HOUSTON, TX – May 12, 2026 – Evolution Petroleum Corporation announced a challenging fiscal third quarter, posting a significant net loss amid volatile energy markets and operational setbacks. However, the company underscored its confidence in its long-term strategy by declaring its 51st consecutive quarterly cash dividend, signaling a commitment to shareholder returns while actively reshaping its asset portfolio for future growth.

The Houston-based energy firm reported a net loss of $8.9 million, or ($0.26) per share, for the quarter ended March 31, 2026. The results stand in stark contrast to the $2.2 million net loss from the same period last year and were heavily influenced by a combination of unfavorable market conditions, one-time adjustments, and hedging effects.

A Quarter of Financial Headwinds

Evolution’s financial performance was battered by a perfect storm of external and internal pressures. Total revenues fell 11% year-over-year to $20.2 million, primarily driven by an 11% drop in average realized commodity prices. The company’s Adjusted EBITDA, a key measure of operational profitability, saw a dramatic 58% decline to $3.1 million from $7.4 million in the prior-year quarter.

A significant factor was the turbulent natural gas market. The quarter began with severe cold snaps, including Winter Storm Fern in January, which caused price spikes but also production freeze-offs. This was followed by a rapid price decline as milder weather returned in February and March. Evolution was particularly exposed at its Jonah Field in Wyoming, where a historically warm winter on the West Coast suppressed regional demand, causing natural gas field differentials to plummet by an average of $1.96 per Mcf compared to the previous year. This single factor reduced the company’s average realized price by approximately $3.39 per barrel of oil equivalent (BOE).

Compounding the market issues was a one-time prior-period adjustment of $1.2 million at the company’s Delhi Field in Louisiana. The charge stemmed from a new marketing contract entered into by the field’s operator in late 2024, the financial impact of which was not communicated to Evolution until the recent quarter. The company stated it is reviewing its options regarding the matter. Furthermore, realized losses on derivative contracts used for hedging shaved another $2.2 million from the bottom line, while unrealized losses on future hedges were the primary driver behind the reported GAAP net loss.

Operational Resilience and Future Catalysts

Despite the financial figures, Evolution’s underlying production remained resilient. Average daily output held steady at 6,700 BOEPD, a slight increase from the 6,667 BOEPD in the prior-year quarter. Contributions from recent acquisitions in Oklahoma and Texas successfully offset production downtime caused by severe winter storms and unexpected equipment failures.

Operational challenges were widespread during the quarter. The January ice storms caused shutdowns and power outages across multiple fields, including the Barnett Shale, Williston Basin, and Delhi Field, resulting in a temporary loss of over 300 BOEPD. At Delhi, a CO₂ recycle compressor remained offline for 40 days, further hampering production. However, management confirmed these issues have since been resolved, with production substantially restored.

Looking ahead, the company is focused on proactive optimization projects. “As these have rolled off, we can already see the powerful effects of combining our long-life, low-decline legacy properties, our higher-margin portfolio additions, and our high-return, low-cost workover projects,” said Kelly Loyd, President and CEO. At its TexMex assets, a new workover program is expected to add over 100 net BOEPD by the end of the fiscal fourth quarter. Meanwhile, at the Chaveroo field, the company is converting wells from electric submersible pumps to more cost-effective rod pumps, a move expected to lower operating costs and improve run-times.

High-Grading the Portfolio

The most significant part of Evolution’s forward-looking strategy involves the active management of its asset base. During the quarter, the company executed on its plan to build a portfolio of capital-light, high-margin mineral and royalty interests. It spent approximately $5.0 million acquiring interests in Louisiana’s Haynesville and Bossier Shales, prolific natural gas plays known for active development.

Shortly after the quarter ended, Evolution announced it was ‘high-grading’ its portfolio by divesting a portion of its non-core, unproved mineral acres in its SCOOP/STACK portfolio for $3.3 million. The proceeds are being redeployed into near-term cash-flowing properties, including an additional $0.5 million acquisition in the heart of the Haynesville shale.

The immediate impact of this strategy is expected to be felt soon. The company anticipates that 23 newly acquired wells tied to its Louisiana royalty acquisitions will begin producing in the near term, a development poised to “meaningfully” drive revenue and cash flow contributions beginning in the fiscal fourth quarter of 2026.

Unwavering Dividend Commitment

Amid the quarterly loss and strategic spending, Evolution’s board declared a cash dividend of $0.12 per share, payable on June 30, 2026. This marks the company’s 51st consecutive quarterly dividend payment, a streak stretching back to 2013 that has returned over $147 million to shareholders. This consistency is a cornerstone of the company’s value proposition.

The company ended the quarter with $10.4 million in total liquidity, consisting of $2.6 million in cash and $7.7 million available under its credit facility, against outstanding borrowings of $56.5 million. While the net loss and capital outlays for acquisitions put pressure on the balance sheet, management remains steadfast in its capital allocation priorities.

“Looking ahead, we remain committed to our long-standing capital allocation framework and believe we are well positioned to protect the balance sheet, support a dividend that we have maintained for more than 50 consecutive quarters, which we believe is durable through cycles, deploy capital where we see compelling risk-adjusted returns, and continue compounding long-term value for our shareholders,” Loyd affirmed in the announcement. With operational issues in the rearview mirror and new, high-margin production on the horizon, Evolution is betting that its strategic maneuvers will validate this confidence.