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Evolution Petroleum Corporation, Inc.
EPM recently inked a deal to acquire oil and gas properties from Enduro Resource Partners LLC, in a bid to progress toward its long-term goal for diversifying its asset base. The deal valued at $27.5 million is subject to satisfactory closing conditions and the outcome of Enduro’s Chapter 11 process. Notably a couple of days ago, the Dallas-based energy explorer, Enduro filed voluntary petitions under the Chapter 11 proceedings to ensure smooth facilitation of asset divestitures.
Per the deal, the acquired assets are mainly located in two key regions: the prolific Permian Basin that includes 88% of Enduro’s total estimated equivalent reserves; and East Texas & North Louisiana, accounting for the remaining12% of its reserves. The assets meet Evolution Petroleum’s criteria to buy properties with long reserve life and a favorable reserve-to-production ratio, along with capability to generate top-tier returns with minimal risk.
The small-cap upstream player, Evolution Petroleum plans to fund the transaction via cash. Notably as of Mar 31, the company had $27.2 million of cash balance with no debt outstanding. Moreover this February, Evolution increased its borrowing limit and currently has $40 million credit facility available.
Banking on the improving energy landscape and rebounding commodity prices, along with its strong financials, Evolution Petroleum now remains focused on ramping up its production activities and entering into strategic acquisitions to tap on the long-term growth opportunities.
On May 8, Evolution Petroleum delivered improved year-over-year fiscal third-quarter 2018 earnings and revenues on higher realized prices. The company, which remains committed toward shareholders’ returns, paid the 18th consecutive quarterly dividend in the last reported quarter. Strong cash flows, continued buildup of working capital and solid liquidity metrics are likely to keep the company’s dividend streak alive in the coming quarters as well.
In a separate release, Evolution Petroleum also announced the retirement of its president and CEO, Randy Keys, effective May 31, 2018. Robert Herlin will take the position of Executive Chairman and serve as the interim CEO till the company zeros in on a new president.
Zacks Rank and Key Picks
Evolution Petroleum currently carries a Zacks Rank #3 (Hold).
Evolution Petroleum Corporation, Inc. Price
Evolution Petroleum Corporation, Inc. Price | Evolution Petroleum Corporation, Inc. Quote
Some better-ranked players in the energy space include Bonanza Creek Energy, Inc. BCEI, Eclipse Resources Corporation ECR and Geopark Ltd. GPRK, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bonanza Creek delivered an average positive earnings surprise of 215.36% in the last four quarters.
Eclipse Resources delivered an average positive earnings surprise of 133.33% in the trailing four quarters.
Geopark’s 2018 earnings are expected to witness year-over-year growth of 745.516%.
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Bonanza Creek Energy, Inc. (BCEI) : Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report
Geopark Ltd (GPRK) : Free Stock Analysis Report
Eclipse Resources Corporation (ECR) : Free Stock Analysis Report
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