Epsilon Energy .-Epsilon Reports Third Quarter 2024 Results

Core Viewpoint - Epsilon Energy Ltd. reported its third quarter 2024 financial and operational results, highlighting a mixed performance with significant growth in oil production and revenue, while natural gas production and revenues declined. Financial Performance - NRI Production: - Gas production decreased to 1,304 MMcf, down 7% quarter-over-quarter (QoQ) and 29% year-over-year (YoY) [2] - Oil production increased to 53 Mbbl, up 19% QoQ and 317% YoY [2] - NGL production decreased to 17 Mbbl, down 11% QoQ and up 99% YoY [2] - Revenues: - Total gas revenue was $1,904 million, down 3% QoQ and 9% YoY [2] - Total oil revenue was$ 3,965 million, up 13% QoQ and 329% YoY [2] - Total NGL revenue was $335 million, down 14% QoQ and up 47% YoY [2] - Midstream revenue was$ 1,084 million, down 25% QoQ and 65% YoY [2] - Adjusted EBITDA was $3,744 million, down 4% QoQ and 5% YoY [2] - Cash and short-term investments totaled$ 8,775 million, down 7% QoQ and 72% YoY [2] - Capital expenditures (Capex) were $3,908 million, down 32% QoQ and 26% YoY [2] Operational Updates - Capital expenditures primarily related to the completion of one well in Texas and drilling two wells in Alberta, Canada [4] - Three of the seven Marcellus wells completed in Q1 2024 were put on flowback, producing approximately 60 MMcf per day gross [5] - The company anticipates increased production and cash flow in Q4 2024 and 2025 due to improving natural gas fundamentals [6] Strategic Developments - Epsilon's entry into Alberta, Canada is seen as an attractive opportunity for capital deployment starting in Q4 2024 [7] - The company returned$ 2 million to shareholders through dividends and share repurchases during the quarter [2] Hedge Book - The current hedge book includes various swaps for natural gas and crude oil, with notable contracts starting in 2025 [7]