Epsilon Announces Third Quarter 2025 Results

Rhea-AI Summary

Epsilon (NASDAQ: EPSN) reported third quarter 2025 results and operational updates on November 5, 2025.

Key financials: Total revenue of $8,981M, adjusted EBITDA of $4,365M, cash + short-term investments of $13,236M, capex of $2,885M, and adjusted net income of $1,904M. Dividends were $1,379M and share buybacks were $0 for the quarter.

Operations: NRI production totaled 2,456 Mmcfe (daily 26.7 Mmcfe/d); Texas Barnett well completed (1 gross, 0.25 net) with a 30-day gross IP >870 Boe/d (82% oil). The company announced an acquisition of the operated business in the Powder River Basin expected to close in November 2025.

Positive

• Adjusted EBITDA of $4,365M in Q3 2025
• Cash + short-term investments of $13,236M (Q3 2025)
• Powder River Basin operated business acquisition expected to close in November 2025
• Completed Barnett well with 30-day gross IP > 870 Boe/d (82% oil)

Negative

• Total NRI production -20% QoQ in Q3 2025
• Adjusted EBITDA -41% QoQ in Q3 2025
• Oil production -26% YoY in Q3 2025
• Share buybacks reduced to $0 from $628M prior quarter (-100% QoQ)

Insights

Energy financial analyst

Mixed quarter: strong year-over-year growth and cash build, but notable quarter-on-quarter declines in volumes and EBITDA; Powder River acquisition pending close.

Epsilon Energy reported lower quarterly volumes and revenues versus the prior quarter with NRI production down ~-20 QoQ to 2,456 Mmcfe and daily volumes at 26.7 Mmcfe/d; Adj. EBITDA fell to 4,365 million (-41 QoQ) while Adj. Net Income was 1,904 million. Offsetting signs include material YoY growth in total volumes (+42) and revenues (+23), and a cash plus STI balance increase to 13,236 million.

The business mechanics show cash generation strength despite quarter sequencing effects: lower realized gas volumes and temporary shut-ins reduced near-term production and QoQ profitability, while realized prices for gas and oil support YTD results. Risks and dependencies include the timing and successful close/integration of the Powder River Basin operated asset (expected to close in November), completion performance of the new Texas Barnett well and seasonal price-driven shut-ins in the Marcellus. Monitor the November closing, subsequent production contribution from Powder River, quarter-over-quarter trends in NRI production and Adj. EBITDA in upcoming reports (next 1–2 quarters) for clarity on whether cash strength translates into sustained operating improvement.

HOUSTON, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. (“Epsilon” or the “Company”) (NASDAQ: EPSN) today reported third quarter 2025 financial and operating results.

Third Quarter 2025 Highlights:

Epsilon - Q3 2025
		Q3 2025	Q2 2025	Q3 2024	QoQ%		YoY%		YTD 2025
NRI Production
Gas	MMcf	2,136	2,752	1,304	-22	%	64	%	7,628
Oil	Mbbl	39	44	53	-11	%	-26	%	129
NGL	Mbbl	14	8	17	78	%	-18	%	38
Total	Mmcfe	2,456	3,064	1,727	-20	%	42	%	8,629
Daily	Mmcfe/d	26.7	33.7	18.8					31.6
Revenues	$M
Gas		4,758	6,910	1,904	-31	%	150	%	22,282
Oil		2,511	2,725	3,965	-8	%	-37	%	8,505
NGL		267	145	335	84	%	-20	%	799
Midstream1		1,445	1,845	1,084	-22	%	33	%	5,183
Total		8,981	11,625	7,288	-23	%	23	%	36,769
Realized Prices2
Gas	$/Mcf	2.23	2.51	1.46	-11	%	53	%	2.92
Oil	$/Bbl	63.73	61.72	74.27	3	%	-14	%	65.87
NGL	$/Bbl	19.12	18.51	19.56	3	%	-2	%	21.26
Adj. EBITDA	$M	4,365	7,396	3,744	-41	%	17	%	22,370
Cash + STI3	$M	13,236	10,378	8,775	28	%	51	%
Capex4	$M	2,885	2,698	3,908	7	%	-26	%	13,618
Dividend	$M	1,379	1,376	1,374	0	%	0	%	4,130
Share Buybacks	$M	0	0	628	0	%	-100	%	0
Adj Net Income5	$M	1,904	4,146	406					10,023
p/share	$	0.09	0.19	0.02					0.45
1) Net of elimination entry for fees paid by Epsilon
2) Excludes impact of hedge realizations
3) Includes restricted cash balance
4) Includes acquisitions
5) Excludes one-time expenses for transaction costs and impairment

Operations Update:

Epsilon’s capital expenditures were $2.9 million for the quarter ended September 30, 2025. These were primarily related to the completion of 1 gross (0.25 net) well in Texas. The well in Texas is the eighth Barnett well developed in the project and is performing in-line with pre-drill expectations with a 30-day gross IP rate of over 870 Boe/d (82% oil). Offset wells were shut-in for approximately 20 days during the quarter during the completion, with a net impact of approximately 3,000 net barrels.

In the Marcellus, operator elected shut-ins occurred in the second half of the quarter in response to lower gas prices during the shoulder season, with a net impact of approximately 110 MMcf.

Jason Stabell, Epsilon’s Chief Executive Officer, commented, “Over the last several weeks, net wellhead pricing in the Marcellus has moved up strongly as we exit the shoulder season, providing a strong setup for enhanced cash flows in the coming quarters. In the Permian, we continue to deliver good results. The eighth well in the project was brought online in September and performance is consistent with other wells developed in the project area. The next well in Texas is planned for development in the first quarter next year.  

The big news during the quarter was our announcement of the acquisition of the operated business in the Powder River Basin. This transaction represents a major milestone in our strategic objectives to add scale, capital control and highly economic inventory at an attractive valuation. The transaction complements our non-operated portfolio and delivers on all these objectives. Integration planning and due diligence have progressed on schedule. We are excited to welcome a capable operating team from Peak and a premier long term focused energy investor in Yorktown as an anchor shareholder. The transaction is expected to close in November.”
  
Current Hedge Book:

Date	Natural Gas											Crude Oil
	Swaps			Basis Swaps			Costless Collars					Swaps
	Volume (MMcf)	Price ($/MMBtu)		Volume (MMcf)	Basis ($/MMBtu)		Volume (MMcf)	Bought Put ($/MMBtu)		Sold Call ($/MMBtu)		Volume (MBbl)	Price ($/Bbl)
4Q 2025	597		3.69	414	(0.96	)	286		3.46		5.60	22		67.66
FY 2025	597	$3.69		414	($0.96	)	286	$3.46		$5.60		22	$67.66
1Q 2026	270		4.66	-	-		567		3.36		5.49	6		65.00
2Q 2026	273		4.10	-	-		459		3.35		5.00	3		64.00
3Q 2026	276		4.10	-	-		439		3.35		5.01	-		-
4Q 2026	93		4.10	-	-		590		3.33		5.26	-		-
FY 2026	912	$4.27		-	-		2,055	$3.35		$5.21		9	$64.67
1Q 2027	-		-	-	-		619		3.43		5.41	-		-
2Q 2027	-		-	-	-		553		3.25		5.04	-		-
3Q 2027	-		-	-	-		229		3.16		4.46	-		-
4Q 2027	-		-	-	-		75		3.16		4.46	-		-
FY 2027	-		-	-	-		1,477	$3.31		$5.07		-		-

Earning’s Call:

The Company will host a conference call to discuss its results on Thursday, November 6, 2025, 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 Third Quarter 2025 Earnings Conference Call.”

A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Z4tohzO8. 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 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
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 September 30,								Nine months ended September 30,
		2025				2024				2025				2024
Revenues from contracts with customers:
Gas, oil, NGL, and condensate revenue		$	7,536,248			$	6,203,953			$	31,586,766			$	18,118,368
Gas gathering and compression revenue			1,445,211				1,083,988				5,182,566				4,464,134
Total revenue			8,981,459				7,287,941				36,769,332				22,582,502
Operating costs and expenses:
Lease operating expenses			2,397,052				2,099,501				7,615,735				5,517,830
Gathering system operating expenses			563,542				490,325				1,729,988				1,692,862
Depletion, depreciation, amortization, and accretion			2,570,462				2,698,812				9,247,973				7,127,641
Impairment expense			—				—				2,676,669				—
General and administrative expenses:
Stock based compensation expense			376,613				309,109				1,148,289				944,267
Other general and administrative expenses			2,467,785				1,449,576				5,748,081				4,486,814
Total operating costs and expenses			8,375,454				7,047,323				28,166,735				19,769,414
Operating income			606,005				240,618				8,602,597				2,813,088
Other income (expense):
Interest income			84,894				60,693				117,440				435,908
Interest expense			(11,666	)			(17,598	)			(43,783	)			(35,117	)
Gain on derivative contracts, net			964,307				440,712				2,076,000				245,095
Other income (expense), net			5,252				9,994				(28,086	)			111,067
Other income, net			1,042,787				493,801				2,121,571				756,953
Net income before income tax expense			1,648,792				734,419				10,724,168				3,570,041
Income tax expense			576,497				368,398				4,084,378				881,464
NET INCOME		$	1,072,295			$	366,021			$	6,639,790			$	2,688,577
Currency translation adjustments			(42,676	)			39,845				(168,288	)			62,438
Unrealized loss on securities			—				—				—				(1,598	)
NET COMPREHENSIVE INCOME		$	1,029,619			$	405,866			$	6,471,502			$	2,749,417
Net income per share, basic		$	0.05			$	0.02			$	0.30			$	0.12
Net income per share, diluted		$	0.05			$	0.02			$	0.30			$	0.12
Weighted average number of shares outstanding, basic			22,017,310				21,948,519				22,028,248				21,954,803
Weighted average number of shares outstanding, diluted			22,159,532				22,155,292				22,170,223				22,000,881

EPSILON ENERGY LTD. Unaudited Consolidated Statements of Cash Flows (All amounts stated in US$)
		September 30				December 31,
		2025				2024
ASSETS
Current assets
Cash and cash equivalents		$	12,766,167			$	6,519,793
Accounts receivable			4,515,199				5,843,722
Fair value of derivatives			889,187				—
Prepaid income taxes			—				975,963
Other current assets			965,970				792,041
Total current assets			19,136,523				14,131,519
Non-current assets
Property and equipment:
Oil and gas properties, successful efforts method
Proved properties			200,066,005				191,879,210
Unproved properties			33,396,744				28,364,186
Accumulated depletion, depreciation, amortization and impairment			(134,181,378	)			(123,281,395	)
Total oil and gas properties, net			99,281,371				96,962,001
Gathering system			43,540,301				43,116,371
Accumulated depletion, depreciation, amortization and impairment			(37,271,826	)			(36,449,511	)
Total gathering system, net			6,268,475				6,666,860
Land			637,764				637,764
Buildings and other property and equipment, net			221,901				259,335
Total property and equipment, net			106,409,511				104,525,960
Other assets:
Operating lease right-of-use assets, long term			272,298				344,589
Restricted cash			470,000				470,000
Prepaid drilling costs			4,673				982,717
Total non-current assets			107,156,482				106,323,266
Total assets		$	126,293,005			$	120,454,785
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable trade		$	2,963,805			$	2,334,732
Gathering fees payable			978,890				997,016
Royalties payable			1,481,520				1,400,976
Income taxes payable			1,556,724				—
Accrued capital expenditures			1,605,705				572,079
Accrued compensation			726,213				695,018
Other accrued liabilities			490,970				371,503
Fair value of derivatives							487,548
Operating lease liabilities			120,799				121,135
Total current liabilities			9,924,626				6,980,007
Non-current liabilities
Asset retirement obligations			3,822,030				3,652,296
Deferred income taxes			12,062,053				12,738,577
Operating lease liabilities, long term			266,263				355,776
Total non-current liabilities			16,150,346				16,746,649
Total liabilities			26,074,972				23,726,656
Commitments and contingencies (Note 11)
Shareholders' equity
Preferred shares, no par value, unlimited shares authorized, none issued or outstanding			—				—
Common shares, no par value, unlimited shares authorized and 22,058,574 shares issued and outstanding at September 30, 2025 and 22,008,766 issued and outstanding at December 31, 2024			116,081,031				116,081,031
Additional paid-in capital			13,267,196				12,118,907
Accumulated deficit			(38,995,173	)			(41,505,076	)
Accumulated other comprehensive income			9,864,979				10,033,267
Total shareholders' equity			100,218,033				96,728,129
Total liabilities and shareholders' equity		$	126,293,005			$	120,454,785

EPSILON ENERGY LTD. Unaudited Consolidated Statements of Cash Flows (All amounts stated in US$)
		Nine months ended September 30,
		2025				2024
Cash flows from operating activities:
Net income		$	6,639,790			$	2,688,577
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion, depreciation, amortization, and accretion			9,247,973				7,127,641
Impairment expense			2,676,669				—
Accretion of discount on available for sale securities			—				(297,637	)
Gain on derivative contracts			(2,076,000	)			(245,095	)
Settlement received on derivative contracts			699,265				1,245,931
Settlement of asset retirement obligation			(1,600	)			(88,992	)
Stock-based compensation expense			1,148,289				944,267
Deferred income tax (benefit) expense			(676,523	)			584,088
Changes in assets and liabilities:
Accounts receivable			1,328,523				1,545,431
Prepaid income taxes			—				(67,878	)
Other assets and liabilities			(191,487	)			(94,360	)
Accounts payable, royalties payable, gathering fees payable, and other accrued liabilities			(430,885	)			(1,520,707	)
Income taxes payable			2,532,686				—
Net cash provided by operating activities			20,896,700				11,821,266
Cash flows from investing activities:
Additions to unproved oil and gas properties			(5,032,558	)			(3,100,294	)
Additions to proved oil and gas properties			(5,901,411	)			(28,728,498	)
Additions to gathering system properties			(384,124	)			(76,625	)
Additions to land, buildings and property and equipment			(12,102	)			(13,912	)
Purchases of short term investments - available for sale			—				(4,045,785	)
Proceeds from short term investments - held to maturity			—				23,116,930
Prepaid drilling costs			978,044				1,813,808
Net cash used in investing activities			(10,352,151	)			(11,034,376	)
Cash flows from financing activities:
Buyback of common shares			—				(1,831,208	)
Dividends paid			(4,129,887	)			(4,116,777	)
Net cash used in financing activities			(4,129,887	)			(5,947,985	)
Effect of currency rates on cash, cash equivalents, and restricted cash			(168,288	)			62,438
Increase (decrease) in cash, cash equivalents, and restricted cash			6,246,374				(5,098,657	)
Cash, cash equivalents, and restricted cash, beginning of period			6,989,793				13,873,628
Cash, cash equivalents, and restricted cash, end of period		$	13,236,167			$	8,774,971
Supplemental cash flow disclosures:
Income tax paid - federal		$	1,417,860			$	—
Income tax paid - state (PA)		$	755,138			$	—
Income tax paid - state (other)		$	26,710			$	4,000
Interest paid		$	9,935			$	16,832
Non-cash investing activities:
Change in proved properties accrued in accounts payable		$	2,266,859			$	818,504
Change in gathering system accrued in accounts payable		$	39,805			$	173,193
Asset retirement obligation asset additions and adjustments		$	25,196			$	39,597

		Three months ended September 30,								Nine months ended September 30,
		2025				2024				2025				2024
Net income		$	1,072,295			$	366,021			$	6,639,790			$	2,688,577
Add Back:
Interest income, net			(73,228	)			(43,095	)			(73,657	)			(400,791	)
Income tax expense			576,497				368,398				4,084,378				881,464
Depreciation, depletion, amortization, and accretion			2,570,462				2,698,812				9,247,973				7,127,641
Impairment expense			—				—				2,676,669				—
Stock based compensation expense			376,613				309,109				1,148,289				944,267
(Gain) loss on derivative contracts net of cash received or paid on settlement			(156,659	)			44,677				(1,376,735	)			1,000,836
Foreign currency translation loss			(710	)			—				23,601				570
Adjusted EBITDA		$	4,365,270			$	3,743,922			$	22,370,308			$	12,242,564

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, and (7) 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 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.

	Q125		Q225		Q325		YTD 2025
Net Income		3,965,918		1,475,965		1,029,619		6,471,502
Adjustments
Transaction Costs		0		0		874,541		874,541
Impairment - Canada		6,669		2,670,000				2,676,669
Adjusted Net Income		3,972,587		4,145,965		1,904,160		10,022,712
WA Shares O/S - Diluted		22,109,819		22,202,315		22,159,532		22,170,223
P/Share	$	0.18	$	0.19	$	0.09	$	0.45

Epsilon defines Adjusted Net Income Per Share as reported U.S. GAAP Net Income Per Share adding back expenses related to (1) transaction expenses related to the Peak acquisitions and (2) impairments of natural gas and oil properties. Adjusted Net Income Per Share 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.

FAQ

What did Epsilon (EPSN) report for Q3 2025 adjusted EBITDA?

Epsilon reported $4,365M in adjusted EBITDA for Q3 2025.

When will Epsilon's Powder River Basin acquisition close and who is involved?

The acquisition is expected to close in November 2025 and includes an operating team from Peak and investor Yorktown as anchor shareholder.

How much cash did EPSN hold at the end of Q3 2025?

Cash plus short-term investments totaled $13,236M at September 30, 2025.

What was Epsilon's Q3 2025 total revenue and capex?

Total revenue was $8,981M and capital expenditures were $2,885M in Q3 2025.

How did Epsilon's production change in Q3 2025 and what impacted volumes?

NRI production fell 20% QoQ to 2,456 Mmcfe, with shut-ins during Texas completion and Marcellus seasonal operator shut-ins cited as impacts.

Will Epsilon hold an earnings call for Q3 2025 and when?

Yes; the earnings call is scheduled for November 6, 2025 at 10:00 a.m. Central Time with a webcast available on the company website.