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Epsilon Energy Ltd. ("Epsilon" or the "Company") (NASDAQ: EPSN) today reported financial results for the fourth quarter and full-year ended December 31, 2025.
Full Year and Q4 2025 Highlights:
| Epsilon - Full-Year 2025 & Q4 2025 | |||||||||
| 2025 | 2024 | Q4 2025 | Q3 2025 | YoY% | QoQ% | ||||
| NRI Production | |||||||||
| Gas | MMcf | 10,001 | 6,142 | 2,373 | 2,136 | 63 | % | 11 | % |
| Oil | MBbl | 223 | 187 | 94 | 39 | 20 | % | 138 | % |
| NGL | MBbl | 81 | 69 | 43 | 14 | 17 | % | 211 | % |
| Total | MMcfe | 11,825 | 7,676 | 3,196 | 2,456 | 54 | % | 30 | % |
| Daily | MMcfe/d | 32.4 | 21.0 | 34.7 | 26.7 | ||||
| Revenues | $M | ||||||||
| Gas | 29,121 | 10,786 | 6,839 | 4,758 | 170 | % | 44 | % | |
| Oil | 13,804 | 13,731 | 5,299 | 2,511 | 1 | % | 111 | % | |
| NGL | 1,979 | 1,482 | 1,180 | 267 | 34 | % | 342 | % | |
| Midstream1 | 6,684 | 5,524 | 1,501 | 1,445 | 21 | % | 4 | % | |
| Total | 51,588 | 31,523 | 14,818 | 8,981 | 64 | % | 65 | % | |
| Realized Prices2 | |||||||||
| Gas | $/Mcf | 2.91 | 1.76 | 2.88 | 2.23 | 66 | % | 29 | % |
| Oil | $/Bbl | 61.90 | 73.61 | 56.44 | 63.73 | -16 | % | -11 | % |
| NGL | $/Bbl | 24.43 | 21.41 | 27.17 | 19.12 | 14 | % | 42 | % |
| Adj. EBITDA3 | $M | 30,744 | 17,578 | 7,553 | 5,240 | 75 | % | 44 | % |
| Cash + STI4 | $M | 9,513 | 6,990 | 9,513 | 13,236 | 36 | % | -28 | % |
| Capex5 | $M | 15,259 | 18,926 | 1,641 | 2,885 | -19 | % | -43 | % |
| Dividend | $M | 5,998 | 5,487 | 1,868 | 1,379 | 9 | % | 36 | % |
| Adj Net Income6 | $M | 21,294 | 3,639 | 11,103 | 1,947 | ||||
| p/share7 | $ | 0.92 | 0.17 | 0.43 | 0.09 | ||||
| 1) Net of elimination entry for fees paid by Epsilon | |||||||||
| 2) Excludes impact of hedge realizations | |||||||||
| 3) Excludes transaction costs | |||||||||
| 4) Includes restricted cash balance | |||||||||
| 5) Excludes acquisitions | |||||||||
| 6) Excludes one-time / non-recurring expenses for transaction costs, impairments, and loss on asset sale | |||||||||
| 7) Calculated on weighted average shares outstanding for the period | |||||||||
Note: The acquisition of the Peak companies was closed on November 14, 2025 and the Powder River Basin (Wyoming) results are reflected from the closing date to year-end.
Jason Stabell, Epsilon's Chief Executive Officer, commented, "Over the past three years, we have repositioned Epsilon into a differentiated, multi-basin platform that is unique among small-cap energy companies. Building on our legacy position in the Marcellus—where we are partnered with a premier operator in one of the lowest-cost natural gas basins in the world—we have added exposure and meaningful organic growth potential in one of the most attractive emerging plays in the Permian. Recent announcements from leading public Permian operators, including Occidental and Diamondback, further underscore the industry's growing enthusiasm for the Barnett oil play.
In January, a leading private-equity-backed operator assumed operations of our 16,600-gross-acre Ector County Barnett project, a transition we expect will accelerate development cadence and improve capital efficiency. In 2026, we expect to participate in up to 4 gross wells (1 net). The first well was drilled and cased this month as a 3-mile completion (the first 3-mile well in the project), which is expected to begin production by June. Based on preliminary discussions with the operator, we see an additional 8-10 gross wells (2-2.5 net) drilled and completed in 2027. Going forward, we anticipate all Barnett wells in the project will be 3-mile laterals.
In late 2025, we closed the transformative acquisition of the Peak companies, with assets in the Powder River Basin ("PRB"), adding a new focus area with approximately 40,000 net acres in the core of the basin, along with an experienced operating team. Across the PRB, we now control over 100 highly economic net locations, with near-term development focused on 21 gross (15 net) Parkman locations that generate rates of return in excess of 60% at $65 oil. Our current 2026 plans include completing 2 gross Niobrara DUCs (0.7 net) in the second quarter, followed in the third and fourth quarters by the drilling and completion of up to 3 gross (2.8 net) Parkman wells, with production expected in the fourth quarter.
Looking ahead, we intend to build on the momentum created in 2025 when we grew adjusted EBITDA 75% and production 53% year over year. Our portfolio provides shareholders with a large and diversified portfolio of high-quality oil and natural gas inventory; non-operated partnerships with leading operators in the Permian and Marcellus; a minority interest in a free cash flow generating PA midstream asset; and a highly economic, operated, largely held by production (~75%) acreage position in the PRB.
We believe Epsilon now represents one of the most compelling organic growth opportunities in the North American onshore upstream sector. We remain committed to our fixed dividend and expect to deliver meaningful per-share growth in earnings, cash flow, and production over the coming years, while targeting an average annual leverage ratio below 1.5X."
| $M | Q125 | Q225 | Q325 | Q425 | 2025 | |||||
| GAAP Net Income (Loss) | 4,016 | 1,551 | 1,072 | -11,486 | -4,847 | |||||
| One-time adjustments | ||||||||||
| Transaction Costs | 875 | 2,073 | 2,948 | |||||||
| Impairment - NM | 700 | 700 | ||||||||
| Impairment - Canada | 7 | 2,670 | 559 | 3,236 | ||||||
| Loss - Oklahoma Sale | 19,257 | 19,257 | ||||||||
| Adj. Net Income | 4,023 | 4,221 | 1,947 | 11,103 | 21,294 | |||||
| WA Shares O/S | 22,110 | 22,202 | 22,160 | 25,966 | 23,021 | |||||
| P/Share | $ | 0.18 | $ | 0.19 | $ | 0.09 | $ | 0.43 | $ | 0.92 |
Reported net income (loss) is adjusted in the tables above by one-time expenses during the year. Adjusted net income is presented to show normalized performance over the year.
Transaction costs include advisory and legal services incurred by the Company related to the acquisition of the Peak companies.
The impairments in New Mexico and Canada impacted a total of 4 gross (0.7 net) wells and are the result of an offset frac hit impacting production (New Mexico) and low forward oil prices on December 31, 2025, which are required to be used in impairment testing.
Management believes the consideration received in the divestiture of the Oklahoma assets was very attractive (cash received + cash tax savings together were over 8X expected 2026 cash-flow from the assets). The write-off was primarily the balance held in undeveloped leasehold. The Oklahoma assets did not compete for capital in the Company portfolio. The divested Oklahoma assets represented 3% of the year-end 2025 Proved Developed Produced reserves and 3% of 2025 total Company production.
2025 Operations:
Epsilon's capital expenditures were $15.3 million for the year ended December 31, 2025 (excluding acquisitions), a 19% increase year over year. The spending was primarily related to the drilling and completion of 2 gross (0.5 net) Glauconitic wells in the Garrington area of Alberta, Canada ($9 million, including $4.9 million of drilling carry in favor of the operator) in the first half of the year, and the drilling and completion of 1 gross (0.25 net) Barnett well in Texas ($3.6 million, the eighth well in the project).
The Company expects the level of spending in 2026 will increase meaningfully year over year, with accelerated activity in the Permian, with up to 4 gross wells (including three 3-mile Barnett wells), the first operated activity in the PRB, with the completion of 2 gross (0.7 net) Niobrara wells and the drilling and completion of 3 gross (2.8 net) Parkman wells, and resumed activity in PA, with 5 gross (0.38 net) Marcellus wells to be developed during the year by our operating partner.
The Auburn Gas Gathering System (Epsilon is a 35% owner) gathered and delivered 40.5 Bcf gross natural gas volumes during the year, or 111 MMcf/d.
Q1 2026 Update:
During January 2026, the Company earned $11.4 million of revenue driven by very strong regional cash gas pricing in PA during the end of the month. While gas prices did not maintain those levels into the following month, the company expects strong quarter over quarter revenue and cash flow growth.
In March 2026, the Company made a $5 million repayment on its outstanding debt balance, leaving the current outstanding balance at $45.5 million.
The Company received 5 well proposals from our operating partner in PA (Expand Energy), totaling 0.38 net wells, with a weighted average lateral length of ~15,000 CLL ft. The wells are planned to spud in late Q1 and Q2, with completion dates in the second half of the year.
Additionally, the Company went under contract to sell its owned office building in Durango, Colorado (which was acquired in the Peak acquisition), for $3 million. The sale is expected to close in the second quarter.
Reserves:
The Company has received the year-end 2025 third-party reserves reports completed by the engineering firms DeGolyer & MacNaughton ("D&M") and Cawley Gillespie & Associates ("CG&A"). The CG&A report only includes the Wyoming assets. CG&A was the third-party engineer for the assets before the acquisition by the Company. The table below summarizes the reports.
| Epsilon Net Year End Reserves | |||||||||||||||||
| 12/31/2024 | 12/31/2025 | YoY Change | |||||||||||||||
| Oil | NGL | Gas | Total | Oil | NGL | Gas | Total | Oil | NGL | Gas | Total | Total | |||||
| Mbbl | Mbbl | MMcf | Mmcfe | Mbbl | Mbbl | MMcf | Mmcfe | Mbbl | Mbbl | MMcf | Mmcfe | % | |||||
| Proved Developed | 847 | 490 | 56,851 | 64,872 | 4,000 | 1,599 | 75,849 | 109,444 | 3,153 | 1,109 | 18,998 | 44,572 | 69% | ||||
| Proved Undeveloped | 725 | 387 | 12,551 | 19,225 | 5,259 | 753 | 10,523 | 46,594 | 4,534 | 366 | (2,028 | ) | 27,369 | 142% | |||
| Total Proved | 1,572 | 877 | 69,402 | 84,097 | 9,259 | 2,352 | 86,372 | 156,037 | 7,687 | 1,475 | 16,970 | 71,940 | 86% | ||||
| Total Probable | 380 | 384 | 137,906 | 142,487 | 26,318 | 13,090 | 262,283 | 498,729 | 25,938 | 12,706 | 124,377 | 356,242 | 250% | ||||
| Total Proved + Probable | 1,952 | 1,261 | 207,308 | 226,584 | 35,576 | 15,442 | 348,655 | 654,766 | 33,624 | 14,181 | 141,347 | 428,182 | 189% | ||||
As shown in the table above, Company Proved reserves increased 86% year over year, and Company Probable reserves increased by 250% year over year. The increase was driven by the acquisition of the Wyoming assets, adding 12.8 Mboe of Proved and 57.3 Mboe of Probable reserves.
The majority of the Company's inventory in Texas is not included in the reserve report, due to no offset producing wells in the Southern (undeveloped) portion of the project. The Company and the operating partner believe the unaccounted-for inventory is comparable to the existing wells in the project and expects to add meaningful reserves in Texas with incremental development.
Proved reserves for the Wyoming (PRB) assets for year-end 2025 (77,028 MMcfe or 12,838 MBoe) were 40% lower than the year-end 2024 report, also provided by CG&A. This revision is almost entirely attributable to a more measured approach in the development pace assumption, which removed 25 gross wells and approximately $130 million of capital from the 5-year forward SEC window for the development of Proved reserves. The change is not due to reserve prospectivity. The development pace assumptions included in the reserve reports are subject to change.
The majority of the Company's inventory in PA and Wyoming is included in Probable reserves, due to the development of those reserves occurring outside of the 5-year forward SEC window for the development of Proved reserves.
Current Hedge Book:
| Date | Natural Gas | Crude Oil | |||||||||||||||
| Swaps | Costless Collars | Swaps | Costless Collars | ||||||||||||||
| Volume (MMcf) | Price ($/MMBtu) | Volume (MMcf) | Bought Put ($/MMBtu) | Sold Call ($/MMBtu) | Volume (MBbl) | Price ($/Bbl) | Volume (MBbl) | Bought Put ($/Bbl) | Sold Call ($/Bbl) | ||||||||
| 1Q 2026 | - | - | - | - | - | 16 | 62.62 | 11 | 59.31 | 68.89 | |||||||
| 2Q 2026 | 455 | 3.89 | 581 | 3.34 | 4.94 | 79 | 62.83 | 3 | 59.78 | 70.01 | |||||||
| 3Q 2026 | 451 | 3.93 | 551 | 3.35 | 4.95 | 80 | 65.16 | 0 | 60.00 | 70.10 | |||||||
| 4Q 2026 | 178 | 3.87 | 783 | 3.35 | 5.10 | 39 | 62.71 | 28 | 59.00 | 69.00 | |||||||
| FY 2026 | 1,084 | $3.90 | 1,916 | $3.34 | $5.01 | 214 | $63.67 | 43 | $59.15 | $69.06 | |||||||
| 1Q 2027 | 87 | 4.12 | 818 | 3.41 | 5.23 | 27 | 61.45 | 34 | 59.23 | 69.47 | |||||||
| 2Q 2027 | 91 | 3.49 | 793 | 3.21 | 4.81 | 36 | 64.05 | 22 | 55.94 | 66.02 | |||||||
| 3Q 2027 | 90 | 3.58 | 626 | 3.12 | 4.32 | 28 | 66.36 | 26 | 57.32 | 67.60 | |||||||
| 4Q 2027 | 44 | 3.95 | 201 | 3.28 | 4.39 | 14 | 62.32 | 36 | 57.30 | 67.55 | |||||||
| FY 2027 | 312 | $3.76 | 2,437 | $3.26 | $4.79 | 106 | $63.76 | 118 | $57.60 | $67.82 | |||||||
| 1Q 2028 | 28 | 4.46 | 28 | 3.65 | 4.70 | 8 | 62.97 | 8 | 57.58 | 67.96 | |||||||
Earning's Call:
The Company will host a conference call to discuss its results on Wednesday, March 25, 2026, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time).
Interested parties in the United States and Canada may participate toll-free by dialing (833) 816-1385. International parties may participate by dialing (412) 317-0478. Participants should ask to be joined to the "Epsilon Energy 2025 Year End Earnings Conference Call."
A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=EHvW1sm9. A webcast replay will be available on the Company's website (www.epsilonenergyltd.com) following the call.
About Epsilon
Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets across the Appalachian, Powder River, Permian, and Western Canadian Sedimentary basins.
Forward-Looking Statements
Certain statements contained in this news release constitute forward looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", ‘may", "will", "project", "should", ‘believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated. Forward-looking statements are based on reasonable assumptions, but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.
Contact Information:
281-670-0002
Jason Stabell
Chief Executive Officer
Jason.Stabell@EpsilonEnergyLTD.com
Andrew Williamson
Chief Financial Officer
Andrew.Williamson@EpsilonEnergyLTD.com
| Epsilon Energy Ltd. Consolidated Statements of Operations (All amounts stated in US$) | ||||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues from contracts with customers: | ||||||||
| Gas, oil, NGL, and condensate revenue | $ | 44,903,821 | $ | 25,998,712 | ||||
| Gas gathering and compression revenue | 6,683,735 | 5,524,063 | ||||||
| Total revenue | 51,587,556 | 31,522,775 | ||||||
| Operating costs and expenses: | ||||||||
| Lease operating expenses | 12,518,325 | 7,264,824 | ||||||
| Gathering system operating expenses | 2,362,036 | 2,265,190 | ||||||
| Depletion, depreciation, amortization, and accretion | 12,170,320 | 10,185,119 | ||||||
| Impairment expense | 3,936,669 | 1,450,076 | ||||||
| Loss on sale of oil and gas properties | 19,256,530 | — | ||||||
| Transaction costs | 2,947,907 | — | ||||||
| General and administrative expenses: | ||||||||
| Stock based compensation expense | 1,744,917 | 1,244,416 | ||||||
| Other general and administrative expenses | 7,168,235 | 5,688,714 | ||||||
| Total operating costs and expenses | 62,104,939 | 28,098,339 | ||||||
| Operating (loss) income | (10,517,383 | ) | 3,424,436 | |||||
| Other income (expense): | ||||||||
| Interest income | 188,369 | 493,277 | ||||||
| Interest expense | (624,160 | ) | (46,400 | ) | ||||
| Gain (loss) on derivative contracts, net | 5,500,486 | (391,147 | ) | |||||
| Other income, net | 16,556 | 76,727 | ||||||
| Other income, net | 5,081,251 | 132,457 | ||||||
| Net (loss) income before income tax expense | (5,436,132 | ) | 3,556,893 | |||||
| Income tax (benefit) expense | (589,535 | ) | 1,629,093 | |||||
| NET (LOSS) INCOME | $ | (4,846,597 | ) | $ | 1,927,800 | |||
| Currency translation adjustments | (136,700 | ) | 262,588 | |||||
| Unrealized loss on securities | — | (1,598 | ) | |||||
| NET COMPREHENSIVE (LOSS) INCOME | $ | (4,983,297 | ) | $ | 2,188,790 | |||
| Net (loss) income per share, basic | $ | (0.21 | ) | $ | 0.09 | |||
| Net (loss) income per share, diluted | $ | (0.21 | ) | $ | 0.09 | |||
| Weighted average number of shares outstanding, basic | 23,020,672 | 21,930,277 | ||||||
| Weighted average number of shares outstanding, diluted | 23,020,672 | 21,930,277 | ||||||
| Epsilon Energy Ltd. Consolidated Balance Sheets (All amounts stated in US$) | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 8,959,954 | $ | 6,519,793 | ||||
| Accounts receivable | 16,132,501 | 5,843,722 | ||||||
| Fair value of derivatives | 2,694,340 | — | ||||||
| Prepaid income taxes | 2,949,311 | 975,963 | ||||||
| Other current assets | 1,847,672 | 792,041 | ||||||
| Total current assets | 32,583,778 | 14,131,519 | ||||||
| Non-current assets | ||||||||
| Property and equipment: | ||||||||
| Oil and gas properties, successful efforts method | ||||||||
| Proved properties | 233,334,212 | 191,879,210 | ||||||
| Unproved properties | 79,307,169 | 28,364,186 | ||||||
| Accumulated depletion, depreciation, amortization and impairment | (131,636,141 | ) | (123,281,395 | ) | ||||
| Total oil and gas properties, net | 181,005,240 | 96,962,001 | ||||||
| Gathering system | 43,540,389 | 43,116,371 | ||||||
| Accumulated depletion, depreciation, amortization and impairment | (37,472,139 | ) | (36,449,511 | ) | ||||
| Total gathering system, net | 6,068,250 | 6,666,860 | ||||||
| Land | 1,231,965 | 637,764 | ||||||
| Buildings and other property and equipment, net | 4,132,732 | 259,335 | ||||||
| Total property and equipment, net | 192,438,187 | 104,525,960 | ||||||
| Other assets: | ||||||||
| Operating lease right-of-use assets, long term | 488,949 | 344,589 | ||||||
| Restricted cash | 553,000 | 470,000 | ||||||
| Fair value of derivatives, long term | 1,154,936 | — | ||||||
| Deferred financing costs | 774,347 | — | ||||||
| Prepaid drilling costs | 246,220 | 982,717 | ||||||
| Total non-current assets | 195,655,639 | 106,323,266 | ||||||
| Total assets | $ | 228,239,417 | $ | 120,454,785 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable trade | $ | 11,148,050 | $ | 2,334,732 | ||||
| Gathering fees payable | 1,076,143 | 997,016 | ||||||
| Royalties payable | 8,702,526 | 1,400,976 | ||||||
| Accrued capital expenditures | 24,888 | 572,079 | ||||||
| Accrued compensation | 1,056,304 | 695,018 | ||||||
| Other accrued liabilities | 2,682,090 | 371,503 | ||||||
| Fair value of derivatives | — | 487,548 | ||||||
| Operating lease liabilities | 271,494 | 121,135 | ||||||
| Total current liabilities | 24,961,495 | 6,980,007 | ||||||
| Non-current liabilities | ||||||||
| Credit facility payable | 50,500,000 | — | ||||||
| Ad valorem taxes, long term | 7,411,971 | — | ||||||
| Asset retirement obligations | 7,437,960 | 3,652,296 | ||||||
| Deferred income taxes | 11,903,319 | 12,738,577 | ||||||
| Operating lease liabilities, long term | 340,052 | 355,776 | ||||||
| Total non-current liabilities | 77,593,302 | 16,746,649 | ||||||
| Total liabilities | 102,554,797 | 23,726,656 | ||||||
| Commitments and contingencies (Note 11) | ||||||||
| Shareholders' equity | ||||||||
| Preferred shares, no par value, unlimited shares authorized, none issued or outstanding | — | — | ||||||
| Common shares, no par value, unlimited shares authorized and 30,239,980 shares issued and outstanding at December 31, 2025 and 22,008,766 issued and outstanding at December 31, 2024 | 154,274,125 | 116,081,031 | ||||||
| Additional paid-in capital | 13,863,824 | 12,118,907 | ||||||
| Accumulated deficit | (52,349,896 | ) | (41,505,076 | ) | ||||
| Accumulated other comprehensive income | 9,896,567 | 10,033,267 | ||||||
| Total shareholders' equity | 125,684,620 | 96,728,129 | ||||||
| Total liabilities and shareholders' equity | $ | 228,239,417 | $ | 120,454,785 | ||||
| Epsilon Energy Ltd. Consolidated Statements of Cash Flows (All amounts stated in US$) | |||||||||
| Year ended December 31, | |||||||||
| 2025 | 2024 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | (4,846,597 | ) | $ | 1,927,800 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depletion, depreciation, amortization, and accretion | 12,190,729 | 10,185,119 | |||||||
| Impairment expense | 3,936,669 | 1,450,076 | |||||||
| Accretion of discount on available for sale securities | — | (297,637 | ) | ||||||
| Amortization on deferred financing costs | 44,510 | — | |||||||
| Loss on sale of oil and gas properties | 19,256,530 | — | |||||||
| (Gain) loss on derivative contracts | (5,500,486 | ) | 391,147 | ||||||
| Settlement received on derivative contracts | 1,163,662 | 1,196,656 | |||||||
| Settlement of asset retirement obligation | (1,600 | ) | (88,992 | ) | |||||
| Stock-based compensation expense | 1,744,917 | 1,244,416 | |||||||
| Deferred income tax (benefit) expense | (835,258 | ) | 1,184,634 | ||||||
| Changes in assets and liabilities, net of assets and liabilities acquired in business combination: | |||||||||
| Accounts receivable | (1,608,792 | ) | 171,726 | ||||||
| Prepaid income taxes | (1,973,348 | ) | (23,662 | ) | |||||
| Other assets and liabilities | (10,365 | ) | (17,828 | ) | |||||
| Accounts payable, royalties payable, gathering fees payable, and other accrued liabilities | (2,940,888 | ) | (493,176 | ) | |||||
| Net cash provided by operating activities | 20,619,683 | 16,830,279 | |||||||
| Cash flows from investing activities: | |||||||||
| Additions to unproved oil and gas properties | (6,999,905 | ) | (4,507,280 | ) | |||||
| Additions to proved oil and gas properties | (7,929,773 | ) | (31,695,651 | ) | |||||
| Additions to gathering system properties | (465,203 | ) | (341,452 | ) | |||||
| Additions to land, buildings and property and equipment | 270,488 | (16,513 | ) | ||||||
| Purchases of short term investments - available for sale | — | (4,045,785 | ) | ||||||
| Proceeds from short term investments - held to maturity | — | 6,743,178 | |||||||
| Proceeds from short term investments - available for sale | — | 16,373,752 | |||||||
| Net asset acquired in business combination | (49,754,846 | ) | — | ||||||
| Proceeds from sale of oil and gas properties | 2,500,000 | — | |||||||
| Prepaid drilling costs | 736,497 | 831,091 | |||||||
| Net cash used in investing activities | (61,642,742 | ) | (16,658,660 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Buyback of common shares | — | (1,831,208 | ) | ||||||
| Borrowings on credit facility | 50,500,000 | — | |||||||
| Dividends paid | (5,998,223 | ) | (5,486,834 | ) | |||||
| Deferred financing costs | (818,857 | ) | — | ||||||
| Net cash provided by (used in) financing activities | 43,682,920 | (7,318,042 | ) | ||||||
| Effect of currency rates on cash, cash equivalents, and restricted cash | (136,700 | ) | 262,588 | ||||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 2,523,161 | (6,883,835 | ) | ||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 6,989,793 | 13,873,628 | |||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 9,512,954 | $ | 6,989,793 | |||||
| Supplemental cash flow disclosures: | |||||||||
| Income tax paid - federal | $ | 1,417,860 | $ | 414,250 | |||||
| Income tax paid - state (PA) | $ | 755,138 | $ | — | |||||
| Income tax paid - state (other) | $ | 3,986 | $ | (2,071 | ) | ||||
| Interest paid | $ | 9,935 | $ | 16,832 | |||||
| Non-cash investing activities: | |||||||||
| Change in proved properties accrued in accounts payable | $ | (937,079 | ) | $ | (862,744 | ) | |||
| Change in gathering system accrued in accounts payable | $ | (41,186 | ) | $ | 36,645 | ||||
| Asset retirement obligation asset additions and adjustments | $ | 25,195 | $ | 54,902 | |||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net (loss) income | $ | (4,846,597 | ) | $ | 1,927,800 | |||
| Add Back: | ||||||||
| Interest expense (income), net | 435,791 | (446,877 | ) | |||||
| Income tax (benefit) expense | (589,535 | ) | 1,629,093 | |||||
| Depreciation, depletion, amortization, and accretion | 12,170,320 | 10,185,119 | ||||||
| Impairment expense | 3,936,669 | 1,450,076 | ||||||
| Stock based compensation expense | 1,744,917 | 1,244,416 | ||||||
| Loss on sale of assets | 19,256,530 | — | ||||||
| Transaction costs | 2,947,907 | |||||||
| (Gain) loss on derivative contracts net of cash received or paid on settlement | (4,336,824 | ) | 1,587,803 | |||||
| Foreign currency translation loss | 24,805 | 570 | ||||||
| Adjusted EBITDA | $ | 30,743,983 | $ | 17,578,000 | ||||
Epsilon defines Adjusted EBITDA as earnings before (1) net interest expense, (2) taxes, (3) depreciation, depletion, amortization and accretion expense, (4) impairments of natural gas and oil properties, (5) non-cash stock compensation expense, (6) gain or loss on sale of assets, (7) gain or loss on derivative contracts net of cash received or paid on settlement, (8) transaction costs, and (9) gain or loss on foreign currency translation. Adjusted EBITDA is not a measure of financial performance as determined under U.S. GAAP and should not be considered in isolation from or as a substitute for net income or cash flow measures prepared in accordance with U.S. GAAP or as a measure of profitability or liquidity.
Additionally, Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Epsilon has included Adjusted EBITDA as a supplemental disclosure because its management believes that EBITDA provides useful information regarding its ability to service debt and to fund capital expenditures. It further provides investors a helpful measure for comparing operating performance on a "normalized" or recurring basis with the performance of other companies, without giving effect to certain non-cash expenses and other items. This provides management, investors and analysts with comparative information for evaluating the Company in relation to other natural gas and oil companies providing corresponding non-U.S. GAAP financial measures or that have different financing and capital structures or tax rates. These non-U.S. GAAP financial measures should be considered in addition to, but not as a substitute for, measures for financial performance prepared in accordance with U.S. GAAP.
Epsilon defines Adjusted Net Income as reported U.S. GAAP Net Income adding back expenses related to (1) transaction expenses related to the Peak companies acquisition, (2) impairments of natural gas and oil properties, and (3) gain or less on sale of assets. Adjusted Net Income is not a measure of financial performance as determined under U.S. GAAP and should not be considered in isolation from or as a substitute for net income or cash flow measures prepared in accordance with U.S. GAAP or as a measure of profitability or liquidity.
