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