Epsilon Reports Third Quarter 2024 Results

HOUSTON, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. ("Epsilon" or the "Company") (NASDAQ:EPSN) today reported third quarter 2024 financial and operating results.

Third Quarter 2024 Highlights:

Epsilon - Q3 2024

 

 

 

 

 

 

 

Q3 2024

Q2 2024

Q3 2023

QoQ %

YoY %

NRI Production

 

 

 

 

 

 

Gas

MMcf

1,304

1,407

1,848

-7

%

-29

%

Oil

Mbbl

53

45

13

19

%

317

%

NGL

Mbbl

17

19

9

-11

%

99

%

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Gas

$M

1,904

1,961

2,089

-3

%

-9

%

Oil

$M

3,965

3,514

925

13

%

329

%

NGL

$M

335

388

228

-14

%

47

%

Midstream1

$M

1,084

1,444

3,069

-25

%

-65

%

 

 

 

 

 

 

 

Realized Prices2

 

 

 

 

 

 

Gas

$/Mcf

1.46

1.39

1.13

5

%

29

%

Oil

$/Bbl

74.27

78.44

72.27

-5

%

3

%

NGL

$/Bbl

19.56

20.21

26.50

-3

%

-26

%

 

 

 

 

 

 

 

Adj. EBITDA

$M

3,744

3,904

3,925

-4

%

-5

%

 

 

 

 

 

 

 

Cash + STI3

$M

8,775

9,481

31,864

-7

%

-72

%

 

 

 

 

 

 

 

Capex

$M

3,908

5,709

5,284

-32

%

-26

%

 

 

 

 

 

 

 

1) Does not include elimination entry for fees paid by Epsilon

 

 

2) Excludes impact of hedge realizations

 

 

 

 

3) Includes restricted cash balance

 

 

 

 

Returned $2.0 million to shareholders through the quarterly dividend and the repurchase of 125,000 shares during the quarter.

Realized gains of $0.5 million on Henry Hub (HH) and TGP Z4 basis swaps totaling 690,000 MMBTU, and losses of $0.02 million on WTI CMA swaps totaling 17 MBbls.

Operations Update:

Epsilon's capital expenditures were $3.9 million for the quarter ended September 30, 2024. These were primarily related to the completion of one gross (0.25 net) well in Ector Co., Texas and the drilling of two gross (1 net) wells in Alberta, Canada.

The Marcellus wells (7 gross) completed in Q1 2024 were not turned in line during the quarter. Three of the seven wells were put on flowback during the last week of October and are now producing approximately 60 MMcf per day gross. Our operating partner in PA has maintained production curtailments. We estimate that 3-4 MMcf per day of NRI production was offline during the quarter.

Jason Stabell, Epsilon's Chief Executive Officer, commented, "We delivered our fourth consecutive quarter of liquids volume, revenue and cash flow growth from our Permian assets continuing to fill the gap while we wait for an improved natural gas pricing environment. In Pennsylvania, we are expecting increased production and cash flow in the fourth quarter and next year aided by improving natural gas fundamentals. Our diversified and growing asset portfolio is well positioned to produce volume and cash flow growth in 2025.

The recently announced entry into Alberta, Canada provides an attractive new area to deploy capital starting in in the fourth quarter. We will provide an update on our 2025 Canadian investment plans once finalized with our operating partner.

Finally, our diversified assets, strong balance sheet and liquidity continue to differentiate us in the small cap energy space."

Current Hedge Book:

Hedge Book

 

 

 

 

 

 

 

 

Trade Date

Product

Structure

Ref

Contract Start

Contract End

Price / Strike

Outstanding

Metric

10/07/2024

Crude Oil

Swaps

NYMEX WTI CMA

04/01/2025

06/30/2025

$

72.00

 

7,500

BBL

10/02/2024

Natural Gas

Swaps

NYMEX Henry Hub (LD)

04/01/2025

10/31/2025

$

3.23

 

535,000

MMBtu

10/02/2024

Natural Gas

Swaps

Tenn Z4 300L Basis

04/01/2025

10/31/2025

$

(1.04

)

535,000

MMBtu

08/28/2024

Natural Gas

Swaps

NYMEX Henry Hub (LD)

01/01/2025

03/31/2025

$

3.18

 

225,000

MMBtu

08/28/2024

Natural Gas

Swaps

Tenn Z4 300L Basis

01/01/2025

03/31/2025

$

(0.68

)

225,000

MMBtu

06/07/2024

Natural Gas

Swaps

NYMEX Henry Hub (LD)

01/01/2025

03/31/2025

$

3.70

 

225,000

MMBtu

06/07/2024

Natural Gas

Swaps

Tenn Z4 300L Basis

01/01/2025

03/31/2025

$

(0.80

)

225,000

MMBtu

04/30/2024

Natural Gas

Swaps

NYMEX Henry Hub (LD)

01/01/2025

03/31/2025

$

3.54

 

225,000

MMBtu

04/30/2024

Natural Gas

Swaps

Tenn Z4 300L Basis

01/01/2025

03/31/2025

$

(0.75

)

225,000

MMBtu

03/28/2024

Natural Gas

Swaps

NYMEX Henry Hub (LD)

11/01/2024

12/31/2024

$

3.15

 

77,500

MMBtu

03/05/2024

Natural Gas

Swaps

NYMEX Henry Hub (LD)

11/01/2024

12/31/2024

$

3.28

 

155,000

MMBtu

03/05/2024

Natural Gas

Swaps

Tenn Z4 300L Basis

11/01/2024

12/31/2024

$

(1.04

)

155,000

MMBtu

02/26/2024

Crude Oil

Swaps

NYMEX WTI CMA

03/01/2024

03/31/2025

$

74.34

 

22,898

BBL

 

 

 

 

 

 

 

 

 

Earning's Call:

The Company will host a conference call to discuss its results on Thursday, November 7, 2024 at 2:00 p.m. Central Time (3:00 p.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 Third Quarter 2024 Earnings Conference Call."

A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=S0pmngFY. 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 in Pennsylvania, Texas, Alberta CA, New Mexico, and Oklahoma.

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 StabellChief Executive

Andrew Williamson Chief Financial Officer

EPSILON ENERGY LTD.Unaudited Consolidated Statements of Operations(All amounts stated in US$)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenues from contracts with customers:

 

 

 

 

 

 

 

 

 

 

 

 

Gas, oil, NGL, and condensate revenue

 

$

6,203,953

 

 

$

3,241,531

 

 

$

18,118,368

 

 

$

14,509,184

 

Gas gathering and compression revenue

 

 

1,083,988

 

 

 

3,068,996

 

 

 

4,464,134

 

 

 

7,657,755

 

Total revenue

 

 

7,287,941

 

 

 

6,310,527

 

 

 

22,582,502

 

 

 

22,166,939

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

2,099,501

 

 

 

1,559,957

 

 

 

5,517,830

 

 

 

4,404,757

 

Gathering system operating expenses

 

 

490,325

 

 

 

631,725

 

 

 

1,692,862

 

 

 

1,854,000

 

Depletion, depreciation, amortization, and accretion

 

 

2,698,812

 

 

 

1,392,032

 

 

 

7,127,641

 

 

 

4,780,766

 

Loss on sale of oil and gas properties

 

 



 

 

 



 

 

 



 

 

 

1,449,871

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation expense

 

 

309,109

 

 

 

439,653

 

 

 

944,267

 

 

 

799,149

 

Other general and administrative expenses