Press Release: Epsilon Announces Full Year 2025 Results

Dow Jones03-25 05:19

HOUSTON, March 24, 2026 (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, 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% 
   Midstream(1)              6,684   5,524    1,501    1,445   21%       4% 
   Total                    51,588  31,523   14,818    8,981   64%      65% 
 
Realized 
Prices(2) 
   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. EBITDA(3)          $M  30,744  17,578    7,553    5,240   75%      44% 
 
Cash + STI(4)           $M   9,513   6,990    9,513   13,236   36%     -28% 
 
Capex(5)                $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 Income(6)       $M  21,294   3,639   11,103    1,947 
p/share(7)               $    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:

 
                         Natural Gas                                    Crude Oil 
-----  -----------------------------------------------  ----------------------------------------- 
             Swaps              Costless Collars             Swaps           Costless Collars 
       -----------------  ----------------------------  ---------------  ------------------------ 
                                   Bought                                        Bought    Sold 
       Volume    Price    Volume     Put     Sold Call  Volume   Price   Volume    Put     Call 
Date   (MMcf)  ($/MMBtu)  (MMcf)  ($/MMBtu)  ($/MMBtu)  (MBbl)  ($/Bbl)  (MBbl)  ($/Bbl)  ($/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.

(END) Dow Jones Newswires

March 24, 2026 17:19 ET (21:19 GMT)

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