Epsilon Announces the Closing of the Acquisitions of the Peak Companies With Assets in the Powder River Basin

Rhea-AI Summary

Epsilon (NASDAQ: EPSN) announced the closing of its acquisitions of Peak Exploration and Production LLC and Peak BLM Lease LLC on November 14, 2025. At Closing, the company issued 5,681,489 common shares to Peak shareholders after purchase price adjustments and may issue or pay up to 2,500,000 additional shares or $6.5 million depending on regulatory approval timing. The company's credit facility commitments were increased to $80 million, with $50.5 million drawn at Closing; those loan proceeds repaid the Peak Companies’ prior loan and related costs. The Board appointed Bryan H. Lawrence and Jack Vaughn, and 16 former Peak employees accepted full-time roles based in Durango, CO and Wright, WY.

Positive

• Issued 5,681,489 common shares at Closing
• Up to 2,500,000 additional shares or $6.5M contingent
• Credit facility increased to $80 million
• Loans of $50.5 million drawn at Closing to repay Peak debt
• Appointed Bryan H. Lawrence and Jack Vaughn to the Board

Negative

• Potential shareholder dilution from up to 2,500,000 additional shares
• Increased leverage: $50.5 million drawn at Closing on credit facility

Insights

Acquisitions & Capital Structure Analyst

Acquisition closed; shares issued, credit facility increased and draw used to repay seller debt.

Epsilon completed the acquisitions of the Peak Companies on November 14, 2025, issuing 5,681,489 common shares at closing and leaving a contingent consideration of up to 2,500,000 shares or $6.5 million in cash tied to regulatory approval timing. The company increased commitments on its credit facility to $80 million and drew $50.5 million at closing; proceeds repaid the Peak Companies’ existing loan and related costs.

The deal materially alters capital structure via equity issuance and incremental leverage. Key dependencies and risks are explicit in the release: (1) contingent issuance/payment of up to 2,500,000 shares or $6.5 million depending on regulatory approval timing, which will dilute existing holders or require cash; (2) the enlarged $80 million facility and the $50.5 million draw increase leverage until free cash flow or asset synergies absorb it; and (3) integration execution including retention of sixteen former Peak employees and Board additions with two new directors can affect near-term operational continuity.

Watch the regulatory approvals that trigger the contingent share/cash payment and their expected timing over the coming quarters, the company’s near-term covenant and interest obligations under the amended credit facility, and operational updates from the Durango, Colorado and Wright, Wyoming bases as integration proceeds; these items should show progress within the next few quarters to clarify financial and operational impact.

HOUSTON, Nov. 14, 2025 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. (“Epsilon” or the “Company”) (NASDAQ: EPSN) today reported the consummation of the previously announced acquisitions of Peak Exploration and Production LLC and Peak BLM Lease LLC (together, the “Peak Companies”) (the “Closing”).

The Closing followed a special meeting of the Company’s shareholders held on November 12, 2025, where the Company’s shareholders approved the issuance of common shares in connection with the acquisitions.

As consideration at Closing, 5,681,489 common shares were issued to the shareholders of the Peak Companies, after closing purchase price adjustments. Following Closing, up to 2,500,000 common shares or $6.5 million in cash is required to be issued or paid based on the timing of certain regulatory approvals, as contemplated by the membership interest purchase agreement for Peak BLM Lease LLC, a copy of which was attached to the Company’s proxy statement filed with the Securities and Exchange Commission on October 10, 2025.

At Closing, the commitments on the Company’s credit facility were increased to $80 million, with loans extended (drawn) at Closing of $50.5 million. Loan proceeds were used to repay the Peak Companies’ existing loan and associated costs. All other material terms of the Company’s credit facility remain the same.

Also at Closing, the Company’s board of directors (the “Board”) appointed Bryan H. Lawrence and Jack Vaughn to the Board.

Sixteen former employees of the Peak Companies have accepted full-time offers of employment with the Company’s subsidiary, Epsilon Energy USA Inc., and will be primarily based in Durango, Colorado and Wright, Wyoming.

Jason Stabell, Epsilon’s Chief Executive Officer, commented “We are thrilled to announce the successful closing of this transformational acquisition, marking a pivotal step in the company’s growth. We warmly welcome our new colleagues to the team. Their combined talents and basin expertise will be instrumental to our future success. We’re also honored to welcome two exceptional leaders in Bryan and Jack to our board. Their guidance will be invaluable as we execute on our strategy moving forward.”

About Epsilon

Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets in Wyoming, 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
Jason.Stabell@EpsilonEnergyLTD.com

Andrew Williamson
Chief Financial Officer
Andrew.Williamson@EpsilonEnergyLTD.com

FAQ

What did Epsilon (EPSN) complete on November 14, 2025?

Epsilon completed the acquisitions of Peak Exploration and Production LLC and Peak BLM Lease LLC and closed the transaction on November 14, 2025.

How many shares did EPSN issue for the Peak acquisitions?

Epsilon issued 5,681,489 common shares at Closing, with up to 2,500,000 additional shares or $6.5M contingent on regulatory timing.

What change occurred to Epsilon’s credit facility after the Closing?

Commitments were increased to $80 million, and Epsilon drew $50.5 million at Closing.

How were the loan proceeds from EPSN’s draw used at Closing?

The $50.5 million drawn was used to repay the Peak Companies’ existing loan and associated costs.

Who joined Epsilon’s board after the Peak acquisitions (EPSN)?

Bryan H. Lawrence and Jack Vaughn were appointed to Epsilon’s board of directors at Closing.

Will former Peak employees join Epsilon after the acquisition?

Yes; 16 former Peak employees accepted full-time offers and will be primarily based in Durango, Colorado and Wright, Wyoming.