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- **Strategic PRB Acquisition**: Epsilon to acquire Peak Companies, adding 111 net priority locations in PRB with >100% IRR at $65 WTI. 
- **Hedging Strength**: 60% oil and 50% gas hedged for 2026, providing downside protection. 
- **Operational Momentum**: Permian drilling resumes Q1 2026; PRB development to accelerate in 2027. 
- **Financial Flexibility**: New credit facility supports capital allocation and shareholder returns. 
- **Market Outlook**: PRB rig count poised to increase, driven by active operators and improving oil prices.

**【CEO Summary Section】**
- **Strategic Acquisition**: Announced definitive agreements to acquire Peak Companies in the Powder River Basin (PRB), subject to shareholder approval. The deal includes up to 8.5 million Epsilon shares and contingent consideration of 2.5 million shares, valued at $5 per share. The acquisition adds 111 net priority locations in the PRB, with a focus on the Parkman inventory, which is expected to yield attractive returns at $65 WTI. 
- **Operational Highlights**: 
  - Permian: Eighth well drilled, producing consistently; 2026 drilling to resume Q1. 
  - Marcellus: Seasonal curtailments due to low gas prices ($2.95/MBtu) in Q3, but colder weather in November lifted prices. 
  - PRB: Pro forma company expects to capitalize on oil price recovery; 2027 set for significant PRB development. 
- **Shareholder Returns**: Post-close, diversified drilling inventory and fee-based cash flows from midstream assets will support investment and returns. 

**【CFO Financial Commentary】**
- **Hedging**: 
  - Oil: 60% of 2026 PDP hedged at $63.30/WTI, with 75% coverage via swaps. 
  - Gas: 50% of 2026 PDP hedged via costless collars ($3.30 floor, $5.00 ceiling). 
- **Credit Facility**: New $250M revolver with term to Q4 2029, replacing Peak term loan on better terms. Pro forma leverage manageable. 
- **Financial Performance**: Year-to-date adjusted EPS of $0.45, driven by new Marcellus wells. 

**【COO Operational Details】**
- **PRB Assets**: 
  - Experienced team with 100+ wells drilled in PRB. 
  - 75% leasehold held by production; 1111 net priority locations identified. 
  - Parkman inventory: $7M-$7.5M/well cost, ~$300K/location valuation. 
- **Development Timeline**: 
  - 2026: Front-end infrastructure in Converse County (water sourcing/storage). 
  - 2027: Significant PRB activity, including multi-well pads. 
- **Midstream**: Exploring sale of non-core Oklahoma assets. 

**【Q&A Highlights】**
- **BLM Permits**: Recent approvals allow front-end planning in Converse County, with infrastructure work starting Q2 2026. 
- **Parkman IRR**: >100% at $65 WTI, with potential for higher density drilling. 
- **Marcellus Outlook**: Operator shifting focus to Auburn area, with ~15 gross locations. 
- **PRB Activity**: 8 rigs active, with potential for rig count increase over 18 months. 
- **Integration**: Smooth transition with Peak team; minimal disruption expected post-close.

Epsilon Energy Ltd. (EPSN) Q3 2025 Earnings Call Transcript

- **$49M PRB Acquisition**: Adds 14 net Parkman locations and 90 net Niobrara/Mowry locations with 75% held by production.
- **Financial Strength**: 1x net debt/EBITDA ratio; 150% proved reserves growth; 200% liquids production increase.
- **Operational Momentum**: 2026 capital plan includes PRB, Marcellus, and Permian development; 7 gross Marcellus wells coming online in Q4 2026.
- **Strategic Advantage**: Semi-conventional PRB economics at lower cost than Marcellus/Permian; 40% of inventory >25% returns at $65 WTI.

**【CFO Opening Remarks】**
- Announced the acquisition of Peak Companies, adding PRB assets with 75% held by production and 14 net Parkman 2-mile laterals.
- Transaction consideration: 6 million Epsilon shares + $49M debt; contingent 2.5M shares if Converse County moratorium lifted.
- Pro forma net debt/EBITDA ratio ~1x, maintaining dividend and growth flexibility.
- Proved reserves +150%, liquids production +200%, priority inventory +600%.

**【CEO Strategic Update】**
- PRB assets offer semi-conventional Parkman economics rivaling existing portfolio at lower acquisition cost.
- 90 net Niobrara/Mowry locations adjacent to EOG/Devon development.
- 30% of inventory subject to Converse County moratorium; contingent consideration tied to access.
- New shareholder Yorktown adds strategic value; Peak team brings 15+ years PRB experience.

**【CFO Financial Details】**
- Q2 production flat vs. prior quarter; cash flows down 30% due to lower gas/oil pricing.
- 2025 capital plan includes PRB, Marcellus, and Permian development starting Q1 2026.
- 2024 proved reserves +150%; liquids production +200%; 40% of acquired inventory >25% returns at $65 WTI/$4 Henry Hub.

**【COO Operational Highlights】**
- 2,200 Boe/d production (56% oil) with 15% annual decline rate; 168 wellbores across 5 intervals.
- 2 Niobrara DUCs to complete in Q4; 3 high-working interest Parkman wells in Q1 2026.
- Marcellus partner to drill 7 gross (1.2 net) wells in 2026, tied to Auburn Gas Gathering System.
- Permian Barnett project to drill 2+ gross (0.5 net) wells in 2026.
- Alberta JV impairment due to cost overruns and underperformance; technical review underway.

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

- **Q1 Growth**: Marcellus upstream cash flows up 200%, midstream 140%.
- **Capital Constraint**: $9-12M budget for 2025 drilling.
- **Hedging**: 45% oil at $71, 30% gas at $3.33; expanding gas hedges for 2026.
- **Alberta Wells**: Early production with cash flow; detailed update pending.
- **Portfolio Resilience**: Diversified assets and strong balance sheet.

**【CFO Opening Remarks】**
- Reminder of forward-looking statements and non-GAAP financial measures.

**【CEO Commentary】**
- **Strong Q1 performance**: Pennsylvania business drove 200% sequential increase in upstream cash flows and 140% in midstream.
- **Capital allocation**: $9-12M planned for 0.5 net wells in Texas and Alberta; no further investments in Pennsylvania.
- **Balance sheet strength**: Diversified portfolio supports resilience in volatile markets.

**【CFO Financial Commentary】**
- **Future inventory**: 500,000 completed lateral length for potential 2027+ development.
- **Texas returns**: Barnett type curve delivers 15% return at $55 WTI; 2 gross wells for leasehold obligations.
- **Hedging strategy**: 45% oil hedged at $71 WTI, 30% gas at $3.33; targeting 30-40% gas hedge for 2026.

**【COO Operational Update】**
- **Texas activity**: 2 gross wells planned for late 2025, with first spud in May.
- **Alberta progress**: 2 horizontal wells on production since April; optimizing artificial lift.

**【Q&A Highlights】**
- **Alberta wells update**: Early production with cash flow; detailed update expected in Q3.

**【Closing Remarks】**
- Gratitude to investors and anticipation for future updates.

Epsilon Energy (EPSN)-15 May 25-2025 Q1 Earnings call transcript

- **Permian Dominance**: 180% oil production growth; 60% of 2024 cash flows from Permian.
- **Marcellus Revival**: Q1 2025 gas production up 85% YoY, pricing doubles to $3.90/Mcf.
- **Alberta Expansion**: 30,000-acre JV with 5 initial wells; 2 wells on flowback.
- **Liquidity & Dividends**: $50M+ liquidity to fund growth while maintaining fixed dividend.
- **Reserve Growth**: +20% proved reserves; 10 Bcf PUD added in Marcellus.
- **Hedging Caution**: 30% gas hedged through Oct 2025; no 2025 buybacks yet.


**【CEO Opening Remarks】**
- **Permian Expansion Success**: 180% YoY oil production growth via bolt-on acquisition and 2 wells drilled, contributing 60% of 2024 cash flows.
- **Alberta JV Launch**: 30,000 gross-acre position with 5 initial wells committed; 2 wells currently on flowback.
- **Marcellus Resilience**: Weathered sub-$2/Mcf pricing with 20-25% curtailments, now seeing 85% production recovery in Q1 2025.

**【CFO Financial Highlights】**
- **Marcellus Recovery**: Q1 2025 gas production up 85% YoY to 30 MMcf/d, net pricing $3.90/Mcf (+100% YoY).
- **Permian Investment**: $24M spent in 2024; 14,000 gross acres and 40+ two-mile laterals remain undeveloped.
- **Liquidity Strength**: $50M+ liquidity including undrawn credit facility.

**【COO Reserve Updates】**
- **Proved Reserves Growth**: +20% YoY, driven by 10 Bcf PUD in Marcellus and 11.5 Bcfe in Permian.
- **Auburn Gathering System**: 15% PDP uplift from pressure reduction to 450 psi.
- **Alberta JV Progress**: 2 wells drilled (0.5 net), with 3 more planned for 2025.

**【Q&A Key Takeaways】**
- **Alberta Drilling Plan**: 2-3 additional wells expected in 2025 post-summer breakup.
- **Marcellus Operator Clarity**: 2026-2028 multi-year development plan confirmed, no 2025 activity.
- **Hedging Strategy**: 30% gas production hedged through Oct 2025; tactical additions planned for 2026.
- **Share Buybacks**: $50M+ program available; no activity YTD but opportunistic approach.


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