After a strategic review of its oilfield technology operations marketed as GARP® in the fall of 2015, Company management recommended and the Board of Directors approved a majority transfer of its GARP® oilfield technology operations to a separate and unrelated entity, including the lead executive and inventor of the technology, Daryl Mazzanti. Evolution Petroleum has retained a minority equity interest in the entity and will have an option to convert part of its initial funding into a substantially increased equity stake in the future. In addition, the Company has retained a 5% royalty on all future gross revenues associated with the GARP® technology. The three Evolution employees who had primary responsibilities for the GARP® operations, including Mr. Mazzanti, a Sales Engineer and a Field Superintendent, have become full-time employees of the new entity and have ceased to be employees of Evolution Petroleum, effective as of December 31, 2015. The separation of this operation is expected to reduce the Company's ongoing general and administrative costs by approximately $1 million per year.