Epsilon Energy Ltd. Announces New Share Repurchase Program and Borrowing Base Redetermination

Epsilon Energy Ltd. announced a new share repurchase program for up to 2.2 million shares, aimed at enhancing shareholder value.

Quiver AI Summary

Epsilon Energy Ltd. announced the termination of its previous share repurchase program and the initiation of a new one-year share repurchase program that allows for the buyback of up to 2,200,876 common shares, or 10% of its outstanding shares, at an aggregate price not exceeding $13 million. This new program, effective from February 12, 2025, aims to enhance shareholder value as the Board believes the market price does not reflect the company's intrinsic value. The repurchases will occur through the NASDAQ Global Market at prevailing market prices and will be funded by available cash without incurring debt. Additionally, Epsilon reported a redetermination of its borrowing base to $45 million for its senior secured reserve-based lending facility with Frost Bank, effective February 10, 2025.

Potential Positives

• The approval of a new one-year share repurchase program allows Epsilon to buy back up to 2,200,876 common shares, potentially enhancing shareholder value.
• The share repurchase program signals the Board’s belief that the current market price does not reflect the company's underlying value, which may bolster investor confidence.
• The company maintains that the repurchase will be funded through available cash, indicating financial stability and a responsible approach to capital management.
• A redetermined borrowing base of $45 million on the Credit Facility highlights the company’s access to financial resources, supporting its operational and strategic initiatives.

Potential Negatives

• The termination of the prior share repurchase program may signal a lack of confidence in the company's stock performance or financial stability, potentially undermining investor trust.
• The redetermined borrowing base of $45 million may reflect challenges in the company's operational cash flow or asset valuations, raising concerns about financial health.
• The decision to initiate a new share repurchase program for a limited amount of shares could indicate the company's inability to pursue more substantial growth initiatives or investments, suggesting a conservative approach in a potentially unfavorable market environment.

FAQ

What is the purpose of Epsilon Energy's new share repurchase program?

The new share repurchase program aims to enhance shareholder value by repurchasing up to 2,200,876 common shares.

When does the new share repurchase program start and end?

The program began on February 12, 2025, and will end on February 11, 2026, unless shares are purchased earlier.

How much is Epsilon Energy authorized to spend on share repurchases?

Epsilon Energy is authorized to spend an aggregate purchase price of up to US $13.0 million on share repurchases.

What factors prompted Epsilon Energy to initiate the share repurchase program?

The Board believes the market price does not reflect the underlying value of shares, making repurchases an appropriate use of funds.

What was the result of Epsilon Energy's recent borrowing base redetermination?

The borrowing base for Epsilon's Credit Facility was redetermined to $45 million, effective February 10, 2025.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

$EPSN Insider Trading Activity

$EPSN insiders have traded $EPSN stock on the open market 3 times in the past 6 months. Of those trades, 3 have been purchases and 0 have been sales.

Here’s a breakdown of recent trading of $EPSN stock by insiders over the last 6 months:

• JASON STABELL (Chief Executive Officer) has made 2 purchases buying 83,139 shares for an estimated $421,953 and 0 sales.
• ANDREW WILLIAMSON (Chief Financial Officer) purchased 50,000 shares for an estimated $252,500

To track insider transactions, check out Quiver Quantitative's insider trading dashboard.

$EPSN Hedge Fund Activity

We have seen 16 institutional investors add shares of $EPSN stock to their portfolio, and 25 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

• PALO DURO INVESTMENT PARTNERS, LP removed 1,329,107 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $7,788,567
• PARAGON ASSOCIATES & PARAGON ASSOCIATES II JOINT VENTURE removed 55,000 shares (-6.9%) from their portfolio in Q4 2024, for an estimated $341,550
• ADAGE CAPITAL PARTNERS GP, L.L.C. removed 50,000 shares (-4.5%) from their portfolio in Q3 2024, for an estimated $293,000
• QUBE RESEARCH & TECHNOLOGIES LTD added 42,403 shares (+2120150.0%) to their portfolio in Q3 2024, for an estimated $248,481
• BANK OF NEW YORK MELLON CORP removed 40,531 shares (-100.0%) from their portfolio in Q4 2024, for an estimated $251,697
• PUNCH & ASSOCIATES INVESTMENT MANAGEMENT, INC. removed 24,900 shares (-7.6%) from their portfolio in Q3 2024, for an estimated $145,914
• STATE STREET CORP removed 21,406 shares (-24.9%) from their portfolio in Q3 2024, for an estimated $125,439

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

Full Release

HOUSTON, Feb. 13, 2025 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd. (“

Epsilon

” or the “

Company

”) (NASDAQ: EPSN) today announced that its Board of Directors terminated and revoked authority under the normal course issuer bid program which commenced on March 27, 2024. At the same time, the Board of Directors approved a new one-year share repurchase program, under which the Company is authorized to repurchase up to 2,200,876 common shares, representing 10% of the outstanding common shares of Epsilon, for an aggregate purchase price of not more than US $13.0 million, pursuant to a normal course issuer bid. The one-year period commenced on February 12, 2025. The program will end on February 11, 2026, unless the maximum amount of common shares is purchased before then or Epsilon provides earlier notice of termination.

The Company believes that the market price of its common shares may not reflect their underlying value and the Board of Directors has authorized this initiative because, in the Board’s opinion, the proposed repurchase of common shares constitutes an appropriate use of Epsilon’s funds, and the repurchase of its common shares is one way of creating shareholder value.

Repurchases will be made from time to time through the facilities of the NASDAQ Global Market. The price paid for the common shares will be, subject to applicable securities laws, the prevailing market price of such common shares on the NASDAQ Global Market at the time of such purchase. The Company intends to fund the purchase out of available cash and does not expect to incur debt to fund the share repurchase program.

The Company also announced the results of a borrowing base redetermination on the Company’s senior secured reserve-based lending revolving credit facility (the “

Credit Facility

”) with Frost Bank (the “

Lender

”). Effective on February 10, 2025, the Lender redetermined the borrowing base at $45 million, which will remain until the next redetermination later in the year.

About Epsilon

Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets in Pennsylvania, Texas, Alberta, New Mexico, and Oklahoma.

Contact Information:

281-670-0002

Jason Stabell


Chief Executive Officer



Jason.Stabell@EpsilonEnergyLTD.com

Andrew Williamson


Chief Financial Officer



Andrew.Williamson@EpsilonEnergyLTD.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.