Evolution Petroleum Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 10, 2023

Key Takeaways

  • Record Q3 financial results: Evolution Petroleum delivered revenue of $36.9 million, net income of $14.0 million ($0.41/share), and adjusted EBITDA of $22.0 million, all setting new quarterly highs.
  • Robust shareholder returns: The company returned roughly $8 million in the quarter via a $0.12/share dividend (39th consecutive quarterly payout) and share repurchases, bringing total capital returned since 2013 to ~$98.4 million.
  • Modest production decline: Net output fell 2% to 7,089 BOE/d, driven by slower recovery in the Barnett Shale after severe winter weather, though Williston Basin volumes rebounded 16%.
  • Improved operating efficiency: Lease operating expenses dropped 10% sequentially to $13.6 million (down to $21.26/BOE) and G&A expenses declined 12%, reflecting strong cost control across the portfolio.
  • Strong liquidity and disciplined capex: With zero debt, cash of $18.4 million, working capital of $10.7 million and $68.4 million in total liquidity (up 85% YoY), Evolution reaffirmed full-year development spend of $6–7 million and extended its credit facility to April 2026.
AI Generated. May Contain Errors.
Earnings Conference Call
Evolution Petroleum Q3 2023
00:00 / 00:00

There are 12 speakers on the call.

Operator

Afternoon, and welcome to the Evolution Petroleum Fiscal Third Quarter 2023 Earnings Conference Call. At this time, all participants have been placed in a listen only mode and the floor will be opened for questions and comments after the presentation. I will now turn the call over to your host, Brandy Hudson, Investor Relations Manager. Please go ahead.

Speaker 1

Thank you. Welcome to Evolution Petroleum's fiscal 3rd quarter earnings call. I'm joined by Kelly Woolley, President and Chief Executive Officer Ryan Stash, Senior Vice President, Chief Financial Officer and Treasurer and Mark Bunch, Chief Operating Officer. We released our Q3 financial results May 10, 2023, and any time sensitive information may not be accurate at a later date. Today's discussion will contain forward looking statements of management's beliefs and assumptions based on currently available information.

Speaker 1

These forward looking statements are subject to the risks, assumptions and uncertainties as described in our SEC filings. Actual results may differ materially from those expected. We undertake no obligation to update any forward looking statement. During today's call, we may discuss certain non GAAP financial measures, including adjusted EBITDA and adjusted net income. Please refer to the reconciliations of these measures to the comparable GAAP measures in our earnings release.

Speaker 1

Kelly will begin today's call with a few opening comments, Followed by our operational results from COO, Mark Bunch and Ryan Stasch, our CFO, will review our Q3 financials before turning back over to Kelly for closing comments. After our prepared remarks, the management team will be available to answer any questions. As a reminder, this conference call is being recorded. If you wish to listen to a webcast replay of today's call, it will be available on the Investor Relations section of our website. With that, I will turn the call over to Kelly.

Speaker 2

Thanks, Brandy. Good afternoon, everyone, and thank you for joining us for today's call. Our results In the Q3 of fiscal 2023, we're excellent and continued to demonstrate our diversified portfolio Of long life, low decline oil and natural gas assets' ability to generate strong free cash flow even during periods of high commodity price volatility. A couple of highlights from the quarter are we reported record quarterly revenue of $36,900,000 and record quarterly net income of $1,000,000 or $0.41 per diluted share. We returned cash of roughly $8,000,000 to shareholders via cash dividends and share repurchases.

Speaker 2

And we generated record adjusted EBITDA of $22,000,000 while maintaining 0 accomplishments of our team. I want to thank each and every member of the Evolution team for their contributions and continued to driving near and long term value for our shareholders. During the Q3, we paid a cash dividend of $0.12 per common share. This was 20% higher than the same period for fiscal 2022, which we view as a clear indicator of the growth and strength of our business. Our Board recently declared a cash dividend of $0.12 per share for fiscal Q4, payable on June 30 to shareholders of record on June 15, Marking the payment of our 39th consecutive quarterly dividend and our 4th in a row at the $0.12 per share amount.

Speaker 2

Since the company began paying dividends in December 2013, we have returned approximately $98,400,000 or $2.97 per share of capital to shareholders. As we've discussed in the past, there are very few small cap E and P companies They can say that they have consistently paid a dividend for that length of time throughout several tumultuous commodity price cycles. We believe this reinforces the strategic view our Board takes as we prudently grow the business through the targeted acquisition of solid, Long life and low decline assets that will continue to support a sustainable quarterly dividend for the immediate and long term. In short, maintaining and ultimately growing the payment of a quarterly cash dividend remains front and center for our Board and management team. I will now turn the call over to Mark to discuss operations.

Speaker 3

Thanks, Kelly. 3rd quarter fiscal 2023 production of 7,089 net BOE per day was down around 2% from 7,250 net BOE per day for fiscal Q2. In large part, due to the extended recovery of gas production in the Barnett associated with the severe winter storm at the end of Q2. Looking at our 3rd quarter results in more detail, net production at Jona Field for Q3 was 18.44 BOE per day With an average gas price of $20.31 per Mcf for the quarter. The Jonah Field is our most recent acquisition and we remain pleased with its Similar to other assets, the field is highlighted by long life and low decline reserves that generate significant cash flow.

Speaker 3

In addition, the asset base provides access to attractive Western markets. 3rd quarter net production in the Williston Basin was up 16% Relative to the last quarter at 5.67 BOE per day, of which approximately 76% was oil. The Williston Basin oil production was impacted by the winter storm during Q2, which has been restored in Q3. During the quarter, we participated in a vertical Bakken recompletion and are awaiting results. We continue to work closely with our operator on high grading in the field such as expense workovers, additional recompletions and sidetrack drilling opportunities.

Speaker 3

Q3 net production for Barnett Shale was 3,156 BOE per day, of which approximately 76% was natural gas. As mentioned previously, production was lower due to the effects of the severe winter storm. Production was down by 4.5% relative to last quarter. Net production for Q3 at Hamilton Dome was essentially flat at 400 BOE per day. We continue to support the operator, Merit Energy, in their efforts to restore production, adjust water injection locations And volumes and execute on other targeted projects, both maintenance and improvement.

Speaker 3

3rd quarter net production at Delhi Field was essentially flat At approximately 11 11 BOE per day, we continue to work with our operator to perform conformance workovers and upgrades to the facilities.

Speaker 4

With that, I will turn it over to Ryan to discuss our financial highlights. Thanks, Mark. As mentioned earlier, please refer to yesterday's earnings release for additional information concerning our Q3 results. My comments today were primarily focused on financial highlights and comparative results between fiscal Q3 and Q2. The key highlight of the Q3 was our continued strong generation of cash flow, including adjusted EBITDA of $22,000,000 This was $34.42 on a per BOE basis, which was an increase from the 2nd quarter.

Speaker 4

We have now generated 55 $4,000,000 in adjusted EBITDA for fiscal 2023 year to date. As Kelly discussed, during the Q3, we continue to fund our operations, Development capital expenditures, cash dividends and share repurchases out of operating cash flow, while also maintaining 0 debt. Supported by our continued strong operational and cash flow outlook, we paid a dividend of $0.12 per share in the 3rd quarter and declared a dividend of $0.12 per share for fiscal Q4, payable on June 30 to shareholders of record as of June 15. Our cash dividend program has been and will continue to be a top priority as we clearly recognize the strategic importance of returning value to our shareholders. During the Q3, we maintained our debt free balance sheet and ended the quarter with cash and cash equivalents of $18,400,000 And working capital of $10,700,000 The result was increased liquidity of $68,400,000 up 85% since June 30, 2022.

Speaker 4

This is a direct result of our targeted and immediately accretive acquisitions over the past couple of years as well as our continued focus on cost control. We are ideally positioned for the continued execution of targeted future growth opportunities and meet our strategic vision. In May, we entered into the 10th amendment to our credit facility that extended the maturity date to April 2026 And also replace LIBOR as a benchmark interest rate with software. All the existing terms remain substantially the same. Now looking at the 3rd quarter financials in more detail.

Speaker 4

Our total revenue of $36,900,000 was up 9% from last quarter Due to a combination of factors, including higher natural gas revenue due to a 34% increase in realized pricing, Partially offset by a 5% decrease in daily production, increased NGL revenue due to 10% higher realized pricing. This was offset by lower oil revenue associated with a 10% decrease in realized pricing. The result was an average realized price per BOE increase of 14% to $55.79 Lease operating expenses decreased 10% sequentially to $13,600,000 in the 3rd quarter. On a per BOE basis, lease operating expenses were $21.26 for the 3rd quarter compared to $22.55 in the 2nd quarter, primarily contributing to the decrease in LOE were lower costs of the Barnett Shale. The costs were partially offset by higher production taxes associated with higher natural gas prices at Jonah Field.

Speaker 4

Also contributing to the decrease was reduced CO2 costs at Delhi Field associated with the decrease in crude oil prices from the prior quarter. As a reminder, our CO2 costs at Delhi Field are directly impacted by the price of oil. Therefore, lower oil prices result in lower CO2 costs. General and administrative expenses were $2,300,000 for the 3rd quarter versus $2,600,000 for Q2. The decrease was primarily associated with lower consulting and audit fees.

Speaker 4

Net income for the 3rd quarter was $14,000,000 or $0.41 per diluted share versus $10,400,000 or $0.31 per diluted share in the 2nd quarter. Adjusted net income for the quarter was $14,100,000 or 0 point 42 or $0.28 per diluted share in the prior quarter. During the Q3, we invested $2,300,000 in development and maintenance capital expenditures. For fiscal 2023, we continue to expect total development capital expenditures of $6,000,000 to 7,000,000 This estimate includes upgrades to the Delhi Field Central Facility, workovers at Hamilton Dome Field, Barnett Shale and the Jonah Field, and a vertical recompletion in the Williston Basin. We expect capital spending on our existing properties will continue to be met from cash flows from operations And current working capital.

Speaker 4

Of course, our spending outlook may change depending on conversations with our operating partners, commodity pricing and other considerations. During the quarter, we repurchased $3,900,000 worth of common shares under our 10b5-1 plan. I will now turn the call back over to Kelly for his closing remarks.

Speaker 2

Thanks, Ryan. We continue to benefit from the targeted Acquisitions we have completed over the past few years. As a result, we enjoy a larger and more geographically diverse asset base and commodity mix. This provides us with a solid platform for significant cash flow generation that we will continue to use to support and enhance our well established Shareholder Capital Return Program. Our shareholders expect a consistent and meaningful cash return on their investment, And we remain committed to maintaining and as appropriate increasing our dividend and payout over time.

Speaker 2

Another component of our capital return strategy is the share repurchase program we put in place and began making purchases on after the end of the second fiscal This provides us the optionality to opportunistically repurchase our shares from time to time through open market transactions, privately negotiated transactions or by other means in accordance with federal securities laws. As in the past, we will maintain a conservative balance sheet and remain disciplined in our management of capital as we fully recognize the cyclicality of our business. Our ongoing commitment to remaining fiscally prudent is evidenced by our 0 debt balance and meaningful cash reserves at quarter's end. As a result, we are well positioned to execute on targeted high rate of return and immediately accretive growth opportunities as appropriate. We will pursue initiatives designed to maximize total shareholder return by optimizing the value of every dollar we invest on a risk adjusted basis Depending on where we are in the cycle, our approach of building a targeted asset base of oil and natural gas reserves Capable of supporting cash payments to shareholders has served us well over the past decade and will continue to benefit our shareholders for many years to come.

Speaker 2

As and strategically enhance our base of assets and do not result in any material dilution. Any transaction must also clearly support our long standing thesis of providing a significant total return for our shareholders. With that, we're ready to take questions. Operator?

Operator

We will now begin the question and answer At this time, we will take our first question, which will come from Donovan Shafer with Northland Capital Markets.

Speaker 5

I want to Start with, so getting looking at the production numbers. In the Williston, you saw a nice bounce back there from the reversal of the weather impacts. In this quarter's results, so for next quarter, is it kind of a nature where we could see some kind of a bounce back in the production there, similar to what we saw for the Williston This quarter or is there something kind of more fundamentally different between the 2?

Speaker 6

First of all, Donovan, thank you very much For calling. Really appreciate it. Look, it was as we mentioned last quarter, at the end of the quarter, there was a winter storm which affected Yes, Barnett. And it didn't just come back immediately. So, you should see a bit of a recovery just due to that, but look at the fields decline.

Speaker 6

I don't know, Mark, you want to

Speaker 7

take it from here? Yes. Well, Don, good to talk to you. The Barnett, it makes a lot of water. So what happens when you shed in large areas or even Sometimes even smaller areas as the water kind of builds up on the wells.

Speaker 7

It just takes a while to get them unloaded. They come back. It's just slower than a lot of other types of production. So I think Kelly is spot on on what the deal So you should see an adjustment upward, but there's always other things that can go on in the oil and gas field.

Speaker 5

Yes. I'm familiar with that. My first job out of college was in the Marcellus. I know you've got to lob the rig, Fluid would build up to the shut in for a while, putting hydrostatic pressure and then it shuts the gas up slowing and you go around to the swap rigs. So okay, That makes sense.

Speaker 5

And then for natural gas prices, fantastic And Jonah, it's north of $20 in NCS this quarter, and I think it was like $11 last quarter. I think we might have gone over this before, but so there's sort of a lag there. Correct me if I'm wrong, but there's sort of a lag in timing, right? And or maybe it's like a first Day of the month pricing or something, because we think of it was November, December When pricing really blew out, unless I'm just forgetting that it was also crazy in January. So why the higher natural gas price in JONA this quarter versus last quarter?

Speaker 6

Sure. Ryan, why don't you talk about that a little? Sure.

Speaker 8

Yes. So, Domin, good

Speaker 9

If you recall, yes, we did talk about that last quarter. And so we sell our gas up at Jonah, probably a little more than half of what we sell on what we call inside During December and the end of December, which bumped up that 1st a month pricing for January, which really benefited it there, Obviously, for quite a bit in January. And then, honestly, it stayed pretty high throughout January and didn't even start coming down until maybe February and more in March. There is a little I wouldn't call it a lag necessarily because we do book we do know what we're going to get and we booked revenue in that month. But we do Sell most of our or more of our production, more than half on 1st month pricing.

Speaker 9

So that was happening at least in January for that for this past quarter.

Speaker 5

Okay. And then being on other calls, a lot of people are talking about what's the future for Natural gas pricing or the outlook for natural gas pricing sort of nationally or something some people really focus even And on Europe, but of course you guys stand out a bit because this great West Coast exposure. Things have changed a bit. I think most recently, I just saw there's supposed to be a heat down this weekend in The Northwest, but they don't run a lot of AC. So I don't know if that creates a lot of electricity burn.

Speaker 5

And then you had Flooding and outages and all this stuff, but that also raised the reservoir levels, right? So say we get an extremely hot summer, on the one hand that could Raised natural gas prices west of the Rockies because of peaker plants operating. But then again, on the flip side, the hydroelectric reservoirs should be higher. Just curious if you have any kind of special perspective or anything you're watching In terms of where natural gas prices west of the Rockies might go or to the hubs where you sell?

Speaker 6

Sure. I'll say this, there isn't a lot of storage in the Western markets. 1 of the bigger Natural gas storage facilities they had, they shut down. So I think it leaves us in a position where you can continue to see some of these More weather driven events create more volatility. I think we are We can't predict what they're going to be, but we're happy to be exposed to these largely sort of uncorrelated And volatile markets relative to Henry Hub.

Speaker 6

So yes, it's difficult, but I think There's a real opportunity that this could continue from time to time. Natural gas, as you know, is a much more regionalized mini market sort of deal versus Oil and we feel like it could happen at any place we sell natural gas, memorating where it's supposed to be in El Nino Coming up, right? So that can mean a hot summer in the Southeast where the bulk of Electrical demand driven from natural gas is in this country. So, the point is, Donovan, we do think that these kind of Price weather driven pricing events will continue. I'm not exactly sure how they'll play out, but we're intentionally happily exposed to them.

Speaker 5

Okay. So you can't predict the weather, but you feel good about the exposure. Does it make sense?

Speaker 6

Yes. But I think you know what I mean. We want to make sure that we were exposed to markets that we felt could be uncorrelated and could see some outside events. And look, we're right this

Speaker 5

Yes. No, I mean, the results clearly show like the strength of the strategy. So, kudos there. Okay. And so my last question, part of me hates asking this question because basically talking about capital allocation.

Speaker 5

And Of course, like this is part of what your job is, is you are in these positions and it's even more so the case of non op With a non op business model, is you're kind of every day thinking about capital allocation, so you can't just Commit to something and tell me something and then be beholden to that. You guys need that flexibility and be return driven. But It would be good to just get any kind of an update on your thinking in terms of you talked about the you have the dividend as an option. That's something there's always the potential That you have it is something within your power and the Board's approval where you could raise the dividend, but You also want to keep that as a base thing, then you have the buybacks to kind of riff around that and return Money to shareholders that way. And then of course there's acquisitions in M and A and with all the price volatility, perhaps there are some opportunities that have opened up.

Speaker 5

So And maybe you're seeing looking at more opportunities, considering things or maybe there's not much that's come across your So just kind of curious if we can get an update, current state of affairs, how things are looking to you guys?

Speaker 6

Sure. And when you hit the nail on the head, I mean, it's a highly dynamic situation. It's constantly changing. And we're always evaluating We're leveraging our context to sort of source negotiated deals and we're looking to grow our company and We think that we can continue our track record of accretive acquisitions. And in this lower price environment, It has maybe shaken a few things around.

Speaker 6

We're starting to see a little bit more on the deal front. But as I mentioned last time, having our balance sheet as pristine as it is And the nature of our assets being long life and low decline, we have the financial security to wait for a deal. We don't have to do something. We're not in that position. No deal better than a bad deal.

Speaker 6

But I will say this, like deal flow is starting to pick up a little bit compared to the final 3 months of The calendar 'twenty two, we're starting to get a little bit more evolution esque kind of deals crossing our desk. The bid ask, Obviously, look, we haven't done anything. So I would say bid ask is still a little off, but we're getting there. And I think there's exciting opportunities out there and we're going to keep pushing for them.

Speaker 5

Okay, great. Thanks, guys. Well, congrats on the quarter. I'll take the rest of my questions offline.

Speaker 6

Thanks, Don. Really appreciate it.

Operator

And our next question will come from John White with ROTH Capital. Please go ahead with your question.

Speaker 10

Thank you, operator, and good afternoon, everybody.

Speaker 6

Hey, John. Thank you. Hey, John.

Speaker 10

Yes. Let me start by offering my congratulations to Mr. Bunch on his appointment. Glad to see that.

Speaker 7

Thanks, John. Sure. Look,

Speaker 10

I know you don't put out guidance and you're a non operator and I'm not trying to pin you down to a lot of specific Numbers, but could you just kind of talk about what you're seeing and what you're thinking about CapEx For the remainder of the year, I saw you push 2 of your Williston wells to later in the year.

Speaker 6

You just want to talk

Speaker 10

about what might be going unfolding over the rest of the year?

Speaker 6

Sure. So it's a multipart question. I assume we're talking about Foundation as a company and then we can get into more specifics On CapEx at Williston. So yes, I don't know if you noticed or not, but during in the press release, We announced our CapEx guidance. I think we reduced it for full year to 6% to 7%.

Speaker 6

And it had been 6.5% to 9.5%. And there will be certain reasons that I'll let Mark go into for maybe why that moved down. I will say on the Delhi front, we still have the rest of The heat exchanger coming in, correct? That's correct. That's still fully on the books.

Speaker 6

And then, look, I'll let Mark take over because I really want him to say some things about the Williston Basin.

Speaker 7

Okay. So John, thanks for the question, by the way. And Really the reason the sidetracks got pushed out into 2024 It's because there was the permitting process in North Dakota is really, really slow. And Foundation has done a great job trying to get Sure. It was in session, so nothing was passed.

Speaker 7

And so really, that's the total cause of pushing things out. Nothing to represent what we think of The Bird Bear locations at all. We're actually really excited about finishing that up and getting starting it on one of them. So That answers your question about the Bird Bear. And then on the rest of the stuff, we should have like at Delhi, we should have The heat exchanger, which will improve operations out there, allow us to be able to stay up and running during really cold phases In the wintertime and also help us in the hot times in the summer, we'll be able to inject more CO2, and it also should lower our operating costs.

Speaker 7

We're really excited about getting that put in. That will be Installed by the end of this month. And I think everything else is trying to remember if there's anything else we missed.

Speaker 6

I don't know if we did we push

Speaker 7

a re complete? Yes, we did push a re complete back in the Williston II and that was the same issue as a Permitting issue getting the permit through and that was actually even sillier because it's recompletions are fairly simple. So really it's kind of a regulatory problem.

Speaker 10

Okay. I appreciate the recap there and the additional details. And I'll pass it back to the operator.

Speaker 6

All right. Thank you, John. Always appreciate you calling in and keeping us on our toes.

Operator

And our next question will come from Bruce Brown with Brown Capital Management. Please go ahead with your questions.

Speaker 6

Thank you.

Speaker 11

And it was a well performed quarter given the impediments weather impediments you had In a couple of fields, I just was curious as number of shares you've repurchased, I'm assuming it was around 600,000.

Speaker 9

Yes, that's right, Bruce. We'll put it out in our queue. A little over 600,000 shares we repurchased for just a little over $6 per share on average for the program throughout this quarter.

Speaker 11

Well, that's good. I think that if you look at the current strip today and also what the Jonah Field, net gas pricing is currently even though I know it You have the 1st of the month for a lot of that gas pricing, etcetera. What would your what would that do to your cash flow, Assuming those prices are maintained for the rest of the quarter, Have you run that yet or can you just give me a fresh some idea?

Speaker 6

So Pricing today on the Pipelines coming off of Opal has come back much more in line with Henry Hub, as it typically does during the shoulder season. Yes. So again, that's today. We're sitting here in May. In April, Yes, there was a differential.

Speaker 6

I got to be a little careful. I don't want to give any kind of guidance. So I think these are they're hard to find, to be honest with you. You almost have to have a subscription to Platts to get the pricing, but It is, well, I don't know, semi publicly available to see what the pricing coming off those pipelines are. But listen, if you're not getting $20 in MCF, it will definitely affect your cash flow.

Speaker 6

I can say that. How about that? Yes.

Speaker 9

I mean, we would We think it's probably going to be somewhere around Henry Hub, we would think for kind of this quarter roughly. So obviously, you're going from $20 to whatever Henry Hub shakes out at the end of this quarter on the gas side.

Speaker 11

All right. I hear you. So It sounds like the cash flow for the current quarter will be Possibly a little bit less than the one just reported.

Speaker 6

Since you said possibly, I'll say yes. Okay. Thanks, fellas. Thank you. Yes.

Speaker 6

Thank you, Bruce.

Operator

And our next question will come from John Bair with Ascend Wealth Advisors.

Speaker 8

Nice sunny day up here. I'm going to ask John White's question in a kind of a different way and that is What do you what is your sense from the operators as to proposed Activity that might potentially increase the need for CapEx spending, not just in the Current quarter, but say over the next 6 to 12 months. And I realize some of that is probably going to be dependent upon Commodity prices, but just generally speaking, what's your sense there?

Speaker 6

I'm going to let Mark take this.

Speaker 7

Well, as Kelly said, we talk to our operators all the time and Then we kind of look at potential acquisitions, development of current assets, dividend payments,

Speaker 10

share repurchase, kind of

Speaker 7

look at the whole thing because we're trying to get the Best risk reward for the company. And just to so it helps our investors out and we're always melding that in with what the operators are telling us. And Currently, we just look at all of these opportunities and one of these deals is we're pushing forward like the Bird Bear activity, which Sidetracks at the Wilson Basin and because they kind of rise to the top of the heap In our current position. We work with each of the operators closely and they all We value that relationship with them and we have a bunch of good operators that we work with. And the Wilson Foundation is one of them.

Speaker 7

And that's Really, I guess, all I can really tell you is that we're constantly looking for things that add value like sidetracks And also recompletions that of existing wellbores.

Speaker 8

Okay. So evaluation of the properties hasn't uncovered some New perspectives or different horizons or whatnot that they might want to give An attempt to develop those. So it's pretty much steady as we go kind of thing. Is that kind of the way to look at it?

Speaker 7

I'd argue that the Bird Bear is probably kind of an extension of kind of a newer idea. It's an existing zone that people have produced before, but I think we have a kind of a new way of going about Doing it and there's some opportunity there. So I could think that, that has legs, but we'll have to just see what happens.

Speaker 8

And those go ahead, I'm sorry.

Speaker 9

Yes. If you think about it field by field, so the Barnett Shale, I don't think we expect It seems much different than we've seen historically. In fact, the workovers may be a little lighter since they've put a lot of the wells on already. The Jonah field has been pretty Steady as well. So really what we're talking about that Mark's mentioned is really a lot of it's in Williston where there's some potential for CapEx that we're sorting out, That helps.

Speaker 8

Okay. Yes, absolutely.

Speaker 6

And listen, Delhi Field, it has We think it has plenty of potential. We think there's some economic projects that can happen there. And we think our operator, Danbury is doing an excellent job of working through all this and hopefully we come up with a plan there that will allow us to spend some Capital productively. We're working together with them on all that too.

Speaker 8

Well, speaking of Denbury, I'm Curious as to whether there's any progress on the CO2 utilization and getting it categorized as Green use or whether you're able to get some industrial gas into that That's been produced that could be used for CO2 injection. Is there any new

Speaker 6

Thank you. Thank you. Thank you. Thank you. Again, and I hate to use the same thing I told you last time, it's Still a little early, but I will say this, we have confirmed that work is being done to progress it towards that end goal And not just by us.

Speaker 6

So I'm optimistic and I'm positive and we have A timeline in mind that where we should get some news going forward. So, but it's a little too early to say anything definitive.

Speaker 8

All right. Okay. Wheels of progress go slow. Thanks. Thanks for taking my questions.

Speaker 8

Take care.

Speaker 6

Yes, John. Thank you. Really appreciate

Operator

Our next question here will come from Jeff Robertson with Water Tower Research. Please go ahead with your question.

Speaker 5

Thanks. Good afternoon.

Speaker 7

Mark, question on just on the asset base. Now that you all have had an apples to apples asset base for a handful of quarters, Can you just talk about the natural decline you see in the production base as we think about fiscal 'twenty four and whether or not there's An acquisition? And whether there's not an acquisition? Yes, assuming there's acquisitions. Okay.

Speaker 7

All right. Yes. Sorry, I misunderstood what your question was. I think Like in some of the assets, we saw actually bump up last year because prices were high. So we were they were

Speaker 10

doing a lot of extra work

Speaker 7

to get I think we're going to be seeing now that prices have more normalized that the decline will be back Typically, what you've seen with Evolution, which is still a relatively very flat sub-ten percent decline, And that's what I would expect for the company as a whole. So that's an annual decline, right?

Speaker 8

Yes.

Speaker 7

Hope it's not daily.

Speaker 6

Okay. Thank you. Yes. Thanks, Jeff. Really appreciate it.

Speaker 6

Just to follow-up with what Mark said, we think things are sort of back in line. We have 20 plus year reserve life as a company and our declines are at least relative to the rest this world really flattened and we're very proud to have that.

Operator

And this concludes our question and answer session today. I would like to turn the conference back over to Mr. Kelly Lloyd for any closing remarks.

Speaker 6

Thank you, and thanks again to everyone for taking the time to listen, and we really do appreciate you all participating in today's call. As always, Please feel free to 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

Operator

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your

Powered by Quartr