EVOLUTION PETROLEUM CORP (EPM)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Liquidity and Capital Resources

Results of Operations

Critical Accounting Policies

Commonly Used Terms

“Current quarter” refers to the three months ended March 31, 2026, our third quarter of fiscal year 2026.

“Year-ago quarter” refers to the three months ended March 31, 2025, our third quarter of fiscal year 2025.

Executive Overview

General

Evolution Petroleum Corporation is an independent energy company focused on maximizing total returns to its shareholders through the ownership of and investment in onshore oil and natural gas properties in the United States. In support of that objective, our long-term goal is to maximize total shareholder return from a diversified portfolio of long-life oil and natural gas properties built through acquisitions and through selective development opportunities, production enhancements, and other exploitation efforts on our oil and natural gas properties.

Our oil and natural gas properties consist primarily of non-operated working and mineral interests in the following areas (as well as small overriding royalty and mineral interests in Texas and Louisiana):

25

Table of Contents

Recent Developments

Dividend Declaration

On May 11, 2026, Evolution’s Board of Directors approved and declared a quarterly dividend of $0.12 per common share payable June 30, 2026.

​

Purchase of Louisiana Minerals

From December 2025 through March 2026, we acquired mineral and royalty interests in multiple parishes across Louisiana from various private sellers for cash consideration totaling $5.0 million, including capitalized direct transaction costs (“Louisiana Minerals”). The mineral acreage in Louisiana primarily consists of proved undeveloped acreage targeting the Bossier/Haynesville Shales and is currently being actively developed by operators in the area. The acquisitions were considered asset acquisitions and funded with cash on hand and sales from our ATM Sales Agreements.

Senior Secured Credit Facility

On November 28, 2025, we entered into a letter agreement with MidFirst Bank pursuant to which the Margined Collateral Value, as defined under the Senior Secured Credit Facility, was modified to $65.0 million. In addition, it

26

Table of Contents

granted us additional time to enter into further commodity hedges to meet the hedging requirements under the Senior Secured Credit Facility.

SCOOP/STACK Minerals Transactions

On August 4, 2025, we completed the acquisition of certain mineral and royalty interests in the SCOOP and STACK plays in Oklahoma from a non-affiliated private seller (the “SCOOP/STACK Minerals Acquisition”) in a cash transaction valued at approximately $16.3 million, which includes $17.0 million paid at closing less transaction costs of $0.1 million and interim purchase price adjustments totaling approximately $0.8 million related to net cash flows earned on the properties from the effective date of May 1, 2025 to the closing date. We accounted for the transaction as an asset acquisition and the allocation of the purchase price was $12.5 million to proved oil and natural gas properties, subject to amortization, and $3.8 million to unproved properties. We funded the purchase price for the SCOOP/STACK Minerals Acquisition with a combination of $15.0 million in borrowings under our Senior Secured Credit Facility and cash on hand. The acquired assets include an average royalty interest of 0.6% across approximately 5,500 net royalty acres located primarily in Grady and Canadian Counties, Oklahoma.

Subsequent to the third fiscal quarter of 2026, we entered into a purchase and sale agreement with a private buyer for the sale of a portion of our non-core, non-producing net royalty acres. The total sale price for the acreage is approximately $3.3 million, subject to customary closing conditions. The divestiture is expected to close in the fourth fiscal quarter of 2026.

Risks and uncertainties

The oil and natural gas industry is a global market impacted by many factors, such as government regulations, particularly in the areas of tariffs, trade sanctions, taxation, energy, climate change and the environment, geopolitical instability, (including ongoing conflicts between Russia and Ukraine, in the Middle East and Venezuela), demand in Asian and European markets, and the extent to which members of OPEC and other oil exporting nations manage oil supply through export quotas. More recently, during the third fiscal quarter, WTI oil prices reached their highest levels since 2022 due to crude oil disruptions at key oil shipping routes in the Middle East, including the Strait of Hormuz. Natural gas prices are generally determined by North American supply and demand and are also affected by imports and exports of liquefied natural gas. Weather also has a significant impact on demand for natural gas since it is a primary heating source.

​

Oil, natural gas, and NGL prices have been, and we expect may continue to be, volatile. During the current fiscal year, crude oil spot prices for WTI dropped below $56 per barrel in December 2025 then rose to more than $100 per barrel in March 2026. Lower oil and natural gas prices not only decrease our revenues, partially offset by applicable hedges, but an extended decline in oil or natural gas prices may affect planned capital expenditures and the oil and natural gas reserves that we can economically produce. Lower oil and natural gas prices may also reduce the amount of our borrowing base under our Senior Secured Credit Facility, which is determined at the discretion of the lenders based on various factors including the collateral value of our proved reserves. Increases in crude oil and natural gas prices are partially offset to the extent that prices exceed applicable derivative contract swap and collar prices.

​

Given the dynamic nature of these factors and events, we cannot reasonably estimate the period of time that certain market conditions will persist. Continuing volatility in political, trade, regulatory and economic conditions could impac

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Liquidity and Capital Resources

Results of Operations

Critical Accounting Policies and Estimates

Executive Overview

General

We are an independent energy company focused on acquiring and developing long-lived oil and natural gas properties in the United States. Our diversified portfolio consists primarily of non-operated working interests and mineral and royalty interests across several leading producing basins.

Our non-operated model allows us to invest alongside experienced operators, participate in a broad range of development opportunities and maintain flexibility in the timing and allocation of capital. Our mineral and royalty interests provide additional exposure to production and future development, generally without associated lifting expenses or drilling and completions costs.

The geographic, commodity, operator and ownership diversity of our asset base reduces our reliance on any single property, basin or development program. It also provides multiple avenues for allocating capital, including acquiring producing working and mineral interests, participating in and benefiting from attractive operator-led projects and pursuing development opportunities within our existing assets.

We seek to maximize total shareholder value through disciplined acquisitions, selective participation in attractive development projects, a conservative balance sheet and the return of capital to shareholders.

Our oil and natural gas properties consist primarily of non-operated working and mineral interests in the following areas (as well as small overriding royalty and mineral interests in Texas):

32

Table of Contents

Recent Developments

​

Dividend Declaration

​

On September 10, 2026, Evolution’s Board of Directors approved and declared a quarterly dividend of $0.12 per common share payable September 30, 2026.

Purchase of Permian Minerals

​

On August 20, 2026, we completed the acquisition of mineral and royalty interests in the core Midland Basin of the Permian Basin from a non-affiliated private seller for a total purchase price of $16.0 million (the “Permian Minerals Acquisition”), subject to customary post-closing adjustments. The Permian Minerals Acquisition has an effective date of August 1, 2026. We funded the purchase price for the Permian Minerals Acquisition with a combination of net proceeds from our concurrent public equity offering and $3.2 million in borrowings under our Senior Secured Credit Facility. The acquired assets include approximately 3,420 net royalty acres across Reagan, Martin, Midland, Glasscock, and Upton Counties, Texas.

​

33

Table of Contents

Common Stock Offering

​

On August 20, 2026, we completed a public offering of 4.3 million shares of our common stock, at an offering price of $3.25 per share (the “Offering”). We received net proceeds of approximately $12.8 million from the Offering, after deducting underwriting discounts and commissions and estimated offering expenses. Net proceeds from the Offering, together with borrowings under our Senior Secured Credit Facility and cash on hand, were used to fund the Permian Minerals Acquisition.

Senior Secured Credit Facility

On August 20, 2026, we entered into a letter agreement with MidFirst Bank pursuant to which the borrowing base on our Senior Secured Credit Facility was temporarily increased from $65.0 million to $73.0 million from August 20, 2026 until October 20, 2026, unless redetermined earlier in accordance with the credit agreement. We currently expect to begin our semi-annual Fall redetermination on or about October 1, 2026.

Previously on November 28, 2025, we entered into a letter agreement with MidFirst Bank pursuant to which the Margined Collateral Value, as defined under the Senior Secured Credit Facility, was modified to $65.0 million. In addition, it granted us additional time to enter into further commodity hedges to meet the hedging requirements under the Senior Secured Credit Facility.

Purchase of Louisiana Minerals

From December 2025 through June 2026, we acquired mineral and royalty interests in multiple parishes across Louisiana from various private sellers for cash consideration totaling $6.2 million, including capitalized direct transaction costs (“Louisiana Minerals”). The mineral acreage in Louisiana consists of proved producing wells, drilled but not yet producing wells, and undeveloped acreage targeting the Bossier/Haynesville Shales and is currently being actively developed by operators in the area. The acquisitions were considered asset acquisitions and funded with cash on hand and sales from our ATM Sales Agreements.

SCOOP/STACK Minerals Transactions

​

On August 4, 2025, we completed the acquisition of certain mineral and royalty interests in the SCOOP and STACK plays in Oklahoma from a non-affiliated private seller (the “SCOOP/STACK Minerals Acquisition”) in a cash transaction valued at approximately $16.3 million, which includes $17.0 million paid at closing less transaction costs of $0.1 million and interim purchase price adjustments totaling approximately $0.8 million related to net cash flows earned on the properties from the effective date of May 1, 2025 to the closing date. We accounted for the transaction as an asset acquisition and the allocation of the purchase price was $12.5 million to proved oil and natural gas properties, subject to amortization, and $3.8 million to unproved properties. We funded the purchase price for the SCOOP/STACK Minerals Acquisition with a combination of $15.0 million in borrowings under our Senior Secured Credit Facility and cash on hand. The acquired assets include an average royalty interest of 0.6% across approximately 5,500 net royalty acres located primarily in Grady and Canadian Counties, Oklahoma.

​

On June 30 2026, we completed the divestiture of a portion of our non-core, non-producing net mineral acres in the SCOOP/STACK with a private buyer. The acreage sold was 3,700 net acres for a total sale price of approximately $3.1 million, before customary post-closing adjustments.

​

At-the-Market (“ATM”) Equity Sales Program

​

On October 21, 2024, we entered into an ATM equity Sales Agreement with Roth Capital Partners, LLC (the “Lead Agent”), Northland Securities Inc., and A.G.P./Alliance Global Partners pursuant to which we may issue and sell, from time to time, up to $30.0 million of shares of common stock through or to the Lead Agent, acting as agent or principal to facilitate acquisitions and other general corporate purposes. On February 11, 2026, the Company executed a new ATM equity Sales Agreement, substantially c

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]