Epsilon Announces Full Year 2024 Results

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

 

 

2024

2023

Q4 2024

Q3 2024

YoY%

QoQ%

NRI Production

 

 

 

 

 

 

 

Gas

MMcf

6,142

8,340

1,765

1,304

-26%

35%

Oil

Mbbl

187

65

52

53

186%

-3%

NGL

Mbbl

69

39

17

17

78%

-2%

Total

Mmcfe

7,676

8,965

2,176

1,727

-14%

26%

 

 

 

 

 

 

 

 

Revenues

$M

 

 

 

 

 

 

Gas

 

10,786

14,864

3,958

1,904

-27%

108%

Oil

 

13,731

5,091

3,537

3,965

170%

-11%

NGL

 

1,482

984

385

335

51%

15%

Midstream1

 

5,524

9,791

1,060

1,084

-44%

-2%

Total

 

31,523

30,730

8,940

7,288

3%

23%

 

 

 

 

 

 

 

 

Realized Prices2

 

 

 

 

 

 

 

Gas

$/Mcf

1.76

1.78

2.24

1.46

-1%

54%

Oil

$/Bbl

73.61

77.96

68.38

74.27

-6%

-8%

NGL

$/Bbl

21.41

25.29

22.98

19.56

-15%

17%

 

 

 

 

 

 

 

 

Adj. EBITDA

$M

17,578

18,828

5,335

3,744

-7%

43%

 

 

 

 

 

 

 

 

Cash + STI3

$M

6,990

32,649

6,990

8,775

-79%

-20%

 

 

 

 

 

 

 

 

Capex4

$M

34,887

22,038

3,804

3,908

58%

-3%

 

 

 

 

 

 

 

 

1) Net of elimination entry for fees paid by Epsilon

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

 

 

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

 

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 Date

Product

Structure

Ref

Contract Start

 

Contract End

 

Price / Strike

Outstanding

Metric

01/14/2025

Crude Oil

Swap

NYMEX WTI CMA

04/01/2025

 

09/30/2025

 

$72.35

 

(14,900.00

)

BBL

01/07/2025

Crude Oil

Swap

NYMEX WTI CMA

04/01/2025

 

12/31/2025

 

$70.20

 

(24,600.00

)

BBL

12/30/2024

Natural Gas

Swap

NYMEX Henry Hub (LD)

04/01/2025

 

10/31/2025

 

$3.49

 

(214,000.00

)

MMBTU

12/30/2024

Natural Gas

Swap

Tenn Z4 300L Basis

04/01/2025

 

10/31/2025

 

-$0.94

 

(214,000.00

)

MMBTU

11/21/2024

Natural Gas

Swap

NYMEX Henry Hub (LD)

04/01/2025

 

10/31/2025

 

$3.23

 

(321,000.00

)

MMBTU

11/21/2024