Evolution Petroleum Corporation (EPM): Business Model Canvas

Welcome to the deep dive into the Business Model Canvas of Evolution Petroleum Corporation (EPM), where we unravel the intricate web of their operational framework. This unique blueprint highlights how EPM navigates the complex landscape of the oil and gas industry through strategic partnerships, cutting-edge technology, and a commitment to sustainable practices. Discover the core components of their model, including key activities, customer segments, and revenue streams, that position them as a reliable energy provider in a competitive market. Read on for an insightful exploration!

Evolution Petroleum Corporation (EPM) - Business Model: Key Partnerships

Oilfield service companies

Evolution Petroleum Corporation relies on a range of oilfield service companies to conduct drilling, completion, and maintenance operations. In 2022, the company partnered with Halliburton and Baker Hughes, two major players in the oilfield services sector. Halliburton reported revenues of approximately $14.5 billion for the year 2022, while Baker Hughes registered about $20.0 billion in the same period.

Service Company	2022 Revenue ($ billion)	Partnership Focus
Halliburton	14.5	Drilling and Completion Services
Baker Hughes	20.0	Technology and Equipment Supply

Equipment suppliers

Key partnerships with equipment suppliers are vital for Evolution Petroleum. In 2022, the company primarily sourced equipment from Schlumberger, which reported a revenue of $22.0 billion for the same year. Other notable suppliers included National Oilwell Varco and Weatherford International, whose revenues were approximately $6.0 billion and $5.0 billion respectively.

Equipment Supplier	2022 Revenue ($ billion)	Supplied Equipment
Schlumberger	22.0	Drilling Equipment and Services
National Oilwell Varco	6.0	Rig Equipment
Weatherford International	5.0	Pressure Control and Completions

Joint venture partners

Joint ventures play a crucial role in EPM's strategy to mitigate risks and share resources. The company's most significant joint venture is with Latigo Petroleum, established in 2019, which has allowed for combined capital expenditures of approximately $30 million over the years. In addition, partnerships with local operators like ExxonMobil, which had a global net revenue of $413.7 billion in 2022, enhance operational efficiency.

Joint Venture Partner	Year Established	Capital Expenditure ($ million)	2022 Revenue ($ billion)
Latigo Petroleum	2019	30	N/A
ExxonMobil	N/A	N/A	413.7

Industry regulators

Compliance with industry regulations is critical for Evolution Petroleum. The company collaborates with various regulators, including the U.S. Energy Information Administration (EIA) and the Environmental Protection Agency (EPA). In 2022, the EIA reported that U.S. crude oil production averaged 11.9 million barrels per day, while the EPA has ongoing initiatives that affect operational regulations across the industry.

Regulatory Body	2022 Reported Activity	Impact on EPM
U.S. Energy Information Administration (EIA)	11.9 million barrels/day average production	Regulatory Compliance and Reporting
Environmental Protection Agency (EPA)	N/A	Operational Regulations

Evolution Petroleum Corporation (EPM) - Business Model: Key Activities

Oil and gas exploration

The primary activity of Evolution Petroleum Corporation focuses on oil and gas exploration, particularly aimed at identifying new reserves to enhance its existing production capabilities. As of 2022, EPM reported successful exploration results from its assets in the Gulf Coast region of the United States.

In the fiscal year ending June 30, 2022, EPM identified approximately 20 million barrels of oil equivalent (MMBOE) in proven reserves. This has been critical in ensuring a continued supply of resources for extraction and refining processes.

Production and development

Production is a core activity for Evolution Petroleum, with substantial investment in optimizing its operation efforts. The company’s flagship asset, the Glen Rose Field, produced an average of approximately 850 barrels of oil per day in the fiscal year 2022.

The company also undertakes various development activities, such as well completions and enhanced oil recovery initiatives, aiming to increase production efficiency. Data from the annual report indicates a 10% increase in production rates year-over-year, attributable to investments in technology and infrastructure.

Year	Average Daily Production (BPD)	Total Production (MMBO)
2020	775	0.28
2021	800	0.29
2022	850	0.31

Asset management

Asset management is critical for EPM as it ensures optimal performance from its oil fields and facilities. Through strategic planning, the company manages its portfolio of oil and gas assets to maximize profitability while minimizing operational risks.

As of October 2023, EPM's asset portfolio includes approximately 7,000 net acres spread across key geographical areas. EPM’s focus on data analytics to assess asset performance has enabled improved **decision-making processes**, leading to significant growth in asset value.

Technological innovation

Technological innovation underpins Evolution Petroleum Corporation’s operational framework, enabling enhanced extraction and processing capabilities. The company invests in advanced methodologies such as hydraulic fracturing and horizontal drilling to maximize output.

In the past year, EPM allocated approximately $3 million towards research and development aimed at adopting new technologies that increase efficiency and environmental sustainability across its operations.

• Investment in cloud-based data analytics
• Integration of advanced reservoir modeling techniques
• Application of automation in production facilities

Evolution Petroleum Corporation (EPM) - Business Model: Key Resources

Oil and Gas Reserves

Evolution Petroleum Corporation's primary assets consist of diverse oil and gas reserves. As of the fiscal year ended June 30, 2023, the company reported proved reserves of approximately 5.3 million barrels of oil equivalent (BOE). The breakdown of these reserves includes 87% oil and 13% natural gas.

Reserve Type	Estimated Reserves (Million BOE)	Percentage
Proved Oil Reserves	4.6	87%
Proved Natural Gas Reserves	0.7	13%

The key locations of these reserves include the Paris Basin in East Texas and regions within Louisiana, where the company has been actively exploring and developing its assets.

Skilled Workforce

The strength of Evolution Petroleum lies significantly in its skilled workforce. As of 2023, the company employs approximately 50 full-time professionals, comprised of engineers, geologists, and management staff, all with substantial experience in the oil and gas sector.

• Average years of experience: 15 years
• Percentage of workforce with advanced degrees: 40%
• Training programs completed annually: 3

Advanced Technology

To enhance operational efficiency and optimize resource extraction, Evolution Petroleum has invested in advanced technology. The company utilizes state-of-the-art drilling techniques and software systems for reservoir management. In 2022, they allocated $2.0 million towards technology upgrades, including:

• 3D seismic imaging tools
• Enhanced oil recovery (EOR) technologies
• Data analytics for production forecasting

Strategic Locations

Strategically, Evolution Petroleum operates in areas that maximize logistical efficiency and market access. Key regions include:

Location	State	Proximity to Demand Centers
Paris Basin	Texas	30 miles from major refining hubs
Northwest Louisiana	Louisiana	20 miles from significant pipeline networks

The strategic positioning allows for reduced transportation costs and improved delivery times, directly impacting operational profitability. The estimated logistics savings in 2023 amounted to around $500,000 compared to previous years.

Evolution Petroleum Corporation (EPM) - Business Model: Value Propositions

Reliable energy supply

Evolution Petroleum Corporation focuses on establishing a dependable energy supply for its customer segments. As of 2024, the company has a production capacity of approximately 2,302 barrels of oil equivalent per day (BOE/d), ensuring a steady flow of resources to meet market demands.

In 2023, Evolution achieved an average sales price for oil of about $78.26 per barrel, reflecting consistent pricing strategies that support both profitability and customer satisfaction.

Efficient resource extraction

The company's extraction techniques have led to an operational efficiency that is noteworthy. Their operations on the Gulf Coast employ advanced technologies which reduce extraction costs, currently averaging around $10.00 per BOE. This efficient resource extraction is key to maximizing profit margins.

Resource Extraction Metrics	Value
Production Capacity (BOE/d)	2,302
Average Extraction Cost (per BOE)	$10.00
2023 Average Sales Price (per barrel)	$78.26

Sustainable practices

Incorporating sustainable practices is a cornerstone of Evolution Petroleum's strategy. The company ranks in the top tier for environmental stewardship, having reduced its greenhouse gas emissions by approximately 23% since 2020. Furthermore, they have initiated programs aimed at minimizing water usage, currently averaging 0.15 barrels of water per barrel of oil produced.

Sustainability Metrics	Value
Greenhouse Gas Emission Reduction (since 2020)	23%
Water Usage (barrels per barrel of oil)	0.15

Competitive pricing

Offering competitive pricing is essential for attracting and retaining clientele. The company's pricing strategy has positioned them to maintain a market share of approximately 4.5% in the Permian Basin. For 2023, Evolution's total revenue reported was around $38.7 million, showcasing their ability to operate effectively within a competitive landscape. An analysis of competitor prices indicates that Evolution's pricing consistently falls within a 5-10% range below the market average.

• Market Share in the Permian Basin: 4.5%
• Total Revenue in 2023: $38.7 million
• Pricing Strategy Below Market Average: 5-10%

Evolution Petroleum Corporation (EPM) - Business Model: Customer Relationships

Long-term contracts

Evolution Petroleum Corporation (EPM) engages in long-term contracts primarily with operators and customers for the sale of natural gas and oil. As of the latest financial reports, approximately 75% of EPM's production is under long-term pricing contracts, providing a stable revenue stream. The contracts typically range from 3 to 10 years, ensuring the company maintains consistent relationships with its key customers.

Customer support services

Customer support services in EPM's business model include responsive communication and personalized assistance for its partners and clients. The company has invested significantly in a support framework, allocating approximately $500,000 annually for staff training and operational enhancements. EPM's customer support team is available 24/7, handling inquiries and providing technical assistance as required.

Regular updates and reporting

EPM ensures that its customers receive regular updates and detailed reports concerning production, pricing trends, and market forecasts. The company distributes quarterly reports that include:

Quarter	Production (BoE)	Average Price ($/BoE)	Revenue ($)
Q1 2023	150,000	42.00	6,300,000
Q2 2023	160,000	44.00	7,040,000
Q3 2023	155,000	43.50	6,732,500
Q4 2023	170,000	45.00	7,650,000

This report helps customers make informed decisions regarding their purchases and investment strategies.

Personal relationship management

EPM prioritizes personal relationship management to foster stronger ties with its clients. The company conducts annual customer engagement meetings where strategic discussions take place. In the past year, EPM reported that approximately 85% of clientele expressed satisfaction with the personal relationship management approach. The company utilizes Customer Relationship Management (CRM) software, which incurs an annual cost of roughly $150,000, to track interactions and enhance customer service efficacy.

Evolution Petroleum Corporation (EPM) - Business Model: Channels

Direct sales team

The direct sales team of Evolution Petroleum Corporation operates with a strategy focused on engaging customers in the oil and gas sectors. This dedicated team is responsible for promoting the company’s services directly to clients, tailoring solutions based on specific customer needs.

As of the latest financial report, the operating expenses associated with the direct sales team are approximately $2.5 million annually. The team consists of about 15 sales professionals, contributing to a direct revenue generation of around $10 million per year, reflecting a strong return on investment.

Industry trade shows

Participation in industry trade shows is a critical channel for Evolution Petroleum Corporation. These events allow the company to showcase its technology and solutions, meet potential clients, and network with industry stakeholders.

In 2022, Evolution Petroleum participated in over 5 major trade shows across North America, generating leads worth approximately $5 million. The company allocates around $300,000 annually for trade show participation and associated marketing efforts.

Online presence

Evolution Petroleum maintains an active online presence, utilizing its website and social media platforms to communicate its value proposition. The company’s website receives an estimated 20,000 unique visitors per month, enhancing customer engagement.

The cost of maintaining the online presence, including website management and online marketing, is about $150,000 per year. In 2022, the online channels resulted in approximately $7 million in sales, showcasing the importance of digital marketing strategies.

Partnerships with distributors

Strategic partnerships with key distributors play a significant role in Evolution Petroleum's channels. These partnerships facilitate the quicker distribution of products and services, allowing the company to expand its market reach.

As of 2023, Evolution Petroleum has partnered with 10 major distributors, contributing to revenues of approximately $15 million, accounting for 30% of the total revenue. The collaboration costs associated with these partnerships approach $1 million annually.

Channel Type	Annual Revenue ($ Million)	Investment/Cost ($ Million)	Lead Generation
Direct Sales Team	10	2.5	N/A
Industry Trade Shows	5	0.3	Generation worth 5 million
Online Presence	7	0.15	20,000 unique visitors/month
Partnerships with Distributors	15	1	10 major distributors

Evolution Petroleum Corporation (EPM) - Business Model: Customer Segments

Industrial Clients

Evolution Petroleum Corporation (EPM) caters to a range of industrial clients including manufacturers and processing facilities that require a stable supply of energy. In the fiscal year 2022, EPM reported a revenue from industrial client contracts amounting to approximately $15 million, reflecting the significant importance of this segment.

Utility Companies

Utility companies represent a major customer segment, as they purchase energy to distribute to their residential and commercial consumers. In 2022, the average contract size for utility companies that Evolution Petroleum serviced was about $5 million. EPM's sales to utility companies constituted approximately 35% of its total revenue.

Year	Utility Revenue ($ million)	Percentage of Total Revenue (%)
2020	$10	25%
2021	$12	28%
2022	$15	35%

Government Agencies

Government agencies often engage with Evolution Petroleum for energy procurement and developmental projects. Contracts with government entities totaled around $8 million in 2022, which accounts for approximately 15% of EPM's total revenue.

Energy Traders

Energy traders form an essential segment, as they purchase energy products for resale in regional energy markets. In 2022, EPM recorded transactions with energy traders generating about $7 million, making up roughly 10% of their revenue stream. These traders rely heavily on market fluctuations and therefore require a versatile supply of energy.

Customer Segment	Revenue ($ million)	Percentage of Total Revenue (%)
Industrial Clients	$15	25%
Utility Companies	$15	35%
Government Agencies	$8	15%
Energy Traders	$7	10%

Evolution Petroleum Corporation (EPM) - Business Model: Cost Structure

Exploration and drilling costs

In the fiscal year 2022, Evolution Petroleum Corporation reported exploration and drilling costs amounting to approximately $5.8 million. The costs are primarily associated with the identification and evaluation of potential oil and gas reserves.

Technology and equipment expenses

The company invests in advanced technology to enhance oil recovery and operational efficiency. In 2022, Evolution Petroleum spent around $3.2 million on technology and equipment, focusing on updated drilling rigs and innovative extraction methods.

Expense Type	Amount (in millions)
Drilling/Exploration	$5.8
Technology	$3.2
Equipment	$2.1

Regulatory compliance costs

Compliance with environmental regulations and governmental policies incurs significant expenses. In 2022, Evolution Petroleum's regulatory compliance costs were around $1.5 million.

Operational and maintenance expenses

The operational and maintenance costs in the same period totaled approximately $6.4 million. These costs include

• Labor expenses
• Maintenance work on existing facilities
• Utility costs

and are essential for the ongoing functionality of operations.

Cost Component	Amount (in millions)
Operational Expenses	$6.4
Regulatory Compliance	$1.5
Total Fixed and Variable Costs	$16.9

Evolution Petroleum Corporation (EPM) - Business Model: Revenue Streams

Oil and gas sales

Evolution Petroleum Corporation generates a significant portion of its revenue through the sale of crude oil and natural gas. As of the fiscal year ended June 30, 2022, the company reported total revenues of approximately $15.5 million, with oil and gas sales contributing the majority of this figure. The average realized price for crude oil during this period was about $98.07 per barrel, while natural gas was sold at an average price of $6.81 per MMBtu.

Licensing fees

In addition to direct sales, Evolution Petroleum engages in licensing agreements for its technologies and processes related to enhanced oil recovery (EOR). For the fiscal year 2022, the company reported licensing revenue totaling approximately $1.3 million. These licenses allow other operators to employ Evolution's patented methods, generating recurring revenue.

Joint venture earnings

Joint ventures play a crucial role in Evolution Petroleum's revenue strategy. The company participates in various partnerships that leverage shared assets and resources. In the fiscal year 2022, earnings from joint ventures accounted for around $4.2 million of total revenue. Key joint ventures involve collaboration on specific projects, which minimizes capital expenditure while maximizing output efficiency.

Asset sales and leasing

The company also engages in the sale and leasing of its oil and gas assets, contributing further to its revenue streams. Asset sales can be significant, particularly when the market conditions are favorable. In the last fiscal year, asset sales generated approximately $3.7 million, while leasing operations provided an additional $2.1 million in revenue. The revenue from leasing includes agreements for the use of equipment and land, proving a stable income source.

Revenue Stream	Fiscal Year 2022 Revenue
Oil and Gas Sales	$15.5 million
Licensing Fees	$1.3 million
Joint Venture Earnings	$4.2 million
Asset Sales	$3.7 million
Leasing Revenue	$2.1 million