HOUSTON, March 19, 2025 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. ("Epsilon” or the "Company”) (NASDAQ: EPSN) today reported financial results for the fourth quarter and full-year ended December 31, 2024.

Full Year and Q4 2024 Highlights:

Epsilon - Full Year 2024 & Q4 2024

  20242023Q4 2024Q3 2024YoY%QoQ%
NRI Production       
GasMMcf6,1428,3401,7651,304-26%35%
OilMbbl187655253186%-3%
NGLMbbl6939171778%-2%
TotalMmcfe7,6768,9652,1761,727-14%26%
        
Revenues$M      
Gas 10,78614,8643,9581,904-27%108%
Oil 13,7315,0913,5373,965170%-11%
NGL 1,48298438533551%15%
Midstream1 5,5249,7911,0601,084-44%-2%
Total 31,52330,7308,9407,2883%23%
        
Realized Prices2       
Gas$/Mcf1.761.782.241.46-1%54%
Oil$/Bbl73.6177.9668.3874.27-6%-8%
NGL$/Bbl21.4125.2922.9819.56-15%17%
        
Adj. EBITDA$M17,57818,8285,3353,744-7%43%
        
Cash + STI3$M6,99032,6496,9908,775-79%-20%
        
Capex4$M34,88722,0383,8043,90858%-3%
        
1) Net of elimination entry for fees paid by Epsilon

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2) Excludes impact of hedge realizations

3) Includes restricted cash balance 
4) Includes acquisitions      

The Company returned $7.3 million to shareholders during the year ended December 31, 2024.

  • $5.5 million through the quarterly dividends
  • $1.8 million through the repurchase of 373,700 shares at an average price of $4.88 per share
Jason Stabell, Epsilon's Chief Executive Officer, commented, "As we expected, the challenging natural gas environment continued in 2024, Marcellus net wellhead prices were below $2 per Mcf for the year and a meaningful portion (est. 20-25%) of our production for the year was curtailed. This also impacted our midstream business and led to lower throughput volumes for the Auburn Gas Gathering System. We were fully aligned with the operator to hold these reserves back for a better pricing environment, and we are now seeing curtailed volumes, alongside delayed volumes from new wells, back online in the first quarter of 2025. These volumes started to ramp in the fourth quarter, but we are now producing 75% more natural gas in the Marcellus than our 2024 average net daily volumes, into a much improved gas price environment.

We continued to invest in our Texas assets during the year, where we now have 7 gross producing wells, all performing better than or as expected, and approximately 14,000 gross undeveloped acres holding up to 40 gross undeveloped 2-mile locations, in the heart of the ascendant Barnett play. We expect development activity to resume there in the second half of 2025. As mentioned last year, this project successfully diversified our commodity mix and provides optionality for multi-year capital allocation.

In the fourth quarter, we entered into a JV in Alberta with a reputable US sponsor-backed operator. This met our criteria of low entry cost, drill-bit focused, large inventory runway, capable operator and attractive well economics. We are excited about the opportunity as it covers over 30,000 gross acres where the well returns screen attractive on productivity, drilling and completion cost structure, and royalty regime. We have drilled and completed the first two wells and expect to discuss those initial results soon.

During the year we continued our track record of shareholder returns with the fixed quarterly dividend and opportunistic share repurchases.

With growing cash flows and over $50 million in available liquidity, the Company is in a strong position to continue to execute on drilling activity and opportunistic deal-making while still returning cash to shareholders.

We are setup for a strong year in 2025, and we expect material growth in production and cash flows.”

2024 Operations:

Epsilon's capital expenditures were $34.9 million for the year ended December 31, 2024, a 58% increase year over year. Texas accounted for approximately 70% of the total, related to the acquisition of 3 gross (0.75 net) wells and 3,246 undeveloped acres in Q1 2024, and the development of 2 gross (0.5 net) wells in Q2 & Q3 2024. Pennsylvania accounted for 15% of the total, primarily related to the completion of 10 gross (0.8 net) wells during the year. The remainder was primarily related to the drilling of 4 gross (1.5 net) wells in Alberta.

The Auburn Gas Gathering System (Epsilon is a 35% owner) gathered and delivered 36.9 Bcf gross natural gas volumes during the year, or 101 MMcf/d.

Reserves:

The Company has received the year-end 2024 third party reserves report completed by the engineering firm DeGolyer & MacNaughton. The table below summarizes the report.

                          
Epsilon Net Year End Reserves
                          
  12/31/2023 12/31/2024 YoY Change
  OilNGLGasTotal OilNGLGasTotal OilNGLGasTotalTotal
  MbblMbblMMcfMmcfe MbblMbblMMcfMmcfe MbblMbblMMcfMmcfe%
Proved Developed 272 249 47,555 50,681  847 490 56,851 64,872  575 241 9,296 14,191 28%
Proved Undeveloped 69 134 18,361 19,581  725 387 12,550 19,225  656 253 (5,811)(356)-2%
Total Proved 341 383 65,916 70,262  1,572 877 69,401 84,097  1,231 494 3,485 13,835 20%
                          
Total Probable 354 437 156,730 161,474  380 384 137,906 142,487  26 (53)(18,824)(18,987)-12%
                          
Total Proved + Probable 695 820 222,646 231,736  1,952 1,261 207,307 226,584  1,257 441 (15,339)(5,152)-2%

As shown in the table above, Company Proved reserves increased 20% year over year. Produced volumes accounted for an 11% decrease, offset by revisions to prior estimates (+14%) and acquisitions and development activity during the year (+16%). Company Probable reserves decreased 12% year over year.

The primary drivers for the positive revisions were (1) changes to the development plan in PA (as provided by the operator), moving Probable reserves to Proved, (2) Proved reserves acquisitions in Texas, and (3) development activity in Texas adding Proved undeveloped reserves.

The majority of the Company's inventory in Texas is not included in the reserve report, due to no offset producing wells. The Company believes the unaccounted-for inventory is comparable to the existing wells in the project and expects to add meaningful reserves in Texas with incremental development.

Current Hedge Book:

Hedge Book           
Trade DateProduct StructureRefContract Start Contract End  Price / Strike

Outstanding Metric
01/14/2025Crude OilSwapNYMEX WTI CMA04/01/2025 09/30/2025 $72.35 (14,900.00)BBL
01/07/2025Crude OilSwapNYMEX WTI CMA04/01/2025 12/31/2025 $70.20 (24,600.00)BBL
12/30/2024Natural GasSwapNYMEX Henry Hub (LD)04/01/2025 10/31/2025 $3.49 (214,000.00)MMBTU
12/30/2024Natural GasSwapTenn Z4 300L Basis04/01/2025 10/31/2025 -$0.94 (214,000.00)MMBTU
11/21/2024Natural GasSwapNYMEX Henry Hub (LD)04/01/2025 10/31/2025 $3.23 (321,000.00)MMBTU
11/21/2024Natural GasSwapTenn Z4 300L Basis04/01/2025 10/31/2025 -$0.93 (321,000.00)MMBTU
11/20/2024Natural GasSwapNYMEX Henry Hub (LD)04/01/2025 10/31/2025 $3.16 (214,000.00)MMBTU
11/20/2024Natural GasSwapTenn Z4 300L Basis04/01/2025 10/31/2025 -$0.89 (214,000.00)MMBTU
11/13/2024Natural GasSwapNYMEX Henry Hub (LD)04/01/2025 10/31/2025 $3.08 (535,000.00)MMBTU
11/13/2024Natural GasSwapTenn Z4 300L Basis04/01/2025  Advertisement

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