**EXHIBIT 99.4**

 

August 17, 2010

 

Mr. RobertHerlin

EvolutionPetroleum Corp.

2500City West Blvd. Suite 1300

Houston,Texas 77042

 
|   | Re:    | Evolution  Petroleum Corporation     |
|--------|--------|--------------------------------------|
|   |   | Estimated  Reserves and Revenues     |
|   |   | “As  of” July 1, 2010 |

 

Mr. Herlin:

 

At your request, W.D. Von Gonten & Co. has estimated futurereserves and projected net revenues attributable to interests in certain oiland gas properties owned by Evolution Petroleum Corp. (Evolution), “As of” July 1,2010.  The properties represented in thisreport are located in Brazos, Burleson, Duval, Fayette, Grimes, Lee,Washington, and Webb Counties, Texas. All net revenue projections were prepared utilizing mid year 2010 SECpricing, as per SEC guidelines.

 

Summaries of our conclusions, “As of” July 1, 2010, are asfollows:

 
| ** **                                  | ** ** | **Net to Evolution Petroleum Corporation** | ** ** |
|---------------------------------------------|------------|----------------------------------------------------------------|------------|
| ** **                                  | ** ** | **Proved Developed**                                      | ** ** | **Proved** | ** ** | **Total** | ** ** | **Total** | ** ** | **Total** | ** ** |
| **SEC Pricing**                        | ** ** | **Producing**                                                  | ** ** | **Non-Producing** | ** ** | **Undeveloped** | ** ** | **Proved** | ** ** | **Probable** | ** ** | **Possible** | ** ** |
|                                        |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| **Reserve Estimates**                       |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| Oil/Cond.,  Mbbl                            |       | 81.2                                                           |       | 11.9 |   | 749.5 |   | 842.6 |   | 489.5 |   | 241,843.0 |   |
| Gas,  MMcf                                  |       | 1,347.7                                                        |       | 51.5 |   | 5,226.1 |   | 6,625.3 |   | 3,271.5 |   | 0.0 |   |
| NGL,  Mbbl                                  |       | 142.8                                                          |       | 14.5 |   | 879.3 |   | 1,036.6 |   | 226.1 |   | 0.0 |   |
| Gas  Equivalent, MMcfe                      |       | 2,691.5                                                        |       | 210.1 |   | 14,999.1 |   | 17,900.7 |   | 7,564.8 |   | 1,451,058.0 |   |
|                                        |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| **Revenues**                                |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| Oil,  $ (48.1) %                       |       | 6,087,289                                                      |       | 900,546 |   | 56,568,859 |   | 63,556,703 |   | 37,019,484 |   | 18,322,047 |   |
| Gas,  $ (20.6) %                       |       | 5,375,119                                                      |       | 208,835 |   | 21,587,465 |   | 27,171,416 |   | 13,496,356 |   | 0 |   |
| NGL,  $ (31.3) %                       |       | 5,713,927                                                      |       | 606,669 |   | 35,050,789 |   | 41,371,383 |   | 8,231,312 |   | 0 |   |
| Total,  $                                   |       | 17,176,334                                                     |       | 1,716,050 |   | 113,207,109 |   | 132,099,516 |   | 58,747,152 |   | 18,322,047 |   |
|                                        |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| **Expenditures**                            |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| Ad  Valorem Tax, $                          |       | 669,783                                                        |       | 65,886 |   | 4,442,016 |   | 5,177,686 |   | 2,236,962 |   | 699,169 |   |
| Severance  Tax, $                           |       | 431,755                                                        |       | 68,892 |   | 2,156,717 |   | 2,657,364 |   | 2,823,095 |   | 842,814 |   |
| Direct  Operating Expense, $                |       | 3,073,603                                                      |       | 191,520 |   | 16,421,250 |   | 19,686,365 |   | 15,177,800 |   | 0 |   |
| Variable  Operating Expense, $              |       | 674,624                                                        |       | 3,106 |   | 0 |   | 677,730 |   | 0 |   | 2,908,714 |   |
| Transporation  Expense, $                   |       | 695,272                                                        |       | 52,689 |   | 4,309,962 |   | 5,057,923 |   | 1,719,476 |   | 0 |   |
| Total,  $                                   |       | 5,545,038                                                      |       | 382,093 |   | 27,329,936 |   | 33,257,066 |   | 21,957,334 |   | 4,450,697 |   |
|                                        |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| **Investments including Abandonment**       |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| Total,  $                                   |       | 225,000                                                        |       | 280,000 |   | 32,878,949 |   | 33,383,949 |   | 14,080,500 |   | 0 |   |
|                                        |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| **Estimated Future Net Revenues (FNR)**     |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| Undiscounted  FNR, $                        |       | 11,406,298                                                     |       | 1,053,957 |   | 52,998,230 |   | 65,458,488 |   | 22,709,320 |   | 13,871,348 |   |
| FNR  Disc. @ 10%, $                         |       | 8,114,521                                                      |       | 534,732 |   | 32,688,342 |   | 41,337,594 |   | 12,553,537 |   | 7,602,077 |   |
|                                        |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| **Allocation Percentage by Classification** |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |
| FNR  Disc. @ 10%                            |       | 19.6                                                           | %          | 1.3 | % | 79.1 | % | 100.0 | % |   |   |   |   |

 

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*Due to computer rounding, numbers in the above table may not sumexactly.

 

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**Report Qualifications**

 

**Purpose of Report** — The purpose of thisreport is to provide Evolution with an estimate of future reserves and revenuesattributable to certain oil and gas interests owned by Evolution.

 

**Scope of Work** — W. D. Von Gonten & Co. wasengaged by Evolution to estimate the reserves and revenues associated with theproperties included in this report.  Oncethe reserves were estimated, future revenue projections were made based on aSEC constant price deck.

 

**Reporting Requirements** — Securitiesand Exchange Commission (SEC) Regulation S-X 210, Rule 4-10 and RegulationS-K 229, Item 1200 (as revised in December 2008, effective 1-1-10),and Financial Accounting Standards Board (FASB) Statement No. 69 requireoil and gas reserve information to be reported by publicly held companies assupplemental financial data. These regulations and standards provide forestimates of Proved reserves and revenues discounted at 10% and based onunescalated prices and costs.  Revenuesbased on alternate product price scenarios may be reported in addition to thecurrent pricing case.  Reporting probableand possible reserves is optional. Probable and Possible reserves must bereported separately from Proved reserves.

 

TheSociety of Petroleum Engineers (SPE) requires Proved reserves to beeconomically recoverable with prices and costs in effect on the “as of” date ofthe report.  In conjunction with the World Petroleum Council (WPC),American Association of Petroleum Geologists (AAPG), and the Society ofPetroleum Evaluation Engineers (SPEE), the SPE has issued *Petroleum Resources Management System*(**2007 ed.**),**which sets forth the definitions and requirements associated withthe classification of both reserves and resources.  In addition, the SPEhas issued *Standards Pertaining to theEstimating and Auditing of Oil and Gas Reserve Information,*whichsets requirements for the qualifications and independence of reserve estimatorsand auditors.

 

Theestimated Proved reserves herein have been prepared in conformance with allSEC, SPE, WPC, AAPG, and SPEE definitions and requirements.

 

**Projections** — The attached reserve and revenueprojections are on a calendar year basis, with the first time period beginning July 1,2010 and ending December 31, 2010.

 

**Property Discussion**

 

Evolution’soperations are centered on two sets of assets, the Giddings Field area locatedin central Texas and the Lopez Field in south Texas.

 

Evolution’score assets are located in the Giddings Field area spanning over six countiesin Texas which include Brazos, Burleson, Fayette, Grimes, Lee, and Washington.Within the Giddings Field area, there are three reservoirs targeted byEvolution. These three reservoirs are the Austin Chalk, Buda, andGeorgetown.  Evolution is planninginfill, as-well-as stepout locations mainly focusing on the Georgetownreservoir in north Grimes County and the Austin Chalk reservoir in northWashington County.  In addition to thescheduled drilling locations, Evolution has several re-entry candidates plannedfor existing vertical well bores.  Aftercleaning out the vertical well bore, Evolution would either extend a single lateralor two opposing laterals.  Currently,Evolution is producing from ten leases. The net production of these leases, located in Brazos, Burleson,Fayette, and Grimes Counties, is approximately 55 barrels of oil and 1.1 Mmcfof gas per day from the Austin Chalk and Georgetown reservoirs.

 

Evolutionhas leased acreage in the South Lopez Unit located in the Lopez Field. LopezField is located on the border of Duval and Webb Counties, Texas. Evolutionplans to re-enter existing wellbores and reactivate completions in theMiranda-Jackson reservoir. In addition to re-entering four wellbores, Evolutionplans to drill 21 infill wells down spacing to five acres.

 

**Reserves Estimates**

 

**Proved Developed Producing** — Reserveestimates for the producing properties were based on a combination of theextrapolation of production history and analogy to offset production.  The majority of the producing properties werere-entries of vertical well bores with Evolution adding a horizontal 

 

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lateral into the Austin Chalk or Georgetown.  Our future projections of the currentproducing rates were based on the extrapolation of the previous historicalproduction trends adjusting for the current measured rates.

 

**Proved Undeveloped******— Analysis was performed onthe re-entries completed by Evolution in Austin Chalk wells since 2008.  It was determined that a distance of 4,000’from the closest adjacent horizontal producer was necessary to encounternon-depleted reservoir. After it was determined that the proposed lateral metthis minimum distance requirement, reserve estimates were then assigned to thelocation in conjunction with lateral length and historical performance ofadjacent producers.

 

Reserve estimates were also determined for three locations and onere-entry candidate in north Grimes County, Texas.  These wells are offsets to producing wells inthe Georgetown reservoir.  Analogy tooffset production was used to determine the reserves.

 

**Probable Undeveloped******— The reserve estimations ofthe twenty-one five acre infill wells scheduled for Lopez Field were determinedby analyzing the results of the past two infill drilling programs in the 1970’sand the 1980’s. Probable initial rates and incremental reserves associated withthe additional wells were based on historical production rate increases andtest data from the historical infill programs in Lopez Field.

 

**Possible Undeveloped******— In addition to theProbable Undeveloped reserves, twenty-one incremental Possible Undevelopedcases were estimated. The reserve estimations associated with this reservecategory represent the possibility of the infill well initially producing athigher oil and water rates which would add incremental reserves to the ProbableUndeveloped.

 

**Reserves and schedules of production included in this report are onlyestimates. The amount of available data, reservoir and geological complexity,reservoir drive mechanism, and possible future mechanical problems withwellbores or production facilities can have a material effect on the accuracyof these reserve estimates. Substantially more data was reviewed for propertieshaving higher overall value than marginal properties. Reserve estimates shouldbe considered in context with the overall or total estimated value.**

 

**Product Prices**

 

SEC pricing is determined by averaging the first day of each month’sclosing price for the previous calendar year using published benchmark oil andgas prices.  This method renders a price of $75.76 per barrel of oil and$4.10 per MMBtu of gas.

 

TheNGL price that was utilized in this evaluation was based on the historicalprice received versus the NYMEX basis oil price.  The average historical differential receivedfor NGL volumes was extracted from Percent of Proceeds statements from a tenmonth time period from July 1, 2009 through April 30, 2010.

 

Pricing differentials were applied to all properties, on an individualproperty basis, in order to reflect prices actually received at the wellhead.The price received for the oil production was represented by Evolution as theNYMEX price with a deduction depending on the oil marketer. Pricingdifferentials typically account for transportation, geographical differentials,and any marketing bonuses or reductions.

 

Quality adjustments havebeen applied based on actual BTU factors for each well.  A shrinkage factor has been applied based onproduction volumes versus actual sales volumes, this shrinkage accounts for thegeneration of natural gas liquids, any line loss, or fuel usage before theactual sales point.

 

Allprices have been held constant throughout the life of the properties.

 

**Lease Operating and Capital Costs**

 

Monthly operating expenses for each well were derived from the averageof the twelve-month historical cost from April 1, 2009 — March 31,2010, which were extracted from the profit and loss statements. All expensesassociated with Lopez Field were provided by Evolution.

 

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Capital costs necessary to perform workover and/or remedial operationswere supplied by Evolution for all properties.

 

All expenses and costs were held constant for the life of theproperties with no escalation.

 

**Other Considerations**

 

**Abandonment Costs** — Cost estimates regardingfuture plugging and abandonment procedures associated with the remainingproperties were supplied by Evolution for the purposes of this report.  Based on analysis performed by Evolution, netof salvage, the cost of the plug and abandoning would be $25,000 for theproperties located in Giddings Field while the scheduled abandonment cost is$10,000 for the properties located in Lopez Field.  As we have not inspected the propertiespersonally, a third party study would be necessary in order to accuratelyestimate all future abandonment liabilities.

 

**Additional Costs** — Costs were not deductedfor depletion, depreciation and/or amortization (a non-cash item), or federalincome tax.

 

**Data Sources** — Data furnished by Evolution included basicwell information, operating cost, capital cost, ownership, pricing, andproduction information on certain leases.

 

**Context** — We specifically advise that any particularreserve estimate for a specific property not be used out of context with theoverall report.  ***Therevenues and present worth of future net revenues are not represented to bemarket value either for individual properties or on a total property basis. Theestimation of fair market value for oil and gas properties requires additionalanalysis other than evaluating undiscounted and discounted future net revenues.***

 

We have not inspected the properties included in this report, nor havewe conducted independent well tests. W.D. Von Gonten & Co. and ouremployees have no direct ownership in any of the properties included in thisreport. Our fees are based on hourly expense and are not related to the reserveand revenue estimates produced in this report.

 

Thank you for the opportunity to assist Evolution Petroleum Corporationwith this project.

 
| Respectfully  submitted,               |   |  |
|----------------------------------------|--------|--|
|                                   |   |
|                                        |   |
| William  D. Von Gonten, Jr., P.E. |   |
| TX  #73244                             |   |
|                                   |   |
|                                   |   |

 
|                  |   |   |
|------------------|--------|--------|
| Jason  P. Warren |   |   |
|             |   |   |
|             |   |        |

 

 

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Qualifications of Reserve Estimator

 

WilliamD. Von Gonten, Jr, a Registered Texas Professional Engineer, and owner of W.D.Von Gonten and Co. Petroleum Engineering since 1995, is primarily responsiblefor overseeing the preparation of the reserve report.  Hisprofessional qualifications meet or exceed the qualifications of reserveestimators set forth in the “Standards Pertaining to Estimation and Auditing ofOil and Gas Reserves Information” promulgated by the Society of PetroleumEngineers.  His qualifications include: Bachelor’s of Science degreein Petroleum Engineering from Texas A & M University 1987; member ofthe Society of Petroleum Engineers , member of the Society of PetroleumEvaluation Engineers; and more than 22 years of practical experience inestimating and evaluating reserve information and estimating and evaluatingreserves.

 

Thetechnical person primarily responsible for the preparation of the reservereport is, Jason Warren, Engineer.  He earned a Bachelor’s of Sciencedegree in Petroleum Engineering at Texas A & M University in 2005.Jason has been employed with W.D. Von Gonten and Co. since graduation in May,2005. He has more than five years of experience in the estimation andevaluation of oil and gas reserves. Jason is also a member of the Society ofPetroleum Engineers.

 

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