Epsilon Energy Reports Mixed Financial Results for Nine Months Ended September 30, 2024

Epsilon Energy Ltd. reported its financial results for the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. Total revenue for the nine months reached $22.6 million, a slight increase of $0.4 million, or 2%, from $22.2 million in the same period of 2023. The revenue breakdown showed a significant increase in oil and condensate revenue, which rose by $7.7 million, or 310%, while natural gas revenue decreased by $4.5 million, or 40%.

For the three months ended September 30, 2024, total revenue was $7.3 million, up from $6.3 million in the same quarter of 2023. However, operating income for the same quarter fell to $240,618 from $746,802 in the prior year, reflecting increased operating costs, which rose to $7.0 million from $5.6 million. Net income for the three months was $366,021, a slight decrease from $388,775 in Q3 2023. For the nine-month period, net income was $2.7 million, down from $4.3 million in the previous year.

Epsilon's total assets as of September 30, 2024, were $121.8 million, a decrease from $124.0 million at the end of 2023. The company reported cash and cash equivalents of $8.3 million, down from $13.4 million at the end of the previous year. Notably, total oil and gas properties increased to $98.5 million from $72.1 million, reflecting strategic acquisitions, including a 25% working interest in three producing wells in Texas for $12.1 million.

The company also engaged in a share repurchase program, authorizing the buyback of up to 2.2 million common shares for a total of $12 million, with 125,000 shares repurchased at $5.00 per share as of September 30, 2024. Epsilon's capital expenditures for the nine months were $32.9 million, primarily focused on leasehold and well costs in Pennsylvania, Texas, and Canada.

Epsilon's operational segments include Upstream, Gas Gathering, and Corporate, with the Upstream segment contributing significantly to revenue. The company continues to manage commodity price risks through hedging strategies, which are crucial given the volatility in natural gas and oil prices. As of September 30, 2024, Epsilon maintained compliance with its financial covenants under its credit facility, which has a borrowing base of $45 million and no current borrowings.