2 weeks Ago By [email protected] (MENAFN)
Full Year and Q4 2024 Highlights : The Company returned $7.3 million to shareholders during the year ended December 31, 2024. Jason Stabell, Epsilon's Chief Executive Officer, commented,“As we expected, the challenging natural gas environment continued in 2024, Marcellus net wellhead prices were below $2 per Mcf for the year and a meaningful portion (est.
20-25%) of our production for the year was curtailed. This also impacted our midstream business and led to lower throughput volumes for the Auburn Gas Gathering System. We were fully aligned with the operator to hold these reserves back for a better pricing environment, and we are now seeing curtailed volumes, alongside delayed volumes from new wells, back online in the first quarter of 2025.
These volumes started to ramp in the fourth quarter, but we are now producing 75% more natural gas in the Marcellus than our 2024 average net daily volumes, into a much improved gas price environment. We continued to invest in our Texas assets during the year, where we now have 7 gross producing wells, all performing better than or as expected, and approximately 14,000 gross undeveloped acres holding up to 40 gross undeveloped 2-mile locations, in the heart of the ascendant Barnett play. We expect development activity to resume there in the second half of 2025.
As mentioned last year, this project successfully diversified our commodity mix and provides optionality for multi-year capital allocation. In the fourth quarter, we entered into a JV in Alberta with a reputable US sponsor-backed operator. This met our criteria of low entry cost, drill-bit focused, large inventory runway, capable operator and attractive well economics.
We are excited about the opportunity as it covers over 30,000 gross acres where the well returns screen attractive on productivity, drilling and completion cost structure, and royalty regime. We have drilled and completed the first two wells and expect to discuss those initial results soon. During the year we continued our track record of shareholder returns with the fixed quarterly dividend and opportunistic share repurchases.
With growing cash flows and over $50 million in available liquidity, the Company is in a strong position to continue to execute on drilling activity and opportunistic deal-making while still returning cash to shareholders. We are setup for a strong year in 2025, and we expect material growth in production and cash flows.” 2024 Operations: Epsilon's capital expenditures were $34.
9 million for the year ended December 31, 2024, a 58% increase year over year. Texas accounted for approximately 70% of the total, related to the acquisition of 3 gross (0.75 net) wells and 3,246 undeveloped acres in Q1 2024, and the development of 2 gross (0.
5 net) wells in Q2 & Q3 2024. Pennsylvania accounted for 15% of the total, primarily related to the completion of 10 gross (0.8 net) wells during the year.
The remainder was primarily related to the drilling of 4 gross (1.5 net) wells in Alberta. The Auburn Gas Gathering System (Epsilon is a 35% owner) gathered and delivered 36.
9 Bcf gross natural gas volumes during the year, or 101 MMcf/d. Reserves: The Company has received the year-end 2024 third party reserves report completed by the engineering firm DeGolyer & MacNaughton. The table below summarizes the report.
As shown in the table above, Company Proved reserves increased 20% year over year. Produced volumes accounted for an 11% decrease, offset by revisions to prior estimates (+14%) and acquisitions and development activity during the year (+16%). Company Probable reserves decreased 12% year over year.
The primary drivers for the positive revisions were (1) changes to the development plan in PA (as provided by the operator), moving Probable reserves to Proved, (2) Proved reserves acquisitions in Texas, and (3) development activity in Texas adding Proved undeveloped reserves. The majority of the Company's inventory in Texas is not included in the reserve report, due to no offset producing wells. The Company believes the unaccounted-for inventory is comparable to the existing wells in the project and expects to add meaningful reserves in Texas with incremental development.
Current Hedge Book: Earning's Call: The Company will host a conference call to discuss its results on Thursday, March 20, 2025, at 10:30 a.m. Central Time (11:30 a.
m. Eastern Time). Interested parties in the United States and Canada may participate toll-free by dialing (833) 816-1385.
International parties may participate by dialing (412) 317-0478. Participants should ask to be joined to the“Epsilon Energy 2024 Year End Earnings Conference Call.” A webcast can be viewed at: .
A webcast replay will be available on the Company's website ( ) following the call. About Epsilon Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets in Pennsylvania, Texas, Alberta CA, New Mexico, and Oklahoma.
Forward-Looking Statements Certain statements contained in this news release constitute forward looking statements. The use of any of the words“anticipate”,“continue”,“estimate”,“expect”, 'may”,“will”,“project”,“should”, 'believe”, and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated.
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 news release should not be unduly relied upon. Contact Information: 281-670-0002 Jason Stabell Chief Executive Officer ..
. Andrew Williamson Chief Financial Officer ..
. Epsilon defines Adjusted EBITDA as earnings before (1) net interest expense, (2) taxes, (3) depreciation, depletion, amortization and accretion expense, (4) impairments of natural gas and oil properties, (5) non-cash stock compensation expense, (6) gain or loss on derivative contracts net of cash received or paid on settlement, (7) gain or loss on derivative contracts net of cash received or paid on settlement, and (8) other income. Adjusted EBITDA is not a measure of financial performance as determined under U.
S. GAAP and should not be considered in isolation from or as a substitute for net income or cash flow measures prepared in accordance with U.S.
GAAP or as a measure of profitability or liquidity. Additionally, Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Epsilon has included Adjusted EBITDA as a supplemental disclosure because its management believes that EBITDA provides useful information regarding its ability to service debt and to fund capital expenditures.
It further provides investors a helpful measure for comparing operating performance on a "normalized" or recurring basis with the performance of other companies, without giving effect to certain non-cash expenses and other items. This provides management, investors and analysts with comparative information for evaluating the Company in relation to other natural gas and oil companies providing corresponding non-U.S.
GAAP financial measures or that have different financing and capital structures or tax rates. These non-U.S.
GAAP financial measures should be considered in addition to, but not as a substitute for, measures for financial performance prepared in accordance with U.S. GAAP.
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