE30‐JunE2015E30‐SepE31‐DecE31‐MarE30‐JunE2016E
16,699,604$3,868,602$9,350,014$12,195,671$12,331,178$37,745,465$13,352,607$13,352,607$13,062,333$13,207,470$52,975,018$
623,332115,856187,000187,000187,000676,855203,056203,056203,056203,056812,226
141,51020,36920,3695,0925,0925,0925,09220,369
115,1721,819,2811,779,7321,799,5065,398,5191,960,7691,960,7691,918,1431,939,4567,779,137
2015E2016E
Naturalgas
Totalrevenues
Operatingcosts
Artificiallifttechnology
794,436
17,962,038
124,703
410,352
21,349,920
390,238
93,8901,643,7981,608,0631,625,9314,877,7921,852,9001,852,9001,812,6191,832,7607,351,179
17,673,5084,004,82713,000,09315,770,46515,943,61548,719,00017,374,42517,374,42517,001,24517,187,83568,937,929
609,221197,360197,360197,360197,360789,440203,281203,281203,281203,281813,123
ProductioncostsDelhi
Productioncosts‐otherproperties1,650,2961,390,500
1,651,6111,862,8151,952,6925,467,1172,091,4262,080,8952,005,0532,058,5648,235,938
584,35288,02288,022
Productiontaxes51,90858,11060,460170,47864,27463,47460,70561,861250,314
Depreciation,depletionandamortization
Accretionofassetretirementobligations
RestructuringCharges
1,136,974
77,505
1,300,207
72,312
1,228,685369,350412,903465,704488,1731,736,129548,999546,235526,326540,3732,161,934
41,6264,6362,3522,1271,90211,0171,6791,4561,2351,0155,385
1,293,186
Generalandadministrativeexpenses6,143,2867,495,3098,388,2911,504,5931,515,8771,527,2471,538,7016,086,4181,550,2411,561,8681,573,5821,585,3846,271,075
Totaloperatingcosts
Income(loss)fromoperations
9,132,764
8,829,274
10,648,566
10,701,354
12,145,3612,163,9613,832,0104,113,3614,239,28814,348,6204,459,9004,457,2094,370,1824,450,47817,737,769
5,528,1471,840,8669,168,08311,657,10411,704,32734,370,37912,914,52512,917,21612,631,06212,737,35751,200,160
Interestexpense
Interestincome
Deferredloancostamortizationandbankfees
Netincome(loss)beforeincometaxes(ebt)
Incometaxbenefit(provision)
Netincome(loss)attributabletotheCompany
DividendsonPreferredStock
Netincome(loss)attributabletocommonshareholders
Netincome(loss)pershareofcommonstock:
Basic
Diluted
Averagesharesoutstanding:
Basic
Diluted
9,355
(5,577)
8,833,052
(3,700,922)
5,132,130
630,391
4,501,739$
0.17$
0.14$
27,784,298
31,609,929
(65,745)
22,580
10,658,189
(4,029,761)
6,628,428
674,302
5,954,126$
0.21$
0.19$
28,205,467
31,975,131
(69,092)(18,460)(16,500)(16,500)(16,500)(67,960)(16,500)(16,500)(16,500)(16,500)(66,000)
30,25612,7636,4103,3064,29726,7765,5306,8518,3559,83530,570
5,489,3111,835,1699,157,99311,643,91011,692,12434,329,19612,903,55512,907,56712,622,91712,730,69251,164,730
(1,891,998)(706,159)(3,461,721)(4,401,398)(4,419,623)(12,988,901)(4,877,544)(4,879,060)(4,771,463)(4,812,201)(19,340,268)
3,597,3131,129,0105,696,2727,242,5127,272,50121,340,2948,026,0118,028,5067,851,4557,918,49031,824,462
674,302168,576168,576168,576168,576674,304168,576168,576168,576168,576674,304
2,923,011$960,434$5,527,696$7,073,936$7,103,925$20,665,990$7,857,435$7,859,930$7,682,879$7,749,914$31,150,158$
0.09$0.03$0.17$0.22$0.22$0.63$0.24$0.24$0.24$0.24$0.95$
0.09$0.03$0.17$0.22$0.22$0.63$0.24$0.24$0.23$0.24$0.95$
30,895,83232,682,40132,574,05932,594,11132,614,29232,624,41432,634,59632,655,01932,675,50032,695,98032,706,220
32,564,06732,826,25032,724,05932,744,11132,764,29232,774,41432,784,59632,805,01932,825,50032,845,98032,856,220
SELECTEDCOMMON‐SIZEAMOUNTS
Productioncosts‐otherproperties
Productiontaxes
9.19%
0.00%
6.33%
6.51%
0.00%
6.09%
3.31%2.20%0.00%0.00%0.00%0.18%0.00%0.00%0.00%0.00%0.00%
0.00%0.00%0.40%0.37%0.38%0.35%0.37%0.37%0.36%0.36%0.36%
6.95%9.22%3.18%2.95%3.06%3.56%3.16%3.14%3.10%3.14%3.14%
Generalandadministrativeexpenses34.20%35.11%47.46%37.57%11.66%9.68%9.65%12.49%8.92%8.99%9.26%9.22%9.10%
Income(loss)fromoperations49.16%50.12%31.28%45.97%70.52%73.92%73.41%70.55%74.33%74.35%74.29%74.11%74.27%
Netincome(loss)beforeincometaxes(ebt)49.18%49.92%31.06%45.82%70.45%73.83%73.33%70.46%74.27%74.29%74.25%74.07%74.22%
Netincome(loss)attributabletocommonshareholders
YEARTOYEARCHANGE
Totalrevenues
Productioncosts‐otherproperties
Productiontaxes
Accretionofassetretirementobligations
Generalandadministrativeexpenses
Totaloperatingcosts
Income(loss)fromoperations
25.06%
467.47%
373.86%
n/a
456.96%
366.93%
351.96%
367.18%
629.45%
27.89%
18.86%
‐15.74%
n/a
14.36%
‐6.70%
22.01%
16.60%
21.20%
16.54%23.98%42.52%44.86%44.56%42.42%45.22%45.24%45.19%45.09%45.19%
‐17.22%‐13.57%195.98%263.63%269.88%175.66%333.84%33.65%7.80%7.80%41.50%
‐57.98%‐78.52%n/an/an/a‐84.94%n/an/an/an/an/a
n/an/a298.31%600.88%‐303.39%n/an/a22.28%4.47%2.32%46.83%
‐5.50%19.27%26.21%49.35%74.33%41.30%48.64%32.29%13.02%10.69%24.53%
‐42.44%‐64.14%‐81.06%‐77.92%‐71.39%‐73.53%‐63.79%‐38.07%‐41.92%‐46.65%‐51.12%
11.91%‐22.00%‐42.63%‐33.72%1.71%‐27.44%3.03%3.03%3.03%3.03%3.03%
14.06%‐18.95%‐15.79%38.06%117.88%18.14%106.10%16.32%6.24%4.98%23.62%
‐48.34%‐6.26%‐5899.10%758.70%394.94%521.73%601.55%40.89%8.36%8.83%48.97%
Other:
Production‐oil(bbls)Delhiroyalty
Production‐oil(bbls)includingDelhiroyalty
Production‐NGLs(bbls)
Production‐gas(mcf)
ProductioninequivalentunitsincludingDelhiroyaltyproduction(BOE)
Dailyproductionrate(BOE/d)
136,075
151,081
12,611
266,777
208,155
570.29
180,658
196,379
7,272
139,006
226,819
621.42
164,22437,687103,560135,646140,069408,531144,631144,519140,863142,381571,026
169,74538,543105,913138,729143,253417,816147,919147,804144,065145,617584,004
3,46059,96358,73758,788173,25262,96662,92660,95161,609247,114
26,105420,409400,016436,6651,228,663487,605466,725425,498443,7671,750,281
177,55638,543235,944264,135274,818795,844292,152288,517275,932281,1871,122,831
486.45418.952,564.612,934.843,019.982,180.403,175.573,136.063,032.223,089.973,076.25
Oil%ofproduction
NGL%ofproduction
Gas%ofproduction
72.58%
6.06%
21.36%
44.89%52.52%52.13%52.50%50.63%51.23%52.21%51.79%52.01%
25.41%22.24%21.39%21.77%21.55%21.81%22.09%21.91%22.01%
29.70%25.24%26.48%25.73%27.82%26.96%25.70%26.30%25.98%
OperatingcostperBOEincludingDelhiproduction
OperatingcostperBOEexcludingDelhiproduction22.90$30.12$
7.00$7.05$7.11$7.11$7.16$7.21$7.27$7.32$7.32$
43.83$102.77$0.23$
Depreciation,depletionandamortizationrate7.10$10.83$13.83$14.52$1.75$1.76$1.78$1.87$1.88$1.89$1.91$1.92$2.02$
Burkenroadoilpriceforecast
Burkenroadgaspriceforecast
Naturalgasliquidspriceforecast
100.37$88.28$87.91$86.08$90.34$90.27$90.34$90.67$90.70$90.71$
3.60$3.91$4.02$3.72$3.97$3.80$3.97$4.26$4.13$4.20$
32.00$30.34$30.30$30.61$31.16$31.14$31.16$31.47$31.48$31.48$

37
AnnualandQuarterlyBalanceSheets
Currentassets
Cashandcashequivalents
Certificatesofdeposit
30‐Jun‐12A
14,428,548$
250,000
30‐Jun‐13A
24,928,585$
250,000
30‐Jun‐14A30‐SepA31‐DecE31‐MarE30‐JunE30‐Jun‐15E30‐SepE31‐DecE31‐MarE30‐JunE30‐Jun‐16E
23,940,514$21,368,144$11,019,199$14,323,126$18,432,397$18,432,397$22,835,600$27,849,402$32,782,611$37,563,761$37,563,761$
2015E2016E
Oilandnaturalgassalesreceivable
Jointinterestpartnerreceivable
1,343,347
96,151
1,632,853
49,063
1,456,1461,268,1224,513,3015,415,5915,475,0515,475,0516,098,9796,031,9575,838,2425,902,3175,902,317
Incometaxreceivable92,885281,970
Otherreceivables1909181,06623,52423,52423,52423,52423,52423,52423,52423,52423,52423,524
Deferredtaxasset
Prepaidexpensesandothercurrentassets
Totalcurrentassets
Oilandnaturalgasproperties,net
Otherpropertyandequipment,net
Totalpropertyandequipment,net
Advancestojointinterestoperatingpartner
325,235
233,433
16,769,789
40,476,172
92,271
40,568,443
1,366,921
26,133
266,554
27,436,076
38,789,032
52,217
38,841,249
26,059
159,624159,624156,033152,442148,851148,851145,260141,669138,078134,488134,488
747,453632,706637,451642,232647,049647,049651,902656,791661,717666,680666,680
26,304,80323,452,12016,349,50820,556,91524,726,87224,726,87229,755,26534,703,34339,444,17244,290,76944,290,769
37,822,07037,651,45037,241,36036,778,46936,293,10836,293,10835,746,92135,203,49934,679,98534,142,42434,142,424
424,827444,942444,942444,942444,942444,942444,942444,942444,942444,942444,942
38,246,89738,096,39237,686,30237,223,41136,738,05036,738,05036,191,86335,648,44135,124,92734,587,36634,587,366
Otherassets
Totalassets
Currentliabilities
Accountspayable
JointInterestadvances
Accruedpayroll
Royaltiespayable
250,333
58,955,486$
407,570$
3,217,975
1,005,624
294,013
252,912
66,556,296$
642,018$
127,081
1,385,494
91,427
464,052527,341527,341527,341527,341527,341527,341527,341527,341527,341527,341
65,015,752$62,075,853$54,563,151$58,307,667$61,992,263$61,992,263$66,474,470$70,879,125$75,096,440$79,405,477$79,405,477$
441,722$611,547$811,188$811,347$818,399$818,399$844,604$840,915$836,344$842,964$842,964$
874,013363,811366,539369,288369,288372,058374,848377,660380,492380,492
444,933539,750545,676545,676594,646594,646581,874588,260588,260
Statetaxespayable91,967233,54844,17344,17344,17344,17344,17344,17344,17344,17344,17344,173
Othercurrentliabilities
Totalcurrentliabilities
Deferredincometaxes
71,768
5,088,917
6,205,093
153,182
2,632,750
8,418,969
2,558,004
2,999,7261,529,7331,664,1041,761,8091,777,5371,777,5371,855,4811,854,5821,840,0511,855,8891,855,889
9,897,27210,021,8759,912,7199,789,5099,660,3189,660,3189,514,9379,370,2929,230,9459,087,8609,087,860
Assetretirementobligations968,677615,551205,512209,028189,035169,094149,221149,221129,451109,78690,21370,74270,742
Deferredrent
Totalliabilities
Stockholders'equity:
70,011
12,332,698
52,865
11,720,135
35,72031,43440,00040,00040,00040,00040,00040,00040,00040,00040,000
13,138,23011,792,07011,805,85811,760,41311,627,07611,627,07611,539,87011,374,65911,201,20911,054,49211,054,492
Commonstock,parvalue$0.001
Preferredstockparvalue$0.001
Additionalpaid‐incapital
Retainedearnings(deficit)
28,670
317
29,416,914
18,058,909
29,410
317
31,813,239
24,013,035
32,61532,79732,58432,60432,62432,62432,64532,66532,68632,70632,706
317317317317317317317317317317317
34,632,37735,357,36235,333,01235,308,42935,283,84635,283,84635,259,26335,234,68035,210,09735,185,51435,185,514
17,212,21314,893,3077,391,37911,205,90415,048,40015,048,40019,642,37524,236,80328,652,13233,132,44833,132,448
Treasurystock
Totalstockholders'equity
Totalliabilitiesandstockholders'equity
(882,022)
46,622,788
58,955,486$
(1,019,840)
54,836,161
66,556,296$
51,877,52250,283,78342,757,29246,547,25450,365,18750,365,18754,934,60059,504,46663,895,23268,350,98568,350,985
65,015,752$62,075,853$54,563,151$58,307,667$61,992,263$61,992,263$66,474,470$70,879,125$75,096,440$79,405,477$79,405,477$
SELECTEDCOMMONSIZEBALANCESHEETAMOUNTS(%ofrevenues)
Receivables
Oilandnaturalgassalesreceivable7.48%7.65%8.24%135.23%34.72%34.34%34.34%11.24%35.10%34.72%34.34%34.34%8.56%
Prepaidexpensesandothercurrentassets1.30%1.25%4.23%15.80%4.90%4.07%4.06%1.33%3.75%3.78%3.89%3.88%0.97%
Oilandnaturalgasproperties,net225.34%181.68%214.00%940.15%286.47%233.21%227.63%74.49%205.74%202.62%203.98%198.64%49.53%
Accountspayable
Accruedpayroll
Royaltiespayable
2.27%
5.60%
1.64%
3.01%
6.49%
0.43%
2.50%15.27%6.24%5.14%5.13%1.68%4.86%4.84%4.92%4.90%1.22%
0.00%21.82%2.80%2.32%2.32%0.76%2.14%2.16%2.22%2.21%0.55%
0.00%0.00%3.42%3.42%3.42%1.12%3.42%3.42%3.42%3.42%0.85%
Assetretirementobligations5.39%2.88%1.16%5.22%1.45%1.07%0.94%0.31%0.75%0.63%0.53%0.41%0.10%
Deferredrent0.39%0.25%0.20%0.78%0.31%0.25%0.25%0.08%0.23%0.23%0.24%0.23%0.06%
SELECTEDCOMMONSIZEBALANCESHEETAMOUNTS(%oftotalassets)
Totalcurrentassets28.44%41.22%40.46%37.78%29.96%35.26%39.89%39.89%44.76%48.96%52.52%55.78%55.78%
Totalpropertyandequipment,net
Otherassets
68.81%
0.42%
58.36%
0.38%
58.83%61.37%69.07%63.84%59.26%59.26%54.44%50.29%46.77%43.56%43.56%
0.71%0.85%0.97%0.90%0.85%0.85%0.79%0.74%0.70%0.66%0.66%
Totalcurrentliabilities
Deferredincometaxes
Assetretirementobligations
8.63%
10.53%
1.64%
3.96%
12.65%
0.92%
4.61%2.46%3.05%3.02%2.87%2.87%2.79%2.62%2.45%2.34%2.34%
15.22%16.14%18.17%16.79%15.58%15.58%14.31%13.22%12.29%11.44%11.44%
0.32%0.34%0.35%0.29%0.24%0.24%0.19%0.15%0.12%0.09%0.09%
Deferredrent
Totalstockholders'equity
0.12%
79.08%
0.08%
82.39%
0.05%0.05%0.07%0.07%0.06%0.06%0.06%0.06%0.05%0.05%0.05%
79.79%81.00%78.36%79.83%81.24%81.24%82.64%83.95%85.08%86.08%86.08%

38
AnnualandQuarterlyStatementsofCashFlows
Inthousands
Cashflowsfromoperatingactivities:
Netincome(loss)
Adjustments:
2012A
5,132,130$
2013A
6,628,428$
3,597,313$1,129,010$5,696,272$7,242,512$7,272,501$21,340,294$8,026,011$8,028,506$7,851,455$7,918,490$31,824,462$
2016E2015E
Stock‐basedcompensation
Stock‐basedcompensationrelatedtorestructuring
1,150,454
1,475,995
1,341,055
1,531,745
1,272,778381,509412,903465,704488,1731,748,288548,999546,235526,326540,3732,161,934
1,352,322243,337350,000350,000350,0001,293,337350,000350,000350,000350,0001,400,000
376,365
Accretionofassetretirementobligations77,50572,31241,6264,6362,3522,1271,90211,0171,6791,4561,2351,0155,385
Settlementofassetretirementobligations(61,936)(90,531)(315,952)(226,008)(22,345)(22,067)(21,776)(292,196)(21,448)(21,122)(20,808)(20,485)(83,864)
Deferredrent
Deferredincometaxes
(15,401)
2,549,592
(17,146)
2,512,978
(17,145)(4,286)8,5664,280
1,344,812124,603(105,565)(119,619)(125,600)(226,181)(141,790)(141,055)(135,755)(139,494)(558,095)
Changesinassetsandliabilities:
Receivablesfromoilandnaturalgassales
Receivablesfromincometaxesandother
Duefromjointinterest
216,057
(64,194)
139,705
(289,506)
(189,813)
(9,947)
176,707188,024(3,245,179)(902,291)(59,460)(4,018,905)(623,928)67,022193,715(64,075)(427,266)
281,822(22,458)(22,458)
49,063
Prepaidexpensesandothercurrentassets
Accountspayableandaccruedexpenses
Royaltiespayable
(165,581)
379,873
(448,638)
(33,121)
538,057
(202,586)
(480,899)114,747(4,745)(4,781)(4,817)100,404(4,853)(4,889)(4,926)(4,963)(19,631)
663,645(1,345,875)(310,562)2,8889,801(1,643,747)28,974(899)(1,759)9,45235,769
444,93394,8175,926545,67648,970(12,772)6,38642,584
Incometaxespayable
Netcashprovidedby(usedin)operatingactivities
Cashflowfrominvestingactivities:
NetproceedsfromthesaleoftheTullosAssets
Developmentofoilandnaturalgasproperties
Acquisitionsofoilandnaturalgasproperties
Proceedsfromotherassetsales
Capitalexpendituresforotherequipment
Advancestojointventureoperatingpartner
9,845
10,375,406
799,610
(3,291,921)
(3,768,162)
(61,176)
(224,206)
141,581
11,933,506
(4,163,080)
(755,194)
3,479,976
(233,548)44,17344,173
8,108,909631,4123,226,6307,109,2897,916,65218,883,9838,212,6148,825,2558,746,7108,596,69934,381,278
(966,931)(2,813)(2,813)(2,813)(8,438)(2,813)(2,813)(2,813)(2,813)(11,250)
(59,315)(1,136)(1,136)
542,347
(312,890)(156,798)(156,798)
Maturitiesofcertificatesofdeposit
Otherassets
Netcashusedininvestingactivities
Cashflowfromfinancingactivities:
(35,056)
(6,580,911)
(32,160)
(1,470,458)
250,000
(202,017)(55,046)(55,046)
(748,806)(212,980)(2,813)(2,813)(2,813)(221,418)(2,813)(2,813)(2,813)(2,813)(11,250)
Proceedsfromissuanceofcommonstock
Proceedsfromissuanceofrestrictedstock
Proceedsfromtheexerciseofstockoptions
Proceedsfromissuanceofpreferredstock,net
Purchaseoftreasurystock
6,930,535
32
70,719
(137,818)
3,252,80125,43725,43725,43776,31225,43725,43725,43725,437101,749
(1,655,251)(55,452)(400,000)(400,000)(400,000)(1,255,452)(400,000)(400,000)(400,000)(400,000)(1,600,000)
Windfalltaxbenefit
Commonstockdividendspaid
Preferredstockdividendspaid
Deferredloancosts
Taxbenefitsrelatedtostock‐basedcompenstation
Other
Netcashprovidedby(usedin)financingactivities
Netincrease(decrease)incashandcashequivalents
Cashandcashequivalentsatbeginningofperiod
Cashandcashequivalentsatendofperiod
249,728
(630,391)
(163,257)
6,386,615
10,181,110
4,247,438
14,428,548
794,569
(674,302)
(16,211)
36,989
10,500,037
14,428,548
24,928,585
(9,723,833)(3,279,341)(13,029,624)(3,259,411)(3,261,429)(22,829,805)(3,263,460)(3,265,502)(3,267,550)(3,269,598)(13,066,110)
(674,302)(168,575)(168,576)(168,576)(168,576)(674,303)(168,576)(168,576)(168,576)(168,576)(674,304)
(63,535)(24,716)(24,716)
509,096537,282537,282
6,850
(8,348,174)(2,990,802)(13,572,762)(3,802,550)(3,804,568)(24,170,682)(3,806,598)(3,808,641)(3,810,689)(3,812,737)(15,238,664)
(988,071)(2,572,370)(10,348,945)3,303,9274,109,271(5,508,117)4,403,2035,013,8014,933,2094,781,15019,131,364
24,928,58523,940,51421,368,14411,019,19914,323,12623,940,51418,432,39722,835,60027,849,40232,782,61118,432,397
23,940,51421,368,14411,019,19914,323,12618,432,39718,432,39722,835,60027,849,40232,782,61137,563,76137,563,761
Operatingcashflowpershare
excludingworkingcapitalchanges
Operatingcashflowpershare
includingworkingcapitalchanges
0.33$
0.33$
0.36$
0.37$
0.24$0.06$0.09$0.21$0.24$0.61$0.25$0.27$0.27$0.26$1.04$
0.25$0.02$0.10$0.22$0.24$0.58$0.25$0.27$0.27$0.26$1.05$

39
EVOLUTIONPETROLEUMCORPORATION
Ratios
Fortheperiodended
ProductivityRatios
Receivablesturnover
(EPM)
2012A
13.37
2013A
14.35
11.441.172.623.182.9314.063.002.862.862.9312.12
2016E2015E
Workingcapitalturnover1.541.170.730.180.710.940.762.110.680.570.480.432.11
Netfixedassetturnover0.440.540.460.110.350.430.441.310.480.490.490.501.96
Netfixedassetturnover(production)0.010.010.000.000.010.010.010.020.010.010.010.010.03
Totalassetturnover0.300.340.270.060.220.280.270.770.270.250.230.220.98
#ofdaysSalesinaccountsreceivable272830122323232413232323231
#ofdaysCostsinoperatingpayables47474784686868476868686847
LiquidityMeasures
Currentratio3.3010.428.7715.339.8211.6713.9113.9116.0418.7121.4423.8623.86
Quickratio3.1510.188.4717.529.3511.2213.4613.4615.6118.2821.0023.4323.43
Cashratio3.1010.098.4717.529.3511.2213.4613.4615.6118.2821.0023.4323.43
Cashflowfromoperationsratio2.044.532.700.411.944.044.4510.624.434.764.754.6318.53
Workingcapital11,680,87224,803,32623,305,07721,922,38714,685,40318,795,10622,949,33522,949,33527,899,78432,848,76137,604,12142,434,88042,434,880
FinancialRisk(Leverage)Ratios
Totaldebt/equityratio0.260.210.250.230.280.250.230.230.210.190.180.160.16
TotalLTdebt/equityratio0.160.170.200.200.240.210.200.200.180.160.150.130.13
Totaldebtratio0.210.180.200.190.220.200.190.190.170.160.150.140.14
Profitability/ValuationMeasures
Operatingprofitmargin49.16%50.12%31.28%45.97%70.52%73.92%73.41%70.55%74.33%74.35%74.29%74.11%74.27%
Returnonassets7.64%9.49%4.44%1.51%9.48%12.53%11.81%32.54%12.23%11.44%10.53%10.03%44.06%
Returnonequity9.66%11.74%5.48%1.88%11.88%15.84%14.66%40.43%14.92%13.74%12.45%11.72%52.48%
EBITDAmargin55.49%56.21%38.23%55.19%73.70%76.87%76.47%74.11%77.49%77.49%77.39%77.25%77.41%
EBITDA/Assets16.90%19.12%10.27%3.48%16.43%21.48%20.27%56.86%20.96%19.60%18.03%17.19%75.48%

THIS PAGE LEFT INTENTIONALLY BLANK

BURKENROAD REPORTS RATING SYSTEM
MARKET OUTPERFORM: This rating indicates that we believe forces are in place that would enable this
company's stock to produce returns in excess of the stock market averages over the next 12 months.
MARKET PERFORM: This rating indicates that we believe the investment returns from this company's
stock will be in line with those produced by the stock market averages over the next 12 months.
MARKET UNDERPERFORM: This rating indicates that while this investment may have positive attributes,
we believe an investment in this company will produce subpar returns over the next 12 months.

BURKENROAD REPORTS CALCULATIONS
 CPFS is calculated using operating cash flows excluding working capital changes.
 All amounts are as of the date of the report as reported by Bloomberg or Yahoo Finance unless
otherwise noted. Betas are collected from Bloomberg.
 Enterprise value is based on the equity market cap as of the report date, adjusted for long‐
term debt, cash, & short‐term investments reported on the most recent quarterly report date.
 12‐month Stock Performance is calculated using an ending price as of the report date.
The stock performance includes the 12‐month dividend yield.

2014‐2015 COVERAGE UNIVERSE
Amerisafe Inc. (AMSF)
Bristow Group Inc. (BRS)
The First Bancshares (FBMS)
CalIon Petroleum Company (CPE)
Cal‐Maine Foods Inc. (CALM)
Carbo Ceramics Inc. (CRR)
Cash America International Inc. (CSH)
Conn's Inc. (CONN)
Crown Crafts Inc. (CRWS)
Cyberonics Incorporated (CYBX)
Denbury Resources Inc. (DNR)
EastGroup Properties Inc. (EGP)
Era Group Inc. (ERA)
Evolution Petroleum Corp. (EPM)
Globalstar (GSAT)
Gulf Island Fabrication Inc. (GIFI)
Hibbett Sports (HIBB)
Hornbeck Offshore Services Inc. (HOS)
IBERIABANK Corp. (IBKC)
ION Geophysical Corp. (IO)
Key Energy Services (KEG)
Marine Products Corp. (MPX)
MidSouth Bancorp Inc. (MSL)
Newpark Resources Inc. (NR)
PetroQuest Energy Inc. (PQ)
Popeyes Louisiana Kitchen (PLKI)
Pool Corporation (POOL)
Powell Industries Inc. (POWL)
Rollins Incorporated (ROL)
RPC Incorporated (RES)
Ruth’s Hospitality Group Inc. (RUTH)
Sanderson Farms Inc. (SAFM)
SEACOR Holdings Inc. (CKH)
Sharps Compliance Inc. (SMED)
Stone Energy Corp. (SGY)
Sunoco LP (SUN)
Superior Energy Services Inc. (SPN)
Team Incorporated (TISI)
Vaalco Energy Inc. (EGY)
Willbros Group Inc. (WG)

PETER RICCHIUTI
Director of Research
Founder of Burkenroad
Reports
Peter.Ricchiuti@tulane.edu

ANTHONY WOOD
Senior Director of Accounting
Awood11@tulane.edu

JERRY DICOLO
DAVID DOWTY
ELLIOTT EDWARDS
Associate Directors of Research

BURKENROAD REPORTS
Tulane University
New Orleans, LA 70118‐5669
(504) 862‐8489
(504) 865‐5430 Fax

Evolution Petroleum Burkenroad Report

Evolution Petroleum Burkenroad Report

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (9)

Similar to Evolution Petroleum Burkenroad Report

Similar to Evolution Petroleum Burkenroad Report (20)

Evolution Petroleum Burkenroad Report