Epsilon Reports Second Quarter 2024 Results
Epsilon Energy (NASDAQ: EPSN) reported its Q2 2024 financial results, showing mixed performance. Total revenues increased 12% year-over-year to $7.3 million, despite a 9% decrease quarter-over-quarter. The company saw significant growth in oil production and revenue, with oil revenues up 236% year-over-year. However, natural gas production and revenues declined due to curtailments and deferred well completions. Adjusted EBITDA decreased 6% year-over-year to $3.9 million.
Epsilon returned $1.4 million to shareholders through dividends and realized gains on hedges. The company completed one well and drilled another in Texas during Q2. Cash and short-term investments stood at $9.5 million, down 74% year-over-year. Epsilon's CEO highlighted strong performance from Permian assets and potential upside in Marcellus assets for 2025.
Epsilon Energy (NASDAQ: EPSN) ha riportato i risultati finanziari del secondo trimestre 2024, mostrando performance miste. I ricavi totali sono aumentati del 12% rispetto all'anno precedente, raggiungendo i 7,3 milioni di dollari, nonostante un calo del 9% rispetto al trimestre precedente. L'azienda ha registrato una crescita significativa nella produzione di petrolio e nei ricavi, con ricavi petroliferi in aumento del 236% rispetto all'anno precedente. Tuttavia, la produzione e i ricavi di gas naturale sono diminuiti a causa di restrizioni e completamenti di pozzi posticipati. L'EBITDA rettificato è diminuito del 6% rispetto all'anno precedente, raggiungendo i 3,9 milioni di dollari.
Epsilon ha restituito 1,4 milioni di dollari agli azionisti attraverso dividendi e guadagni realizzati su coperture. L'azienda ha completato un pozzo e ne ha perforato un altro in Texas durante il secondo trimestre. Le disponibilità liquide e gli investimenti a breve termine ammontano a 9,5 milioni di dollari, in calo del 74% rispetto all'anno precedente. Il CEO di Epsilon ha evidenziato la forte performance degli asset del Permiano e il potenziale di crescita degli asset del Marcellus per il 2025.
Epsilon Energy (NASDAQ: EPSN) informó sus resultados financieros del segundo trimestre de 2024, mostrando un rendimiento mixto. Los ingresos totales aumentaron un 12% interanual, alcanzando los 7,3 millones de dólares, a pesar de una disminución del 9% con respecto al trimestre anterior. La compañía experimentó un crecimiento significativo en la producción de petróleo y los ingresos, con ingresos por petróleo aumentados en un 236% interanual. Sin embargo, la producción y los ingresos de gas natural disminuyeron debido a limitaciones y finalizaciones de pozos diferidas. El EBITDA ajustado disminuyó un 6% interanual, sumando 3,9 millones de dólares.
Epsilon devolvió 1,4 millones de dólares a los accionistas a través de dividendos y ganancias realizadas en coberturas. La compañía completó un pozo y perforó otro en Texas durante el segundo trimestre. El efectivo y las inversiones a corto plazo se situaron en 9,5 millones de dólares, lo que representa una disminución del 74% interanual. El CEO de Epsilon destacó el sólido desempeño de los activos de Permian y el potencial de aumento en los activos de Marcellus para 2025.
Epsilon Energy (NASDAQ: EPSN)는 2024년 2분기 재무 결과를 발표하며 혼합된 성과를 보였습니다. 총 수익은 전년 대비 12% 증가하여 730만 달러에 이르렀습니다, 하지만 전 분기 대비 9% 감소했습니다. 회사는 석유 생산 및 수익에서 큰 성장을 보였으며, 석유 수익은 전년 대비 236% 증가했습니다. 그러나 자연가스 생산 및 수익은 제한 및 완료 지연 사유로 감소했습니다. 조정된 EBITDA는 전년 대비 6% 감소하여 390만 달러에 이르렀습니다.
Epsilon은 배당금과 헤지에서의 실현된 이익을 통해 주주에게 140만 달러를 반환했습니다. 회사는 2분기 동안 텍사스에서 하나의 유정을 완료하고 다른 하나를 뚫었습니다. 현금 및 단기 투자는 950만 달러에 달하며, 이는 전년 대비 74% 감소한 수치입니다. Epsilon의 CEO는 퍼미안 자산에서의 강력한 성과와 2025년을 위한 마셀러스 자산의 잠재력을 강조했습니다.
Epsilon Energy (NASDAQ: EPSN) a publié ses résultats financiers du deuxième trimestre 2024, montrant des performances mitigées. Les recettes totales ont augmenté de 12 % par rapport à l'année précédente, atteignant 7,3 millions de dollars, malgré une baisse de 9 % par rapport au trimestre précédent. L'entreprise a enregistré une croissance significative de la production de pétrole et des revenus, avec les revenus pétroliers en hausse de 236 % par rapport à l'année précédente. Cependant, la production et les revenus de gaz naturel ont chuté en raison de restrictions et de report de finalisations de puits. L'EBITDA ajusté a diminué de 6 % par rapport à l'année précédente, atteignant 3,9 millions de dollars.
Epsilon a restitué 1,4 million de dollars aux actionnaires sous forme de dividendes et de gains réalisés sur des couvertures. L'entreprise a achevé un puits et en a foré un autre au Texas au cours du deuxième trimestre. Les liquidités et les investissements à court terme s'élevaient à 9,5 millions de dollars, en baisse de 74 % par rapport à l'année précédente. Le PDG d'Epsilon a souligné la forte performance des actifs Permien et le potentiel de croissance des actifs Marcellus pour 2025.
Epsilon Energy (NASDAQ: EPSN) hat seine Finanzresultate für das 2. Quartal 2024 veröffentlicht und zeigt gemischte Leistungen. Die Gesamterlöse stiegen im Jahresvergleich um 12 % auf 7,3 Millionen Dollar, trotz eines Rückgangs von 9 % im Vergleich zum Vorquartal. Das Unternehmen verzeichnete ein erhebliches Wachstum in der Ölproduktion und den Einnahmen, wobei Öleinnahmen im Jahresvergleich um 236 % gestiegen sind. Allerdings sank die Produktion und die Einnahmen aus Erdgas aufgrund von Einschränkungen und verschobenen Bohrabschlüssen. Das bereinigte EBITDA fiel im Jahresvergleich um 6 % auf 3,9 Millionen Dollar.
Epsilon gab 1,4 Millionen Dollar an die Aktionäre in Form von Dividenden und realisierten Gewinnen aus Hedging zurück. Das Unternehmen hat im 2. Quartal einen Brunnen fertiggestellt und einen weiteren in Texas gebohrt. Die liquiden Mittel und kurzfristigen Investitionen betrugen 9,5 Millionen Dollar, was einem Rückgang von 74 % im Jahresvergleich entspricht. Der CEO von Epsilon hob die starke Leistung der Permian-Vermögenswerte und das Potenzial für einen Anstieg der Vermögenswerte in Marcellus für 2025 hervor.
- Total revenues increased 12% year-over-year to $7.3 million
- Oil revenues up 236% year-over-year
- Returned $1.4 million to shareholders through dividends
- Realized gains of $0.4 million on natural gas hedges
- Completed one well and drilled another in Texas during Q2
- Expanded and undrawn credit facility available for future growth
- Adjusted EBITDA decreased 6% year-over-year to $3.9 million
- Natural gas production and revenues declined due to curtailments
- Cash and short-term investments down 74% year-over-year to $9.5 million
- Total revenues decreased 9% quarter-over-quarter
- 3.5-4 MMcf per day of NRI production was offline during the quarter
Epsilon Energy's Q2 2024 results reveal a mixed performance. Total revenues increased by
Notably, Adjusted EBITDA decreased by
The company's strategic focus on Permian assets is yielding results, with strong oil production growth. However, the natural gas segment faces challenges due to weak prices and production curtailments. The hedging strategy provides some price protection, which is important in the current volatile energy market.
Epsilon's Q2 results highlight a strategic pivot towards oil production in the Permian Basin. The
The company's decision to defer turning in line 7 gross Marcellus wells due to weak natural gas prices is prudent, preserving value for a potentially better price environment. The amended gathering agreement for the Auburn gas gathering system is a positive long-term move, enhancing future cash flow potential from this asset.
Epsilon's hedging strategy, covering about
HOUSTON, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. (“Epsilon” or the “Company”) (NASDAQ: EPSN) today reported second quarter 2024 financial and operating results.
Second Quarter 2024 Highlights:
Epsilon - Q2 2024 | |||||||||
Q2 2024 | Q1 2024 | Q2 2023 | QoQ % | YoY % | |||||
NRI Production | |||||||||
Gas | MMcf | 1,407 | 1,666 | 2,118 | -16 | % | -34 | % | |
Oil | Mbbl | 45 | 37 | 14 | 22 | % | 223 | % | |
NGL | Mbbl | 19 | 16 | 11 | 19 | % | 69 | % | |
Revenues | |||||||||
Gas | $M | 1,961 | 2,963 | 3,007 | -34 | % | -35 | % | |
Oil | $M | 3,514 | 2,715 | 1,046 | 29 | % | 236 | % | |
NGL | $M | 388 | 373 | 245 | 4 | % | 59 | % | |
Midstream1 | $M | 1,444 | 1,936 | 2,202 | -25 | % | -34 | % | |
Total | $M | 7,308 | 7,987 | 6,500 | -9 | % | 12 | % | |
Realized Prices2 | |||||||||
Gas | $/Mcf | 1.39 | 1.78 | 1.42 | -22 | % | -2 | % | |
Oil | $/Bbl | 78.44 | 74.13 | 75.38 | 6 | % | 4 | % | |
NGL | $/Bbl | 20.21 | 23.16 | 21.55 | -13 | % | -6 | % | |
Adj. EBITDA | $M | 3,904 | 4,595 | 4,165 | -15 | % | -6 | % | |
Cash + STI3 | $M | 9,481 | 15,447 | 36,788 | -39 | % | -74 | % | |
Capex | $M | 5,709 | 21,466 | 12,458 | -73 | % | -54 | % | |
1) Net of gathering fee revenue paid by Epsilon | |||||||||
2) Excludes impact of hedge realizations | |||||||||
3) Includes restricted cash balance |
- Returned
$1.4 million to shareholders through the quarterly dividend during the quarter. - Realized gains of
$0.4 million on Henry Hub (HH) and TGP Z4 basis swaps totaling 690,000 MMBTU, and losses of$0.1 million on WTI CMA swaps totaling 20 MBbls.
Operations Update:
Epsilon’s capital expenditures were
The Marcellus wells (7 gross) completed in Q1 2024 are not yet turned in line, awaiting better realized natural gas prices. In addition, our operating partner in PA has maintained production curtailments. We estimate that 3.5-4 MMcf per day of NRI production was offline during the quarter.
The Company has six gross (1.5 net) producing wells in Ector Co. Texas. The sixth well was put on production for the last month of the quarter. A seventh well was completed in July and is currently on flowback. Two of the producing wells were offline for 2 weeks during the quarter during completion operations on the sixth well.
Jason Stabell, Epsilon's Chief Executive Officer, commented, “Our Permian assets continue to perform well with strong quarter over quarter increases in oil volumes and revenue, driven by a full quarter of contribution from our first quarter acquisition and one month of production from the sixth well in the Pradera Fuego project. We expect to see additional sequential oil growth in the third quarter with a full quarter of contribution from the sixth well and the seventh well now on flowback and producing over 700 bopd while still cleaning up.
In PA, natural gas volumes and revenues were down quarter over quarter, as expected, due to continued curtailments and the deferred turn in line on the 7 gross (0.7 net) wells completed in the first quarter. Natural gas prices remain weak and the company has fixed price hedges on approximately
Finally, we continue to pursue additional investments in drill bit focused opportunities that meet our return thresholds.
Overall, our business remains well positioned for continued growth in the Permian coupled with material upside for our Marcellus assets next year in an improved natural gas environment. With our recently expanded and undrawn credit facility, cash-flows, and cash on hand we can comfortably continue to pay our dividend and pursue attractive new projects.”
Current Hedge Book:
Hedge Book - as of 8.7.24 | ||||||||||
Trade Date | Product | Structure | Ref | Contract Start | Contract End | Price / Strike | Outstanding | Metric | ||
06/07/24 | Natural Gas | Swaps | NYMEX Henry Hub (LD) | 01/01/2025 | 03/31/2025 | $ | 3.70 | 225,000 | MMBtu | |
06/07/24 | Natural Gas | Swaps | Tenn Z4 300L Basis | 01/01/2025 | 03/31/2025 | $ | (0.80 | ) | 225,000 | MMBtu |
04/30/24 | Natural Gas | Swaps | Tenn Z4 300L Basis | 01/01/2025 | 03/31/2025 | $ | (0.75 | ) | 225,000 | MMBtu |
04/30/24 | Natural Gas | Swaps | NYMEX Henry Hub (LD) | 01/01/2025 | 03/31/2025 | $ | 3.54 | 225,000 | MMBtu | |
03/28/24 | Natural Gas | Swaps | NYMEX Henry Hub (LD) | 11/01/2024 | 12/31/2024 | $ | 3.15 | 152,500 | MMBtu | |
03/05/24 | Natural Gas | Swaps | Tenn Z4 300L Basis | 11/01/2024 | 12/31/2024 | $ | (1.04 | ) | 305,000 | MMBtu |
03/05/24 | Natural Gas | Swaps | NYMEX Henry Hub (LD) | 11/01/2024 | 12/31/2024 | $ | 3.28 | 305,000 | MMBtu | |
02/26/24 | Crude Oil | Swaps | NYMEX WTI CMA | 03/01/2024 | 03/31/2025 | $ | 74.34 | 39,168 | BBL | |
10/18/23 | Natural Gas | Swaps | NYMEX Henry Hub (LD) | 04/01/2024 | 10/31/2024 | $ | 3.29 | 152,500 | MMBtu | |
10/18/23 | Natural Gas | Swaps | Tenn Z4 300L Basis | 04/01/2024 | 10/31/2024 | $ | (1.20 | ) | 152,500 | MMBtu |
09/29/23 | Natural Gas | Swaps | NYMEX Henry Hub (LD) | 04/01/2024 | 10/31/2024 | $ | 3.20 | 305,000 | MMBtu | |
09/29/23 | Natural Gas | Swaps | Tenn Z4 300L Basis | 04/01/2024 | 10/31/2024 | $ | (1.15 | ) | 305,000 | MMBtu |
Earning’s Call:
The Company will host a conference call to discuss its results on Wednesday, August 14, 2024 at 9:30 a.m. Central Time (10:30 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 2024 Earnings Conference Call.”
A webcast can be viewed at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=wNyRpqMC. 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, 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 June 30, | Six months ended June 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenues from contracts with customers: | ||||||||||||||||
Gas, oil, NGL, and condensate revenue | $ | 5,863,370 | $ | 4,298,072 | $ | 11,914,415 | $ | 11,267,653 | ||||||||
Gas gathering and compression revenue | 1,444,448 | 2,202,064 | 3,380,146 | 4,588,759 | ||||||||||||
Total revenue | 7,307,818 | 6,500,136 | 15,294,561 | 15,856,412 | ||||||||||||
Operating costs and expenses: | ||||||||||||||||
Lease operating expenses | 1,649,867 | 1,440,521 | 3,418,329 | 2,844,800 | ||||||||||||
Gathering system operating expenses | 649,967 | 570,934 | 1,202,537 | 1,222,275 | ||||||||||||
Depletion, depreciation, amortization, and accretion | 2,048,403 | 1,615,728 | 4,428,829 | 3,388,734 | ||||||||||||
Loss (gain) on sale of oil and gas properties | — | 1,449,871 | — | 1,449,871 | ||||||||||||
General and administrative expenses: | ||||||||||||||||
Stock based compensation expense | 313,589 | 179,748 | 635,158 | 359,496 | ||||||||||||
Other general and administrative expenses | 1,478,215 | 1,596,626 | 3,037,238 | 3,620,399 | ||||||||||||
Total operating costs and expenses | 6,140,041 | 6,853,428 | 12,722,091 | 12,885,575 | ||||||||||||
Operating income (loss) | 1,167,777 | (353,292 | ) | 2,572,470 | 2,970,837 | |||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 108,943 | 433,201 | 375,215 | 923,963 | ||||||||||||
Interest expense | (8,759 | ) | (34,422 | ) | (17,519 | ) | (62,859 | ) | ||||||||
(Loss) gain on derivative contracts | (94,891 | ) | 628,178 | (195,617 | ) | 1,696,838 | ||||||||||
Other income, net | 101,606 | 3,066 | 101,073 | 4,701 | ||||||||||||
Other income, net | 106,899 | 1,030,023 | 263,152 | 2,562,643 | ||||||||||||
Net income before income tax expense | 1,274,676 | 676,731 | 2,835,622 | 5,533,480 | ||||||||||||
Income tax expense | 459,016 | 246,142 | 513,066 | 1,573,064 | ||||||||||||
NET INCOME | $ | 815,660 | $ | 430,589 | $ | 2,322,556 | $ | 3,960,416 | ||||||||
Currency translation adjustments | 22,229 | 1,129 | 22,593 | (1,471 | ) | |||||||||||
Unrealized gain (loss) on securities | 3,011 | (47,006 | ) | (1,598 | ) | (47,006 | ) | |||||||||
NET COMPREHENSIVE INCOME | $ | 840,900 | $ | 384,712 | $ | 2,343,551 | $ | 3,911,939 | ||||||||
Net income per share, basic | $ | 0.04 | $ | 0.02 | $ | 0.11 | $ | 0.17 | ||||||||
Net income per share, diluted | $ | 0.04 | $ | 0.02 | $ | 0.11 | $ | 0.17 | ||||||||
Weighted average number of shares outstanding, basic | 21,921,752 | 22,749,322 | 21,957,980 | 22,869,440 | ||||||||||||
Weighted average number of shares outstanding, diluted | 22,029,475 | 22,783,987 | 21,987,142 | 22,904,922 | ||||||||||||
EPSILON ENERGY LTD. Unaudited Consolidated Balance Sheets (All amounts stated in US$) | ||||||||
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 8,581,484 | $ | 13,403,628 | ||||
Accounts receivable | 4,944,664 | 6,015,448 | ||||||
Short term investments | — | 18,775,106 | ||||||
Fair value of derivatives | 403,992 | 1,219,025 | ||||||
Prepaid income taxes | 632,531 | 952,301 | ||||||
Other current assets | 414,736 | 763,288 | ||||||
Total current assets | 14,977,407 | 41,128,796 | ||||||
Non-current assets | ||||||||
Property and equipment: | ||||||||
Oil and gas properties, successful efforts method | ||||||||
Proved properties | 185,238,373 | 160,263,511 | ||||||
Unproved properties | 28,498,028 | 25,504,873 | ||||||
Accumulated depletion, depreciation, amortization and impairment | (117,604,188 | ) | (113,708,210 | ) | ||||
Total oil and gas properties, net | 96,132,213 | 72,060,174 | ||||||
Gathering system | 42,854,372 | 42,738,273 | ||||||
Accumulated depletion, depreciation, amortization and impairment | (35,957,863 | ) | (35,539,996 | ) | ||||
Total gathering system, net | 6,896,509 | 7,198,277 | ||||||
Land | 637,764 | 637,764 | ||||||
Buildings and other property and equipment, net | 281,444 | 291,807 | ||||||
Total property and equipment, net | 103,947,930 | 80,188,022 | ||||||
Other assets: | ||||||||
Operating lease right-of-use assets, long term | 392,792 | 441,987 | ||||||
Restricted cash | 900,000 | 470,000 | ||||||
Prepaid drilling costs | 926,827 | 1,813,808 | ||||||
Total non-current assets | 106,167,549 | 82,913,817 | ||||||
Total assets | $ | 121,144,956 | $ | 124,042,613 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable trade | $ | 2,386,055 | $ | 3,236,871 | ||||
Gathering fees payable | 971,599 | 1,136,237 | ||||||
Royalties payable | 1,196,239 | 1,422,898 | ||||||
Accrued capital expenditures | 108,216 | 696,761 | ||||||
Accrued compensation | 416,037 | 636,295 | ||||||
Other accrued liabilities | 614,231 | 561,537 | ||||||
Fair value of derivatives | 259,896 | 118,770 | ||||||
Operating lease liabilities | 103,846 | 86,473 | ||||||
Total current liabilities | 6,056,119 | 7,895,842 | ||||||
Non-current liabilities | ||||||||
Asset retirement obligations | 3,528,208 | 3,502,952 | ||||||
Deferred income taxes | 11,499,207 | 11,553,943 | ||||||
Operating lease liabilities, long term | 415,805 | 476,911 | ||||||
Total non-current liabilities | 15,443,220 | 15,533,806 | ||||||
Total liabilities | 21,499,339 | 23,429,648 | ||||||
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 21,921,850 shares issued and outstanding at June 30, 2024 and 22,222,722 issued and 22,151,848 shares outstanding at December 31, 2023 | 116,708,531 | 118,272,565 | ||||||
Treasury shares, at cost, 0 at June 30, 2024 and 70,874 at December 31, 2023 | — | (360,326 | ) | |||||
Additional paid-in capital | 11,509,649 | 10,874,491 | ||||||
Accumulated deficit | (38,365,835 | ) | (37,946,042 | ) | ||||
Accumulated other comprehensive income | 9,793,272 | 9,772,277 | ||||||
Total shareholders' equity | 99,645,617 | 100,612,965 | ||||||
Total liabilities and shareholders' equity | $ | 121,144,956 | $ | 124,042,613 | ||||
EPSILON ENERGY LTD. Unaudited Consolidated Statements of Cash Flows (All amounts stated in US$) | |||||||||
Six months ended June 30, | |||||||||
2024 | 2023 | ||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 2,322,556 | $ | 3,960,416 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depletion, depreciation, amortization, and accretion | 4,428,829 | 3,388,734 | |||||||
Accretion of discount on available for sale securities | (297,637 | ) | (343,328 | ) | |||||
Gain on available for sale securities | — | (47,659 | ) | ||||||
Loss on sale of oil and gas properties | — | 1,449,871 | |||||||
Loss (gain) on derivative contracts | 195,617 | (1,696,838 | ) | ||||||
Settlement received on derivative contracts | 760,542 | 1,632,858 | |||||||
Settlement of asset retirement obligation | (87,284 | ) | — | ||||||
Stock-based compensation expense | 635,158 | 359,496 | |||||||
Deferred income tax (benefit) expense | (54,736 | ) | 230,327 | ||||||
Changes in assets and liabilities: | |||||||||
Accounts receivable | 1,070,784 | 2,846,310 | |||||||
Prepaid income taxes | 319,770 | — | |||||||
Other assets and liabilities | 354,014 | 425,789 | |||||||
Accounts payable, royalties payable and other accrued liabilities | (572,099 | ) | (1,910,674 | ) | |||||
Income taxes payable | — | (93,575 | ) | ||||||
Net cash provided by operating activities | 9,075,514 | 10,201,727 | |||||||
Cash flows from investing activities: | |||||||||
Additions to unproved oil and gas properties | (2,993,155 | ) | (7,821,248 | ) | |||||
Additions to proved oil and gas properties | (26,425,017 | ) | (5,653,284 | ) | |||||
Additions to gathering system properties | (70,236 | ) | (30,264 | ) | |||||
Additions to land, buildings and property and equipment | (13,912 | ) | (47,933 | ) | |||||
Purchases of short term investments - held to maturity | — | (32,812,974 | ) | ||||||
Purchases of short term investments - available for sale | (4,045,785 | ) | — | ||||||
Proceeds from sales and maturities of short term investments | 23,116,930 | 6,352,473 | |||||||
Proceeds from sale of oil and gas properties | — | 12,498 | |||||||
Prepaid drilling costs | 886,981 | — | |||||||
Net cash used in investing activities | (9,544,194 | ) | (40,000,732 | ) | |||||
Cash flows from financing activities: | |||||||||
Buyback of common shares | (1,203,708 | ) | (3,054,775 | ) | |||||
Dividends paid | (2,742,349 | ) | (2,828,602 | ) | |||||
Debt issuance costs | — | (140,000 | ) | ||||||
Net cash used in financing activities | (3,946,057 | ) | (6,023,377 | ) | |||||
Effect of currency rates on cash, cash equivalents, and restricted cash | 22,593 | (1,471 | ) | ||||||
Decrease in cash, cash equivalents, and restricted cash | (4,392,144 | ) | (35,823,853 | ) | |||||
Cash, cash equivalents, and restricted cash, beginning of period | 13,873,628 | 45,806,947 | |||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 9,481,484 | $ | 9,983,094 | |||||
Supplemental cash flow disclosures: | |||||||||
Income taxes paid | $ | 131,392 | $ | 1,432,000 | |||||
Interest paid | $ | — | $ | 80,075 | |||||
Non-cash investing activities: | |||||||||
Change in proved properties accrued in accounts payable and accrued liabilities | $ | (1,471,985 | ) | $ | 72,999 | ||||
Change in gathering system accrued in accounts payable and accrued liabilities | $ | 45,862 | $ | 4,240 | |||||
Asset retirement obligation asset additions and adjustments | $ | 21,831 | $ | 4,640 | |||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||
Net income | $ | 815,660 | $ | 430,589 | $ | 2,322,556 | $ | 3,960,416 | |||||||||
Add Back: | |||||||||||||||||
Interest income, net | (100,184 | ) | (398,779 | ) | (357,696 | ) | (861,104 | ) | |||||||||
Income tax expense | 459,016 | 246,142 | 513,066 | 1,573,064 | |||||||||||||
Depreciation, depletion, amortization, and accretion | 2,048,403 | 1,615,728 | 4,428,829 | 3,388,734 | |||||||||||||
Stock based compensation expense | 313,589 | 179,748 | 635,158 | 359,496 | |||||||||||||
Gain on sale of assets | — | 1,449,871 | — | 1,449,871 | |||||||||||||
Loss (gain) on derivative contracts net of cash received or paid on settlement | 367,148 | 641,380 | 956,159 | (63,980 | ) | ||||||||||||
Foreign currency translation loss | — | (5 | ) | 570 | (987 | ) | |||||||||||
Adjusted EBITDA | $ | 3,903,632 | $ | 4,164,674 | $ | 8,498,642 | $ | 9,805,510 | |||||||||
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 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.
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