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<SEC-DOCUMENT>0001144204-06-040042.txt : 20060928
<SEC-HEADER>0001144204-06-040042.hdr.sgml : 20060928
<ACCEPTANCE-DATETIME>20060928104705
ACCESSION NUMBER:		0001144204-06-040042
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060928
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060928
DATE AS OF CHANGE:		20060928

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:		061112720

	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>v053698_8k.txt
<TEXT>


                                  UNITED STATES
                       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 28, 2006
               Date of Earliest Event Reported: September 27, 2006

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

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

               0-27862                                 80-0028196
- ----------------------------------------    ------------------------------------
       (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)


- --------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425).

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12).

|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b)).

|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c)).


<PAGE>

Item 2.02. Results of Operations and Financial Condition

On September 27, 2006, Evolution Petroleum Corporation, a Nevada corporation,
issued a press release announcing its financial results for the fiscal year
ended June 30, 2006. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.         Description
- -------------       ------------------------------------------------------------

99.1                Press release issued by Evolution Petroleum Corporation on
                    September 27, 2006.


<PAGE>

                                   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, thereunto duly authorized.


 Date: September 27, 2006            EVOLUTION PETROLEUM CORPORATION

                                     By: /s/ Robert Herlin
                                         --------------------------------
                                         Robert Herlin, Chief Executive Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v053698_ex99-1.txt
<TEXT>
EVOLUTION PETROLEUM CORP.                                           NEWS
820 Gessner, Suite 1340, Houston, TX 77024                          RELEASE

FOR IMMEDIATE RELEASE

Company Contact:
Sterling McDonald, CFO
Phone:  (713) 935-0122
Email:  smcdonald@evolutionpetroleum.com

Investor Relations Contact:
Kathleen Heaney
Integrated Corporate Relations
(203) 803-3585


            Evolution Reports Fiscal 2006 Results Highlighted by 75%
       Increase in Operating Revenues and $50 Million Received for Delhi
                                     Farmout

Houston, TX, September 27, 2006. Evolution Petroleum Corporation (AMEX: EPM),
formerly Natural Gas Systems, announced today that operating revenues for the
fiscal year ended June 30, 2006 increased 75% over fiscal year 2005 to $2.9
million. Increased oil volumes and higher realized oil prices led to a 91%
increase in oil revenues, and decreased natural gas volumes on higher realized
prices led to an 18% increase in natural gas revenues. Net income for the year
was $24.6 million, compared with a net loss of $2.2 million in fiscal 2005. A
$45.3 million pre-tax gain on the sale of assets was the major factor in the
increased net income reported for fiscal 2006. The Company reported earnings per
share of $0.98 basic and $0.96 diluted for fiscal 2006, as compared to a loss
per share of $0.09 in fiscal 2005.

Fiscal 2006 Operating Highlights

      o     Sales Volumes:

            o     Oil (Mbbls) - 46.9

            o     Gas (MMcf) - 45.4

      o     5 development wells drilled

      o     Average Realized Prices (including price risk activities):

            o     Oil - $51.92

            o     Gas - $9.35

      o     Proved Reserves - 465 MBOE

Costs and Expenses

Lease operating expenses of $1.7 million ($31.66/boe sold) were 97% higher than
fiscal 2005 and reflect a full year of operating expenses in the Tullos Field, a
general increase in oilfield service costs and unexpectedly high workover costs
on older, recently recompleted wells in the Delhi Field. General and
administrative (G&A) costs were $2.8 million for fiscal 2006 as compared to $2.2
million in fiscal 2005. Increased G&A expenses reflect the overall growth of the
business as well as higher costs associated with being a public company. For
fiscal 2006, the company reported an operating loss of $2.2 million compared to
an operating loss of $1.8 million in fiscal 2005.


<PAGE>

Robert Herlin, President and Chief Executive Officer of Evolution Petroleum,
commented, "Fiscal 2006 was a transformational year for Evolution Petroleum. The
sale of our Delhi Farmout was completed late in the fiscal year, potentially
adding 11 million to 16 million barrels of unproven resources to our interest
through the CO2-EOR project planned for Delhi. This transaction also
significantly strengthened our balance sheet, providing us with the necessary
funds to further grow our three business initiatives in re-developing older
fields, enhanced oil recovery and tight gas projects."

Conference Call Info.

Management will host a conference call to discuss these results today at 4:30
p.m. Eastern Time (3:30 p.m. Central Time). To participate in the conference
call, dial 877-704-5384. International callers, please dial: 913-312-1279. No
Passcode required.

The conference call will be webcast and can be accessed from the Company's
website at www.evolutionpetroleum.com as well as from
http://viavid.net/dce.aspx?sid=000035E3. For those who are unable to listen to
the webcast live, an indexed recording of the call will be posted on the
Company's website following the call's completion.

A telephone replay will also be available for one week beginning at 7:30 p.m.
(Eastern) on September 26, 2006, and can be accessed by dialing 1-888-203-1112
or 1-719-457-0820 (international callers) and entering pin number 1040577.

About Evolution Petroleum
Evolution Petroleum Corporation (http://www.evolutionpetroleum.com) acquires
mature oil and gas resources and applies conventional and specialized technology
to accelerate production and develop incremental reserves and value. The Company
currently owns 7.4% in overriding royalty interests and a 25% reversionary
working interest in the 13,636 acre Delhi Field Holt Bryant Unit, a 25% working
interest in certain other depths in the Delhi Field and 100% working interests
in smaller fields, all located onshore in Louisiana. Having already produced 190
million barrels of oil through primary and secondary recovery methods, the Delhi
Holt Bryant Unit is scheduled for redevelopment using CO2 enhanced oil recovery
technology. The Company is actively engaged in other development projects.

Safe Harbor Statement
All statements contained in this press release regarding potential results and
future plans and objectives of the Company are forward-looking statements that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. The Company
undertakes no obligation to update or review any forward-looking statement,
whether as a result of new information, future events, or otherwise. Important
factors that could cause actual results to differ materially from our
expectations include, but are not limited to, those factors that are disclosed
under the heading "Risk Factors" and elsewhere in our documents filed from time
to time with the United States Securities and Exchange Commission and other
regulatory authorities. Statements regarding our ability to complete
transactions, successfully apply technology applications in the re-development
of oil and gas fields, realize future production volumes, realize success in our
drilling and development activity, prices, future revenues and income and cash
flows and other statements that are not historical facts contain predictions,
estimates and other forward- looking statements. Although the Company believes
that its expectations are based on reasonable assumptions, it can give no
assurance that its goals will be achieved and these statements will prove to be
accurate. Important factors could cause actual results to differ materially from
those included in the forward-looking statements.


                                     #######


<PAGE>

                               EVOLUTION PETROLEUM
                          Consolidated Income Statement

<TABLE>
<CAPTION>
                                                                          Years Ended June 30,
                                                                 ------------------------------------
                                                                       2006                 2005
                                                                 ----------------    ----------------
<S>                                                              <C>                 <C>
Revenues:
      Oil sales                                                  $      2,450,676    $      1,335,288
      Gas sales                                                           424,190             358,433
      Price risk management activities                                    (13,452)            (58,534)
                                                                 ----------------    ----------------
              Total revenues                                            2,861,414           1,635,187

Operating Costs:
      Production expenses                                               1,725,760             874,876
      Production taxes                                                     86,562              68,386
      Depreciation, depletion and amortization                            407,467             260,124
      General and administrative (includes non-cash
      stock based compensation expense of $546,567
      and $707,117 for the years ended June 30, 2006 and 2005)          2,826,085           2,220,780
                                                                 ----------------    ----------------
              Total operating costs                                     5,045,874           3,424,166

Loss from operations                                                   (2,184,460)         (1,788,979)

Other income and (expense):
      Interest income                                                     165,313              11,709
      Interest expense                                                 (2,600,180)           (387,301)
      Gain on sale of assets                                           45,325,468                   0
                                                                 ----------------    ----------------
              Total other income and (expense)                         42,890,601            (375,592)
                                                                 ----------------    ----------------

Income / (loss) before income taxes                                    40,706,141          (2,164,571)

Income tax expense:

      Current                                                           2,978,650                   0

      Deferred                                                         13,101,350                   0
                                                                 ----------------    ----------------

              Total income tax expense                                 16,080,000                   0
                                                                 ----------------    ----------------
Net income (loss)                                                $     24,626,141    $     (2,164,571)
                                                                 ================    ================

Earnings/ (Loss) per common share
      Basic                                                      $           0.98    $          (0.09)
                                                                 ================    ================
      Diluted                                                    $           0.96    $          (0.09)
                                                                 ================    ================


Weighted average number of common share

      Basic                                                            25,031,125          23,533,922
                                                                 ================    ================
      Diluted
                                                                       25,555,992          23,533,922
                                                                 ================    ================
</TABLE>


<PAGE>

                Evolution Petroleum Corporation and Subsidiaries
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                                 June 30,
                                                                                   ------------------------------------
                                                                                           2006               2005
                                                                                   ----------------    ----------------
<S>                                                                                <C>                 <C>
Assets
Current Assets:
     Cash                                                                          $      9,893,547    $      2,548,688
     Accounts receivable, trade                                                             132,371             300,761
     Inventories                                                                             76,917             222,470
     Prepaid expenses                                                                       157,629              84,304
     Retainers and deposits                                                                  60,895              56,335
                                                                                   ----------------    ----------------
             Total current assets                                                        10,321,359           3,212,558


     Cash in qualified intermediary account for "like-kind" exchanges                    34,662,368                   0

     Oil & Gas properties - full cost                                                     3,878,551           5,276,303
     Oil & Gas properties - not amortized                                                    52,098              61,887
     Less:  accumulated depletion                                                          (371,624)           (313,391)
                                                                                   ----------------    ----------------
             Net oil & gas properties                                                     3,559,025           5,024,799

     Furniture, fixtures and equipment, at cost                                              16,561              12,113
     Less:  accumulated depreciation                                                         (7,998)             (3,401)
                                                                                   ----------------    ----------------
                                                                                              8,563               8,712

     Restricted deposits                                                                    326,835             863,089
     Other assets                                                                            79,808             356,066
                                                                                   ----------------    ----------------
     Total assets                                                                  $     48,957,958    $      9,465,224
                                                                                   ================    ================

Liabilities and Stockholders' Equity
Current liabilities:
     Accounts payable                                                              $        310,272    $        240,389
     Accrued liabilities                                                                    473,782             276,470
     Notes payable, current                                                                       0               6,754
     Income taxes payable                                                                 2,978,650                   0
     Royalties payable                                                                       47,054              89,713
                                                                                   ----------------    ----------------
             Total current liabilities                                                    3,809,758             613,326

Long term liabilities:
     Notes Payable, net of discount                                                               0           2,906,548
     Deferred income taxes payable                                                       13,101,350                   0
     Asset retirement obligations                                                           123,679             433,250
                                                                                   ----------------    ----------------
             Total liabilities                                                           17,034,787           3,953,124

     Common Stock, totaling 351,333 shares subject to demand registration rights            790,500                   0

Stockholders' equity:
     Common Stock, par value $0.001 per share; 100,000,000 shares authorized,
        26,300,664 and 24,774,606, issued and outstanding as of June 30, 2006
        and June 30, 2005, respectively, net of 351,333 shares of common stock
        subject to
        demand registration rights                                                           26,300              24,774
     Additional paid-in capital                                                          10,274,555           9,611,767
     Deferred stock based compensation                                                     (265,167)           (595,283)
     Accumulated income / (deficit)                                                      21,096,983          (3,529,158)
                                                                                   ----------------    ----------------
             Total stockholders' equity                                                  31,132,671           5,512,100
                                                                                   ----------------    ----------------
             Total liabilities and stockholders' equity                            $     48,957,958    $      9,465,224
                                                                                   ================    ================
</TABLE>


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