Evolution Petroleum posts $21.3 million revenue in Q1 2026, declares 49th consecutive dividend despite lower oil prices and strategic acquisitions enhancing long-term outlook.

OPERATOR - (00:03:05)

Good Morning. Hello and welcome to the Evolution Petroleum First Quarter and fiscal year 2026 earnings release conference call. All participants are in listen only mode. Please also note that today's event is being recorded at this time. I would like to turn the conference over to Brandi Herdson, Investor Relations Manager. Please go ahead.

Brandi Herdson - Investor Relations Manager - (00:03:28)

Thank you. Welcome to Evolution Petroleum's fiscal Q1 2026 earnings call. I'm joined by Kelly Lloyd, President and Chief Executive Officer, Mark Bunch, Chief Operating Officer and Ryan Stach, Senior Vice President, Chief Financial Officer and Treasurer. We released our fiscal first quarter 2026 financial results after the market closed yesterday. Please refer to our earnings press release. For additional information containing these results, you can access our earnings release in the Investors section of our website. Please note that any statements and information provided in today's call speak only as of Today's date. November 12, 2025 and any time sensitive information may not be accurate at a later date. Our discussion today will contain forward looking statements of management's beliefs and assumptions based on currently available information. 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 statements. During today's call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income. Reconciliations of these measures to the closest comparable GAAP measures can be found in our earnings release. Kelly will begin today's call with opening comments. Mark will provide an update on our properties and plans as they relate to our ongoing strategy of maximizing shareholder returns. Ryan will then provide a brief overview of our fiscal quarter highlights. 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 Investors section of our website. With that, I will turn the call over to Kelly.

Kelly Lloyd - President and Chief Executive Officer - (00:05:13)

Thank you Brandy and good morning everybody. We entered fiscal 2026 in a solid position, building on the momentum we carried through last year. Our first quarter reflected continued execution across a broad and diversified portfolio, underscoring the resiliency of our business model through commodity price cycles. Total revenue was 21.3 million, a modest decline from the prior year period, driven primarily by lower realized oil and NGL prices, partially offset by a 43% increase in natural gas pricing. Even in a softer pricing environment, our assets performed in line with expectations, generating positive earnings and meaningful cash flow. From a strategic standpoint, this was an important quarter for evolution. We closed our first acquisition consisting only of minerals and royalties in the scoop stack, expanding our exposure to high quality long lived reserves while maintaining the capital light profile that defines our portfolio. The structure of this transaction allows us to participate in future development in over 650 gross locations across a highly active basin that we are very familiar with. Given our other assets in the region with minimal operating expenses and no future capital commitments presents us with meaningful upside. We are maintaining a strong financial foundation with ample liquidity and low leverage supported by the credit facility expansion completed at the end of fiscal 25. That flexibility continues to position us well to pursue accretive opportunities while maintaining a consistent return of capital to shareholders through our regular dividend. To that end, yesterday we declared our 49th consecutive quarterly cash dividend and our 44th consecutive cash dividend of $0.12 per share for the fiscal second quarter. As for the macro outlook and how it will affect evolution, we'll start with crude oil. It's in the middle of a tug of war between OPEC trying to appease the US by keeping prices lower and depleting sovereign wealth funds. When will we begin filling the Strategic Petroleum Reserve? Will the ceasefires hold? With global supply and demand so close to being in balance, there are a lot of questions as to when and where the next marginal barrel will be needed with the futures market at or near all time. net short levels at present, the herd has spoken and pushed crude to around $60 per barrel. A couple of points here. First, I don't think anybody would argue with this, but at $60 a barrel, capex budgets are beginning to be reduced which will lead to at some point prices needing to move higher to spur enough drilling to meet demand. Second, with the speculative net short position, any geopolitical catalyst can quickly trigger a short covering rally with our resilient portfolio. Whether the upswing in the cycle occurs in the next few quarters or next few years, evolution and its shareholders will be there to reap the rewards. As for natural gas, the electrification of everything everywhere and ongoing carbon intensity reduction efforts along with growing exports create a rapidly growing demand environment set to persist for at least the next decade. Weather remains all important however, with an estimated 20 to 30 BCF per day of coming demand over the next decade or so off of a current 105 ish BCF per day supply base. There is a reason the futures curves for natural gas currently range from the high threes to the high fours for as far out as they trade. Of note, our natural gas revenues were up 38% over the year ago quarter and Henry Hub only averaged 303 for the quarter, whereas the calendar 2026 strip is currently over $4. Turning back to our assets, we were encouraged this quarter by the continued operational consistency across our portfolio. Each of our assets delivered steady results during the quarter, reflecting the quality of our fields and the strong relationships we maintain with our operating partners. Importantly, we have flexibility across our asset base to adjust development activity based on market conditions, which allows us to balance near term returns with long term value creation. We expand drilling when prices are high and acquire assets when prices are low, all while benefiting from our low decline producing reserves to maintain strong cash flows throughout the cycle. Our strategy remains consistent, operate efficiently, allocate capital prudently and return capital to shareholders while maintaining financial strength. We remain focused on generating sustainable free cash flow that supports our regular dividend and positions us to take advantage of attractive acquisition opportunities as they arise. That discipline has been a cornerstone of Evolution's success for more than a decade and it will continue to guide our decisions in fiscal 2026 and beyond. With that, I'll hand it over to Mark for more details on the assets.

Mark Bunch - Chief Operating Officer - (00:10:49)

Thanks Kelly Good morning everyone. I will focus my remarks on key operational highlights from the quarter and encourage listeners to review our earnings press release and filings for additional details across our asset base. Starting with the scoop stack, three wells were turned to sales and two additional wells remain in progress from prior periods. Additionally, we have seen current drilling activity on 12 gross wells from our newly acquired mineral acreage at Shabiru. Operations remain stable. We continue to build optimization efforts including converting electric submersible pumps to rod lift on five of our seven wells, which should help lower our future operating costs. No new drilling occurred during the quarter and permitting continues for the next development pad. With timing of drilling contingent on oil prices in the Williston Basin, we continue to see horizontal drilling activity moving towards our approximately 40,000 net acres and we are very excited to see what may come out of this. At Delhi, we continue to recycle CO2 with no new capital activity. Delhi production was impacted this quarter because of downtime related to an unscheduled turbine repair and higher summer temperatures which reduced CO2 activity in the field. The turbine has been repaired and temperatures are already cooler at Jonah. Production increased in fiscal Q1 as the field worked off prior pipeline imbalance volumes from fiscal Q4 2025, with imbalance corrections substantially completed by October, sales volumes have now returned to expected levels. Turning to the Barnett Shale, field performance remained consistent with expectations. Production was stable supported by targeted workovers and higher realized gas prices versus a year ago quarter At Hamilton Dome lease operating expenses normalized in fiscal Q1 following elevated work order activity in prior periods. A slower pace of workovers is expected during the fall and winter months with efforts focused on maintaining key Wells. Finally, at TexMex, integration efforts progressed during the quarter where we did see some higher operating costs resulting from the transition to the new operator, which was accounted for in the acquisition and is customary. The new operator performed repair and maintenance work on several existing wells and identified candidates for further reactivation as part of a broader field optimization plan. Ongoing activity remains focused on restoring production, evaluating future opportunities across the acquired acreage consistent with our expectations at the time of the acquisition last fiscal year. All said, we expect production to increase and operating cost per barrel to decrease moving forward. Overall, our assets continue to perform as expected and we remain disciplined in allocating capital for the highest return opportunity opportunities while maintaining operational flexibility. Over to you Ryan.

Ryan Stach - Senior Vice President, Chief Financial Officer and Treasurer - (00:13:51)

Thanks Mark, and good morning everybody. As Brandy mentioned earlier, we released our earnings yesterday, which contains more information on our results for today. I'd like to go through our financial highlights for the first fiscal quarter of 2026. Total revenue was $21.3 million compared to $21.9 million in the same period last year and up from fiscal Q4. The modest decline year over year was driven primarily by lower realized oil and NGL prices, down 14% and 8% respectively, partially offset by a 43% increase in natural gas prices. The quarter's revenue mix was 60% oil, 28% natural gas and 12% NGLs, and our average realized price was $31.63 per barrel. Net income for the quarter was 0.8 million, or $0.02 per diluted share, compared to 2.1 million or $0.06 per share. In the year ago. Quarter adjusted EBITDA was 7.3 million compared to 8.1 million last year, reflecting the impact of lower oil and NGL prices and higher lease operating costs at our Tex Mex asset. As previously discussed, cash provided by operating activities increased to 7.8 million for the quarter compared to 7.6 million last year and capital expenditures incurred for drilling and completion activities were 1.9 million at September 30, 2025, cash and cash equivalents totaled 0.7 million. We had 53 million of borrowings and 0.8 million in letters of credit outstanding under a revolving credit facility, resulting in total liquidity of approximately 11.9 million, including cash and cash equivalents. The reduction in net Working capital this quarter is related to the integration of two recent acquisitions and we expect this to improve over the coming months. During the quarter, we returned 4.1 million to shareholders through our consistent $0.12 per share quarterly dividend, marking the 49th consecutive quarterly dividend and 14th consecutive at the current rate. To date, evolution has returned approximately 139 million or or $4.17 per share back to stockholders in common stock dividends. On the hedging front, we have continued to add hedges to maintain compliance with our credit facility covenants and protect cash flow for our shareholder return program. Overall, our strong asset base and financial position continue to support both the dividend and our ability to pursue accretive acquisitions that enhance long term shareholder value. I'll now hand it back over to Kelly for closing comments. Thanks, Ryan.

Kelly Lloyd - President and Chief Executive Officer - (00:16:38)

As we progress with fiscal 26, we're encouraged by the continued consistency of our operations and the strength of our asset base. We'll continue to return meaningful capital to shareholders through our dividend program, maintaining our policy of setting the dividend at a level that we view to be sustainable for multiple years. We believe evolution is well positioned for both the year ahead and many years to come, and we remain steadfast in executing on our strategy to deliver long term shareholder value creation through disciplined capital management, strategic acquisitions and conservative cost management, all to ensure the strength and continuity of our quarterly cash dividend through all market environments. We've been doing this for many years. years and we continue to do this. For 20, 26 and beyond. With that, I'll turn it over to the operator to begin our Q and A session.

OPERATOR - (00:17:38)

Thank you. Thank you. We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Jeff Cramp with Northland Capital Markets. Please go ahead.

Jeff Cramp - Analyst - (00:18:23)

Morning, guys.

Kelly Lloyd - President and Chief Executive Officer - (00:18:25)

Good morning.

Jeff Cramp - Analyst - (00:18:26)

I wanted to start at Tex Mex. It sounds like the results from the quarter probably understate the potential of that asset in the quarters ahead. So I was just kind of wondering if you guys have is there a way to quantify, I guess, what a normalized lease operating expenses (LOE) would be for that asset and what kind of upside you guys are maybe expecting from some of the optimization workover activities that you and the operator have identified so far?

Kelly Lloyd - President and Chief Executive Officer - (00:18:52)

Okay, yeah. Jeff, I'll take that one in. You know, now when we bought this we, you know, we expected that there was, you know, there'll be extra costs and stuff going forward up front and just to get it up to where we wanted it to be that we agreed with the new operator about that. But we also had a little hiccup in the road and the transition time between transferring operators took a little longer. So we had some production that dropped down that they weren't able to get back online. We've actually started doing that now. So really with the production being brought back up to where we expect it to be and we've also seen the costs, the baseline cost dropping with the new operator taking over control, we expect the lifting costs to get back to a more reasonable level. It's not going to stay at 47 and you know, we will probably have a little bit higher workover cost here going forward, but it's not going to be excessive. And so far the, the three workovers that the new operators done, they've done for, you know, significantly under budget. So we're really pretty happy with the way the asset's going. You know, I kind of look at this asset as, you know, on a going forward basis kind of looks. I think of it a lot of as it looks a lot like the lifting costs for like Williston or something like that. That's how I kind of look at it. But right now I don't know what I could, I can't give you more guidance than that on what I think it would do just because we haven't really seen enough going forward with the new operator.

Jeff Cramp - Analyst - (00:20:20)

Understood. And just to dive in on that with one more follow up is do you think you get some of that production benefit in the current fiscal quarter we're in or what's kind of the cadence of when some of these can flow through into production results?

Kelly Lloyd - President and Chief Executive Officer - (00:20:36)

Once the operator took over and got control, the new operator took over and got control. They've already done three of seven that they've already proposed to us and they're going to have some more they're going to be proposing. So yeah, I expect the line sheet that will be back this quarter, but. Maybe not the full effect for the whole quarter.

Jeff Cramp - Analyst - (00:20:53)

Right.

Kelly Lloyd - President and Chief Executive Officer - (00:20:53)

But as we progress through the quarter.

Jeff Cramp - Analyst - (00:20:55)

That's correct, Kelly. Thanks. Understood. Okay, that's really helpful. And for my follow up I'll ask the obligatory M and a question and just kind of get an update from you guys on deal flow and I guess it's, you know, it's an interesting time with the dichotomy of gas versus oil prices and just kind of wondering if you guys are seeing any major delta in terms of bid ask spreads for oil weighted deals versus gas weighted deals and how you guys balance your focus. Thanks.

Kelly Lloyd - President and Chief Executive Officer - (00:21:24)

Sure. Yeah, thanks. Jeff, this is Kelly. I'll take that. We are seeing a number of attractive or potentially attractive deals that we're looking at and it is kind of across both fronts. The gas being attractive because they're sort of trading on current terms, whereas we have some futures markets where we can lock in nice returns. And then on the oil side they're also trading on futures terms which again are pretty muted at the moment. And at least our group doesn't think for the next five years you're going to see oil prices at 60. We just don't think that's remotely sustainable to meet the demand that's going forward. So yeah, we're seeing a lot of good stuff. I will say one of the things that's interesting on the acquisition front, we've been always opportunistic and that's what we like to look at. I will say right now, looking at the minerals deal we did, buying that at 3.5 times multiple. Those are multiples that we consider really attractive for minerals with upside in inventory. So if minerals are going to be competitive with working interest positive, that's something we're going to continue to look at. So that anyway, we're excited about what we're looking at going forward. Thanks for the question.

Jeff Cramp - Analyst - (00:22:45)

Thanks for those details. I'll turn it back.

OPERATOR - (00:22:50)

The next question comes from Jeff Robertson with Water Tower Research. Please go ahead. Thank you.

Jeff Robertson - Analyst - (00:22:58)

Mark. To follow up on the question around Tex Mex over the next several quarters, can you talk about the trajectory of workovers that will flow through the LOE line? And I think you said you thought if I heard right, that that asset from an LOE standpoint could normalize somewhere around the level of your Williston Basin properties. Is that correct?

Mark Bunch - Chief Operating Officer - (00:23:23)

To answer the last thing you said there where it's the Williston Basin, yeah, that's kind of what I look at is where it. Cause it's kind of similar type property. And then I think it'll. I mean I don't right now. I actually don't know if we'll be completely finished by the end of this quarter. I would suspect it may bleed over into the next. It's the same deal. It's going to be a process, just fixing things up. You know, we got a good deal on this thing for a reason. And we knew that we were going to have to do some work on it. And we, you know, I think over the course of time it's going to turn into something really valuable for.

Kelly Lloyd - President and Chief Executive Officer - (00:24:00)

But you know, Jeff, to follow up on that this, Kelly, we do expect to see the numerator and the denominator move.

Jeff Robertson - Analyst - (00:24:05)

Right.

Kelly Lloyd - President and Chief Executive Officer - (00:24:05)

So we're putting production back online as we go too.

Mark Bunch - Chief Operating Officer - (00:24:08)

So, yeah, we had. Because the operator was. Because the transition time took a lot longer and honestly, that was really a problem with the state. It wasn't really a problem with the operator. The goal posts were kind of changed. That's actually what kind of put us a little bit behind on keeping the production up was, was that the new operator couldn't get on some of the wells. And so now that they're back on them, they are working really fast. They've gotten a lot of stuff done faster than I actually expected. So so far we're excited about how things are going.

Jeff Robertson - Analyst - (00:24:45)

And then from a margin standpoint, can you just elaborate on what's going on at Delhi and how you think that. How you think expenses there will trend over the next couple of quarters? I think you all are now just recycling CO2 rather than purchasing and injecting CO2.

Mark Bunch - Chief Operating Officer - (00:25:06)

Yeah. Since we're not, you know, I think from a total cost basis those, you know, that's going to stay fairly consistent to where it was to where it has been. You know, we expect the production rates will come back up, which will help the lifting costs in dollars per BOE terms. Just because we're going to be, you know, we're getting back into the cooler months and so oil rates go up and we also have had good run times from the NGL plants, you know, after we got the turbine fixed. So I think that you'll see overall the cost for BOE to improve slightly.

Kelly Lloyd - President and Chief Executive Officer - (00:25:47)

Yes, I mean, I think that's right, Jeff. Like on a. If you look on a total cost basis. Right. Sequential quarters, it was pretty flat.

Jeff Robertson - Analyst - (00:25:53)

Right.

Mark Bunch - Chief Operating Officer - (00:25:53)

It was slightly down this quarter. But obviously production took a hit from some of the downtime in the summer weather. So on a dollar per BOE basis, it should trend down a little bit. But you can see the overall cost. Excuse me, are relatively flat.

Jeff Robertson - Analyst - (00:26:08)

Lastly, are you having any conversations yet with the operators of some of your more significant properties on any plans that they have as they look into 2026 to maintain production levels?

Kelly Lloyd - President and Chief Executive Officer - (00:26:25)

Sorry, Jeff, you broke up a little bit.

Jeff Robertson - Analyst - (00:26:27)

Could you repeat that, please? Sure, Kelly.

Kelly Lloyd - President and Chief Executive Officer - (00:26:30)

Are you all having any conversations that you can Talk about with the operators of some of your major properties like the Barnett or like Jonah, as far as what they intend to do or what they might think about doing in 2026 just to try to maintain production levels. Sure. The honest answer there is that with prices where they are, they have told us they intend to do everything they can to keep production as high as they can. There's not a whole lot of levers they can pull. But if prices we have seen in the past, when prices get really low, they sort of, if oil goes down, they may let it stay down. Well, that won't be the case for the natural gas properties right now. So.

Jeff Robertson - Analyst - (00:27:14)

Thank you.

OPERATOR - (00:27:19)

Thank you. If you have a question, please press Star then one. The next question comes from Ron Aubrey with RJ Aubrey Investments. Please go ahead.

Ron Aubrey - (00:27:43)

Yeah, thanks guys. Pretty much want to focus on natural gas. Looks like just revenues and production healthy 5% quarter on quarter growth. And I'm just wondering when you look at your hedging program for future natural gas production, what percent is that currently?

Kelly Lloyd - President and Chief Executive Officer - (00:28:04)

Yeah. So on a hedging basis, you know, because of our credit facility requirements, you know, we're, we're over 50% hedged, actually closer to probably 70% hedge for the next year. But what we've done on the hedging programs, we try to maintain upside. Right. So we've done a mix of, you know, collars and swaps, trying to lean more towards collars to range for the upside. So, you know, our floors are generally in the 350 to $360 range for next year. But you know, on a lot of the ceilings for the colors, you've got almost $5.

Ron Aubrey - (00:28:38)

Right.

Kelly Lloyd - President and Chief Executive Officer - (00:28:38)

High fours to five. So, you know, we want to maintain that upside but protecting the downside. And I think in the natural gas market, certainly we're a little more apt to hedge into the contango Right. Gas curve versus the crude. Right. On crude, we're trying to stay much more near term as far as the crude because it's flat to backward date. It's generally historically. So I'd say we're probably more hedged than typical in gas. But a lot of that is just because of the opportunity set too in the gas book.

Ron Aubrey - (00:29:07)

Yep, that's very helpful and nice to see Jonah coming back to normal sales volumes, especially going into winter. What does the outlook look like for. West coast pricing as a premium To Henry Hub?

Kelly Lloyd - President and Chief Executive Officer - (00:29:23)

It's kind of. This is Kelly, thanks for the question. It's always pretty variable, but the expectations, expectations are for that area to be Normal, which I don't know if normal is plus a buck fifty plus two bucks, but we've certainly seen higher than that. And in an awful winter we've seen less than that. But I think everybody's expectation there now is for, you know, pretty healthy premium.

Ron Aubrey - (00:29:48)

So yeah, I mean thanks for that.

Kelly Lloyd - President and Chief Executive Officer - (00:29:51)

A lot of it's going to depend on obviously it goes without saying, weather.

Ron Aubrey - (00:29:56)

Right.

Kelly Lloyd - President and Chief Executive Officer - (00:29:56)

I mean some of the forecasts call for of course the west coast, but we'll just see. You know, the thing about the west coast is the storage levels are just not very abundant. So it doesn't take a lot of cold weather to get spikes there. But you know, we're just going to have to wait and see for the weather. But we generally will expect a premium to Henry Hub in the winter. You know, barring a very warm winter, it should still be a premium to Henry Hub.

Ron Aubrey - (00:30:17)

Yeah.

Kelly Lloyd - President and Chief Executive Officer - (00:30:17)

You know, Ryan brings up a really good point. You can look at, oh, west coast storage is full, it's high. Well, that is a matter of days of coverage. I mean if you get the weather come in in any reasonable normal, I'm not asking for extraordinary, any kind of normal way. They don't have near enough storage to cover their demand that would be drawn on a normalized weather basis. So you can see some pretty good movements there. And again that's why we intentionally wanted to get exposed to that market. Fair enough.

Ron Aubrey - (00:30:51)

And one final question on Barnett. Looks like their production was relatively flat. Quarter by quarter, which is fine, but. Saw a pretty significant increase in their loes. Was that a one off thing or. Is that, can you give you some color on that?

Kelly Lloyd - President and Chief Executive Officer - (00:31:04)

Yeah, that's the reason you saw the increase from consecutive quarters is because you probably forgot that we had a out of period adjustment due to an audit settlement with the operator and that's what lowered it down below nine bucks and now it's back up to a normal run rate.

Ron Aubrey - (00:31:26)

All right, fair enough. Thanks for all your answers and continued. Operating this company in a wonderful way.

Kelly Lloyd - President and Chief Executive Officer - (00:31:34)

Thank you. Thank you very much. We appreciate the input. Thank you.

OPERATOR - (00:31:43)

The next question comes from Jeff Robertson with Water Tower Research. Please go ahead.

Jeff Robertson - Analyst - (00:31:50)

Thanks Ryan. Is there any color you can share on the bank market as you all look at acquisition opportunities and availability for increase the RBL if you were to need one.

Ryan Stach - Senior Vice President, Chief Financial Officer and Treasurer - (00:32:04)

Yeah. So the bank market still remains pretty healthy. In fact, the conversations I've had with bankers, a lot of them are actually looking now to deploy capital again. You know, getting back more an aggressive nature. I wouldn't call it's Ever going to see what we did a few years ago with those kind of terms and aggression. But you know, terms are generally flat to a little better. Right. For borrowers. And the market for the size facilities we're looking at is really healthy. You know, a lot of the regional banks and even some of the larger banks I'm hearing are getting a little bit more aggressive into the, you know, coming down to the oil and gas space. So I think people are seeking returns really on the bank side. So certainly we don't feel like we'd have an issue increasing the size of the facility if needed for the right acquisition.

Kelly Lloyd - President and Chief Executive Officer - (00:32:50)

And to follow up with that, one of the reasons, Jeff, that we redid our RBL before the end of the year was to add other partners and have it be very syndicatable. So if something was highly accretive and would work out great for us that it needed some bank piece to it, we are well set up to be there for it.

Jeff Robertson - Analyst - (00:33:15)

Thanks, Kelly. Yeah, thanks Jeff.

OPERATOR - (00:33:21)

The next question comes from PO Frat with Alliance Global Partners. Please go ahead.

Frat - (00:33:28)

Hey, good morning. Just a couple cleanup questions. What did the minerals acquisition add in the quarter and then is there another step up in the coming quarter as far as was it in for the full quarter?

Kelly Lloyd - President and Chief Executive Officer - (00:33:46)

Hey PO this is Kelly. Appreciate the question. Yeah, no, it was only for a couple months of the quarter, so a little less than two months of the quarter. So.

Frat - (00:33:58)

Absolutely.

Kelly Lloyd - President and Chief Executive Officer - (00:33:59)

We do expect that we'll see a full benefit of that coming in this quarter and it's really in line with what we said in the press release. Volumes are coming in good, so are revenues.

Frat - (00:34:13)

Okay, great. And then when I sort of look at scoopstack up a little bit. Tex Mex should, you know, be up a little bit. Delhi should be up a little bit for the next quarter. But would you take a stab at the full year production guidance? I think with all the puts and takes, I'm looking at sort of a flat year from a production standpoint. Fiscal 26 versus Fiscal 25. Any comments on that would be helpful.

Ryan Stach - Senior Vice President, Chief Financial Officer and Treasurer - (00:34:46)

Yeah, I mean obviously, you know, we kind of have provided guidance just you know, on a yearly basis on production. Really frankly, just because of the control factor. But to your point, I mean, you know there are going to be puts and takes and to some of it's going to development right in Scoop stack. You know, we are seeing good activity on our asset but with the delays in reporting, especially on the royalty side, it's hard to get a good feel for where the direction of production. You obviously also have Shabaru and the timing of those wells which, which we are getting, you know, we're getting permits and obviously continuing to monitor those but like a flattish outlook is probably not, you know, that, that's not a bad assumption. But ultimately it's hard for us to really provide guidance until we see some of the activity levels like I said.

Frat - (00:35:31)

In scoop stack, that's helpful color. And then when I look at the Capex side, you know, 3.8 million in the first quarter is that, you know, I know that there are, you know, some uncontrollables in that number, but would 15 million for the year be a reasonable target?

Ryan Stach - Senior Vice President, Chief Financial Officer and Treasurer - (00:35:54)

No, actually we, you know, we put out kind of our, in our year end we said kind of 4 to 6 was our guidance range for, for 20, 26. And actually I will have to, we can, we can look offline but we're, you know, we only reported about 2 million in capital for the first quarter and some of that 1.9. Yeah, some of that's a little bit, bit loaded in the front for some of the work we had to do on wells out in Shavaru to convert some of the pumps. So you know, I still think 4 to 6 for a range still makes sense, you know, all things considered for actually this upcoming fiscal year.

Frat - (00:36:30)

Okay, so, but a half, about half of that was spent in the first quarter. In the first quarter. The September quarter, right?

Ryan Stach - Senior Vice President, Chief Financial Officer and Treasurer - (00:36:38)

About a third of it. Yeah, yeah, about a third. And that was mainly because of the five pump jacks we put in at Chevroot replacing the ESPs.

Frat - (00:36:48)

Okay. And then since you mentioned Chevroot a couple times, any early read on what's going to happen with Chevro, considering the pivot by the operator to become more of a Rockies flare?

Kelly Lloyd - President and Chief Executive Officer - (00:37:04)

Sure. We've had brief discussions with them and for everything that we're told, business as usual. So we have a really good relationship with them.

Frat - (00:37:15)

And.

Kelly Lloyd - President and Chief Executive Officer - (00:37:17)

Look, so far that's what we've been told, business as usual. And we both agree on timing and when to start things. I think we mentioned this last quarter, but we don't believe at 60 ish dollars per barrel we're in a rush to go out and start drilling wells right now. There.

Frat - (00:37:37)

Yeah, I was just looking at more from a strategic standpoint for Podebco.

Kelly Lloyd - President and Chief Executive Officer - (00:37:42)

Yeah, if something changes for them, we've got plenty of ways that we can all work together on that as well. But yeah, again, from what they're telling.

Frat - (00:37:54)

Us so far it's business as usual. So. Great, thank you so much.

OPERATOR - (00:38:01)

Thank you. Thank you. This concludes the question and answer session. I would like to turn the conference back over to Kelly Lloyd for any closing remarks.

Kelly Lloyd - President and Chief Executive Officer - (00:38:16)

I appreciate that. Thank you. Listen, we want to thank everybody for taking the time and showing the interest and asking your questions. We really appreciate it. Just in summary, we're really excited about fiscal 26 and beyond, where the where our portfolio is and the outlook going forward. It's going just as we expected. So we're excited going forward and happy to have you all along with us. Thank you.

OPERATOR - (00:38:45)

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