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Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Taxes  
Income Taxes

Note 6. Income Taxes

The Company files a consolidated federal income tax return in the United States and various combined and separate filings in several state and local jurisdictions in a timely manner.

There were no unrecognized tax benefits, nor any accrued interest or penalties associated with unrecognized tax benefits during the years ended June 30, 2025 and 2024. The Company believes that it has appropriate support for the income tax positions taken and to be taken on the Company’s tax returns and that the accruals for tax liabilities are adequate for all open years based on its assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. The Company’s federal and state income tax returns are open to audit under the statute of limitations for the fiscal years ended June 30, 2021 through June 30, 2024 for federal tax purposes and for the fiscal years ended June 30, 2020 through June 30, 2024 for state tax purposes. To the extent the Company utilizes net operating losses (“NOLs”) generated in earlier years, such earlier years may also be subject to audit.

Income tax (expense) benefit for the years ended June 30, 2025 and 2024 is comprised of the following (in thousands):

​

​

​

​

​

​

​

​

​

    

June 30, 2025

    

June 30, 2024

Current:

​

​

 

​

​

 

Federal

​

$

(462)

​

$

(898)

State

​

​

(402)

​

​

(620)

Total current income tax (expense) benefit

​

​

(864)

​

​

(1,518)

Deferred:

​

​

 

​

​

 

Federal

​

​

584

​

​

59

State

​

​

(116)

​

​

42

Total deferred income tax (expense) benefit

​

​

468

​

​

101

Total income tax (expense) benefit

​

$

(396)

​

$

(1,417)

​

For the year ended June 30, 2025 the Company recognized income tax expense of $0.4 million and had an effective tax rate of 21.2% compared to income tax expense of $1.4 million and an effective tax rate of 25.8% for the year ended June 30, 2024. During each of the years ended June 30, 2025 and 2024, the Company recognized an income tax benefit of $0.1 million and less than $0.1 million, respectively, related to the vesting of restricted stock awards.

The Company’s effective tax rate will typically differ from the statutory federal rate as a result of state income taxes, primarily in the states of Louisiana, North Dakota, Oklahoma and Texas, due to percentage depletion in excess of basis, and other permanent differences including federal tax credits expected from production on marginal natural gas wells. The following table presents the reconciliation of the Company’s income taxes calculated at the statutory federal tax rate to the income tax (expense) benefit (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

% of Income

​

​

​

​

% of Income

​

​

​

​

​

​

Before

​

​

​

​

Before

​

​

    

June 30, 2025

    

Income Taxes

    

June 30, 2024

    

Income Taxes

​

Income tax (expense) benefit computed at the statutory federal rate:

​

$

(392)

​

​

21.0

%

$

(1,154)

​

21.0

%

Reconciling items:

​

​

 

​

​

​

​

​

 

​

​

​

Return to provision adjustments

​

​

(2)

​

​

0.1

%

​

3

​

(0.1)

%

Depletion in excess of tax basis

​

​

59

​

​

(3.2)

%

​

114

​

(2.1)

%

State income taxes, net of federal tax benefit

​

​

(548)

​

​

29.3

%

​

(458)

​

8.4

%

Permanent differences related to stock-based compensation and other

​

​

(58)

​

​

3.1

%

​

80

​

(1.5)

%

State valuation allowance

​

​

140

​

​

(7.5)

%

​

—

​

—

%

Marginal well credit

​

​

408

​

​

(21.8)

%

​

—

​

—

%

Other

​

​

(3)

​

​

0.2

%

​

(2)

​

0.1

%

Income tax (expense) benefit

​

$

(396)

​

​

21.2

%

$

(1,417)

​

25.8

%

​

Deferred income taxes primarily represent the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of net deferred income tax assets (liabilities) recognized are as follows (in thousands):

​

​

​

​

​

​

​

​

​

    

June 30, 2025

    

June 30, 2024

Deferred tax assets:

​

​

 

​

​

 

Non-qualified stock-based compensation

​

$

599

​

$

381

Net operating loss carry-forwards and other carry-forwards

​

​

148

​

​

313

Derivative losses

​

​

298

​

​

192

Asset retirement obligations

​

​

4,982

​

​

4,427

Other deferred tax assets

​

​

481

​

​

197

Total deferred tax assets

​

​

6,508

​

​

5,510

Deferred tax liabilities:

​

​

 

​

​

 

Oil and natural gas properties

​

​

(12,742)

​

​

(12,072)

Total deferred tax liabilities

​

​

(12,742)

​

​

(12,072)

Valuation allowance

​

​

—

​

​

(140)

Net deferred tax liabilities

​

$

(6,234)

​

$

(6,702)

​

Evolution Petroleum OK, Inc., a wholly-owned subsidiary of the Company, had a prior year carryforward of NOLs of $8.9 million generated during tax years 2011 through 2017. In fiscal year 2024, in conjunction with the acquisition of oil and natural gas properties in Oklahoma by Evolution Petroleum OK, Inc., a deferred tax asset was recorded for a portion of this NOL carryforward. In fiscal year 2025, the valuation allowance of $0.1 million was released.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. As the legislation was signed into law after the close of the fiscal year end, the impacts are not included in the Company’s operating results as of and for the year-end June 30, 2025 as ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The Company is currently assessing the impact of the OBBBA on its consolidated financial statements, and while it does not expect it to have a material impact on its results of operations, it does expect it to provide a benefit to its cash flows from operating activities.