Epsilon Energy Ltd. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Epsilon Energy Ltd. has filed its 2023 10-K, detailing financial performance and corporate actions.</b>

AI Summary

Epsilon Energy Ltd. (EPSN) filed a Annual Report (10-K) with the SEC on March 21, 2024. Epsilon Energy Ltd. filed its 2023 Form 10-K on March 21, 2024, reporting on its fiscal year ended December 31, 2023. The company's business address is 500 Dallas Street, Suite 1250, Houston, TX 77002. Epsilon Energy Ltd. is classified under SIC code 1311 for Crude Petroleum & Natural Gas. The filing includes details on the company's Normal Course Issuer Bid Repurchase Program, with specific dates and maximum amounts mentioned. Key financial statement components like Retained Earnings, Additional Paid-In Capital, and Accumulated Other Comprehensive Income are detailed for fiscal years 2021, 2022, and 2023.

Why It Matters

For investors and stakeholders tracking Epsilon Energy Ltd., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Epsilon Energy Ltd.'s financial health and operational activities for the fiscal year 2023, crucial for investors to assess performance and future outlook. The inclusion of details on share repurchase programs and various equity components offers insights into the company's capital allocation strategies and shareholder value initiatives.

Risk Assessment

Risk Level: low — Epsilon Energy Ltd. shows low risk based on this filing. The filing is a standard 10-K annual report, which typically contains routine financial and operational information without immediate, significant market-moving news.

Analyst Insight

Investors should review the detailed financial statements and management discussion within the 10-K to understand Epsilon Energy Ltd.'s performance and strategic direction for 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (The end date of the reporting period.)
• 2024-03-21 — Filing Date (Date the 10-K was filed with the SEC.)
• 110 — Public Document Count (Total number of documents in the filing.)
• 281-670-0002 — Business Phone (Contact phone number for the company.)

Key Players & Entities

• Epsilon Energy Ltd. (company) — Filer of the 10-K report.
• 2023-12-31 (date) — Conformed period of report.
• 2024-03-21 (date) — Filed as of date.
• 500 Dallas Street, Suite 1250, Houston, TX 77002 (address) — Business and mailing address.
• 1311 (industry_code) — Standard Industrial Classification for Crude Petroleum & Natural Gas.
• EPSN (ticker) — Ticker symbol for Epsilon Energy Ltd.

FAQ

Industry Context

Epsilon Energy Ltd. operates in the Crude Petroleum & Natural Gas industry, a sector characterized by exploration, production, and market volatility.

Regulatory Implications

As a publicly traded company, Epsilon Energy Ltd. is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of annual 10-K reports.

What Investors Should Do

1. Review the full 10-K filing for detailed financial statements and management's discussion and analysis.
2. Analyze the company's share repurchase program details for insights into capital allocation.
3. Assess the company's position within the Crude Petroleum & Natural Gas industry based on the provided SIC code.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K.
• 2024-03-21: 10-K Filing Date — Date Epsilon Energy Ltd. submitted its annual report.

Year-Over-Year Comparison

This is the initial filing of the 2023 Form 10-K, providing the latest annual financial and operational data for Epsilon Energy Ltd.

Key Financial Figures

• $2.5 million — Williams Partners, LP. In 2023, we paid $2.5 million (after elimination) to the Auburn GGS t
• $2.8 million — natural gas production in Pennsylvania ($2.8 million after elimination was paid to the Aubur
• $1.74 — psilon's realized natural gas price was $1.74 per Mcf, excluding the impact of hedges
• $5.96 — e impact of hedges, a 71% decrease from $5.96 for the year ended December 31, 2022.
• $52.49 — r all Permian Basin production was 5 $52.49 per BOE, excluding the impact of hedges
• $5.35 — d price for all Oklahoma production was $5.35 per Mcfe, excluding the impact of hedge
• $8.68 — e impact of hedges, a 38% decrease from $8.68 for the year ended December 31, 2022.

Filing Documents

• epsn-20231231x10k.htm (10-K) — 3515KB
• epsn-20231231xex10d8.htm (EX-10.8) — 996KB
• epsn-20231231xex23d1.htm (EX-23.1) — 5KB
• epsn-20231231xex23d2.htm (EX-23.2) — 3KB
• epsn-20231231xex31d1.htm (EX-31.1) — 11KB
• epsn-20231231xex31d2.htm (EX-31.2) — 11KB
• epsn-20231231xex32d1.htm (EX-32.1) — 7KB
• epsn-20231231xex32d2.htm (EX-32.2) — 7KB
• epsn-20231231xex97d1.htm (EX-97.1) — 38KB
• epsn-20231231xex99d1.htm (EX-99.1) — 95KB
• epsn-20231231xex10d8001.jpg (GRAPHIC) — 2KB
• epsn-20231231xex10d8002.jpg (GRAPHIC) — 2KB
• epsn-20231231xex97d1001.jpg (GRAPHIC) — 11KB
• 0001558370-24-003645.txt (&nbsp;) — 14436KB
• epsn-20231231.xsd (EX-101.SCH) — 66KB
• epsn-20231231_cal.xml (EX-101.CAL) — 99KB
• epsn-20231231_def.xml (EX-101.DEF) — 282KB
• epsn-20231231_lab.xml (EX-101.LAB) — 660KB
• epsn-20231231_pre.xml (EX-101.PRE) — 528KB
• epsn-20231231x10k_htm.xml (XML) — 2556KB

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS. Certain statements contained in this report constitute forward-looking statements. The use of any of the words anticipate,'' continue,'' estimate,'' expect,'' may,'' will,'' project,'' should,'' believe,'' and similar expressions and statements relating to matters that are not historical facts constitute forward looking statements'' within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated. Such forward-looking statements are based on reasonable assumptions, but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this report should not be unduly relied upon. These statements are made only as of the date of this report. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to oil and natural gas production rates, commodity prices for crude oil or natural gas, supply and demand for oil and natural gas; the estimated quantity of oil and natural gas reserves, including reserve life; future development and production costs, and statements expressing general views about future operating results — are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our present expecta

BUSINESS

ITEM 1. BUSINESS. Summary Epsilon Energy Ltd. (the "Company" or "Epsilon" or "we") was incorporated under the laws of the Province of Alberta, Canada on March 14, 2005, pursuant to the ABCA. The Company is extra-provincially registered in Ontario pursuant to the Business Corporations Act (Ontario). Epsilon is a North American on-shore focused independent natural gas and oil company engaged in the acquisition, development, gathering and production of natural gas and oil reserves. On February 14, 2019, Epsilon's registration statement on Form 10 was declared effective by the United States Securities and Exchange Commission and on February 19, 2019, we began trading in the United States on the NASDAQ Global Market under the trading symbol "EPSN." At December 31, 2023, Epsilon's total estimated net proved reserves were 65,916 million cubic feet of natural gas reserves, 383,174 barrels of NGL reserves, and 341,286 barrels of oil and other liquids. Epsilon holds leasehold rights to approximately 84,684 gross (15,463 net) acres, excluding the Texas acreage acquired in February 2024. The Company has natural gas production in the Marcellus Shale in Pennsylvania and oil, natural gas liquids and natural gas production in the Permian Basin in Texas and New Mexico and in the Anadarko Basin in Oklahoma. We conduct operations in the United States through our wholly owned subsidiaries Epsilon Energy USA Inc., an Ohio corporation, or Epsilon Energy USA; Epsilon Midstream, LLC, a Pennsylvania limited liability company, or Epsilon Midstream; Epsilon Operating, LLC, a Delaware limited liability company; Dewey Energy GP LLC, a Delaware limited liability company; Dewey Energy Holdings LLC, a Delaware limited liability company; and Altolisa Holdings, LLC, a Delaware limited liability company. Substantially all the production from our Pennsylvania acreage (4,807 net) is dedicated to the Auburn Gas Gathering System, or the Auburn GGS, located in Susquehanna County, Pennsylvania for a

Properties

Properties Wells As of December 31, 2023, Epsilon's 84,684 gross (15,463 net) acres are all located in the United States and include 362 gross (37.47 net) wells. Gross (1) Net (2) Producing Wells Gas 289 31.42 Oil 29 2.68 Total Producing Wells 318 34.10 Non-Producing Wells 44 3.37 Total Wells 362 37.47 Acreage As of December 31, 2023, our leasehold inventory consisted of the following acreage amounts, rounded to the nearest acre: Gross (1) Net (2) (3) Developed Acres Pennsylvania 11,270 4,807 Texas 800 200 Oklahoma 5,113 991 17,183 5,998 Undeveloped Acres Pennsylvania 335 335 Texas 11,573 2,893 Oklahoma 55,593 6,237 67,501 9,465 Total Acres Pennsylvania 11,605 5,142 Texas 12,373 3,093 Oklahoma 60,706 7,228 Total acres 84,684 15,463 6 (1) "Gross" means one-hundred percent of the working interest ownership in each leasehold tract of land. (2) "Net" means the Company's fractional working interest share in each leasehold tract of land on which productive wells have been drilled. (3) "Net Undeveloped" means the Company's fractional working interest share in each leasehold tract of land where productive wells have yet to be drilled. All of Epsilon's Oklahoma undeveloped properties are deep rights acreage which is held by production of developed properties. Business Segments Our operations are conducted by three operating segments for which information is provided in our consolidated financial statements for the years ended December 31, 2023 and 2022. The three segments are as follows: Upstream: Activities include acquisition, exploration, development and production of oil and natural gas reserves on properties within the United States. Gathering System: We partner with two other companies to operate a natural gas gathering system. Corporate: Activities include our corporate and governance functions. For information about our segment's revenues, profits and lo

View Full Filing

View this 10-K filing on SEC EDGAR