Evolution Petroleum closes $16M Permian Basin acquisition

Houston-based Evolution Petroleum Corporation has acquired mineral and royalty interests in the Midland Basin of the Permian Basin for $16 million, as announced in a press release on Wednesday. The purchase, subject to customary post-closing adjustments, is set to take effect on August 1, 2026. The acquired interests span approximately 3,420 net royalty acres across multiple counties in Texas.

Evolution funded the acquisition through a combination of net proceeds from a recent stock offering, cash reserves, and borrowing under its revolving credit facility.

The interests acquired include royalties from an estimated 832 producing wells, 7 completed wells, 34 drilled but uncompleted wells, 27 permitted wells, and roughly 1,257 upside locations. Current production is valued at approximately 210 barrels of oil equivalent per day, with about 65% of that being liquids. The company estimates that the acquired interests will generate around $3.9 million in cash flow over the next twelve months, assuming a crude oil price of $75 per barrel and a natural gas price of $3.50 per thousand cubic feet.

Evolution anticipates that daily production from the acquisition could more than double by fiscal year 2029, based on current development projections of 125 new wells being completed annually.

After the transaction, Evolution's total liquidity has increased to approximately $19 million, including additional borrowing capacity under its senior secured reserve-based credit facility. Importantly, the mineral and royalty interests acquired require no lifting expenses, future drilling capital, or overhead costs for Evolution. As a result, mineral and royalty interests are projected to contribute around 20% of Evolution's pro forma fiscal 2027 asset cash flow mix, up from less than 10% in fiscal year 2026.