Epsilon Energy (EPSN) Proxy Filing summary

Executive summary

• The proxy filing seeks shareholder approval for the issuance of up to 8,500,000 common shares to acquire Peak Exploration & Production, LLC and Peak BLM Lease LLC, making them indirect wholly owned subsidiaries.

• The transaction is structured through two Membership Interest Purchase Agreements, with consideration including common shares and a $51.2 million cash payment to retire Peak E&P's debt.

• The acquisition will expand the asset base, reserves, and operational footprint, particularly in the Powder River Basin, and is expected to be accretive to key financial metrics.

Voting matters and shareholder proposals

• Shareholders are asked to approve: (1) the issuance of common shares for the acquisitions (Share Issuance Proposal), and (2) the potential adjournment of the meeting if more time is needed to solicit votes (Adjournment Proposal).

• Approval of the Share Issuance Proposal is required under NASDAQ Listing Rule 5635, as the share issuance exceeds 20% of outstanding shares.

• The Board unanimously recommends voting FOR both proposals.

Board of directors and corporate governance

• At closing, two designees of the sellers will join the Board and all committees except the Audit Committee.

• The Board will consist of eight members, including six current directors and two new appointees from the sellers.