Epsilon Energy Earnings Call Transcripts
Fiscal Year 2026
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The portfolio has 115 net priority-one locations, with development advancing in the Powder River Basin, Permian and Marcellus. 2026 guidance midpoint implies 18% YoY production growth, with substantial projected cash flow and midstream upside from planned development.
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Operational execution remains strong with production growth expected through 2026, driven by Powder River and Permian developments. Capital spending will ramp up in Q3, with leverage maintained at 1.5x EBITDA and hedging at 50% PDP.
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Production growth is set to accelerate in the second half of 2026, driven by new wells in the Permian and Powder River basins. Adjusted Q1 EPS was $0.29, with strong gas pricing and asset sales supporting a strengthened balance sheet.
Fiscal Year 2025
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Adjusted EBITDA rose 75% and production 54% year-over-year, driven by the Peak acquisition and strong development in key basins. Portfolio optimization, asset sales, and robust returns at higher oil prices position the company for multi-year growth and capital returns.
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Announced Peak Companies acquisition, adding Powder River Basin assets and experienced team. Year-to-date adjusted EPS reached $0.45, with strong cash flow from Texas assets. 2026 focus is on integration and execution, with major development in 2027 if market conditions allow.
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Announced acquisition of Peak Companies adds significant oil-weighted production and inventory, boosting reserves by over 150% and liquids output by 200%. Second quarter saw flat production but a 30% drop in cash flows due to lower realized prices.
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Strong sequential growth in Marcellus and midstream cash flows drove robust first quarter results, with production up 58% and realized pricing up 70%. Capital spending is focused on Texas and Alberta, while hedging strategies and a strong balance sheet support stability.
Fiscal Year 2024
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Achieved strategic growth in Permian and Alberta, with 180% oil production increase and 20% reserve growth. Marcellus production rebounded in early 2025, and strong liquidity supports continued investment and shareholder returns.
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Permian oil production grew 19% quarter-over-quarter, offsetting Pennsylvania's curtailments and low prices. New Alberta joint ventures expand the liquids-rich portfolio, with initial wells planned for 2025. Strong liquidity and hedging support growth into next year.
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Permian assets drove half of revenue and most cash flow, while Marcellus faced curtailments amid weak gas prices. Borrowing base rose to $45M, and new development in the Permian and Canada is planned, pending operator sale completion.