Epsilon Energy Ltd
For the period ended Sep 30, 2024. Filed Nov 6, 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.
Sep 30, 2024 · Filed Nov 6, 2024
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5. Property and Equipment
The following table summarizes the Company’s property and equipment as of September 30, 2024 and December 31, 2023:
| | | | | | | |
|---|---|---|---|---|---|---|
| · September 30, · December 31, | ||||||
| · · 2024 · · 2023 | ||||||
| Property and equipment: | | | | | | |
| Oil and gas properties, successful efforts method | | | | | | |
| Proved properties | | $190,162,954 | | $160,263,511 | ||
| Unproved properties | | | 28,292,321 | | | 25,504,873 |
| Accumulated depletion, depreciation, amortization and impairment | | | (119,981,434) | | | (113,708,210) |
| Total oil and gas properties, net | | | 98,473,841 | | | 72,060,174 |
| Gathering system | | | 42,988,092 | | | 42,738,273 |
| Accumulated depletion, depreciation, amortization and impairment | | | (36,221,366) | | | (35,539,996) |
| Total gathering system, net | | | 6,766,726 | | | 7,198,277 |
| Land | | | 637,764 | | | 637,764 |
| Buildings and other property and equipment, net | | | 269,133 | | | 291,807 |
| Total property and equipment, net | | $106,147,464 | | $80,188,022 | ||
Asset Acquisitions
During the nine months ended September 30, 2024, Epsilon acquired assets that included the following:
| ● | a 25% working interest in three producing wells in Ector County, Texas for $12.1 million. |
| ● | a 25% working interest in 3,620 gross undeveloped acres in Ector County, Texas for $2.6 million. |
| ● | a 50% working interest in 14,243 gross undeveloped acres in Alberta, Canada for $1.0 million. |
Management determined that substantially all the fair value of the assets acquired was concentrated in a group of similar identifiable assets. Based on this determination, the acquisitions were accounted for as asset acquisitions.
During the nine months ended September 30, 2023, Epsilon acquired assets that included the following:
| ● | a 10% interest in two wellbores located in Eddy County, New Mexico for $2.1 million. |
| ● | a 25% working interest in 1,297 gross acres in Ector County, Texas including the drilling of one well for $3.7 million and a commitment for the completion of that well for $1.6 million. |
| ● | a 25% working interest in 11,067 gross acres in Ector County, Texas for $6.3 million. |
Property Impairment
We perform a quantitative impairment test whenever events or changes in circumstances indicate that an asset group's carrying amount may not be recoverable, over proved properties using the published NYMEX forward prices, basis differentials, timing, methods and other assumptions consistent with historical periods. When indicators of impairment are present, GAAP requires that the Company first compare expected future undiscounted cash flows by asset group to their respective carrying values. If the carrying amount exceeds the estimated undiscounted future cash flows, a reduction of the carrying amount of the properties to their estimated fair values is required. Additionally, if an exploratory well is determined not to have found proved reserves, the costs incurred, net of any salvage value, should be charged to expense.
During the three and nine months ended September 30, 2024 and 2023, no impairment was recorded.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.