Epsilon Energy .(EPSN) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a cash flow decrease of approximately 30% quarter over quarter due to significantly lower realized pricing for gas and oil [13] - Proved reserves increased by over 150% based on third-party reports, with liquids production rising by over 200% and priority inventory count increasing by over 600% [12] Business Line Data and Key Metrics Changes - The acquisition of the Peak Companies adds approximately 2,200 net barrels of oil equivalent daily production, with 56% being oil [15] - The company plans to develop three high working interest Parkman wells in the first quarter of the following year, subject to the closing timeline of the transactions [15] Market Data and Key Metrics Changes - Approximately 30% of the identified priority inventory is currently affected by a drilling permit moratorium in Converse County, Wyoming, but the company is optimistic about the moratorium being lifted soon [7] Company Strategy and Development Direction - The acquisition of the Peak Companies is seen as a strategic move to enhance the company's asset base and operational control, providing opportunities for both organic and inorganic growth [5] - The company aims to maintain its existing per share dividend while having sufficient discretionary cash flow to drive growth through a development plan covering multiple regions starting next year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the regulatory environment and the potential lifting of the drilling permit moratorium, which would allow access to additional inventory [7] - The company anticipates that the addition of the Peak asset base will enhance capabilities and control to add per share value [7] Other Important Information - The transaction consideration includes the issuance of 6,000,000 Epsilon common shares and the assumption of approximately $49 million of long-term debt [9] - The company plans to file a proxy statement in the fall with additional details on the transaction and financial position of the pro forma business [12] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the Q&A session was brief or not detailed in the records [20]