Item 2.01 Completion of Acquisition or Disposition of Assets.
On January 14, 2022, Evolution Petroleum Corporation (the "Company") completed
the acquisition of non-operated oil and gas assets in the Williston Basin in
North Dakota (the "Transaction") from Foundation Energy Fund VII-A, LP and
Foundation Energy Management, LLC (collectively "FEM" or the "Seller"), for
$25.9 million, net of preliminary purchase price adjustments. The Transaction
had an effective date of June 1, 2021. Evolution also entered into a Purchase
and Sale Agreement ("PSA") with the Seller contemporaneously with the closing of
the Transaction. The PSA contains customary representations and warranties,
covenants, and indemnification provisions and also provides for various purchase
price adjustments to be calculated as of the closing date to be settled in a
post-closing statement.
The acquired assets consist of an approximately 39% working interest net to the
Company, in 73 producing wells in the Williston Basin in Billings, Golden
Valley, and McKenzie counties, North Dakota. The acquisition also included
approximately 47,500 net acres with associated 400 potential drilling
opportunities. The acquired assets consist of producing reserves of
approximately 2.0 million barrels of liquids and 1,600 million cubic feet of
natural gas, using January 14, 2022 strip pricing. The commodity mix of the
assets is 80% oil, 11% natural gas, and 9% natural gas liquids. The assets had
production of 596 barrels of oil equivalent per day, based on the three months
ended September 30, 2021.
The Transaction was funded with cash on hand and borrowings under the Company's
existing senior credit facility.
Cautionary Statement
This Current Report on Form 8-K contains certain statements that are, or may be
deemed to be, "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements, other than statements of historical facts, included in this Current
Report on Form 8-K that address activities, events or developments that the
Company expects, believes or anticipates will or may occur in the future are
forward-looking statements. The Company has based these forward-looking
statements largely on its current expectations and projections about future
events and financial trends affecting the financial condition of its business.
These forward-looking statements are subject to a number of risks and
uncertainties, most of which are difficult to predict and many of which are
beyond its control, including the completion of the proposed transaction on the
terms or timeline currently contemplated or at all. Please read the Company's
filings with the Securities and Exchange Commission, including "Risk Factors" in
its Annual Report on Form 10-K for the year ended June 30, 2021, for a
discussion of risks and uncertainties that could cause actual results to differ
from those in such forward-looking statements. The words "believe," "may,"
"estimate," "continue," "anticipate," "intend," "plan," "expect," "indicate" and
similar expressions are intended to identify forward-looking statements. All
statements other than statements of current or historical fact contained in this
Current Report on Form 8-K are forward-looking statements. Although the Company
believes that the forward-looking statements contained in this Current Report on
Form 8-K are based upon reasonable assumptions, the forward-looking events and
circumstances discussed in this press release may not occur and actual results
could differ materially from those anticipated or implied in the forward-looking
statements.
Item 7.01 Regulation FD Disclosure.
On January 20, 2022, the Company issued a press release disclosing the closing
of the Transaction and signing of the PSA. A copy of the press release is
included herewith as Exhibit 99.1 and the information in the press release is
incorporated by reference into this Item 7.01.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
Exhibit 99.1 Evolution Petroleum Corporation Press Release dated January 20,
2022
2
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses