Epsilon Energy secures new $47.5 million credit facility with Frost Bank

HOUSTON - Epsilon Energy Ltd. (NASDAQ:EPSN) announced Monday it has closed a new senior secured reserve-based revolving credit facility with Frost Bank as the administrative agent and Frost Bank and Texas Capital Bank as lenders. The company, currently valued at $108 million, maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 2.23.

The $47.5 million facility replaces Epsilon’s previous credit arrangement and has a four-year term maturing on October 8, 2029. According to the company’s press release, the borrowing base is expected to increase following the completion of Epsilon’s acquisition of the Peak companies, which is anticipated later in the fourth quarter of 2025.

The new credit facility features semi-annual redeterminations and charges interest on drawdowns at the 3-Month Term SOFR rate plus a margin of 3-4%, depending on facility utilization, payable quarterly.

Epsilon indicated that the facility will initially fund concurrently with the closing of its previously announced Peak companies acquisition. Proceeds will be used to repay Peak’s existing term loan, which is estimated to have a balance of $49.6 million at closing.

Andrew Williamson, Epsilon’s Chief Financial Officer, stated that the revised credit facility "adds commitment capacity and tenor and enables the Company to comfortably close the acquisitions announced in August while maintaining a strong balance sheet and liquidity going forward."

Epsilon Energy is a North American onshore natural gas and oil production and gathering company with assets across Pennsylvania, Texas, Alberta, New Mexico, and Oklahoma.

The company has filed the complete loan agreement details in a Form 8K following the announcement.

In other recent news, Epsilon Energy Ltd. reported its second-quarter 2025 earnings, showing a notable shortfall in both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of $0.07, which was below the anticipated $0.11, while revenue reached $11.62 million, slightly under the expected $11.8 million. Additionally, Epsilon Energy announced that its Board of Directors declared a quarterly dividend of $0.0625 per share of common stock, translating to an annualized dividend of $0.25 per share. This dividend will be payable on September 30, 2025, to shareholders recorded by September 15, 2025. These recent developments provide investors with key insights into Epsilon Energy’s current financial standing and shareholder returns.

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