Epsilon Energy .(US:EPSN)2025-03-20 20:12Financial Data and Key Metrics Changes - In 2024, the company achieved a 180% year-on-year increase in oil production, with the Permian contributing over 60% to cash flows [7][10] - Proved reserves grew approximately 20% year-over-year despite pricing headwinds [18] - The company reported net revenue interest production in Pennsylvania at approximately 30 million cubic feet a day, up 85% from the daily average during 2024 [12] Business Line Data and Key Metrics Changes - The Permian business saw significant growth with an investment of $24 million, leading to increased production and undeveloped acreage [14] - In the Marcellus, production curtailments were estimated at 20% to 25% of net total, but the environment improved in the fourth quarter, leading to a strong start in 2025 [9][13] - The company established a new project area in Alberta, Canada, with a joint venture that adds multi-year economic inventory for approximately a $7 million drilling carry [7][16] Market Data and Key Metrics Changes - The Marcellus experienced sub $2 per Mcf net wellhead pricing, but pricing improved significantly in early 2025, with realized prices over $3.90 per Mcf [9][12] - The gathering system throughput in the Marcellus is up over 50% from the average in the third quarter of 2024 [13] Company Strategy and Development Direction - The company remains committed to its fixed dividend while exploring opportunities to reduce share count [10] - Future development in the Permian is expected to pick back up, with significant undeveloped acreage available [14][15] - The company is focused on capital allocation across multiple project areas, including a new project in Alberta [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Marcellus market, indicating a strong start to 2025 and improved cash flows [11][13] - The company is in a strong position with over $50 million of liquidity and strong free cash flows [17] Other Important Information - The operator in the Marcellus has provided clarity on a multi-year plan, which includes development scheduling for 2026 and beyond [41] - The company has not been active in share repurchases year-to-date but remains opportunistic in its capital allocation strategy [49] Q&A Session Summary Question: How many wells were drilled and completed in Alberta in 2024? - The company drilled 2 gross wells, 1 net, in the small project called Killam, and 2 gross wells in the larger Garrington area [28][30] Question: How many wells will be drilled in the larger area in 2025? - There are plans for another 2 wells to be drilled in the larger area over the remainder of 2025 [31][32] Question: What are the expectations regarding the Marcellus operator's plans into 2026? - The operator's multi-year plan includes development scheduling for 2026, 2027, and 2028, which has been included in the reserve report [41][42] Question: What is the company's hedge position for natural gas? - The company is hedged through October at roughly 30% of gas production, with plans to be aggressive in the winter months [46][47] Question: Has the company been active in share repurchases year-to-date? - The company has not been active in share repurchases but considers it an option for capital allocation [48][49]