HOUSTON, Nov. 11, 2013 /PRNewswire/ -- Evolution Petroleum Corporation (NYSE MKT: EPM) today announced that the Company's Board of Directors approved a new growth initiative, a new common stock dividend policy and declared the initial common stock quarterly dividend.
- Initiation of a new quarterly cash dividend of $0.10 per common share beginning December 27, 2013 to shareholders of record as of December 6, 2013
- Rationalization and redeployment of resources into focused growth projects incorporating the Delhi Field and the Company's GARP® artificial lift business
- Restructuring of staff to reflect the redeployment of resources and to reduce recurring overhead
Current oil production at the Delhi Field, the Company's primary producing asset, is generating substantial free cash flow. Based on the June 2013 independent reserves report, projected increases in field production and reversion of our 24% working interest are expected to increase our free cash flows from Delhi by more than 400% within the next four years. Consequently, dividend growth over the next four years is a reasonable expectation. Management also believes that its GARP® artificial lift business, based on proprietary patented technology, layers in a new and visible growth catalyst to complement increasing production and cash flows from Delhi. The new dividend on common shares will directly reward shareholders with cash distributions that can be reinvested in accordance with their individual risk profiles.
Evolution Petroleum has established GARP® proof of concept with six commercial installations, giving new life to older wells by increasing oil and gas recoveries and generating material incremental cash flow at minimal cost using existing infrastructure. Management believes it can leverage the success of its initial GARP® installations in the Giddings Field in Texas by expanding into other mature fields to extend the life of wells at or near their economic limits. In addition to legacy horizontal wells, other applications of GARP® include vertical wells either too deep for conventional artificial lift or having thick or multiple pay zones. The low cost per BOE of installing GARP® offers the potential of another step change in the Company's per share value as acceptance of the technology grows.As part of the new growth initiative, Company staff is being reduced to lower overhead and restructured to reflect the operational, sales and marketing functions necessary for successful commercialization of GARP®.