Business Description

Summary Epsilon Energy Ltd. (the “Company” or “Epsilon” or “we”) was incorporated under the laws of the Province of Alberta, Canada on March 14, 2005, pursuant to the ABCA. The Company is extra-provincially registered in Ontario pursuant to the Business Corporations Act (Ontario). Epsilon is a North American on-shore focused independent natural gas and oil company engaged in the acquisition, development, gathering and production of natural gas and oil reserves. On February 14, 2019, Epsilon’s registration statement on Form 10 was declared effective by the United States Securities and Exchange Commission and on February 19, 2019, we began trading in the United States on the NASDAQ Global Market under the trading symbol “EPSN.” At December 31, 2025, Epsilon’s total estimated net proved reserves were 86.4 Bcf of natural gas reserves, 9.3 MMBbls of oil reserves, and 2.4 MMBbls of NGL reserves. Epsilon holds leasehold rights to approximately 101,265 gross (54,044 net) acres. The Company has natural gas production in the Appalachian Basin Pennsylvania and oil, natural gas liquids and natural gas production in the Powder River Basin in Wyoming, the Permian Basin in Texas and New Mexico, and the Western Canadian Sedimentary Basin in Alberta, Canada. On November 14, 2025, Epsilon acquired Peak Exploration & Production LLC and Peak BLM Lease LLC and their subsidiaries (together, “Peak”) for total consideration of $88.5 million consisting of 1) issuance of 5,681,489 common shares valued at $27.6 million, 2) contingent consideration of up to 2,500,000 common shares valued at $10.6 million, and the settlement of $50.3 million of debt. The contingent consideration was settled on November 19, 2025, through the issuance of 2,234,847 common shares for $10.6 million. The acquired assets primarily include operated and non-operated production and leasehold interests in the core of the Powder River Basin in Wyoming. As part of the acquisition, the Company added 17 full-time employees from Peak. ​ The results of operations attributable to the Peak acquisition have been included in the Company’s consolidated financial statements as of the closing date of the acquisition. We conduct operations in the United States through our wholly owned subsidiaries Epsilon Energy USA Inc., an Ohio corporation, or Epsilon Energy USA; Epsilon Midstream, LLC, a Pennsylvania limited liability company, or Epsilon Midstream; Epsilon Operating, LLC, a Delaware limited liability company; Dewey Energy GP LLC, a Delaware limited liability company; Peak Exploration & Production LLC, a Delaware limited liability company; Peak BLM Lease LLC, a Delaware limited liability company; Peak Powder River Resources, LLC, a Wyoming limited liability company (the licensed operator in the state of Wyoming); Peak Energy Operating #2, LLC, a Colorado limited liability company; Willow Springs Development, LLC, a Colorado limited liability company; Peak Powder River Acquisition, LLC, a Delaware limited liability company; and Altolisa Holdings, LLC, a Delaware limited liability company. Substantially all the Pennsylvania acreage (4,878 net) is dedicated to the Auburn Gas Gathering System (“Auburn GGS”) located in Susquehanna County, Pennsylvania for a 10-year term expiring in 2033 under an operating agreement whereby the Auburn GGS owners charge a fixed gathering and compression rate which is adjusted annually by the CPI-U All Urban Consumer Price Index published by the US Bureau of Labor Statistics. We own a 35% interest in the Auburn GGS which is operated by a subsidiary of Williams Partners, LP. In 2025, we paid $3.5 million (after elimination) to the Auburn GGS to gather and treat our 9.4 Bcf of natural gas production in Pennsylvania ($2.4 million after elimination was paid to the Auburn GGS to gather and treat our 5.7 Bcf in 2024), including the fees paid to our subsidiary, Epsilon Midstream. Our principal executive office is located at 500 Dallas Street, Suite 1250, Houston, Texas 77002, and our telephone number at that address is (281) 670-0002. Our registered office in Alberta, Canada is located at 14505 Bannister Road SE, Suite 300, Calgary, AB, Canada T2X 3J3.…