HOUSTON, March 18, 2020 (GLOBE NEWSWIRE) — Epsilon Energy Ltd. (“Epsilon”) (NASDAQ: EPSN) today reported its financial results for the fourth quarter and full-year ended December 31, 2019. Epsilon’s highlights for 2019 and material subsequent events following year end through the date of this release include:Total Revenues of $26.7 million for the year as compared to $29.7 million for the same period of 2018.
Net after tax income of $8.7 million for the year as compared to $6.7 million for the same period of 2018.
Adjusted EBITDA of $18.0 million for the year as compared to $15.6 million for the same period of 2018.
Marcellus net gas production averaged 21.4 MMcf/d for the year as compared to 20.8 MMcf/d net gas production in 2018. Net gas production as of this release is approximately 27.8 MMcf/d (or 32 MMcf/d of gross working interest gas production).
Total estimated proved natural gas reserves of 124 Bcf as of December 31, 2019 after 2019 production of 7.8 Bcf, and 116 Mbbl of proved oil and condensate reserves after 2019 production of 5.9 Mbbl.
Gathered and delivered 87.8 Bcf gross (30.7 Bcf net to Epsilon’s interest) during the year, or 241 MMcf/d through the Auburn System which represents approximately 73% of designed throughput capacity.Michael Raleigh, CEO, commented, “During 2019, Epsilon delivered upon its guidance of adding at least 10,000 net feet of completed lateral in the Marcellus. The company ended the year with 124 Bcf of proved natural gas reserves, which represents an increase of 5 Bcf despite lower natural gas prices and net production of 7.8 Bcf. While the current environment remains challenging, we are well prepared for an eventual turnaround.For the first quarter of 2020 we anticipate net gas production of 25- 27 MMcf/d (29 – 31MMcfpd gross working interest production) and $4 – 4.5MM in EBITDA. Epsilon’s objective is to pursue capital investments that provide a suitable rate of return to our shareholders. As such, we are deferring the majority of our 2020 drilling budget in response to the lower current natural gas prices. However, we remain active in optimizing our assets to improve return to shareholders. In February, we lowered the operating pressure of the Auburn GGS which increased both Epsilon’s net production and Auburn compression facility throughput without any investment of capital. Further compressor modifications may require some minor additional capital. We will consider additional operating pressure reductions if appropriate to manage our net production and midstream throughput as efficiently as possible throughout the year.Natural gas prices declined throughout 2019 and into the first quarter of 2020 as growth in supply outpaced growth in demand and normal winter heating demand failed to materialize. We believe that the industry has begun to self-correct through much needed capital discipline as current market conditions are not sustainable. We expect Northeast natural gas production to flatten and then decline throughout 2020. In addition, the recently announced reduction in oil focused drilling due to the dramatic decrease in crude oil prices will result in lower future associated natural gas supply, thereby supporting future natural gas pricing improvement.”Financial and Operating ResultsCapital Expenditures
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