Epsilon Energy Ltd
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
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Operating Costs
The following table presents total cost and cost per unit of production (Mcfe), including ad valorem, severance, and production taxes for the three and six months ended June 30, 2024 and 2023:
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| · · Three months ended June 30, · · Six months ended June 30, | ||||||||||||
| · 2024 · 2023 · 2024 · 2023 | ||||||||||||
| Lease operating costs (net of elimination) | | $1,649,867 | | $1,440,521 | | $3,418,329 | | $2,844,800 | ||||
| Gathering system operating costs | | | 649,967 | | | 570,934 | | | 1,202,537 | | | 1,222,275 |
| | | $2,299,834 | | $2,011,455 | | $4,620,866 | | $4,067,075 | ||||
| | | | | | | | | | | | | |
| Upstream operating costs—Total $/Mcfe | | | 0.92 | | | 0.63 | | | 0.91 | | | 0.60 |
| Gathering system operating costs $/Mcf | | | 0.32 | | | 0.17 | | | 0.22 | | | 0.17 |
Operating costs include the effects of elimination entries to remove the gathering fees paid to Epsilon’s ownership in the gathering system.
Upstream operating costs consist of lease operating expenses necessary to extract natural gas and oil, including gathering and treating the natural gas and oil to ready it for sale. For the six months ended June 30, 2024 these costs increased by $0.6 million, or 20%, over the same period in 2023. The increase is primarily due to the additional wells in the Permian Basin. For the three months ended June 30, 2024 these costs increased by $0.2 million, or 15%, over the same period in 2023. The increase is primarily due to the additional wells in the Permian Basin.
Gathering system operating costs consist primarily of rental payments for the natural gas fueled compression units and overhead fees due to the system’s operator. For the six months ended June 30, 2024, gathering system operating costs were constant, decreasing by $0.02 million, or 2% from the same period in 2023. For the three months ended June 30, 2024, gathering system operating costs increased by $0.1 million, or 14% from the same period in 2023. An increase of $0.3 million was due to higher prices offset by an $0.2 million decrease related to lower throughput volumes.
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