Epsilon Energy (EPSN) Q4 2024 earnings summary

Executive summary

• Achieved main strategic objectives in 2024: expanded Permian business, added a new Alberta project, and managed through an oversupplied gas market.

• Full-year 2024 revenue rose 3% year-over-year to $31.5M, with Q4 revenue up 23% sequentially to $8.9M.

• Permian bolt-on acquisition and investments drove a 180% year-over-year increase in oil production, with Permian contributing over 60% of 2024 cash flows.

• Net income for 2024 was $1.9M, down from $6.9M in 2023, with Q4 impacted by lower gas prices and production curtailments.

• Established a joint venture in Alberta, Canada, adding multi-year inventory and drilling upside.

Financial highlights

• Gas production fell 26% year-over-year, while oil and NGL production increased 186% and 78%, respectively.

• Net revenue interest production in Marcellus (PA) reached ~30 MMcf/d in early 2025, up 85% from 2024 daily average.

• Realized over $3.90 per MCF at the wellhead in early 2025, up 100% year-over-year for the same period.

• Permian investments totaled $24 million in 2024, including acquisition and two new wells.

• Over $50 million in liquidity, including undrawn credit facility and strong free cash flows.

Outlook and guidance

• Management expects material growth in production and cash flows in 2025, with curtailed and delayed volumes returning online into a stronger pricing environment.

• Permian development to resume in Ector County in the second half of 2025, with significant undeveloped acreage and drilling runway.

• Alberta JV to see ~$10 million CapEx in 2025, with two additional wells planned.

• Four gross wells (one net) expected on production in Alberta's Garrington area by year-end 2025.

• Over $50M in available liquidity supports continued drilling and opportunistic deals while maintaining shareholder returns.