Reserves and Production - As of December 31, 2024, Epsilon Energy Ltd. reported total estimated net proved reserves of 84,097 MMcfe, a 20% increase from December 31, 2023[211]. - The company estimates proved natural gas and oil reserves, which directly impact financial accounting estimates such as depreciation and impairments[262]. - Significant uncertainties exist in estimating proved reserves, including geological and engineering data interpretation, which may lead to material revisions in reserve estimates over time[262]. Financial Performance - Revenues for the year ended December 31, 2024, increased by $0.8 million, or 3%, to $31.5 million compared to $30.7 million in 2023[215]. - Net income for the year ended December 31, 2024, was $1,927,800, a decrease of $5,017,353, or 72%, from $6,945,153 in 2023[239]. - Adjusted EBITDA for the year ended December 31, 2024, was $17,578,000, a decrease of $1,249,512, or 7%, from $18,827,512 in 2023[239]. - Cash flow from operating activities provided $16.8 million in 2024, compared to $18.2 million in 2023, reflecting a decrease of $1.4 million, or 7%[245]. Revenue Sources - Upstream oil and condensate revenue for the year ended December 31, 2024, increased by $8.6 million, or 170%, over 2023, primarily due to increased production from new wells in the Permian Basin[219]. - The Auburn Gas Gathering System, located in the Marcellus Shale, is expected to maintain revenue levels despite short-term low commodity prices due to historically high recoverable reserves[275]. Expenses and Costs - General and administrative expenses for the year ended December 31, 2024, decreased by $0.3 million, or 5%, compared to the same period in 2023, primarily due to a reduction in legal expenses[231]. - Operating costs for the year ended December 31, 2024, increased by $0.9 million, or 13.4%, from the same period in 2023, primarily due to acquired and developed wells in the Permian Basin[222]. - Interest income for the year ended December 31, 2024, decreased by $1.2 million, or 71%, from the same period in 2023, primarily due to a reduction in the balance of cash and short-term investments[232]. - Interest expense decreased by $0.03 million, or 42%, during the year ended December 31, 2024, compared to 2023, due to higher fees in 2023 associated with a new credit facility[233]. - Income tax expense decreased by $1.6 million, or 49%, to $1,629,093 for the year ended December 31, 2024, primarily due to a decrease in taxable income from losses on derivative contracts[238]. Capital Expenditures and Investments - Total capital expenditures (net to Epsilon) through year-end 2024 in the Ector County, Texas project amounted to $38.6 million[206]. - The company used $16.7 million for investing activities in 2024, a decrease of $21.7 million, or 57%, from $38.4 million in 2023[246]. - Capital commitments as of December 31, 2024, were $7.8 million, related to the first two wells of a joint venture in Alberta[260]. Impairments and Asset Management - Epsilon recorded an impairment of $1.45 million for the year ended December 31, 2024, related to the Killam project in Alberta, Canada[229]. - The company reviews the carrying value of oil and natural gas properties for impairment based on expected future cash flows, which may result in reductions to fair value if cash flows are lower than carrying values[265]. - Asset retirement obligations (ARO) are recognized at fair value, requiring management to make assumptions about future costs and timing related to the retirement of long-lived assets[268]. Financing and Credit Facilities - The company closed a senior secured revolving credit facility with a current borrowing base of $45 million, maturing on June 28, 2027[248]. - The company repurchased 125,000 common shares for $627,500 at an average price of $5.00 per share during the year ended December 31, 2024[251]. Risk Management - Changes in commodity prices significantly affect the company's earnings and cash flow, with potential impacts on asset values and exploration activities[274]. - The company employs a hedging strategy to manage risks associated with commodity price fluctuations, stabilizing cash flows and supporting capital spending[276].

Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming the fundamentals behind a stock's momentum is essential for profitability [1][2]. Group 1: Trend Analysis - Timing entries into a trend significantly impacts investment success, as trends can reverse unexpectedly, leading to potential losses [1][2]. - A predefined "Recent Price Strength" screen can help identify stocks that are currently trending upward, supported by strong fundamentals and trading near their 52-week high [3]. Group 2: Company Spotlight - Epsilon Energy Ltd. (EPSN) - Epsilon Energy Ltd. has shown a solid price increase of 21.4% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 11.3% in the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, EPSN is trading at 95.4% of its 52-week high-low range, indicating a potential breakout [5]. Group 3: Fundamental Strength - EPSN holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. - The Zacks Rank system has a strong historical performance, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [7]. Group 4: Investment Strategy - In addition to EPSN, there are other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities [8]. - The effectiveness of stock-picking strategies can be backtested using tools like the Zacks Research Wizard, which offers insights into successful strategies [9].

Epsilon Energy Ltd. (EPSN) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.The po ...

Group 1 - Epsilon Energy Ltd. has terminated its previous normal course issuer bid program and approved a new one-year share repurchase program, allowing the repurchase of up to 2,200,876 common shares for a total price not exceeding US $13.0 million [1][2] - The new share repurchase program commenced on February 12, 2025, and will conclude on February 11, 2026, unless the maximum number of shares is repurchased earlier or the company provides notice of termination [1] - The company believes the market price of its common shares does not reflect their underlying value, and the repurchase initiative is seen as a way to create shareholder value [2] Group 2 - Share repurchases will be conducted through the NASDAQ Global Market at the prevailing market price, and the company plans to fund the purchases using available cash without incurring debt [3] - Epsilon Energy has undergone a borrowing base redetermination for its senior secured reserve-based lending revolving credit facility, with the new borrowing base set at $45 million effective February 10, 2025 [4] - Epsilon Energy Ltd. operates as a North American onshore natural gas and oil production and gathering company with assets located in Pennsylvania, Texas, Alberta, New Mexico, and Oklahoma [5]

Industry Analysis - The oil and gas industry is described as a boom-bust, cyclical industry, requiring patience and experience to navigate effectively [2] - The industry has experienced low natural gas prices in some basins, leading to challenging conditions for operators [2] Company Analysis: Epsilon Energy (EPSN) - Epsilon Energy (EPSN) now derives most of its earnings from oil and liquids, which has positively impacted its results amid low natural gas prices [2] - The company's financials, competitive position, and development prospects are key areas of focus for analysis [1] Research Service - The Oil & Gas Value Research service provides in-depth analysis of undervalued oil and gas companies, including balance sheets, competitive positions, and development prospects [1] - Members of the service receive exclusive analysis on certain companies that is not published on the free site [1]

Epsilon Energy Ltd. (NASDAQ:EPSN) Q3 2024 Results Conference Call November 7, 2024 3:00 PM ET Company Participants Andrew Williamson - Chief Financial Officer Jason Stabell - Chief Executive Officer Henry Clanton - Chief Operating Officer Conference Call Participants John White - ROTH Capital Operator Good afternoon, and welcome to the Epsilon Energy Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] I would now like to turn the conference ov ...

Financial Performance - The company reported a net operating revenue of $29,000,000 for the quarter, with an adjusted EBITDA of $10,000,000, indicating a margin of approximately 34.5%[15]. - Total revenue for the three months ended September 30, 2023, was $7,287,941, an increase from $6,310,527 in the same period last year, representing a growth of approximately 15.4%[18]. - Net income for the three months ended September 30, 2023, was $366,021, compared to $388,775 in the prior year, reflecting a decrease of about 5.8%[18]. - Operating income decreased to $240,618 for the three months ended September 30, 2023, down from $746,802 in the same period last year, a decline of approximately 67.8%[18]. - Total operating costs and expenses increased to $7,047,323 for the three months ended September 30, 2023, compared to $5,563,725 in the prior year, marking an increase of about 26.6%[18]. - The company reported a net comprehensive income of $405,866 for the three months ended September 30, 2023, compared to $412,570 in the prior year, a slight decrease of about 1.7%[18]. - Net income for the nine months ended September 30, 2023, was $2,688,577, compared to $4,349,191 for the same period in 2022[33]. - The company reported a net income of $3,570,041 for the nine months ended September 30, 2024, compared to $6,632,419 in the same period of 2023, reflecting a decrease of approximately 46.3%[117]. Asset and Equity Changes - Cash and cash equivalents decreased from $13,403,628 on December 31, 2023, to $8,304,971 on September 30, 2024, representing a decline of approximately 38.5%[15]. - Total current assets decreased significantly from $41,128,796 to $14,811,129, a reduction of about 64.0%[15]. - Shareholders' equity decreased from $100,612,965 to $98,358,664, a decline of approximately 2.2%[15]. - As of September 30, 2023, total shareholders' equity was $99,456,110, a decrease from $105,172,300 at March 31, 2023[21]. - The balance of cash, cash equivalents, and restricted cash at the end of the period was $8,774,971, down from $12,993,051 at the beginning of the period[33]. - Total oil and gas properties, net, increased to $98,473,841 as of September 30, 2024, from $72,060,174 as of December 31, 2023, reflecting an increase of approximately 36.7%[46]. - The total property and equipment, net, increased to $106,147,464 as of September 30, 2024, from $80,188,022 as of December 31, 2023, indicating an increase of approximately 32.4%[46]. Revenue and Production Insights - Gas, oil, NGL, and condensate revenue for the three months ended September 30, 2023, was $6,203,953, up from $3,241,531 in the same period last year, indicating a growth of approximately 91.5%[18]. - Natural gas sales revenue for the nine months ended September 30, 2024, was $6,828,155, compared to $11,351,618 for the same period in 2023, indicating a decrease of about 39.5%[108]. - Total revenues for the nine months ended September 30, 2024, increased by $0.4 million, or 2%, to $22.6 million from $22.2 million in the same period of 2023[167]. - Upstream oil and condensate revenue increased by 310% to $7.7 million for the nine months ended September 30, 2024, compared to the same period in 2023, driven by additional sales volumes from new wells in the Permian Basin[169]. - Total net revenue interest production in the Permian Basin increased by 428% to 73.3 Mboe for Q3 2024 compared to 13.9 Mboe in Q3 2023, and a 565% increase for the nine months ended September 30, 2024, totaling 191.4 Mboe compared to 28.8 Mboe in the same period of 2023[163]. Cost and Expense Management - Interest income for the three months ended September 30, 2023, was $96,220, a decrease from $384,732 in the same period last year, representing a decline of approximately 75.0%[18]. - Total operating costs for the nine months ended September 30, 2024, were $12,641,773, compared to $13,668,534 in 2023, reflecting a decrease of approximately 7.5%[117]. - Operating costs increased by 25% to $1.1 million for the nine months ended September 30, 2024, primarily due to acquired and developed wells in the Permian Basin[170]. - Capital expenditures for the nine months ended September 30, 2024, totaled $32,911,026, up from $16,024,631 in the same period of 2023, representing an increase of approximately 105.5%[117]. Strategic Initiatives and Future Outlook - The company plans to expand its market presence through strategic partnerships and new product launches in the upcoming quarters[12]. - Management anticipates a gradual recovery in commodity prices, which could positively impact revenue in the next fiscal year[12]. - The company is actively pursuing opportunities for acquisitions to enhance its asset portfolio and market share[12]. - The company formed a joint venture in October 2024, earning a 25% working interest across approximately 160,000 gross acres in Alberta, Canada, with a carried interest commitment of $7.3 million[128]. - The company executed a new Anchor Shipper Gas Gathering Agreement in May 2024, establishing fixed rates for gathering services, with a new fixed rate of $0.475 per MMBtu for 2024[162]. Stock and Shareholder Activities - A new share repurchase program was authorized on March 20, 2024, allowing for the repurchase of up to 2,191,320 common shares for an aggregate purchase price of not more than $12 million[54]. - The company repurchased and retired 248,700 shares at an average price of $4.82 per share during the nine months ended September 30, 2024[55]. - The Company declared quarterly dividends of $0.0625 per common share, totaling approximately $4.1 million for the nine months ended September 30, 2024[82]. - The company repurchased 125,000 shares at a price of $5.00 per share under the new program[96]. Tax and Compliance - The effective tax rate for the nine months ended September 30, 2024 was higher than the statutory federal rate due to state income taxes, partially offset by a valuation allowance against the Canadian net operating loss[90]. - The company is currently assessing the potential effects of new accounting standards issued by the FASB, including ASU No. 2023-09, which requires enhanced income tax disclosures effective for fiscal years beginning after December 15, 2024[64].

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 2024Q2 2024Q3 2023 QoQ %YoY %NRI Production      GasMMcf1,3041,4071,848-7%-29%OilMbbl53451319%317%NGLMbbl17199-11%99%       Revenues      Gas$M1,9041,9612,089-3%-9%Oil$M3,9653,51492513%329%NGL$M335388228-14%47%Midstream1$M1,0841,4443,069-25%-65%       Realized Prices2      Gas$/M ...

Earnings Announcement and Conference Call - Epsilon Energy Ltd will release its third quarter 2024 earnings on November 06, 2024 after market close [1] - The company will host a conference call on November 7, 2024 at 2:00 p m Central Time to discuss financial and operating results [1] - Toll-free dial-in numbers are provided for US, Canada, and international participants [1] - A webcast of the conference call will be available at the provided link and a replay will be accessible on the company's website [1] Company Overview - Epsilon Energy Ltd is a North American onshore natural gas and oil production and gathering company [2] - The company has assets located in Pennsylvania, Texas, New Mexico, and Oklahoma [2] - Key executive contacts include CEO Jason Stabell and CFO Andrew Williamson [2]

We wrote about Epsilon Energy Ltd. (NASDAQ: EPSN ) in May of this year, when the North American onshore independent natural gas and oil company was upgraded to a 'Buy'. Since our upgrade, shares have returned just over 15%, including dividend distributions. Although commodity Individual investor with a keen interest in deriving income from investment setups. We do this by buying undervalued profitable stocks with strong balance sheets & minimal debt. Furthermore, when the opportunity arises, we like to writ ...