Evolution Petroleum Reports Fiscal Year-End 2009 Reserves

Evolution Petroleum reported that its independent reservoir engineers have assigned net proved and un-risked probable reserves of 17.8 MMBOE with a pre-tax PV-10 of $244 million (a non-GAAP measure defined below) as of July 1, 2009. Of the totals, 17% of the reserves and 15% of the pre-tax PV-10 are proved, and 91% of the reserves are crude oil, condensate and natural gas liquids (NGLs).

Proved reserves totaled 3.1 million barrels of oil equivalent (MMBOE), of which 65% are crude oil, condensate and NGLs, with a pre-tax PV-10 of $35.8 million ($1.11 per fully diluted share). Proved reserves are net of 134 MBOE of production during the year and downward revisions of 1.1 MMBOE, offset by additions of 291 MBOE. Downward revisions from the prior year ending June 30, 2008 were primarily due to NYMEX commodity price declines of 70% for natural gas ($13.09 to $3.885 per MMBTU) and 50% for oil ($140 to $69.89 per barrel). In particular, 87% of the revisions were the result of five predominantly natural gas proved locations becoming uneconomic at NYMEX gas prices below $5.90 per MMBTU. Proved undeveloped reserves as of July 1, 2009 comprise 2.63 MMBOE with PV-10 of $28.2 million ($0.87 per fully diluted share), and include 21 drilling locations in the Giddings Field and four drilling locations in its Neptune oil project. No write-downs of the full cost pool were required during the year.

Neptune Oil Project

For the first time, the independent reports included reserves assigned to the Company's Neptune oil project in South Texas, including 541 MBO of proved, probable and possible oil reserves, with pre-tax PV-10 of $8.1 million ($0.25 per fully diluted share) associated with the first 25 proved and probable drilling locations. The possible reserves are assigned to the probable locations. The Company also has identified up to 79 additional prospective infill drilling locations on its acreage and is preparing to initiate drilling there.

Oklahoma Shale Gas

Evolution commenced its field test program in the shallow Woodford Shale in Wagoner County of Eastern Oklahoma late in Fiscal 2009 with the re-entry of three vertical wells, drilling of three wells and core testing. The preliminary tests are positive for both the Woodford and a second shale reservoir. Two of the vertical wells are scheduled for hydraulic fracturing with sand and extended production testing to measure peak rates and decline curves.

Evolution also holds acreage in Haskell County, Oklahoma and plans to target multiple shale gas reservoirs at depths between 4,000 and 5,000 feet. A test of the shale reservoirs is planned for fiscal 2010. Evolution believes that its net shale acreage offers up to 200 BCF of shale gas potential at a development cost of $0.75 - $1.25 per MCF.

Delhi EOR Project

Also a first, Evolution engaged DeGolyer & MacNaughton (D&M), independent reservoir engineers, to evaluate its interests in the Delhi Field EOR project being operated by a subsidiary of Denbury Resources. D&M assigned 13.6 MMBO of probable oil reserves, net to Evolution, with a pre-tax PV-10 of $196.6 million ($6.07 per fully diluted share). The Company believes that there is additional upside potential through a limited EOR severance tax abatement.

Operationally, Denbury has reported that first CO2 injection may be delayed by up to three months for a minor modification to their recently completed CO2 pipeline to the Delhi Field. If delayed, first CO2 injection would likely occur in the fourth calendar quarter of 2009, with first oil production response expected within six months.

Giddings Field

The Company began fiscal 2010 with net production of approximately 366 BOE per day from ten wells located in the Giddings Field in Central Texas. Net proved reserves attributable to the field are 3.0 MMBOE, with a pre-tax PV-10 of $35.3 million ($1.09 per fully diluted share), and include fourteen re-entry drilling locations and seven grassroots drilling locations. Probable reserves are 0.9 MMBOE with a pre-tax PV-10 of $10.9 million ($0.34 per fully diluted share), associated with two probable grassroots locations and incremental reserves associated with five proved undeveloped locations.

Fiscal 2010 Capital Expenditure Plan

For Fiscal 2010, Evolution expects to conduct a limited capital expenditure program of approximately $3 million, funded from operations and existing working capital. Activities will be focused on completing the production testing program in Oklahoma, initial development drilling of infill oil wells in the Neptune Project in South Texas, work-overs and drilling of a salt water disposal well in Giddings to optimize production and lifting costs, and expansion of Evolution's artificial lift technology applications.

Robert Herlin, President, stated, "We begin fiscal 2010 with no debt, a strong balance sheet and solid projects. During the current environment of low natural gas prices, we intend to concentrate our efforts on protecting and enhancing share value by allocating our capital to projects that we believe can add substantial value on a small capital outlay. In the near term, we are focusing on developing our South Texas oil project to confirm additional reserves and add net oil production, verifying the potential in our gas shale acreage in Oklahoma and commercializing our artificial lift technology that appears to be successful in its first application in Giddings. The timing for resuming our development drilling in the Giddings Field will depend upon improvements in natural gas prices. Expected increases in cash flow from our Delhi interests during calendar 2010 and beyond should allow us to expand these development activities. "