Epsilon Energy Ltd.
For the period ended Mar 31, 2025. Filed May 14, 2025.
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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.
Mar 31, 2025 · Filed May 14, 2025
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5. Property and Equipment
The following table summarizes the Company’s property and equipment as of March 31, 2025 and December 31, 2024:
| | | | | | | |
|---|---|---|---|---|---|---|
| · March 31, · December 31, | ||||||
| · · 2025 · · 2024 | ||||||
| Property and equipment: | | | | | | |
| Oil and gas properties, successful efforts method | | | | | | |
| Proved properties | | $194,811,616 | | $191,879,210 | ||
| Unproved properties | | | 33,425,087 | | | 28,364,186 |
| Accumulated depletion, depreciation, amortization and impairment | | | (126,370,072) | | | (123,281,395) |
| Total oil and gas properties, net | | | 101,866,631 | | | 96,962,001 |
| Gathering system | | | 43,176,418 | | | 43,116,371 |
| Accumulated depletion, depreciation, amortization and impairment | | | (36,777,152) | | | (36,449,511) |
| Total gathering system, net | | | 6,399,266 | | | 6,666,860 |
| Land | | | 637,764 | | | 637,764 |
| Buildings and other property and equipment, net | | | 246,894 | | | 259,335 |
| Total property and equipment, net | | $109,150,555 | | $104,525,960 | ||
Asset Acquisitions
During the three months ended March 31, 2025, Epsilon hadno asset acquisitions.
During the three months ended March 31, 2024, Epsilon acquired assets that included the following:
| ● | a 25% working interest in three producing wells located in Ector County, Texas. |
| ● | a 25% working interest in 3,246 gross undeveloped acres in Ector County, Texas. |
| ● | total consideration paid of $14.8 million consisting of |
| (i) | $12.1 million for the producing wells and |
| (ii) | $2.7 million for the undeveloped acreage. |
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 acquisition was accounted for as an asset acquisition.
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 value 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 months ended March 31, 2025, Epsilon recorded an impairment of $0.01 million forone well drilled during 2024 that was deemed non-commercial. During the three months ended March 31, 2024, no impairment was recorded. For the year ended December 31, 2024, the Company had $0.53 million of impairment reflected in proved properties on the Consolidated Balance Sheets. To be consistent with the current presentation, the prior year impairment
has been reclassed to accumulated depletion, depreciation, amortization and impairment on the Consolidated Balance Sheets.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.