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<SEC-DOCUMENT>0001144204-06-039551.txt : 20060922
<SEC-HEADER>0001144204-06-039551.hdr.sgml : 20060922
<ACCEPTANCE-DATETIME>20060922172258
ACCESSION NUMBER:		0001144204-06-039551
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060914
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060922
DATE AS OF CHANGE:		20060922

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EVOLUTION PETROLEUM CORP
		CENTRAL INDEX KEY:			0001006655
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				411781991
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32942
		FILM NUMBER:		061105175

	BUSINESS ADDRESS:	
		STREET 1:		820 GESSNER
		STREET 2:		SUITE 1340
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77024
		BUSINESS PHONE:		713-935-0122

	MAIL ADDRESS:	
		STREET 1:		820 GESSNER
		STREET 2:		SUITE 1340
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77024

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATURAL GAS SYSTEMS INC/NEW
		DATE OF NAME CHANGE:	20040817

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATURAL GAS SYSTEMS, INC.
		DATE OF NAME CHANGE:	20040810

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	REALITY INTERACTIVE INC
		DATE OF NAME CHANGE:	19960301
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v053291.txt
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                Current Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


                       Date of Report: September 22, 2006
               Date of Earliest Event Reported: September 14, 2006
               ---------------------------------------------------


                         EVOLUTION PETROLEUM CORPORATION
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


                                     Nevada
                 ----------------------------------------------
                 (State or Other Jurisdiction of Incorporation)

       0-27862                                           41-1781991
- ------------------------                    ------------------------------------
(Commission File Number)                    (I.R.S. Employer Identification No.)



 820 Gessner, Suite 1340, Houston, Texas                               77024
 ---------------------------------------                               -----
(Address of Principal Executive Offices)                            (Zip Code)



                                 (713) 935-0122
              (Registrant's Telephone Number, Including Area Code)


                            Natural Gas Systems, Inc.
          (Former Name or Former Address, if Changed Since Last Report)

<PAGE>



TABLE OF CONTENTS
- -----------------

Item 1.01         Entry into a Material Definitive Agreement

Item 9.01         Financial Statements and Exhibits.

Signatures


Item 1.01         Entry into a Material Definitive Agreement.

Payment of Bonuses.

On September 14, 2006, under the direction of the Compensation Committee of the
Board of Directors of Evolution Petroleum Corporation ("EPM" or the "Company"),
the Company disbursed the funds under the Company's existing bonus plans
established in various executive officer employment agreements previously filed
with the Securities and Exchange Commission (the "Bonus Plans"). The purposes of
the Bonus Plan are to motivate employees, including executive officers, by tying
compensation to performance, reward exceptional performance that supports
overall EMP objectives, and attract and retain top performing employees. The
Bonus Plan objectives primarily relate to the achievement of certain objectives
set by the Company's Compensation Committee. Achievement of such objectives
determines the amount of cash bonus paid to the executive officers, with
limitations set forth in the respective executive officer employment agreement
or other agreement. Under the Bonus Plan noted above, Robert Herlin, CEO and
President received a bonus of $105,000 for the six months ended June 30, 2006,
Sterling McDonald, CFO, received a bonus of $60,000 for the six months ended
June 30, 2006, and Daryl Mazzanti, VP of Operations, received a bonus of
$116,250 for the 12 months ended June 30, 2006.

Indemnification Agreements with Officers and Directors

On September 20, 2006, the Board of Directors of the Company approved a new form
of indemnification agreement to be entered into by the Company with its
directors and officers. On September 20, 2006, the Company entered into separate
indemnification agreements with Laird Q. Cagan the Company's Chairman of the
Board, William Dozier, Gene Stoever, and E.J. DiPaolo, directors of the Company,
Robert S. Herlin, the Company's Chief Executive Officer and director, Sterling
McDonald, the Company's Chief Executive Officer, and Daryl Mazzanti, the
Company's V.P. of Operations. The Company currently expects that it will enter
into indemnification agreements in the form that was approved on September 20,
2006 with any future directors and officers. In general, the indemnification
agreements provide that the Company will, to the fullest extent permitted by
Nevada law and subject to certain limitations, indemnify the director or officer
against certain expenses (including attorneys' fees), judgments, fines,
penalties and settlement amounts that may be incurred in connection with the
defense or settlement of any claim, criminal, civil or administrative action or
proceeding to which the director or officer becomes subject in connection with
his service as a director or officer of the Company. The agreements provide for
indemnification rights regarding both third-party claims and proceedings brought
by or in the right of the Company. In addition, each indemnification agreement
provides for the advancement of expenses incurred by the indemnitee in
connection with any proceeding covered by the agreement to the fullest extent
permitted by Nevada law. The indemnification agreements supersede all prior
indemnification agreements entered into with the directors and officers. The
indemnification agreements do not exclude any other rights to indemnification or
advancement of expenses to which the indemnitees may be entitled, including any
rights arising under the Articles of Incorporation or By-Laws of the Company, or
Nevada law. The above description of the indemnification agreements does not
purport to be complete and is qualified in its entirety by reference to the form
of indemnification agreement, which is filed as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.

<PAGE>

Item 9.01         Financial Statements and Exhibits.


         Exhibits.


         The Exhibit included as part of this Current Report is listed in the
attached Exhibit Index. The Exhibit Index, together with the Exhibit listed
therein, is incorporated herein by this reference.

Exhibit No.        Description
- -----------        -----------
10.1               Form of Indemnification Agreement for Officers and Directors,
                   as adopted on September 20, 2006



                                   SIGNATURES


      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                  EVOLUTION PETROLEUM CORPORATION


Date: September 22, 2006          By:  /s/ Robert S. Herlin
                                       -----------------------------------------
                                       Robert S. Herlin, Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v053291_ex10-1.txt
<TEXT>
                            INDEMNIFICATION AGREEMENT



      THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made this ____ day of
September, 2006, between Evolution Petroleum Corporation, a Nevada corporation
(the "Company"), and _______________________, an individual ("Indemnitee").

                                    RECITALS

      WHEREAS, Indemnitee is either a member of the board of directors ("Board"
or "Board of Directors"), an officer, an employee or an agent of the Company, or
more than one of such positions, or is serving at the request of the Company as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, and in such capacity or capacities is
performing a valuable service for the Company;

      WHEREAS, the Corporation has adopted bylaws ("Bylaws") providing for the
indemnification of the officers, directors, employees and agents of the Company
or individuals serving at the request of the Company as directors, officers,
employees or agents of another corporation, partnership, joint venture, trust or
other enterprise; ("Covered Persons");

      WHEREAS, the Bylaws and Nevada Revised Statute ("NRS") Sections 78.751 and
78.7502 (the "State Statutes") specifically provide that they are not exclusive,
and thereby contemplate that agreements may be entered into between the Company
and a Covered Person with respect to indemnification of such Covered Person;

      WHEREAS, Indemnitee is willing to serve, to continue to serve, and to take
on additional service for and on behalf of the Company on the condition that
Indemnitee is indemnified as set forth in this Agreement;

      WHEREAS, it is intended that Indemnitee shall be paid promptly by the
Company all amounts necessary to effectuate in full the indemnity provided in
this Agreement; and

      WHEREAS, to induce Indemnitee to continue to serve as a director, officer,
employee or agent, the Company has determined and agreed to enter into this
Agreement with Indemnitee.

      NOW, THEREFORE, in consideration of Indemnitee's continued service as a
director or officer of the Company after the date hereof, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Indemnitee hereby agree as follows:
<PAGE>

                                    AGREEMENT

      1. Indemnification of Indemnitee. The Company hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent authorized or permitted
by the provisions of the State Statutes, or any successor statute or amendment
thereof, or any other statutory provisions authorizing or permitting such
indemnification that is adopted after the date of this Agreement.

      2. Additional Indemnity. Subject only to the exclusions set forth in
Section 3 of this Agreement, the Company hereby further agrees to hold harmless,
indemnify and defend Indemnitee:

            (a) against any and all expenses (including fees for attorneys,
accountants, private investigators, court and transcript costs, fees and
expenses of witnesses, travel expenses and all other like disbursements or
expenses reasonably incurred by or for Indemnitee), judgments damages, fines,
penalties and amounts paid in settlement (including all interest assessments and
other charges paid or payable in connection with or in respect of such judgment,
fines, penalties, or amounts paid in settlement) actually and reasonably
incurred by or for Indemnitee in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company)(a "Covered
Action") to which Indemnitee is made a party as a result of the fact that at the
time of the act or omission which is the subject matter of such Covered Action
the Indemnitee was a director, officer, employee or agent of the Company, and

            (b) otherwise to the fullest extent as may be provided to Indemnitee
by the Company under the non-exclusivity provisions the Bylaws of the Company
and the State Statutes. The provisions of this Agreement are in addition to, and
not in limitation of, the provisions of such Bylaws and the State Statutes.

      3. Limitations on Additional Indemnity. No indemnity pursuant to Sections
1 and 2 of this Agreement shall be paid by the Company to the extent that:

            (a) payment therefor is actually made to Indemnitee under a valid
and collectible insurance policy or policies, except with respect to any excess
amount due to Indemnitee beyond the amount of payment to Indemnitee under such
insurance policy or policies. Notwithstanding the availability of such insurance
policy or policies, Indemnitee also may claim indemnification from the Company
pursuant to this Agreement by assigning to the Company in writing any claims of
Indemnitee under such insurance policy or policies to the extent of the amount
Indemnitee is paid by the Company;

            (b) Indemnitee is indemnified by the Company otherwise than pursuant
to this Agreement;

            (c) final judgment is rendered against Indemnitee for the payment of
dividends or other distributions to stockholders of the Company in violation of
the provisions of Subsection 2 of Nevada Revised Statutes ss. 78.300, as
amended;


                                       2
<PAGE>

            (d) final judgment is rendered against Indemnitee for an accounting
of profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Act"), or other similar provisions of any federal,
state or local statutory law;

            (e) Indemnitee's conduct giving rise to the claim for
indemnification is finally adjudged by a court of competent jurisdiction to have
been a breach of fiduciary duty which involved intentional misconduct, fraud or
a knowing violation of the law; and/or

            (f) except as otherwise provided in this Agreement, in connection
with all or any part of a suit or other proceeding which is initiated or
maintained by or on behalf of Indemnitee, or any suit or other proceeding by
Indemnitee against the Company or its directors, officers, employees or other
agents, unless (i) such indemnification is expressly required by Nevada law;
(ii) the suit or other proceeding was expressly authorized by an official act of
the Board of Directors of the Company or (iii) such indemnification is provided
by the Company, in its sole discretion, pursuant to the powers vested in the
Company under Nevada law.

      4. Continuation of Indemnity. All agreements and obligations of the
Company contained in this Agreement shall continue during the period Indemnitee
is a Covered Person, and shall continue thereafter for so long as Indemnitee
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Indemnitee was a Covered Person.

      5. Advancement of Expenses. In the event Indemnitee incurs costs or
expenses in connection with the defense of any such civil, criminal,
administrative or investigative action, suit or proceeding (including any costs
or expenses incurred for any appeal therefor), the Company agrees to pay such
costs or expenses as they are incurred and in advance of the final disposition
of the action, suit or proceeding within 30 calendar days of submission of bills
or vouchers for such costs or expenses, provided that Indemnitee delivers to
Company prior to such payment a written undertaking by or on behalf of
Indemnitee to repay the amount paid by the Company if it is ultimately
determined by a court of competent jurisdiction that Indemnitee is not entitled
to be indemnified by the Company. By such undertaking, Indemnitee agrees to
reimburse the Company for all amounts paid by the Company in defending such
civil, criminal, administrative or investigative action, suit or proceeding
against Indemnitee, including amounts paid in settlement, in the event and only
to the extent that it is ultimately determined by a court of competent
jurisdiction that Indemnitee is not entitled to be indemnified by the Company
for such expenses under the provisions of the State Statute, Bylaws, this
Agreement or otherwise. However, in the case of an action brought against
Indemnitee by the Company pursuant to the provisions of Section 16(b) of the
Act, or other similar provisions of any federal, state or local statutory law
for an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company, Indemnitee's costs and expenses will not be advanced
unless such advancement is approved by the Board of Directors by a majority vote
of a quorum consisting of directors who are not parties to the action, suit or
proceeding, or, if such a quorum cannot be obtained, by independent legal
counsel in a written opinion that such indemnification is proper in the
circumstances.

      6. Presumptions and Effect on Certain Proceedings. Upon making a request
for indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement. The termination of any action, suit or
proceeding by judgment, order, settlement, arbitration award, conviction or by a
plea of nolo contendere or its equivalent shall not affect this presumption
except as may be provided in Section 3 of this Agreement.

                                       3
<PAGE>

      7. Notification and Defense of Claim. Promptly after receipt by Indemnitee
of notice of the commencement of any action, suit or proceeding, if a request
with respect thereto is to be made against the Company under this Agreement,
Indemnitee shall notify the Company of the commencement thereof; but the failure
by Indemnitee to notify the Company will not relieve the Company of any
liability which it may have to Indemnitee under this Agreement or otherwise.
With respect to any such action, suit or proceeding as to which Indemnitee
notifies the Company as required herein:

            (a) The Company shall be entitled to participate therein at its own
expense; and

            (b) Except as otherwise provided below, to the extent that it may
wish, the Company, jointly with any other indemnifying party similarly notified,
shall be entitled to assume the defense of Indemnitee with counsel reasonably
satisfactory to Indemnitee. After notice from the Company to Indemnitee of its
election to assume the defense of Indemnitee in the action, suit or proceeding,
the Company will not be liable to Indemnitee under this Agreement for any legal
or other expenses subsequently incurred by Indemnitee in connection with the
defense thereof, other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ its own counsel in
such action, suit or proceeding, but the fees and expenses of such counsel
incurred after notice from the Company of its assumption of the defense shall be
at the sole expense of Indemnitee unless (i) the employment of counsel by
Indemnitee at the Company's expense has been authorized in writing by the
Company; (ii) Indemnitee shall have reasonably concluded, upon advice of counsel
experienced in such matters, that there may be a conflict of interest between
the Company and Indemnitee in the conduct of the defense of such action; or
(iii) the Company shall not in fact have employed counsel to assume the defense
of such action, suit or proceeding. In each such instance set forth in (i)
through (iii) of this paragraph (b), the reasonable cost of Indemnitee's counsel
shall be borne by the Company. Notwithstanding the foregoing, the Company shall
not be entitled to assume the defense of any action, suit or proceeding brought
against Indemnitee by or on behalf of the Company or as to which Indemnitee
shall have reasonably made the conclusion provided in (ii) above.

            (c) The Company shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without the Company's prior written consent. The Company shall not
settle any action or claim in any manner that would impose any penalty or
limitation on Indemnitee without Indemnitee's prior written consent. Neither the
Company nor Indemnitee will unreasonably withhold consent to any proposed
settlement.

      8. Enforcement.

            (a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Company hereby in
order to induce Indemnitee to continue as a Covered Person, and acknowledges
that Indemnitee is relying on this Agreement in continuing in such capacity.

                                       4
<PAGE>

            (b) In the event Indemnitee is required to bring any action to
enforce his or her rights or to collect moneys due under this Agreement, the
Company shall advance Indemnitee all of Indemnitee's reasonable fees and
expenses in bringing and pursuing such action. Indemnitee shall be responsible
for reimbursement to the Company of such advance in the event that Indemnitee is
not successful in such action.

      9. No Employment Rights. Nothing in this Agreement is intended to confer
on Indemnitee any right to continue in the employ of the Company for any period
of time or to interfere with or otherwise restrict in any way the rights of the
Company or of Indemnitee, which rights are hereby expressly reserved by each, to
terminate Indemnitee's service at any time and for any reason, with or without
cause, except as may be provided otherwise in an agreement, if any, between the
Company and Indemnitee.

      10. Severability. Each of the provisions of this Agreement are separate
and distinct and independent of one another, so that if any provision of this
Agreement shall be held by a court of competent jurisdiction to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
effect the validity or enforceability of the other provisions of this Agreement.
If any provision of this Agreement is so held to be invalid or unenforceable,
the parties agree that the court making such determination shall have the power
to amend such provision or to delete specific words or phrases so that such
provision shall then be enforceable to the fullest extent permitted by law
unless such change is contrary to the intent of the parties hereto.

      11. Subrogation. In the event of payment to Indemnitee under this
Agreement, the Company shall be subrogated to the extent of the amount of such
payment to all rights of recovery of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary or reasonable to secure
such rights, including, without limitation, the execution of such documents
necessary or reasonable to enable the Company to effectively bring suit to
enforce such rights.

      12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Nevada without resort to conflict of
laws principles.

      13. Binding Effect; Amendment. This Agreement shall be binding on the
parties, their heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Indemnitee, his or her heirs, personal
representatives and assigns, and to the benefit of the Company, its successors
and assigns. No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in a writing signed by both parties.

      14. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
when delivered by hand and receipted for by the party to whom said communication
shall have been directed or (ii), if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which said
communication is so mailed and addressed to the appropriate party at the
following address:

                                       5
<PAGE>

                       If to Indemnitee:




                       If to the Company:      Evolution Petroleum Corporation
                                               820 Gessner, Suite 1340
                                               Suite 1340
                                               Houston, Texas 77024
                                               Attention:  Chairman of the Board

      A party may change its address by delivering notice of such change in the
manner set forth in this Section 14.

      IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.

"Indemnitee"                              Evolution Petroleum Corporation



                                          By:
- ---------------------------------            ----------------------------------
                                          Robert S. Herlin, President


                                       6
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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