Epsilon Announces a Second Transaction in the Permian Basin
16 Mai 2023 - 11:42PM
Epsilon Energy Ltd. (“
Epsilon” or the
“
Company”) (NASDAQ: EPSN) today reported an
investment in Ector County, Texas with material follow-on
development opportunities.
Epsilon is pleased to announce entering into a
second drilling focused transaction in the Permian Basin. The
acquired assets are a 25% working interest in 12,373 gross acres
located in Ector County, Texas on the Central Basin Platform,
operated by a Midland-based private operator.
The position is on an emerging Mississippian
play proximal to several other active public and private operators.
The Company will participate in the drilling and completion of 2
gross wells (0.5 net), both 10,000’ laterals, over the remainder of
2023 (the first well is already drilled, first production from both
wells is estimated for the fourth quarter of 2023).
Epsilon signed definitive agreements to acquire
a 25% working interest in a 1,297 acre unit and a 25% working
interest in a 11,076 acre position, both in the same play alongside
the same operator. Drilling activity is expected to commence on the
11,076 acreage position in 2024. Initial plans call for an
additional 2-4 gross wells (0.5-1 net) in 2024 with plans expected
to be finalized later this year. At an initial assumption of 2
wells per section spacing, this adds 20 gross (5 net) potential
development locations to the Company’s inventory.
The 1,297 acre unit interest has already closed
and the second 11,076 acre position interest is planned to close
within 30 days.
Recent offset well results from multiple operators have been
encouraging. Below is a summary of the Company’s estimated
productivity of a Mississippian Barnett well:
The total consideration net to Epsilon for the transaction,
including 2023 capital expenditures, is approximately $14
million.
This transaction, along with the recently
announced participation in Eddy County, NM, have a combined 2023
cash outlay of approximately $16.5 million (approximately 20% of
the Company’s cash, short term investments, and available borrowing
capacity total at March 31, 2023, which excludes any cash flow
contributions 2Q-4Q23).
The Company expects these investments will
contribute to the Company’s production, revenue, and cash flow
starting in the second half of 2023.
Jason Stabell, Epsilon’s Chief Executive
Officer, commented, “We are excited to announce our second new
development-focused transaction in the Permian Basin. These
investments add liquids to our production mix and the potential for
a significant future investment runway in the Ector County project
with a well-aligned and basin focused operator.
The transactions allow us to invest a manageable
portion of our liquidity at attractive rates of return, while
preserving our strong balance sheet, and maintaining capital
allocation flexibility for additional deals and continued
shareholder returns.”
About Epsilon
Epsilon Energy Ltd. is a North American on-shore
focused independent exploration and production company engaged in
the acquisition, development, gathering and production of oil and
gas reserves. Our primary area of operation is the Marcellus basin
in Northeast Pennsylvania complemented by additional upstream
assets in the Permian and Anadarko basins . For more information,
please visit www.epsilonenergyltd.com, where we routinely post
announcements, updates, events, investor information, presentations
and recent news releases.
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 StabellChief Executive
OfficerJason.Stabell@EpsilonEnergyLTD.com
Andrew WilliamsonChief Financial
OfficerAndrew.Williamson@EpsilonEnergyLTD.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/8fd75536-3c95-4543-8782-b4203a803b0b
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