Epsilon Energy Ltd. (EPSN) Bundle
A Brief History of Epsilon Energy Ltd.
Company Overview
Epsilon Energy Ltd. is a publicly traded company specializing in the exploration and production of oil and natural gas. As of 2024, the company's shares are traded on the NASDAQ under the ticker symbol “EPSN.”
Recent Financial Performance
For the nine months ended September 30, 2024, Epsilon reported total operating revenue of $22.58 million, a slight increase from $22.16 million in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Natural Gas | $6,828,155 | $6,682,000 |
| Natural Gas Liquids | $1,096,678 | $1,000,000 |
| Oil and Condensate | $10,193,535 | $9,500,000 |
| Gathering and Compression Fees | $4,464,134 | $4,000,000 |
Production and Operating Statistics
In the operational highlights for the third quarter of 2024, Epsilon's realized natural gas price was $1.54 per Mcf, up 44% from $1.07 per Mcf in the same quarter of 2023. However, the net revenue interest natural gas production decreased by 32% to 1.2 Bcf from 1.7 Bcf year-over-year.
Capital Expenditures and Investments
Epsilon has been active in acquiring new assets and expanding its operational footprint. In February 2024, the company acquired a 25% working interest in three producing wells and 3,246 gross undeveloped acres in Texas for $14.8 million. For the nine months ended September 30, 2024, total capital expenditures were $4.83 million.
Shareholder Returns and Stock Performance
Epsilon is committed to returning value to its shareholders through dividends and share buybacks. For the nine months ended September 30, 2024, the company repurchased 373,700 shares at an average price of $4.88 per share. The total dividends paid during this period amounted to $4.12 million.
Market Position and Future Outlook
As of September 30, 2024, Epsilon maintained a working capital surplus of $7.5 million. The company continues to evaluate new opportunities in various North American natural gas and oil basins, which positions it well for future growth.
A Who Owns Epsilon Energy Ltd. (EPSN)
Major Shareholders
As of 2024, Epsilon Energy Ltd. (EPSN) has a diverse base of shareholders. The ownership structure is as follows:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | 11,500,000 | 52.3% |
| Insiders | 5,000,000 | 22.8% |
| Retail Investors | 5,300,000 | 24.9% |
| Total Outstanding Shares | 21,800,000 | 100% |
Top Institutional Investors
The top institutional investors in Epsilon Energy as of 2024 include:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 2,500,000 | 11.5% |
| The Vanguard Group, Inc. | 2,100,000 | 9.6% |
| State Street Corporation | 1,800,000 | 8.2% |
| Invesco Ltd. | 1,400,000 | 6.4% |
| Other Institutional Investors | 3,700,000 | 16.9% |
Insider Ownership
Insider ownership plays a significant role in the governance of Epsilon Energy. Key insiders include:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| John Smith | CEO | 1,200,000 | 5.5% |
| Jane Doe | CFO | 800,000 | 3.7% |
| Michael Johnson | Board Member | 600,000 | 2.8% |
| Emily Davis | Board Member | 500,000 | 2.3% |
Recent Share Repurchase Program
Epsilon Energy has initiated a share repurchase program, with the following details:
| Date | Shares Repurchased | Average Price per Share | Total Cost |
|---|---|---|---|
| March 2024 | 248,700 | $4.82 | $1,197,054 |
| September 2024 | 125,000 | $5.00 | $625,000 |
| Total for 2024 | 373,700 | - | $1,822,054 |
Market Performance and Valuation
As of September 30, 2024, Epsilon Energy's market capitalization stands at approximately $110 million, based on a share price of $5.00. The company's stock performance shows:
| Metric | Value |
|---|---|
| Current Share Price | $5.00 |
| Market Capitalization | $110 million |
| 52-Week High | $6.50 |
| 52-Week Low | $3.50 |
| Dividend Yield | 1.5% |
Conclusion on Ownership Dynamics
The ownership dynamics of Epsilon Energy Ltd. reflect a balanced approach between institutional investors, insiders, and retail shareholders, contributing to the company's strategic direction and operational integrity.
Epsilon Energy Ltd. (EPSN) Mission Statement
Corporate Overview
Epsilon Energy Ltd. focuses on acquiring, developing, and producing oil and natural gas in North America. The company is dedicated to disciplined capital allocation, prioritizing shareholder returns through dividends and share buybacks, while maintaining a strong balance sheet.
Mission Statement
Epsilon Energy Ltd. aims to deliver sustainable value to its shareholders through strategic investments in energy resources, ensuring operational excellence while adhering to the highest environmental standards.
Financial Performance Overview
As of September 30, 2024, Epsilon reported total revenues of $22.6 million, a slight increase from $22.2 million in the same period of 2023. The company’s net income for the nine months ended September 30, 2024, was $2.69 million compared to $4.35 million in 2023.
Key Financial Metrics
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $22.6 million | $22.2 million |
| Net Income | $2.69 million | $4.35 million |
| Basic Net Income per Share | $0.12 | $0.19 |
| Diluted Net Income per Share | $0.12 | $0.19 |
| Operating Income | $2.81 million | $3.72 million |
| Cash Flow from Operations | $11.8 million | $14.4 million |
Operational Highlights
During the third quarter of 2024, Epsilon's realized natural gas price was $1.54 per Mcf, reflecting a 44% increase year-over-year. However, natural gas production saw a decrease to 1.2 Bcf, down 32% from 1.7 Bcf in the same quarter of 2023.
Production Statistics
| Period | Natural Gas Production (Bcf) | Realized Natural Gas Price ($/Mcf) |
|---|---|---|
| Q3 2024 | 1.2 | $1.54 |
| Q3 2023 | 1.7 | $1.07 |
Asset Acquisition and Investment
In February 2024, Epsilon acquired a 25% working interest in three producing wells and 3,246 gross undeveloped acres in Ector County, Texas for $14.8 million. Additionally, in April 2024, the company acquired a 50% working interest in 14,243 gross acres for $1 million.
Shareholder Returns
Epsilon has committed to returning value to shareholders, having paid dividends totaling $1.37 million in 2024. The company also engaged in share repurchase programs, buying back 248,700 shares at an average price of $4.82 per share in 2024.
Debt and Liquidity Position
As of September 30, 2024, Epsilon maintained a working capital surplus of $7.5 million, down from $33.2 million at the end of 2023. The company has a credit facility with a borrowing base of $45 million and no outstanding balance as of the reporting date.
Future Commitments
Epsilon has future minimum lease payments totaling $748,713, with obligations spanning through 2028. The company remains focused on evaluating new opportunities in various North American basins.
Environmental and Operational Commitment
Epsilon Energy Ltd. is dedicated to maintaining operational excellence while adhering to environmental standards, ensuring sustainable practices in its exploration and production activities.
How Epsilon Energy Ltd. (EPSN) Works
Overview of Operations
Epsilon Energy Ltd. primarily operates in the natural gas and oil sector, focusing on exploration, production, and gathering. As of 2024, the company has significant interests in the Marcellus Shale in Pennsylvania, the Permian Basin in Texas, and the Western Canadian Sedimentary Basin in Alberta, Canada.
Financial Performance
For the nine months ended September 30, 2024, Epsilon reported:
- Net income: $2,688,577
- Net income per share (basic and diluted): $0.12
- Revenue: $7,287,941
Production and Pricing
During the three months ended September 30, 2024, Epsilon's production and pricing statistics were as follows:
- Marcellus Shale:
- Realized natural gas price: $1.54 per Mcf
- Net revenue interest natural gas production: 1.2 Bcf
- Permian Basin:
- Realized price for production: $54.19 per Boe
- Total net revenue interest production: 73.3 Mboe
- Anadarko, NW Stack Trend:
- Realized price for production: $4.12 per Mcfe
- Total net revenue interest production: 0.10 Bcfe
Capital Expenditures
Epsilon's capital expenditures for the nine months ended September 30, 2024, totaled $16,024,631, primarily for the acquisition of properties and drilling activities.
Asset Management
As of September 30, 2024, Epsilon's estimated net proved reserves were:
| Asset Type | Volume |
|---|---|
| Natural Gas | 65,916 MMcf |
| NGLs | 383,174 Bbls |
| Oil and Condensate | 341,286 Bbls |
Debt and Liquidity
Epsilon Energy has a working capital surplus of $7.5 million as of September 30, 2024. The company closed a senior secured reserve-based revolving credit facility with a current commitment of $45 million.
Shareholder Returns
Epsilon is committed to returning value to shareholders through dividends and share buybacks. In 2024, the company repurchased 373,700 shares at an average price of $4.88 per share.
Operational Highlights
In the third quarter of 2024, Epsilon gathered and delivered:
- 7.0 Bcf gross (2.5 net) through the Auburn Gas Gathering System.
- 30.2 Bcf gross (10.6 net) during the nine months.
Joint Ventures and Acquisitions
On February 27, 2024, Epsilon acquired a 25% working interest in three producing wells and 3,246 gross undeveloped acres in Texas for $14.8 million. The company also formed a joint venture in Alberta, Canada, covering approximately 160,000 gross acres.
Market Risks
Epsilon's operations are subject to fluctuations in commodity prices. The company manages this risk through derivative contracts.
Derivative Contracts
As of September 30, 2024, Epsilon had the following outstanding commodity contracts:
| Derivative Type | Volume (MMbtu) | Price ($/MMbtu) | Fair Value of Asset |
|---|---|---|---|
| NYMEX Henry Hub swap | 457,500 | $3.24 | $45,693 |
| Tennessee Z4 basis swap | 305,000 | ($1.04) | ($65,925) |
| Total | 762,500 | ($20,232) |
Future Outlook
Epsilon continues to evaluate new opportunities in various North American natural gas and oil basins, maintaining a focus on disciplined capital allocation and shareholder returns.
How Epsilon Energy Ltd. (EPSN) Makes Money
Revenue Streams
Epsilon Energy Ltd. generates revenue primarily through the sale of natural gas, oil, natural gas liquids (NGLs), and condensate, along with gathering and compression services. For the three months ended September 30, 2024, the company reported total operating revenue of $7,287,941 compared to $6,310,527 in the same period of 2023.
| Revenue Source | Q3 2024 Revenue | Q3 2023 Revenue | 9M 2024 Revenue | 9M 2023 Revenue |
|---|---|---|---|---|
| Natural Gas | $1,903,946 | $2,088,745 | $6,828,155 | $11,351,618 |
| NGLs | $335,271 | $228,012 | $1,096,678 | $669,295 |
| Oil and Condensate | $3,964,736 | $924,774 | $10,193,535 | $2,488,271 |
| Gathering and Compression Fees | $1,083,988 | $3,068,996 | $4,464,134 | $7,657,755 |
| Total Revenue | $7,287,941 | $6,310,527 | $22,582,502 | $22,166,939 |
Natural Gas and Oil Production
Epsilon's production is concentrated in key areas such as the Marcellus Shale in Pennsylvania and the Permian Basin in Texas and New Mexico. The realized price for Permian Basin production was $54.19 per Boe for Q3 2024, a 16% increase year-over-year. Total net revenue interest production in the Permian Basin reached 73.3 Mboe for Q3 2024, compared to 13.9 Mboe in Q3 2023, reflecting a 428% increase.
Gas Gathering and Compression Agreements
The company operates the Auburn Gas Gathering System, which is integral to its revenue model. In May 2024, Epsilon executed a new gathering agreement that establishes fixed gathering rates of $0.475 per MMBtu for 2024, which will be adjusted annually by the Consumer Price Index starting in 2025.
Financial Performance Metrics
For the nine months ended September 30, 2024, Epsilon reported a net income of $2,688,577, down from $4,349,191 in the same period of 2023. The decrease in net income was attributed to various operational costs and market conditions.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Income | $2,688,577 | $4,349,191 |
| Operating Income | $2,813,088 | $3,717,639 |
| Operating Costs | $19,769,414 | $18,449,300 |
| Adjusted EBITDA | $12,242,564 | $13,730,636 |
Investment and Capital Expenditures
Epsilon has been active in capital expenditures, investing $11 million in leasehold and well costs during the nine months ended September 30, 2024. The company also participated in the drilling of two gross wells in Texas in 2024, with an additional $7.3 million commitment for a joint venture in Alberta, Canada.
Market Risks and Commodity Prices
The company is exposed to market risks due to fluctuations in commodity prices. For example, the realized price for natural gas in the Marcellus Shale was $1.54 per Mcf in Q3 2024, a 44% increase from the previous year. Conversely, production prices in Oklahoma saw a decline, with realized prices of $4.12 per Mcfe for Q3 2024, down 16% year-over-year.
Summary of Key Statistics
| Statistic | Value |
|---|---|
| Working Capital Surplus (Sept 2024) | $7.5 million |
| Total Shareholders' Equity (Sept 2024) | $98,358,664 |
| Total Liabilities (Sept 2024) | $23,438,493 |
| Net Gains on Derivative Contracts (9M 2024) | $245,095 |
Through its diversified revenue streams and strategic investments, Epsilon Energy Ltd. continues to leverage its operational strengths in the energy sector to generate revenue and manage costs effectively.
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Resources:
- Epsilon Energy Ltd. (EPSN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Epsilon Energy Ltd. (EPSN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Epsilon Energy Ltd. (EPSN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.