Epsilon Energy Ltd.
For the period ended Mar 31, 2025. Filed May 14, 2025.
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Mar 31, 2025 · Filed May 14, 2025
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Derivative Transactions
The Company has entered into hedging arrangements to reduce the impact of commodity price volatility on operations. By reducing the price volatility from a portion of natural gas and crude oil production, the potential effects of changing prices on operating cash flows have been partially mitigated, but not eliminated. While mitigating the negative effects of falling commodity prices, these derivative contracts also limit the benefits we might otherwise receive from increases in commodity prices.
At March 31, 2025, Epsilon’s outstanding natural gas and crude oil commodity contracts consisted of the following:
| · · · · · · · · | |||||||
|---|---|---|---|---|---|---|---|
| | | | | Weighted Average | | | |
| · · Volume · · Price ($/MMbtu) · · Fair Value of Asset | |||||||
| Derivative Type · (MMbtu) · Swaps · March 31, 2025 | |||||||
| 2025 · · · · · · · · | |||||||
| NYMEX Henry Hub swap | 1,564,000 | | $3.21 | $(1,872,793) | |||
| Tennessee Z4 basis swap | 1,564,000 | | | (0.95) | | 250,785 | |
| | 3,128,000 | | | | | $(1,622,008) | |
| · · · · · · · · | ||||||
|---|---|---|---|---|---|---|
| | | | | | | Fair Value |
| | | Volume | | Weighted Average | | March 31, |
| Derivative Type · (Bbl) · Price ($/Bbl) · 2025 | ||||||
| 2025 · · · · · · · · | ||||||
| Crude Oil NYMEX WTI CMA | 47,000 | | $71.17 | $87,333 | ||
| | 47,000 | | | | | $87,333 |
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