Epsilon Energy Reports Significant Correction to Second Quarter Adjusted Net Income
Epsilon Energy Ltd., a non-operator turned operator/non-operator hybrid, reported its second quarter 2026 financial and operating results. The company's adjusted net income was -$815 million, down from $1,578 million in Q2 2025.
The reason for the correction is the recategorization of sale proceeds from asset sales during the quarter from Other Income to Gain on Asset Sales, to be consistent with the Company’s definition of adjusted net income. The company's production was impacted by planned suction pressure increase in the Auburn Gas Gathering System and field optimization activities.
Despite these challenges, Epsilon's CEO Jason Stabell expressed confidence in the company's ability to provide production and capital expenditure guidance for the first time. At the midpoint of its guidance, Epsilon expects full-year oil production of approximately 1,800 barrels per day and third-quarter oil production growth of over 25% sequentially.
The company's capital expenditures were $8.5 million for the quarter ended June 30, 2026. Epsilon successfully completed two gross (0.7 net) Niobrara DUCs in the Powder River Basin in early July and participated in the drilling of five gross (0.4 net) wells in the Marcellus in April.
In Q3 2026, the company plans to drill three gross (2.1 net) Parkman wells in the Powder River Basin and facilities build-out in preparation for future production. Epsilon's capital program for the second half of 2026 includes drilling and completion of these wells and facilities build-out.