Aug. 18 at 10:36 PM
Evolution Petroleum shares fell in after-hours trading after the Houston-based energy company launched an underwritten public offering of common stock to help fund its previously announced
$16 million acquisition of mineral and royalty interests in the Midland Basin. The company did not disclose the number of shares or offering price, leaving investors facing potential dilution, while underwriters received a 30-day option to purchase additional shares.
The acquisition covers about 3,420 net royalty acres across five Texas counties and royalties on 832 producing wells. Management expects it to be immediately accretive to cash flow per share and dividend coverage, generating roughly
$3.9 million in next-12-month cash flow, implying an acquisition multiple of about 4x. Excess offering proceeds could be used to repay borrowings under EPM’s senior secured revolving credit facility.
$EPM