Epsilon Energy (EPSN) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 102% year-over-year to $16.2 million, driven by higher natural gas prices and volumes, especially in Pennsylvania and the Permian Basin, with strong operational performance in Marcellus and Permian.

• Net income increased to $4.0 million from $1.5 million in Q1 2024, with EPS of $0.18 versus $0.07 year-over-year.

• Adjusted EBITDA more than doubled to $10.6 million from $4.6 million in the prior year period, with margin at 66% of revenue.

• Marcellus gas volumes surged over 50% quarter-over-quarter as curtailments ended and delayed wells came online.

• Maintained a robust balance sheet, no borrowings under the $45 million credit facility, and continued shareholder returns via dividends.

Financial highlights

• Total revenue: $16.2 million, up from $8.0 million year-over-year.

• Net income: $4.0 million, up from $1.5 million year-over-year.

• Adjusted EBITDA: $10.6 million, up from $4.6 million year-over-year.

• Cash flow from operations: $8.6 million, up 133% from $3.7 million year-over-year.

• Dividend of $0.0625 per share paid in Q1 2025, totaling $1.4 million.

Outlook and guidance

• No further Marcellus development expected in 2025 despite strong cash flows; two additional wells planned in Alberta JV and two in Texas for the remainder of the year.

• Planning 0.5 net wells in both Texas and Alberta, with total capital expenditures of $9–$12 million for the rest of the year, including a $1.5 million drilling carry in Alberta.

• Management expects current cash, available borrowings, and operating cash flows to meet requirements for at least the next twelve months.

• Barnett activity contingent on sustained oil prices above $65 WTI.

• Substantial undeveloped Marcellus inventory expected to be developed starting late next year or early 2027, subject to market conditions.