Epsilon Announces Second Quarter 2026 Results and 2026 Production and Capital Guidance
Rhea-AI Summary
Epsilon Energy (NASDAQ: EPSN) reported Q2 2026 revenue of $18.3 million, up 57% year over year but down 29% sequentially, with GAAP net income of $7.1 million (diluted EPS $0.23). Adjusted EBITDA was $5.8 million and adjusted net income $1.6 million ($0.05 per share).
Total production was 3.09 Bcfe, roughly flat year over year, as gas volumes fell 24% while oil and NGL volumes rose sharply. Capital expenditures increased to $8.5 million, and total debt stood at $40.5 million, down $10 million from year-end 2025, with cash and short-term investments of $11.7 million.
The company sold certain Susquehanna County overriding royalty interests for $3.9 million and received $1.1 million for a 24% interest sale in a Powder River Basin project. Epsilon issued Q3 and full-year 2026 guidance, targeting mid-point total production growth of 10% QoQ for Q3 and 18% YoY for 2026, with oil volumes expected to grow 194% year over year at the mid-point.
Positive
- Total Q2 2026 revenue $18.3M, up 57% year over year
- Q2 2026 net income $7.1M vs. $1.6M in Q2 2025
- Cash and short-term investments $11.7M, up 13% year over year
- Total debt reduced to $40.5M, down $10M from year-end 2025
- Q2 2026 oil revenue $11.8M, up 332% year over year
- 2026 guidance mid-point production +18% YoY; oil volumes +194% YoY
Negative
- Total production 3.09 Bcfe, down 13% quarter over quarter
- Gas revenue $3.8M, down 72% quarter over quarter on 66% lower realized prices
- Adjusted EBITDA $5.8M, down 57% quarter over quarter and 21% year over year
- Adjusted net income $1.6M, down 82% quarter over quarter
- Capital expenditures $8.5M, up 74% quarter over quarter and 214% year over year
- Total debt $40.5M at Q2 2026 vs. zero in Q2 2025
News Explained
Development is underway, but 24 percent of 2026 capital is not expected to affect 2026 results and 35 percent has a 60-day Q4 impact.
The company’s development program is already producing some wells, while other wells are drilled or scheduled, so the disclosed capital plan is an active, staged deployment rather than a future-only proposal.
In
The company says approximately
The named checkpoints are Marcellus production online in
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 13 | Q1 earnings report | Positive | +3.3% | Revenue and production increased, while adjusted EBITDA reached $13.4 million. |
| Mar 24 | FY2025 earnings report | Positive | +0.0% | Production and proved reserves increased following the Peak acquisition. |
| Nov 05 | Q3 earnings report | Negative | -3.3% | Results included lower revenue and adjusted EBITDA alongside operational updates. |
| May 14 | Q1 earnings report | Positive | +1.8% | Revenue, production, realized gas prices, and adjusted EBITDA increased year over year. |
| Mar 19 | FY2024 earnings report | Negative | -2.1% | Low natural-gas prices affected production, despite higher reserves and capital spending. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings reactions were aligned with the announcement tone in four of five events, while the five-event average move was -0.08%.
Key Terms
adjusted ebitda financial
overriding royalty interests financial
ducs technical
proved developed producing reserves technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
HOUSTON, Aug. 12, 2026 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. (“Epsilon” or the “Company”) (NASDAQ: EPSN) today reported second quarter 2026 financial and operating results.
Q2 2026 Highlights:
| Epsilon - Q2 2026 | ||||||
| Q2 2026 | Q1 2026 | Q2 2025 | QoQ% | YoY% | ||
| NRI Production | ||||||
| Gas | MMcf | 2,082 | 2,482 | 2,752 | - | - |
| Oil | MBbl | 126 | 136 | 44 | - | |
| NGL | MBbl | 42 | 42 | 8 | - | |
| Total | MMcfe | 3,088 | 3,554 | 3,064 | - | |
| Daily Total | MMcfe/d | 33.9 | 39.5 | 33.7 | ||
| Revenues | $M | |||||
| Gas | 3,767 | 13,403 | 6,910 | - | - | |
| Oil | 11,771 | 9,462 | 2,725 | |||
| NGL | 1,387 | 1,073 | 145 | |||
| Midstream 1 | 1,337 | 1,658 | 1,845 | - | - | |
| Total | 18,262 | 25,596 | 11,625 | - | ||
| Realized Prices 2 | ||||||
| Gas | $/Mcf | 1.81 | 5.40 | 2.51 | - | - |
| Oil | $/Bbl | 93.73 | 69.39 | 61.73 | ||
| NGL | $/Bbl | 32.94 | 25.32 | 18.51 | ||
| Adj. EBITDA | $M | 5,818 | 13,395 | 7,396 | - | - |
| Cash + STI 3 | $M | 11,722 | 8,466 | 10,378 | ||
| Capex 4 | $M | 8,484 | 4,885 | 2,698 | ||
| Total Debt | $M | 40,500 | 45,500 | 0 | - | |
| Dividend | $M | 1,891 | 1,884 | 1,376 | ||
| Adj Net Income 5 | $M | 1,578 | 8,683 | 1,954 | - | - |
| p/share 6 | $ | 0.05 | 0.29 | 0.09 | - | - |
| 1) Net of elimination entry for fees paid by Epsilon | ||||||
| 2) Excludes impact of hedge realizations | ||||||
| 3) Includes restricted cash balance | ||||||
| 4) Accrual basis, excludes acquisitions | ||||||
| 5) Excludes the impact of transaction costs, impairments, gain / loss on asset sales, and unrealized hedge gain / loss | ||||||
| 6) Calculated on weighted average diluted shares outstanding for the period | ||||||
Jason Stabell, Epsilon’s Chief Executive Officer, commented, "Over the past eight months, Epsilon has undergone a significant transformation. We have expanded from a non-operator into a diversified operator/non-operator hybrid with development activities spanning multiple basins. Importantly, this transition has been executed successfully, with projects progressing ahead of schedule and on budget as our team continues to deliver against our objectives.
The operational momentum we have built gives us the confidence to provide production and capital expenditure guidance for the first time. At the midpoint of our guidance, we expect full-year oil production of approximately 1,800 barrels per day and third-quarter oil production growth of over
Based on our planned development activities across our three core operating areas, and the flexibility to allocate capital between oil and gas opportunities, we believe Epsilon has established a foundation for sustained, multi-year production and cash flow growth while maintaining a conservative leverage profile. Supported by a high-quality inventory of development opportunities and disciplined capital allocation, we are well positioned to compound long-term shareholder value."
Quarter Details:
Epsilon’s capital expenditures were
The Company successfully completed 2 gross (0.7 net) Niobrara DUCs in the Powder River Basin in early July. The wells were put on production in July and are performing above expectations.
The Company participated in the drilling of 5 gross (0.4 net) wells in the Marcellus in April. The wells are expected to be completed in the fourth quarter, with production online in December.
The Company participated in the completion of 1 gross (0.25 net) well in the Permian Basin, the ninth well in the Ector Co. project and the first 3-mile Barnett well. The well was put on production in June and is performing in line with expectations.
Production from Q2 2026 activity will have a larger contribution to results in the second half of the year, starting in the third quarter.
Marcellus production was down
Powder River Basin production was down
Permian production was flat quarter over quarter, due to the new well volumes online in June.
The Auburn Gas Gathering System (Epsilon is a
The quarter included
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
In April, the Company made a
Q3 2026 Update
In July, the Company sold down a
In July, the Company successfully drilled 3 gross (2.1 net) Parkman wells in the Powder River Basin. The completions are scheduled for the third quarter with production online in the fourth quarter.
Q3 2026 and FY 2026 Production and Capital Guidance Range
Q3 2026 Total Production (MMcfe): 3,270 – 3,510 (mid-point represents
Q3 2026 Oil Production (MBbl): 155 – 165 (mid-point represents
Q3 2026 Capital :
FY 2026 Production (MMcfe): 13,740 – 14,280 (mid-point represents
FY 2026 Oil Production (MBbl): 640 – 670 (mid-point represents
FY 2026 Capital:
The primary components of the capital program for the second half of 2026:
- Drilling and completion of 3 gross (2.1 net) Parkman wells in the Powder River Basin (operated)
- Facilities build-out in preparation for 2027 drilling plans in the Powder River Basin (operated)
- Drilling of 2 gross (0.5 net) Barnett wells in the Permian Basin (non-operated), completions are expected in Q127
- Completion of 5 gross (0.4 net) Marcellus wells (non-operated)
Due to the timing of these investments, approximately
Hedge Book (8.11.26):
| 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) | |
| Q3 2026 | 146 | 3.93 | 176 | 3.35 | 4.94 | 53 | 65.16 | 0 | 60.00 | 70.10 |
| Q4 2026 | 178 | 3.87 | 783 | 3.35 | 5.10 | 41 | 63.24 | 35 | 61.18 | 70.88 |
| FY 2026 | 325 | 959 | 94 | 35 | ||||||
| Q1 2027 | 87 | 4.12 | 818 | 3.41 | 5.23 | 29 | 62.13 | 40 | 60.95 | 70.91 |
| Q2 2027 | 91 | 3.49 | 793 | 3.21 | 4.81 | 37 | 64.31 | 27 | 58.21 | 68.04 |
| Q3 2027 | 90 | 3.58 | 773 | 3.11 | 4.31 | 28 | 66.36 | 30 | 58.74 | 68.83 |
| Q4 2027 | 44 | 3.95 | 535 | 3.20 | 4.44 | 14 | 62.32 | 38 | 58.20 | 68.32 |
| FY 2027 | 312 | 2,918 | 108 | 135 | ||||||
| Q1 2028 | 28 | 4.46 | 28 | 3.65 | 4.70 | 8 | 62.97 | 11 | 60.29 | 70.25 |
| Q2 2028 | 1 | 70.00 | 78.48 | |||||||
Earning’s Call:
The Company will host a conference call to discuss its results on Thursday, August 13, 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 Second Quarter 2026 Earnings Conference Call.”
A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=6qJpqYfZ. 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 June 30, | Six months ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues from contracts with customers: | |||||||||||||||
| Gas, oil, NGL, and condensate revenue | $ | 16,924,916 | $ | 9,779,728 | $ | 40,862,926 | $ | 24,050,518 | |||||||
| Gas gathering and compression revenue | 1,336,740 | 1,845,005 | 2,994,517 | 3,737,355 | |||||||||||
| Total revenue | 18,261,656 | 11,624,733 | 43,857,443 | 27,787,873 | |||||||||||
| Operating costs and expenses: | |||||||||||||||
| Lease operating expenses | 6,330,193 | 2,462,785 | 13,525,506 | 5,218,683 | |||||||||||
| Gathering system operating expenses | 508,475 | 613,795 | 1,102,921 | 1,166,446 | |||||||||||
| Depletion, depreciation, amortization, and accretion | 2,804,107 | 3,201,654 | 5,806,446 | 6,677,511 | |||||||||||
| Impairment expense | — | 2,670,000 | — | 2,676,669 | |||||||||||
| Gain on sale of oil and gas properties | (4,174,368 | ) | — | (4,174,368 | ) | — | |||||||||
| Transaction costs | 202,532 | — | 273,952 | — | |||||||||||
| General and administrative expenses: | |||||||||||||||
| Stock based compensation expense | 547,527 | 385,838 | 1,095,054 | 771,676 | |||||||||||
| Other general and administrative expenses | 3,664,814 | 1,461,878 | 7,042,956 | 3,280,296 | |||||||||||
| Total operating costs and expenses | 9,883,280 | 10,795,950 | 24,672,467 | 19,791,281 | |||||||||||
| Operating income | 8,378,376 | 828,783 | 19,184,976 | 7,996,592 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest income | 24,785 | 17,247 | 70,327 | 32,546 | |||||||||||
| Interest expense | (877,267 | ) | (19,906 | ) | (1,818,848 | ) | (32,117 | ) | |||||||
| Gain (loss) on derivative contracts, net | 2,245,470 | 2,573,863 | (6,684,358 | ) | 1,111,693 | ||||||||||
| Other expense, net | (208,658 | ) | (10,839 | ) | (192,230 | ) | (33,338 | ) | |||||||
| Other income (expense), net | 1,184,330 | 2,560,365 | (8,625,109 | ) | 1,078,784 | ||||||||||
| Net income before income tax expense | 9,562,706 | 3,389,148 | 10,559,867 | 9,075,376 | |||||||||||
| Income tax expense | 2,429,235 | 1,837,687 | 2,696,971 | 3,507,881 | |||||||||||
| NET INCOME | $ | 7,133,471 | $ | 1,551,461 | $ | 7,862,896 | $ | 5,567,495 | |||||||
| Currency translation adjustments | (2,032 | ) | (75,496 | ) | (4,351 | ) | (125,612 | ) | |||||||
| NET COMPREHENSIVE INCOME | $ | 7,131,439 | $ | 1,475,965 | $ | 7,858,545 | $ | 5,441,883 | |||||||
| Net income per share, basic | $ | 0.24 | $ | 0.07 | $ | 0.26 | $ | 0.25 | |||||||
| Net income per share, diluted | $ | 0.23 | $ | 0.07 | $ | 0.26 | $ | 0.25 | |||||||
| Weighted average number of shares outstanding, basic | 30,248,522 | 22,017,310 | 30,244,275 | 22,013,062 | |||||||||||
| Weighted average number of shares outstanding, diluted | 30,414,909 | 22,202,315 | 30,369,810 | 22,155,629 | |||||||||||
| EPSILON ENERGY LTD. | |||||||
| Unaudited Consolidated Balance Sheets | |||||||
| (All amounts stated in US$) | |||||||
| June 30, | December 31, | ||||||
| 2026 | 2025 | ||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 11,169,421 | $ | 8,959,954 | |||
| Accounts receivable | 17,476,445 | 16,132,501 | |||||
| Fair value of derivatives | 694,977 | 2,694,340 | |||||
| Prepaid income taxes | 2,994,982 | 2,949,311 | |||||
| Other current assets | 1,462,462 | 1,847,672 | |||||
| Total current assets | 33,798,287 | 32,583,778 | |||||
| Non-current assets | |||||||
| Property and equipment: | |||||||
| Oil and gas properties, successful efforts method | |||||||
| Proved properties | 245,787,578 | 233,334,212 | |||||
| Unproved properties | 80,341,257 | 79,307,169 | |||||
| Accumulated depletion, depreciation, amortization and impairment | (136,623,569 | ) | (131,636,141 | ) | |||
| Total oil and gas properties, net | 189,505,266 | 181,005,240 | |||||
| Gathering system | 43,428,789 | 43,540,389 | |||||
| Accumulated depletion, depreciation, amortization and impairment | (37,849,676 | ) | (37,472,139 | ) | |||
| Total gathering system, net | 5,579,113 | 6,068,250 | |||||
| Land | 1,231,965 | 1,231,965 | |||||
| Buildings and other property and equipment, net | 4,036,238 | 4,132,732 | |||||
| Total property and equipment, net | 200,352,582 | 192,438,187 | |||||
| Other assets: | |||||||
| Operating lease right-of-use assets, long term | 371,181 | 488,949 | |||||
| Restricted cash | 553,000 | 553,000 | |||||
| Fair value of derivatives, long term | 33,114 | 1,154,936 | |||||
| Deferred financing costs | 673,754 | 774,347 | |||||
| Prepaid drilling costs | 661,803 | 246,220 | |||||
| Total non-current assets | 202,645,434 | 195,655,639 | |||||
| Total assets | $ | 236,443,721 | $ | 228,239,417 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable trade | $ | 19,129,836 | $ | 11,148,050 | |||
| Gathering fees payable | 938,041 | 1,076,143 | |||||
| Royalties payable | 9,902,986 | 8,702,526 | |||||
| Accrued capital expenditures | 486,548 | 24,888 | |||||
| Accrued compensation | 1,081,171 | 1,056,304 | |||||
| Other accrued liabilities | 2,618,815 | 2,682,090 | |||||
| Fair value of derivatives | 686,882 | — | |||||
| Operating lease liabilities | 272,063 | 271,494 | |||||
| Total current liabilities | 35,116,342 | 24,961,495 | |||||
| Non-current liabilities | |||||||
| Credit facility payable | 40,500,000 | 50,500,000 | |||||
| Ad valorem taxes, long term | 7,411,971 | 7,411,971 | |||||
| Asset retirement obligations | 7,676,996 | 7,437,960 | |||||
| Fair value of derivatives, long term | 97,675 | — | |||||
| Deferred income taxes | 15,527,679 | 12,855,585 | |||||
| Operating lease liabilities, long term | 202,015 | 340,052 | |||||
| Total non-current liabilities | 71,416,336 | 78,545,568 | |||||
| Total liabilities | 106,532,678 | 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 30,248,617 shares issued and outstanding at June 30, 2026 and 30,239,980 shares issued and outstanding at December 31, 2025 | 154,274,125 | 154,274,125 | |||||
| Additional paid-in capital | 14,958,878 | 13,863,824 | |||||
| Accumulated deficit | (49,214,176 | ) | (53,302,162 | ) | |||
| Accumulated other comprehensive income | 9,892,216 | 9,896,567 | |||||
| Total shareholders' equity | 129,911,043 | 124,732,354 | |||||
| Total liabilities and shareholders' equity | $ | 236,443,721 | $ | 228,239,417 | |||
| EPSILON ENERGY LTD. | |||||||
| Unaudited Consolidated Statements of Cash Flows | |||||||
| (All amounts stated in US$) | |||||||
| Six months ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 7,862,896 | $ | 5,567,495 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depletion, depreciation, amortization, and accretion | 5,806,446 | 6,677,511 | |||||
| Impairment expense | — | 2,676,669 | |||||
| Amortization on deferred financing costs | 100,593 | — | |||||
| Gain on sale of oil and gas properties | (4,174,368 | ) | — | ||||
| Loss (gain) on derivative contracts | 6,684,358 | (1,111,693 | ) | ||||
| Settlement paid on derivative contracts | (2,778,616 | ) | (108,383 | ) | |||
| Settlement of asset retirement obligation | — | (1,600 | ) | ||||
| Stock-based compensation expense | 1,095,054 | 771,676 | |||||
| Deferred income tax expense (benefit) | 2,672,093 | (779,676 | ) | ||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (1,343,944 | ) | 346,839 | ||||
| Prepaid income taxes | (45,671 | ) | — | ||||
| Other assets and liabilities | 292,394 | 385,445 | |||||
| Accounts payable, royalties payable, gathering fees payable, and other accrued liabilities | 6,189,202 | (66,454 | ) | ||||
| Income taxes payable | — | 2,572,921 | |||||
| Net cash provided by operating activities | 22,360,437 | 16,930,750 | |||||
| Cash flows from investing activities: | |||||||
| Additions to unproved oil and gas properties | (1,416,572 | ) | (5,132,649 | ) | |||
| Additions to proved oil and gas properties | (8,803,428 | ) | (5,997,993 | ) | |||
| Deductions (additions) to gathering system properties | 100,952 | (228,327 | ) | ||||
| Deductions to land, buildings and property and equipment | (11,446 | ) | (12,102 | ) | |||
| Proceeds from sale of oil and gas properties | 4,174,368 | — | |||||
| Prepaid drilling costs | (415,583 | ) | 705,165 | ||||
| Net cash used in investing activities | (6,371,709 | ) | (10,665,906 | ) | |||
| Cash flows from financing activities: | |||||||
| Payment on credit facility | (10,000,000 | ) | — | ||||
| Dividends paid | (3,774,910 | ) | (2,751,372 | ) | |||
| Net cash used in financing activities | (13,774,910 | ) | (2,751,372 | ) | |||
| Effect of currency rates on cash, cash equivalents, and restricted cash | (4,351 | ) | (125,612 | ) | |||
| Increase in cash, cash equivalents, and restricted cash | 2,209,467 | 3,387,860 | |||||
| Cash, cash equivalents, and restricted cash, beginning of period | 9,512,954 | 6,989,793 | |||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 11,722,421 | $ | 10,377,653 | |||
| Supplemental cash flow disclosures: | |||||||
| Income tax paid - federal | $ | — | $ | 1,325,000 | |||
| Income tax paid - state (PA) | $ | 10,933 | $ | 355,138 | |||
| Income tax paid - state (other) | $ | 50,025 | $ | 1,710 | |||
| Interest paid | $ | 1,722,335 | $ | 9,552 | |||
| Non-cash investing activities: | |||||||
| Change in proved properties accrued in accounts payable | $ | 3,260,493 | $ | (690,866 | ) | ||
| Change in gathering system accrued in accounts payable | $ | (10,648 | ) | $ | 71,366 | ||
| Asset retirement obligation asset additions and adjustments | $ | 6,961 | $ | 18,235 | |||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net income | $ | 7,133,471 | $ | 1,551,461 | $ | 7,862,896 | $ | 5,567,495 | |||||||
| Add Back: | |||||||||||||||
| Interest expense (income), net | 852,482 | 2,659 | 1,748,521 | (429 | ) | ||||||||||
| Income tax expense | 2,429,235 | 1,837,687 | 2,696,971 | 3,507,881 | |||||||||||
| Depreciation, depletion, amortization, and accretion | 2,804,107 | 3,201,654 | 5,806,446 | 6,677,511 | |||||||||||
| Impairment expense | — | 2,670,000 | — | 2,676,669 | |||||||||||
| Stock based compensation expense | 547,527 | 385,838 | 1,095,054 | 771,676 | |||||||||||
| Gain on sale of oil and gas properties | (4,174,368 | ) | — | (4,174,368 | ) | — | |||||||||
| Transaction costs | 202,532 | — | 273,952 | — | |||||||||||
| (Gain)/loss on derivative contracts net of cash received or paid on settlement | (3,976,251 | ) | (2,267,203 | ) | 3,905,742 | (1,220,076 | ) | ||||||||
| Foreign currency translation (gain) loss | (1,201 | ) | 14,021 | (3,076 | ) | 24,310 | |||||||||
| Adjusted EBITDA | $ | 5,817,534 | $ | 7,396,117 | $ | 19,212,138 | $ | 18,005,037 | |||||||
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 sale of assets, and (9) gain or loss on foreign currency translations. 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 | Q225 | Q126 | Q226 | YTD2026 | |||||
| GAAP Net Income (Loss) | 1,551 | 729 | 7,133 | 7,863 | |||||
| Adjustments | |||||||||
| Transaction Cost | 71 | 203 | |||||||
| Impairment | 2,670 | ||||||||
| Asset Sale (Gain) / Loss | -4,174 | ||||||||
| Unrealized Hedge (Gain) / Loss | -2,267 | 7,882 | -3,976 | ||||||
| Adj. Net Income | 1,954 | 8,683 | -815 | 7,868 | |||||
| WA Shares O/S | 22,202 | 30,262 | 30,415 | 30,370 | |||||
| P/Share | $ | 0.09 | $ | 0.29 | $ | (0.03 | ) | $ | 0.26 |
Epsilon defines Adjusted Net Income as reported U.S. GAAP Net Income adjusting for items related to (1) transaction expenses, (2) impairments of natural gas and oil properties, (3) gain or loss on sale of assets, and (4) unrealized gain or loss on hedges. 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.
