Overview

* Epsilon to acquire Peak entities, issuing 6 mln shares, assuming $49 mln debt

* Q2 revenue of $11.6 mln missed analyst expectations, adjusted EBITDA beat, per LSEG data

* Acquisition expected to be accretive to 2025/2026 Adjusted EBITDA and CFPS

Outlook

* Company expects acquisition to close in Q4 2025

* Epsilon sees acquisition accretive to 2025 and 2026 EBITDA

* Epsilon plans to leverage Powder River Basin assets for growth

Result Drivers

* PRODUCTION DECLINE - Q2 2025 total production decreased by 1% QoQ due to a 3% decline in oil production and a 50% drop in NGL production

* IMPAIRMENT CHARGE - Epsilon recorded a $2.7 mln impairment in Q2 due to cost overruns and lower-than-expected performance of recently drilled wells in Alberta

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Miss $11.60 $11.80

Revenue mln mln (1

Analyst)

Q2 EPS $0.07

Q2 Beat $7.40 $6.64

Adjusted bln mln (1

EBITDA Analyst)

Q2 Basic $0.07

EPS

Q2 Capex $4.03

bln

Analyst Coverage

* The one available analyst rating on the shares is "buy"

* The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

* Wall Street's median 12-month price target for Epsilon Energy Ltd ( EPSN ) is $8.40, about 24.3% above its August 12 closing price of $6.36

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)