Evolution Petroleum Corporation (AMEX:EPM) Q2 2023 Earnings Call Transcript

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Ryan Stash: So yes, a couple of things, right? The way that we market our gas, we’re of operators that we sell probably the majority of it on what they call inside FERC. If you’re familiar with that, sort of pricing. So a lot of the pricing gets set actually at the beginning of the month. But it’s — unless you subscribe to the publication or you have Bloomberg kind of hard to find that pricing necessarily. A lot of it does sold at that. The remainder is sold on a daily basis. So you’re going to take the average of the month that we’re going to sell over the whole month, and that portion of it, less than half is sold on a daily basis. So it’s a little bit as to the price. So in your example, if you had a run-up in prices at the end of December, we would see some of the benefit that in December for the daily pricing but not as much from the — what we call the baseload volume we sold.

But again, in January, with the run up right, obviously, that would benefit us in January from the month pricing, if that makes sense.

Donovan Schafer: Okay. Yes, that’s interesting. And then the last is just I was feeling need to kind of check in on the conventional assets, Delhi, Jonah and Hamilton. When you’re in a sort of sustained higher price environment, I know gas has come down a lot, but a lot of times, the operators will sort of circle back around and think or ask themselves, can we turn this up somehow to another level or another phase or anything like that. And so I know there’s the heat exchange project at Delhi, but just have there been any sort of incremental conversations or incremental interest in doing other types of additional phases or investments or things in those fields, maybe not a decision yet, but just increased interest in like, hey, we might want to do that.

Kelly Loyd: Let’s see. So that’s a really good question. I’m thinking one of the — I had an answer in mind, but it’s not really a choice we made in the , the pipeline coming on has really been helpful with natural gas and NGL sales. And this is — we’re just starting to see the benefit of that. I mean it hadn’t really been on the whole time we’ve owned it. So that’s not really a CapEx just it was down, now it’s not. So we’ll see some benefit there. Hamilton Dome, look, Merit has done a great job of adjusting their production — injection rates and going from there, and they’ve been able to keep that pretty flat. So it’s not just sort of one thing. Let’s do it. It’s constantly adjusting and moving and tending to things. So it’s kind of never ending.

But I think we’ve seen really good benefits from that. In Delhi, yes, I mean, Here’s — the biggest thing at Delhi that we’re pushing for is getting 5 back on, right? So that’s one we think, economically, it for sure is very good economic project that Merits being on the books. So that would be the big impact, honestly. but a lot of barrels if you can side in.

Operator: And ladies and gentlemen, at this time, and showing no additional questions, I’d like to turn the conference call back over to Kelly Lloyd for any closing remarks.

Kelly Loyd: Great. Thank you. Thanks again to everyone for taking the time to listen and participate in today’s call. As always, please contact us if you have any additional questions. We appreciate your continued support and look forward to updating you on our ongoing efforts when we report our third quarter results in May. Have a good day.

Operator: Ladies and gentlemen, that does conclude today’s conference call. We do thank you for joining. You may now disconnect your lines.

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