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Evolution Petroleum (AMEX:EPM) Owner Earnings per Share (TTM)

: 0.59 (As of Dec. 2023)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Evolution Petroleum's Owner Earnings per Share (TTM) ended in Dec. 2023 was $0.59. It's Price-to-Owner-Earnings ratio for today is 9.68.


The historical rank and industry rank for Evolution Petroleum's Owner Earnings per Share (TTM) or its related term are showing as below:

EPM' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 3.2   Med: 20   Max: 147.76
Current: 9.71


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Evolution Petroleum was 147.76. The lowest was 3.20. And the median was 20.00.


EPM's Price-to-Owner-Earnings is ranked worse than
61.48% of 527 companies
in the Oil & Gas industry
Industry Median: 7.28 vs EPM: 9.71

Evolution Petroleum's Earnings per Share (Diluted) for the three months ended in Dec. 2023 was $0.03. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $0.49. It's PE Ratio ratio for today is 11.77.

Evolution Petroleum's EPS without NRI for the three months ended in Dec. 2023 was $0.03. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $0.48. It's PE Ratio without NRI ratio for today is 11.92.


Evolution Petroleum Owner Earnings per Share (TTM) Historical Data

The historical data trend for Evolution Petroleum's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Evolution Petroleum Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.49 0.03 -0.78 1.12 1.20

Evolution Petroleum Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.61 1.97 1.20 0.75 0.59

Competitive Comparison

For the Oil & Gas E&P subindustry, Evolution Petroleum's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Evolution Petroleum Price-to-Owner-Earnings Distribution

For the Oil & Gas industry and Energy sector, Evolution Petroleum's Price-to-Owner-Earnings distribution charts can be found below:

* The bar in red indicates where Evolution Petroleum's Price-to-Owner-Earnings falls into.



Evolution Petroleum Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Evolution Petroleum's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 16.68
Depreciation, Depletion and Amortization 16.08
Change In Deferred Tax -0.58
5Y Average of Maintenance Capital Expenditure 13.47
Change In Working Capital 0.64
Shares Outstanding (Diluted Average) 32.90

1. Start with "Net Income" from income statement. Evolution Petroleum's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was $16.68 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Evolution Petroleum's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Dec. 2023 was $16.08 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Evolution Petroleum's Change In Deferred Tax for the trailing twelve months (TTM) ended in Dec. 2023 was $-0.58 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $13.47 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Evolution Petroleum's 5-Year Average Maintenance Capital Expenditure = $13.47 Mil

5. "Change In Working Capital" is from cashflow statement. Evolution Petroleum's Change In Working Capital for the trailing twelve months (TTM) ended in Dec. 2023 was $0.64 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Evolution Petroleum's Shares Outstanding (Diluted Average) for the months ended in Dec. 2023 was 32.900 Mil.

Evolution Petroleum's Onwer Earnings Per Share for Dec. 2023 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 16.679 +16.077+-0.583
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-13.473190337913+0.64)/32.900
=0.59

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=5.71/0.59
=9.68

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Evolution Petroleum Owner Earnings per Share (TTM) Related Terms

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Evolution Petroleum (AMEX:EPM) Business Description

Industry
Traded in Other Exchanges
N/A
Address
1155 Dairy Ashford Road, Suite 425, Houston, TX, USA, 77079
Evolution Petroleum Corp is an independent oil and gas company operating in the US. It is engaged primarily in the acquisition, exploitation, and development of properties for the production of crude oil and natural gas, onshore in the United States. The company's revenues are primarily generated from its crude oil, natural gas and NGL production from the Jonah Field in Sublette County, Wyoming; the Williston Basin in North Dakota; the Barnett Shale located in North Texas; the Hamilton Dome Field in Wyoming; and the Delhi Field in Northeast Louisiana. The revenue generated by the company includes royalty, mineral and working interests.
Executives
John Mark Bunch officer: COO 1155 DAIRY ASHFORD RD., SUITE 425, HOUSTON TX 77079
Kelly Beatty officer: Principal Accounting Officer 1155 DAIRY ASHFORD RD., SUITE 425, HOUSTON TX 77079
Myra C Bierria director 1155 DAIRY ASHFORD, SUITE 425, HOUSTON TX 77079
Ryan Stash officer: SVP & CFO 1155 DAIRY ASHFORD ROAD, SUITE 425, HOUSTON TX 77079
Roderick A. Schultz officer: Chief Accounting Officer 4621 PINERIDGE STREET, HOUSTON TX 77009
Marjorie Anne Hargrave director 999 18TH STREET, SUITE 1925N, DENVER CO 80202
Jason E. Brown officer: President & CEO 1000 LOUISIANA, SUITE 6700, HOUSTON TX 77002
Marran H. Ogilvie director 599 LEXINGTON AVENUE, NEW YORK NY 10022
David Joe officer: VP, Chief Admin. Officer 2500 CITYWEST BLVD., SUITE 1300, HOUSTON TX 77042
Jvl Advisors, L.l.c. 10 percent owner 10,000 MEMORIAL DRIVE, SUITE 550, HOUSTON TX 77024
Randall D Keys officer: President, CFO & Treasurer 3 HICKORY SHADOWS DR, HOUSTON TX 77055
Peninsula Capital Management Inc director 235 PINE STREET, SUITE 1600, SAN FRANCISCO CA 94104
Kelly William Loyd director 10000 MEMORIAL DRIVE, SUITE 550, HOUSTON TX 77024
William Dozier director 3000 SAGE #1312, HOUSTON TX 77056
Gene G Stoever director 5415 GRAYSTONE LANE, HOUSTON TX 77069