EPSNNasdaqCrude Petroleum & Natural GasUS GAAP · USD

Epsilon Energy Ltd.

Epsilon Energy Ltd. is a North American onshore independent oil and gas company focused on acquiring, developing, gathering, and producing natural gas, NGLs, and crude oil. Its portfolio is centered on non-operated assets in Pennsylvania, Texas, New Mexico, Oklahoma, and Alberta, with additional value tied to gathering infrastructure and selective joint ventures. The company also pursues shareholder returns through dividends and buybacks while maintaining balance sheet flexibility for new projects.

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Revenue51.6m USD
+63.7 %y/y
Operating profit (EBIT)-10.5m USD
−407.1 %y/y
EBIT margin-20.4%
−31.3 ppy/y
Net income-5.8m USD
−400.8 %y/y

Fiscal year 2025 · change from previous year

Development 2020–2025

-20020406080m USD2020: 24 m USD2020: EBIT -0.98 m USD20202021: 42 m USD2021: EBIT 21 m USD20212022: 70 m USD2022: EBIT 47 m USD20222023: 31 m USD2023: EBIT 5.4 m USD20232024: 32 m USD2024: EBIT 3.4 m USD20242025: 52 m USD2025: EBIT -11 m USD202552-11
RevenueOperating profit (EBIT)

Business

Share of revenue
Natural gas production40 %

Sales of produced natural gas from Pennsylvania, Oklahoma, Texas, New Mexico, and Alberta assets.

Oil and NGL production50 %

Crude oil and natural gas liquids volumes produced primarily from Permian and Canadian assets.

Gathering and midstream interest5 %

Equity interest in the Auburn Gas Gathering System that supports Pennsylvania gas takeaway.

Asset acquisition and development5 %

Capital deployed to acquire acreage, drill wells, and convert undeveloped land into producing assets.

Products

Reported · share of revenue
56.5%26.8%13.0%FY2025100 %
  • Natural Gas Reserves56.5 %
  • Oil and Condensate26.8 %
  • Gas Gathering and Compression13.0 %
  • Natural Gas Liquids Reserves3.8 %

Source: 10-K FY2025, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

Epsilon sells into commodity markets rather than to a narrow customer base, so its direct counterparties are typically marketers, purchasers, and pipeline-connected buyers of natural gas, NGLs, and crude oil. Its economic customers are end-market demand centers for power generation, industrial use, heating, and transportation fuels, with realized pricing driven by regional basis, liquids content, and takeaway access. The company also depends on joint-venture partners and operators in non-operated projects to execute drilling and development plans.

Commodity purchasers and marketers

Buy produced gas, NGLs, and oil at market-linked prices for resale or end use.

Midstream and pipeline counterparties

Take volumes from producing areas and provide transport, gathering, and market access.

Joint venture operators and working-interest partners

Co-develop acreage and wells, sharing capital and execution risk on projects.

End-market energy consumers

Power, industrial, and residential users ultimately drive demand for the company’s gas production.

Strategy

Epsilon is pursuing disciplined capital allocation, balancing development spending with dividends and share repurchases. The company is shifting capital toward higher-return liquids-rich opportunities in the Permian and Alberta while preserving its Pennsylvania gas base and gathering infrastructure. It is also expanding through selective acquisitions, including the announced Peak transaction, to add operated acreage and production scale.

Disciplined capital allocationShort term

Supports shareholder returns while limiting overinvestment in volatile commodity cycles.

Shift toward liquids-rich growthMedium term

Oil and NGL-heavy assets can improve cash generation and diversify gas price exposure.

Expand through selective acquisitionsMedium term

Adds scale, operated control, and inventory without relying only on organic drilling.

Geography

Epsilon’s operating footprint is concentrated in North American onshore basins, with core activity in Pennsylvania, Texas, New Mexico, Oklahoma, and Alberta. The company’s Pennsylvania assets are tied to the Marcellus and the Auburn Gas Gathering System, while newer capital has been directed to the Permian Basin and Western Canadian Sedimentary Basin. Geography matters because realized prices, liquids mix, and takeaway access vary by basin, and the company is exposed to regional regulatory and operational conditions.

Risks

Epsilon’s results are highly sensitive to commodity prices, because revenue depends on realized gas, NGL, and oil prices that can move sharply with supply-demand and geopolitical conditions. Execution risk also matters because the company operates across multiple basins, relies on partners in non-operated assets, and has faced impairments when wells underperform or costs rise. Balance sheet, acquisition, and hedging decisions can materially affect cash flow, reported earnings, and future capital flexibility.

Sorted by severity
Commodity price volatilityHigh

Natural gas, NGL, and oil prices drive realized revenue and can change quickly with market and geopolitical conditions.

Exposure: All producing basins

Reserve and well-performance riskHigh

Lower-than-expected production, cost overruns, or weaker forward prices can reduce reserve estimates and trigger impairments.

Exposure: Alberta wells and new development projects

Acquisition and integration riskMedium

The Peak transaction adds debt, contingent consideration, and operational complexity before closing and integration.

Exposure: Wyoming acquisition pipeline

Counterparty and operator dependenceMedium

Non-operated assets rely on third-party operators for drilling, completion, and field execution.

ExposurePennsylvaniaTexasOklahomaAlberta
Hedging effectiveness riskMedium

Derivatives can stabilize cash flow but may also create mark-to-market losses or limit upside in rising prices.

Exposure: Commodity price management

Accounting

Judgemental items
Reserve estimates and depletion

DD&A expense is driven by proved reserves and production volumes, so changes in reserve estimates affect earnings.

Impact: Higher or lower depletion expense

Impairment testing of oil and gas properties

Underperforming wells and lower forward prices can reduce undiscounted cash flows and require write-downs.

Impact: Material non-cash charges to earnings

Derivative accounting

Commodity hedges can be marked to market, creating gains or losses that may not match cash settlement timing.

Impact: Quarterly earnings volatility

Asset retirement obligations

Accretion and estimated plugging costs depend on long-lived asset assumptions and regulatory requirements.

Impact: Long-term liability and expense recognition

Acquisition accounting and contingent consideration

The Peak deal includes assumed debt and possible contingent shares, which may affect purchase accounting and future dilution.

Impact: Balance sheet and equity dilution risk

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Last updated: 24/09/2026