The following is a summary of the Epsilon Energy Ltd. (EPSN) Q3 2024 Earnings Call Transcript:
Financial Performance:
Epsilon Energy reported a 19% quarter-over-quarter oil production growth driven by the online activation of the seventh Ector well in the Permian.
In contrast, they forecast quarter-over-quarter declines in liquids production until drilling resumes next year.
Reported a low realized price of $1.54 per Mcf in Pennsylvania and an increase in operating costs by about 40% due to plugging and abandonment activities.EBITDA from the Permian contributed approximately $8.5 million, about 70% of the total company's figure.
Business Progress:
Announced entry into Alberta, Canada through two joint ventures, focusing initial development on the Garrington area with operations starting fourth quarter of this year.
Plans to drill four gross wells in 2025 in Alberta.
Continued development in the Permian Basin, despite operational delays, and plans in Pennsylvania for lifting curtailments and bringing deferred wells back online.
Opportunities:
The expansion into Alberta, Canada represents a significant opportunity due to a favorable cost structure, royalty regime, and a large set of liquid-focused development opportunities.
There is potential for additional investments, particularly in Canada, aligning with the company's strategy to expand international presence and diversify operations.
Risks:
Forecasted declines in liquid production until further drilling activity resumes next year, emphasizing potential operational delays and impact on production volumes.
Continuous low wellhead prices in Pennsylvania impacting revenue negatively.
Uncertainty surrounding the lifting of production curtailments and the timeline for bringing deferred wells back online.
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.
