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Corporate Presentation March 2011 (NYSE Amex: EPM)

Corporate Presentation March 2011 (NYSE Amex: EPM). © Evolution Petroleum Corporation. Forward Looking Statements and Cautionary Note.

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Corporate Presentation March 2011 (NYSE Amex: EPM)

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  1. Corporate Presentation March 2011 (NYSE Amex: EPM) © Evolution Petroleum Corporation

  2. Forward Looking Statements and Cautionary Note The data contained in this presentation that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements may relate to capital expenditures, drilling and exploitation activities, production efforts and sales volumes, proved, probable, and possible reserves, operating and administrative costs, future operating or financial results, cash flow and anticipated liquidity, business strategy, property acquisitions, and the availability of drilling rigs and other oil field equipment and services. These forward-looking statements are generally accompanied by words such as “estimated”, “projected”, “potential”, “anticipated”, “forecasted” or other words that convey the uncertainty of future events or outcomes. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. These statements are based on our current plans and assumptions and are subject to a number of risks and uncertainties as further outlined in our most recent 10-K and 10-Q. Therefore, the actual results may differ materially from the expectations, estimates or assumptions expressed in or implied by any forward-looking statement made by or on behalf of the Company. Cautionary Note to U.S. Investors –The SEC has recently modified its rules regarding oil and gas reserve information that may be included in filings with the SEC. The newly applicable rules allow oil and gas companies to disclose not only proved reserves, but also probable and possible reserves that meet the SEC’s definitions of such terms. We disclose proved, probable and possible reserves in our filings with the SEC. Our reserves as of June 30, 2010 were estimated by DeGolyer & MacNaughton, W.D Von Gonten & Co. (“Von Gonten”), and Lee Keeling and Associates, Inc. (“Keeling”), independent petroleum engineering firms. In this presentation, we make reference to probable reserves. These estimates are by their nature more speculative than estimates of proved reserves and are subject to greater uncertainties, and accordingly the likelihood of recovering those reserves is subject to substantially greater risk.

  3. Quick Facts about EPM • Ticker Symbol EPM (NYSE AMEX) • Fiscal Year-End June 30 • Market Cap* ~$208 million as of 2/25/2011 ($7.58/shr) • Enterprise Value ~$205 MM “ (based on 12/31/10 FS) • Shares 27.5 MM shares outstanding 33.1 MM shares fully diluted ($1.83 avg. exercise) ~42 % owned by institutions • Financial Strength ~$3.2 MM in WC & no debt as of 12/31/10 • Team Record 7 year trackrecord in creating and implementing major projects * Excluding net value of options and warrants

  4. Our Business • EPM generates and implements domestic, onshore oil & gas development projects utilizing our expertise and modern technology. • Our business model is focused on building share value by: • Generating development ideas • Capturing project value without overpaying • Initiating development to reduce risk • Utilizing third parties to finance widespread development without cross- collateralization risk or dilution of share value • Our projects are: • Lower risk development • Engineering-based • Within existing fields

  5. Oil & Gas Core Assets(Net Reserves at 6/30/2010) Delhi Field-producing CO2 EOR - 100% oil 9.4 MMBO Proved 5.7 MMBO Probable East OK Woodford Shale – testing ~15,000 net acres targeting shallow Woodford Giddings Field – producing Horizontal wells – naturally fractured Austin Chalk, Georgetown, Buda plus EagleBine potential 27% oil, 32% NGL, 41% gas 3.0 MMBOE Proved, 1.0 MMBOE Probable

  6. EPM Metrics • Substantial oil and gas reserves • 12.4 MMBOE Proved • 7.2 MMBOE Probable • Oily – Proved reserves are 83% black oil and 8% NGL • Valuation Metrics at fiscal year-end (6/30/2010): (@SEC NYMEX pricing of $76.21/BO, $4.10/MMBTU) • Proved PV10 $8.03 / FD Share • Probable PV10 $1.93/ FD Share • 2P PV10 $9.96 / FD Share • 2P PV10 Futures $11.68 / FD Share Each fully diluted common share owns 60% of 1 BOE of net reserves 6

  7. Why own EPM? • Proved reserves PV10 at current oil price >> current market valuation • Growing value in Delhi CO2 EOR project: • Currently producing with expected steadily increasing cash flows • PV10 grows 40+% over next 5 years without significant EPM capex • + EPM expects ~$140+ MM of pretax cash flows over same 5 years ($76 oil) • Long life oil reserves with premium pricing and upside potential • Proved reserves require no capital expenditures and incur limited operating expenses (our “prepaid PUD annuity”) 7

  8. Why own EPM? • Upside potential in other projects underway: • 15 remaining development drilling locations (13 PUD) in Giddings, of which up to 2 may be included in current joint venture • Exposure to new Eagle Ford / Woodbine play • Proprietary artificial lift technology • Low cost unconventional gas in Eastern Oklahoma • No debt • Employees fully aligned with shareholders by beneficially owning 20% of fully diluted shares and focused on building value per share 8

  9. Successful Team Track Record Using $8.3 MM of paid-in equity, we invested We generated, as of 6/30/10 Delhi EOR Giddings Artificial Lift Technology OK Shale $6.8 MM $26.7 MM $0.2 MM $6.2 MM $50 MM cash pretax + Proved PV10 = $224 million 2P PV10 = $276 million $9.7 MM cash from field + Proved PV10* = $41 million 2P PV10* = $53 million First field tests successful, JVs pending ~15K net acres of Woodford potential; first reserves assigned - testing * Before Giddings drilling JV 9

  10. EPM Reserves Growth (MMBOE) • Reserves as at fiscal year end of June 30 • Does not include other resource or technology potential • 2009 downward revisions primarily due to commodity prices

  11. EPM Assets: Delhi CO2 – EOR Project • Milestones Achieved – • Phase I CO2 injection began Nov 2009 • Early first oil production response in March 2010 from Phase I • Gross production > 1,000 bopd from Phase I • Phase II CO2 injection began Dec 2010 78 mile Delta Pipeline to transport CO2 to Delhi Field Construction of first phase of produced gas facility for recycling CO2 at Delhi 11

  12. EOR - Delhi Field CO2 Project Delhi Tinsley Reserves*: Proved9.4 MMBO $224 MM PV10 Probable5.7 MMBO$ 51 MM PV10 2P 15.1 MMBO $276 MM PV10 (* At 6/30/10 SEC NYMEX price $76.21/BO) Gross Historical Production 192 MMBO Projected EOR Recovery 13% Proved (% of OOIP) 4% Probable Average depth 3,235’ Unit Size 13,636 acres Jackson Dome Reserves Basis Earlier & stronger Phase I oil production - began March 2010 Dedicated CO2 reserves Phase II first injection Dec 2010, installing Phase III during 2011 Upside Potential More original-oil-in-place Higher EOR recovery similar to other DNR projects Utilization of lower cost WAG processunder consideration

  13. EPM’s Delhi Assets • We purchased Delhi Field in 2003 for $2.8 MM, expended $2.5 MM in field, later purchased royalty interests for $1.5 MM, then farmed out our working interest for $50 MM cash + commitment to install EOR project at operator’s sole cost with their proved CO2 reserves + reversionary interest. • We own royalty interests equal to ~7.4% of gross production • EPM receives 7.4% of gross revenues from day one • EPM pays no capital expenditures and no operating costs • Project is exempt from state severance tax for next 6-8 years, subject to oil price & rates • Our 5 MMBO of 2P royalty reserves are 1/3rd of our total reserve volumes and ~1/2 of PV We also own a separate reversionary ~24% working interest (~19% revenue interest) • EPM bears no capital expenditures until deemed payout • Payout occurs when project generates net field cumulative cash flow of $200 million • Net field cash flow = revenue – field operating expense (including CO2) • After Payout, EPM will bear its pro rata share of capital expenditures & expenses and will own pro rata share of all field assets and reserves including injected CO2 • Reversionary interests are in addition to above royalty interests 13

  14. Delhi PV10 @ $76/Bbl Increases With Time Cash Flows from DeGolyer & MacNaughton 7/1/10 SEC Reserves Report @ $76.21/Bbl. Residual PV10 is the PV10 of remaining cash flows from given year to project end.

  15. Delhi Sensitivity Analysis Delhi PV/Share Impact by Levels of Recovery Delhi PV/Share Impact by Oil Price and Inflation EPM stock & Delhi oil price at 2/25/2011 * Varying 2P Reserves; prices & costs escalating @ 3% pa from $76.21/BO NYMEX price * Varying initial oil price with 2P Reserves, oil pricing either flat or escalated as shown

  16. Additional Delhi Analysis @ 2/28/11 LLS Oil price 16

  17. Giddings Field, Central Texas Attractive Drilling Economics Drilling locationsAve. Gross RecoveryAve. cost/wellCost per net BOE 10 proved re-entries 146 MBOE/well $1.5 MM $12.40 3 proved grassroot & 305 MBOE/well $2.7 MM $11.00 2 probable grassroot • Naturally fractured Austin Chalk, Georgetown & Buda – no hydraulic fracs required • Wells typically produce at high initial rates with steep initial decline, then stabilize. About half of estimated reserves are produced in first two years. • Reserves estimated to be 27% oil, 32% gas liquids and 41% natural gas • Industry joint venture may be expanded by two more locations. First three JV wells combined initial test rate as good or better than expected. • 100% WI (~80% NRI) in 10 producers; 20% WI-BPO & 38% WI-APO (16-30% NRI) in 3 completed JV wells with expected aggregate results

  18. Gas Shales in Eastern Oklahoma EPM Acreage EPM owns ~15,000 net acres in Haskell and Wagoner Counties, OK Haskell – Woodford between 4,000’ & 6,000’ in depth Wagoner – Woodford between 1,200’ & 1,800’ in depth Woodford Completions Tulsa EPM vertical re-entry Main Woodford Trend 6,422’ TVD Woodford Hz Test @ 7.1 MMCFE/D Oklahoma 6,000’ TVD Woodford Hz Well – ultimate recovery ~1+ BCF from 2000’ lateral

  19. Our OK Gas Shales: Shallow Low Cost • EPM is targeting a development cost of $1 per MCFe or less • Shallow depth = small rig and light acid fracs = low day rates • Haskell Woodford at 4,000-6,000’ depth – vertical wells targeting 500-1000 mmcf at $500K cost; vertical wells in Wagoner targeting 200+ mmcf at $180K at <1800’ depth • Numerous comparable wells in Haskell with ~1 bcf historical average recovery • Dewatering process to liberate natural gas • EPM testing program underway • EPM first vertical test (re-entry) in Haskell briefly tested strong gas rate and pressure before shut-in for pipeline connection – first sales ~3/1/11. • EPM test in Wagoner western block tested 93 mcfd, eastern block test still dewatering, southern block marginal • Substantial additional acreage is typically obtainable through forced pooling – EPM has substantial footprint in 30 sections in Haskell County

  20. Proprietary Artificial Lift Technology • Conventional artificial lift • Either fluid level eventually drops to a level where rod pump or gas lift are no longer effective, or • Low level of fluid production in gas well builds and eventually shuts off gas production • This can leave substantial volumes of oil and gas unrecovered. • Our technology • Mobilizes remaining fluid to the pump • Cost $50K - $150K per application • Successfully applied in 3 wells in Giddings Field Original fluid level Fluid level at conventional abandonment Remaining potential Reservoir • Our Plan for 2011 • Complete first joint venture to install (2 JVs negotiating) • Expand outside of Giddings Field

  21. Operating Plan for FY 2011 A $4 million base case capital expenditure program to: • Drill up to 5 horizontal wells in Giddings joint venture (3 completed to date) • Re-enter and frac Woodford Shale in two mid-depth vertical wells in Haskell (1 to date) and continue Wagoner production testing • Commercialize artificial lift technology through one or more joint ventures through demonstrations on third party wells Liquidity Plan: • Use Giddings cash flow to cover overhead, and Delhi cash flow to drill • Avoid high cost, high risk capital • Utilize joint ventures, project financing, noncore asset monetization and/or small, opportunistic equity placement to accelerate development as warranted • Maintain liquidity through FY2012 as Delhi cash flows increase

  22. Catalysts for growth in FY2011 • Continued production growth at Delhi at premium LLS oil price • Drilling success in Giddings • Positive tests in Woodford Shale • New joint venture(s) to apply artificial lift technology • Additional development joint venture(s) – Giddings & OK • Maintain conservative financial approach while increasing NAV/share – no debt & 84% oil (90% total liquids) 22

  23. Exhibits Definitions EPM Annual Revenues Management team Board of Directors

  24. Definitions EOR Enhanced oil recovery WAG Water alternating gas – type of CO2 EOR BOE Barrel of oil equivalent CF Cubic feet of natural gas at standard conditions M Thousands MM Millions NGL Natural gas liquids PUD Proved undeveloped 2P Proved + Probable Unrisked Reserves PV10 Future unescalated pretax net cash flows discounted at 10% per annum based on SEC pricing (trailing twelve months realized prices) SEC Reserves Reserves based on unescalated trailing twelve month realized prices Futures Reserves Reserves based on five year forward futures commodity prices with subsequent years held constant at the fifth year prices PV10 Futures PV10 adjusted for Futures Reserves PV10 Flat PV10 adjusted to given commodity prices without escalation PV10 Esc PV10 adjusted to given commodity prices with price & cost escalation FD Share Fully Diluted Shares includes outstanding shares + unvested options & warrants, without considering the weighted average exercise price of $1.83 Cautionary Note: PV-10 is a commonly used financial metric and does not necessarily equal market value. All Reserves are unrisked, and SEC Reserves unless otherwise noted.

  25. EPM Revenues • Revenues in thousands • 2007 revenues decreased by farm-out to DNR • June 30 fiscal year-end

  26. EPM Liquidity 26

  27. Our Management Team Robert Herlin, CEO & Chairman • Co-founded EPM in 2003 and built company using $8.3 million of equity capital • 28 years of leadership experience in M&A, development, operations and finance in public and private sectors • $800 million in transactions completed • Originated and led horizontal drilling team in early years of horizontal drilling adoption by industry • Member of Board of Directors – Boots & Coots • B.S. and M.E. in chemical engineering (Rice University) and MBA (Harvard) Sterling McDonald, CFO • CFO since 2003 • Former CFO for PetroAmerican Services, PetroStar Energy and Treasurer for Reading & Bates Corporation • Responsible for raising ~$4 billion in capital • B.S. and MBA (University of Tulsa)

  28. Our Management Team Daryl Mazzanti, VP-Operations • Joined team in mid-2005; 22 years of experience in oil & gas industry • Former Manager of US Business Development for Anadarko • Former Production Manager, Austin Chalk for Anadarko/UPRC responsible for 1200 wells, staff of 65 and 25,000 BOEPD of production • Responsible for numerous innovations in horizontal drilling, completions and artificial lift • B.S. in Petroleum Engineering (University of Oklahoma) Edward Schell, General Manager for Drilling and Unconventional Development • Joined team in late 2006; 26 years of experience in oil and gas industry • Various management positions in drilling, operations and business development at Anadarko Petroleum • Particular expertise in horizontal drilling and tight gas reservoirs • Drilled ~800 wells, 200 being horizontal and 2/3rds being in unconventional reservoirs • B.S. in Petroleum Engineering (University of Texas)

  29. Our Board of Directors Robert Herlin, CEO, Chairman & Co-founder Laird Cagan, Director & Co-founder Managing Director – Cagan McAfee Capital Partners Formerly with Goldman Sachs and Drexel Burnham Lambert E.J. DiPaolo, Director Energy Partner with Growth Capital Partners, L.P. Former Halliburton Group Senior Vice President of Global Business Development Gene Stoever, Director Retired Partner with KPMG Peat Marwick Former SEC Reviewing Partner for KPMG CPA in the State of Texas and member of the AICPA Bill Dozier, Director Former SVP-Business Development for Vintage Petroleum Former SVP-Operations for Vintage Petroleum Formerly in operations for Santa Fe Minerals and Amoco Kelly W. Loyd, Director Director with JVL Advisors, LLC, a private energy investment company Formerly Associate with RBC Capital markets Formerly Founder of L.A.B. sports and Entertainment and Managing Partner of Tigre Leasing, LLP

  30. (NYSE AMEX: EPM) Company Contact: Sterling McDonald, VP & CFO (713) 935-0122 smcdonald@evolutionpetroleum.com IR Contact: Lisa Elliott / lelliott@drg-e.com Jack Lascar / jlascar@drg-e.com DRG&E / 713-529-6600

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