Epsilon Announces First Quarter 2026 Results
Rhea-AI Summary
Epsilon (NASDAQ: EPSN) reported Q1 2026 revenue of $25.6 million, up 73% quarter-over-quarter and 58% year-over-year, with total production rising 11% and oil volumes up 45% sequentially and 199% year-over-year.
Adjusted EBITDA was $13.4 million. Adjusted net income was $0.8 million, or $0.03 per share, and $8.7 million, or $0.29 per share, excluding an unrealized $7.9 million hedge loss. Capital spending reached $4.9 million, and total debt declined to $45.5 million, with further repayments after quarter-end.
AI-generated analysis. Not financial advice.
Positive
- Total Q1 2026 revenue up 73% QoQ to $25.6M
- Oil revenue up 79% QoQ and 189% YoY to $9.5M
- Adjusted EBITDA rose 77% QoQ to $13.4M
- Total production increased 11% QoQ to 3.55 Bcfe
- Debt reduced from $50.5M year-end 2025 to $40.5M currently
- Sale of Marcellus ORRIs for $3.9M closed May 4, 2026
Negative
- Adjusted net income down 93% QoQ to $0.8M, $0.03/share
- Unrealized hedge loss of $7.9M materially reduced reported net income
- Unit operating costs rose, including $0.7M one-time tax expense
- Capital expenditures increased 198% QoQ to $4.9M
- Natural gas production declined 9% YoY to 2,482 MMcf
News Market Reaction – EPSN
On the day this news was published, EPSN gained 3.25%, reflecting a moderate positive market reaction. This price movement added approximately $6M to the company's valuation, bringing the market cap to $174.84M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
EPSN was up 3.51% while most close peers (PROP, GTE, AMPY, KGEI) showed declines between about -1% and -4%, with only EP positive. This points to a stock-specific move rather than a broad E&P sector shift.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Mar 24 | Full-year 2025 earnings | Positive | +0.0% | Strong 2025 revenue, EBITDA and net income with major production growth. |
| Nov 05 | Q3 2025 earnings | Positive | -3.3% | Revenue and EBITDA growth plus PRB acquisition and strong Barnett well. |
| May 14 | Q1 2025 earnings | Positive | +1.8% | Revenues doubled and production up sharply with higher gas prices. |
| Mar 19 | Full-year 2024 earnings | Neutral | -2.1% | Challenging gas prices but higher capex, reserves and gas gathering volumes. |
| Nov 06 | Q3 2024 earnings | Neutral | +1.0% | Gas volumes down but oil up, continued capex and stable balance sheet. |
Earnings-related headlines have historically produced modest, mixed reactions, with an average move of about -0.53% and only one notable divergence from the underlying fundamental tone.
Over the last several earnings cycles, Epsilon’s updates have highlighted growing scale and portfolio reshaping. Full-year 2024 results emphasized challenging gas prices but rising reserves and shareholder returns. By full-year 2025, revenue reached $51.6B with higher production after the Peak acquisition. Interim quarters, including Q3 2025 and Q1 2025, showed revenue and EBITDA growth and expanding liquids output. Today’s Q1 2026 report builds on that trajectory with higher realized gas prices, increased oil weighting, and continued Permian, PRB, and Marcellus development.
Historical Comparison
Across the last 5 earnings-type releases, EPSN’s average move was -0.53%, indicating historically muted reactions even when fundamentals improved, so Q1 2026 fits into a pattern of incremental rather than dramatic repricing.
Earnings history shows a transition from difficult 2024 gas markets to stronger 2025 results with higher reserves and production after the Peak acquisition. Q1 2026 extends this path, emphasizing rising oil-weighted output, higher realized gas prices, and continued investment in the Permian, Powder River Basin, and Marcellus.
Regulatory & Risk Context
An effective Form S-3 shelf filed on 2026-01-13 allows Epsilon to issue up to $100,000,000 of various securities over time. The company has reported 0 uses of this shelf so far, meaning full capacity remains available for potential future financings.
Market Pulse Summary
This announcement details Q1 2026 revenue of $25.596M, adjusted EBITDA of $13.395M, and materially higher oil production alongside continued Permian, PRB, and Marcellus development. It also highlights hedge-driven volatility in reported net income versus underlying cash flow. Historically, earnings news for EPSN has produced modest market moves, with an average change of -0.53%. Investors may watch execution on new wells, capex levels, and any use of the $100M shelf registration.
Key Terms
mmcf technical
mbbl technical
mmcfe technical
mmbtu technical
ducs technical
swaps financial
costless collars financial
AI-generated analysis. Not financial advice.
HOUSTON, May 13, 2026 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. (“Epsilon” or the “Company”) (NASDAQ: EPSN) today reported first quarter 2026 financial and operating results.
Q1 2026 Highlights:
| Epsilon - Q1 2026 | ||||||
| Q1 2026 | Q4 2025 | Q1 2025 | QoQ% | YoY% | ||
| NRI Production | ||||||
| Gas | MMcf | 2,482 | 2,373 | 2,740 | - | |
| Oil | MBbl | 136 | 94 | 46 | ||
| NGL | MBbl | 42 | 43 | 16 | - | |
| Total | MMcfe | 3,554 | 3,196 | 3,108 | ||
| Daily Total | MMcfe/d | 39.5 | 34.7 | 34.5 | ||
| Daily Oil | Bbl/d | 1,515 | 1,021 | 506 | ||
| Revenues | $M | |||||
| Gas | 13,403 | 6,839 | 10,614 | |||
| Oil | 9,462 | 5,299 | 3,270 | |||
| NGL | 1,073 | 1,180 | 387 | - | ||
| Midstream1 | 1,658 | 1,501 | 1,892 | - | ||
| Total | 25,596 | 14,818 | 16,163 | |||
| Realized Prices2 | ||||||
| Gas | $/Mcf | 5.40 | 2.88 | 3.87 | ||
| Oil | $/Bbl | 69.39 | 56.44 | 71.76 | - | |
| NGL | $/Bbl | 25.32 | 27.17 | 24.52 | - | |
| Adj. EBITDA | $M | 13,395 | 7,553 | 10,609 | ||
| Cash + STI3 | $M | 8,466 | 9,513 | 7,363 | - | |
| Capex4 | $M | 4,885 | 1,641 | 8,035 | - | |
| Total Debt | $M | 45,500 | 50,500 | 0 | - | |
| Dividend | $M | 1,884 | 1,868 | 1,376 | ||
| Adj Net Income5 | $M | 801 | 11,103 | 4,023 | - | - |
| p/share6 | $ | 0.03 | 0.43 | 0.18 | - | - |
| Excl. Q126 Hedge Loss | $M | 8,683 | 11,103 | 4,023 | - | |
| p/share6 | $ | 0.29 | 0.43 | 0.18 | - | |
| 1) Net of elimination entry for fees paid by Epsilon | ||||||
| 2) Excludes impact of hedge realizations | ||||||
| 3) Includes restricted cash balance | ||||||
| 4) Excludes acquisitions | ||||||
| 5) Excludes one-time / non-recurring expenses for transaction costs, impairments, and loss on asset sale | ||||||
| 6) Calculated on weighted average shares outstanding for the period | ||||||
Jason Stabell, Epsilon’s Chief Executive Officer, commented, “So far in 2026, we are executing on the initial stages of our development program outlined in the 2025 year-end release and are expecting to bring meaningful production online starting in the second quarter. In the Permian, three gross 3-mile Barnett wells are expected to come online this year, with the first in the second quarter. In the Powder River Basin, two gross Niobrara DUCs are scheduled for completion and are expected to be online early in the third quarter. We have also begun facilities work on the three gross Parkman wells scheduled for development this summer. We are currently working to secure a rig and expect first production in the fourth quarter.
We have also made recent efforts to monetize non-core assets in the portfolio with the sale of a Marcellus override package and the pending sale of the office building we acquired in the Peak transaction. Together, these are expected to raise
Strong natural gas pricing in the Marcellus in the first few months of the year and a full quarter of contribution from the acquired PRB production drove quarter-over-quarter gains in revenue and cash flow. Importantly, a significant portion of our expected new volumes this year are oil-weighted and will come online into what is currently a strong oil price environment in the second half of the year. The planned development which is underway and attractive oil pricing should allow the Company to deliver strong operational and financial performance as the year progresses."
Quarter Details:
Epsilon’s capital expenditures were
The Company participated in the drilling of 1 gross (0.25 net) well in Texas, the ninth well in the project and the first 3-mile Barnett well. Completion operations on that well are currently underway.
The Company also began constructing facilities in preparation for Parkman drilling activity this summer, where the plan is to a drill a three well Parkman pad in Campbell County, Wyoming, with production expected online in the fourth quarter.
The Company also repaired and cased the 2 gross (0.7 net) Niobrara DUCs acquired in the Peak acquisition. The completion of those wells is scheduled for June, with production expected online early in the third quarter.
The Auburn Gas Gathering System (Epsilon is a
Unit operating costs were up meaningfully quarter over quarter, driven by a full quarter contribution from the PRB production (
The quarter also included
Net income for the quarter was impacted materially by the unrealized loss on the hedge book of
In March, the Company made a
Q2 2026 Update
The Company participated in the drilling of 5 gross (0.4 net) wells in the Marcellus during April. The completion of those wells is expected over the next 30 days, with production online in the fourth quarter. Four of these wells will be gathered by the Auburn system.
On May 4, 2026, the Company closed the sale of certain overriding royalty interests (ORRIs) in Susquehanna Co, Pennsylvania to an undisclosed private buyer for
The Company is expected to close the sale of its Durango, Colorado office building (acquired last year in the Peak acquisition) in June, for gross proceeds of
In April, the Company made an additional
Current Hedge Book:
| Date | Natural Gas | Crude Oil | ||||||||||
| Swaps | Costless Collars | Swaps | Costless Collars | |||||||||
| Volume (MMcf) | Price ($/MMBtu) | Volume (MMcf) | Bought Put ($/MMBtu) | Sold Call ($/MMBtu) | Volume (MBbl) | Price ($/Bbl) | Volume (MBbl) | Bought Put ($/Bbl) | Sold Call ($/Bbl) | |||
| 2Q 2026 | 302 | 3.88 | 387 | 3.34 | 4.94 | 79 | 62.83 | 3 | 59.78 | 70.01 | ||
| 3Q 2026 | 451 | 3.93 | 551 | 3.35 | 4.95 | 80 | 65.16 | 0 | 60.00 | 70.10 | ||
| 4Q 2026 | 178 | 3.87 | 783 | 3.35 | 5.10 | 39 | 62.71 | 28 | 59.00 | 69.00 | ||
| FY 2026 | 931 | $3.91 | 1,722 | $3.35 | $5.01 | 198 | $63.75 | 32 | $59.10 | $69.12 | ||
| 1Q 2027 | 87 | 4.12 | 818 | 3.41 | 5.23 | 27 | 61.45 | 34 | 59.23 | 69.47 | ||
| 2Q 2027 | 91 | 3.49 | 793 | 3.21 | 4.81 | 36 | 64.05 | 22 | 55.94 | 66.02 | ||
| 3Q 2027 | 90 | 3.58 | 773 | 3.11 | 4.31 | 28 | 66.36 | 26 | 57.32 | 67.60 | ||
| 4Q 2027 | 44 | 3.95 | 352 | 3.15 | 4.26 | 14 | 62.32 | 36 | 57.30 | 67.55 | ||
| FY 2027 | 312 | $3.76 | 2,736 | $3.23 | $4.72 | 106 | $63.76 | 118 | $57.60 | $67.82 | ||
| 1Q 2028 | 28 | 4.46 | 28 | 3.65 | 4.70 | 8 | 62.97 | 8 | 57.58 | 67.96 | ||
Earnings Call:
The Company will host a conference call to discuss its results on Thursday, May 14, 2026, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time).
Interested parties in the United States and Canada may participate toll-free by dialing (833) 816-1385. International parties may participate by dialing (412) 317-0478. Participants should ask to be joined to the “Epsilon Energy First Quarter 2026 Earnings Conference Call.”
A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=vCctDJ0X. A webcast replay will be available on the Company’s website (www.epsilonenergyltd.com) following the call.
About Epsilon
Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets across the Appalachian, Powder River, Permian, and Western Canadian Sedimentary basins.
Forward-Looking Statements
Certain statements contained in this news release constitute forward looking statements. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, ‘may”, “will”, “project”, “should”, ‘believe”, and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated. Forward-looking statements are based on reasonable assumptions, but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.
Contact Information:
281-670-0002
Jason Stabell
Chief Executive Officer
Jason.Stabell@EpsilonEnergyLTD.com
Andrew Williamson
Chief Financial Officer
Andrew.Williamson@EpsilonEnergyLTD.com
| EPSILON ENERGY LTD. Unaudited Consolidated Statements of Operations (All amounts stated in US$) | ||||||
| Three months ended March 31, | ||||||
| 2026 | 2025 | |||||
| Revenues from contracts with customers: | ||||||
| Gas, oil, NGL, and condensate revenue | $ | 23,938,010 | $ | 14,270,790 | ||
| Gas gathering and compression revenue | 1,657,777 | 1,892,350 | ||||
| Total revenue | 25,595,787 | 16,163,140 | ||||
| Operating costs and expenses: | ||||||
| Lease operating expenses | 7,195,313 | 2,755,898 | ||||
| Gathering system operating expenses | 594,446 | 552,651 | ||||
| Depletion, depreciation, amortization, and accretion | 3,002,339 | 3,475,857 | ||||
| Impairment expense | — | 6,669 | ||||
| Transaction costs | 71,420 | — | ||||
| General and administrative expenses: | ||||||
| Stock based compensation expense | 547,527 | 385,838 | ||||
| Other general and administrative expenses | 3,378,142 | 1,818,418 | ||||
| Total operating costs and expenses | 14,789,187 | 8,995,331 | ||||
| Operating income | 10,806,600 | 7,167,809 | ||||
| Other income (expense): | ||||||
| Interest income | 45,543 | 15,299 | ||||
| Interest expense | (941,581) | (12,211) | ||||
| Loss on derivative contracts, net | (8,929,829) | (1,462,170) | ||||
| Other income (expense), net | 16,428 | (22,499) | ||||
| Other expense, net | (9,809,439) | (1,481,581) | ||||
| Net income before income tax expense | 997,161 | 5,686,228 | ||||
| Income tax expense | 267,736 | 1,670,194 | ||||
| NET INCOME | $ | 729,425 | $ | 4,016,034 | ||
| Currency translation adjustments | (2,319) | (50,116) | ||||
| NET COMPREHENSIVE INCOME | $ | 727,106 | $ | 3,965,918 | ||
| Net income per share, basic | $ | 0.02 | $ | 0.18 | ||
| Net income per share, diluted | $ | 0.02 | $ | 0.18 | ||
| Weighted average number of shares outstanding, basic | 30,239,980 | 22,008,766 | ||||
| Weighted average number of shares outstanding, diluted | 30,262,466 | 22,109,819 | ||||
| EPSILON ENERGY LTD. Unaudited Consolidated Balance Sheets (All amounts stated in US$) | ||||||
| March 31, | December 31, | |||||
| 2026 | 2025 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 7,912,858 | $ | 8,959,954 | ||
| Accounts receivable | 16,794,429 | 16,132,501 | ||||
| Short term investments | — | — | ||||
| Fair value of derivatives | 426,255 | 2,694,340 | ||||
| Prepaid income taxes | 2,959,475 | 2,949,311 | ||||
| Other current assets | 1,688,563 | 1,847,672 | ||||
| Total current assets | 29,781,580 | 32,583,778 | ||||
| Non-current assets | ||||||
| Property and equipment: | ||||||
| Oil and gas properties, successful efforts method | ||||||
| Proved properties | 237,783,115 | 233,334,212 | ||||
| Unproved properties | 79,690,561 | 79,307,169 | ||||
| Accumulated depletion, depreciation, amortization and impairment | (134,196,469) | (131,636,141) | ||||
| Total oil and gas properties, net | 183,277,207 | 181,005,240 | ||||
| Gathering system | 43,593,370 | 43,540,389 | ||||
| Accumulated depletion, depreciation, amortization and impairment | (37,680,704) | (37,472,139) | ||||
| Total gathering system, net | 5,912,666 | 6,068,250 | ||||
| Land | 1,231,965 | 1,231,965 | ||||
| Buildings and other property and equipment, net | 4,077,163 | 4,132,732 | ||||
| Total property and equipment, net | 194,499,001 | 192,438,187 | ||||
| Other assets: | ||||||
| Operating lease right-of-use assets, long term | 429,923 | 488,949 | ||||
| Restricted cash | 553,000 | 553,000 | ||||
| Fair value of derivatives, long term | 185,056 | 1,154,936 | ||||
| Deferred financing costs | 724,263 | 774,347 | ||||
| Prepaid drilling costs | 246,220 | 246,220 | ||||
| Total non-current assets | 196,637,463 | 195,655,639 | ||||
| Total assets | $ | 226,419,043 | $ | 228,239,417 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable trade | $ | 8,159,934 | $ | 11,148,050 | ||
| Gathering fees payable | 1,047,841 | 1,076,143 | ||||
| Royalties payable | 10,071,572 | 8,702,526 | ||||
| Income taxes payable | — | — | ||||
| Accrued capital expenditures | 577,154 | 24,888 | ||||
| Accrued compensation | 739,649 | 1,056,304 | ||||
| Other accrued liabilities | 2,927,196 | 2,682,090 | ||||
| Fair value of derivatives | 3,833,399 | — | ||||
| Operating lease liabilities | 271,790 | 271,494 | ||||
| Total current liabilities | 27,628,535 | 24,961,495 | ||||
| Non-current liabilities | ||||||
| Credit facility payable | 45,500,000 | 50,500,000 | ||||
| Ad valorem taxes, long term | 7,411,971 | 7,411,971 | ||||
| Asset retirement obligations | 7,553,458 | 7,437,960 | ||||
| Fair value of derivatives, long term | 810,629 | — | ||||
| Deferred income taxes | 13,120,790 | 12,855,585 | ||||
| Operating lease liabilities, long term | 271,046 | 340,052 | ||||
| Total non-current liabilities | 74,667,894 | 78,545,568 | ||||
| Total liabilities | 102,296,429 | 103,507,063 | ||||
| Commitments and contingencies (Note 10) | ||||||
| Shareholders' equity | ||||||
| Preferred shares, no par value, unlimited shares authorized, none issued or outstanding | — | — | ||||
| Common shares, no par value, unlimited shares authorized and 30,239,980 shares issued and outstanding at March 31, 2026 and December 31, 2025 | 154,274,125 | 154,274,125 | ||||
| Treasury shares, at cost, 0 shares at March 31, 2026 and 0 shares at December 31, 2025 | — | — | ||||
| Additional paid-in capital | 14,411,351 | 13,863,824 | ||||
| Accumulated deficit | (54,457,110) | (53,302,162) | ||||
| Accumulated other comprehensive income | 9,894,248 | 9,896,567 | ||||
| Total shareholders' equity | 124,122,614 | 124,732,354 | ||||
| Total liabilities and shareholders' equity | $ | 226,419,043 | $ | 228,239,417 | ||
| EPSILON ENERGY LTD. Unaudited Consolidated Statements of Cash Flows (All amounts stated in US$) | |||||||
| Three months ended March 31, | |||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 729,425 | $ | 4,016,034 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depletion, depreciation, amortization, and accretion | 3,002,339 | 3,475,857 | |||||
| Impairment expense | — | 6,669 | |||||
| Amortization on deferred financing costs | 50,084 | — | |||||
| Loss on derivative contracts | 8,929,829 | 1,462,170 | |||||
| Settlement paid on derivative contracts | (1,047,836) | (415,043) | |||||
| Settlement of asset retirement obligation | — | (1,600) | |||||
| Stock-based compensation expense | 547,527 | 385,838 | |||||
| Deferred income tax expense (benefit) | 265,205 | (321,452) | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (661,928) | (2,159,795) | |||||
| Prepaid income taxes | (10,164) | 978,542 | |||||
| Other assets and liabilities | 112,036 | 141,640 | |||||
| Accounts payable, royalties payable, gathering fees payable, and other accrued liabilities | (1,813,998) | 91,390 | |||||
| Income taxes payable | — | 922,326 | |||||
| Net cash provided by operating activities | 10,102,519 | 8,582,576 | |||||
| Cash flows from investing activities: | |||||||
| Additions to unproved oil and gas properties | (383,391) | (5,060,901) | |||||
| Additions to proved oil and gas properties | (3,830,774) | (2,578,866) | |||||
| Additions to gathering system properties | (50,583) | (104,275) | |||||
| Deductions to land, buildings and property and equipment | 1,825 | — | |||||
| Prepaid drilling costs | — | 960,136 | |||||
| Net cash used in investing activities | (4,262,923) | (6,783,906) | |||||
| Cash flows from financing activities: | |||||||
| Payment on credit facility | (5,000,000) | — | |||||
| Dividends paid | (1,884,373) | (1,375,612) | |||||
| Net cash used in financing activities | (6,884,373) | (1,375,612) | |||||
| Effect of currency rates on cash, cash equivalents, and restricted cash | (2,319) | (50,116) | |||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | (1,047,096) | 372,942 | |||||
| Cash, cash equivalents, and restricted cash, beginning of period | 9,512,954 | 6,989,793 | |||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 8,465,858 | $ | 7,362,735 | |||
| Supplemental cash flow disclosures: | |||||||
| Income tax paid - federal | $ | — | $ | 80,000 | |||
| Income tax paid - state (PA) | $ | 10,933 | $ | 5,138 | |||
| Income tax paid - state (other) | $ | — | $ | 25 | |||
| Interest paid | $ | 42,347 | $ | 657 | |||
| Non-cash investing activities: | |||||||
| Change in proved properties accrued in accounts payable | $ | 618,129 | $ | 341,974 | |||
| Change in gathering system accrued in accounts payable | $ | 2,398 | $ | (44,228) | |||
| Asset retirement obligation asset additions and adjustments | $ | — | $ | 18,235 | |||
| Three months ended March 31, | ||||||
| 2026 | 2025 | |||||
| Net income | $ | 729,425 | $ | 4,016,034 | ||
| Add Back: | ||||||
| Interest expense (income), net | 896,038 | (3,088) | ||||
| Income tax (benefit) expense | 267,736 | 1,670,194 | ||||
| Depreciation, depletion, amortization, and accretion | 3,002,339 | 3,475,857 | ||||
| Impairment expense | — | 6,669 | ||||
| Stock based compensation expense | 547,527 | 385,838 | ||||
| Transaction costs | 71,420 | — | ||||
| Loss on derivative contracts net of cash received or paid on settlement | 7,881,993 | 1,047,127 | ||||
| Foreign currency translation loss | (1,875) | 10,289 | ||||
| Adjusted EBITDA | $ | 13,394,603 | $ | 10,608,920 | ||
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) transaction costs, (7) gain or loss on derivative contracts net of cash received or paid on settlement, (8) gain or loss on foreign currency translation. 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 with 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.
| $M | Q125 | Q425 | Q126 | |||
| GAAP Net Income (Loss) | 4,016 | (12,439) | 729 | |||
| One-time adjustments | ||||||
| Transaction Costs | 2,073 | 71 | ||||
| Impairment - NM | 700 | |||||
| Impairment - Canada | 7 | 559 | ||||
| Loss - Oklahoma Sale | 19,257 | |||||
| Adj. Net Income | 4,023 | 10,150 | 801 | |||
| WA Shares O/S | 22,110 | 25,966 | 30,262 | |||
| P/Share | $ | 0.18 | $ | 0.39 | $ | 0.03 |
Epsilon defines Adjusted Net Income as reported U.S. GAAP Net Income adding back expenses related to (1) transaction expenses related to the Peak companies’ acquisition, (2) impairments of natural gas and oil properties, and (3) gain or loss on sale of assets. Adjusted Net Income 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.
