Epsilon Energy: Newly Acquired Powder River Basin Assets Meaningfully Increases Leverage

2025-11-26 18:55:01 ET

Intro

Epsilon Energy Ltd. (EPSN) is an onshore oil and gas company operating in Oklahoma, Pennsylvania, New Mexico, and Texas. We wrote about it back in March of this year, when we decided to take a cautious stance as opposed to our bullish recommendation in the previous year. Our downgrade to a 'Hold' mainly stemmed from the company's overhanging valuation (specifically the price of Epsilon's earnings) at the time. The downgrade ended up being the right call, as shares have lost approximately 34% of their value over the past eight months. In fact, as we consult EPSN's intermediate chart, we see that the breakout above the 2022 highs only lasted temporarily before turning over (the Stock topped out in June) into a sustained pattern of lower highs and lower lows. Epsilon stock has come up against some downside support in recent sessions, which has stabilized matters somewhat for the time being. Considering Epsilon's mere $127 million market cap, however, elevated near-term risk remains that we may see lower prices, which recent trends seem to be pointing to....

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