What changed in this filing

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Item 1. Business

2026-03-27 compared with 2025-03-19 · 122 added, 87 removed, 222 unchanged (48% of the section changed)

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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, 2024, Epsilon’s total estimated net proved reserves were 69,401 million cubic feet of natural gas reserves, 876,808 barrels of NGL reserves, and 1,572,465 barrels of oil and other liquids.

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 Marcellus Shale in Pennsylvania;

oil, natural gas liquids and natural gas production in the Permian Basin in Texas and New Mexico, the NW Anadarko Basin in Oklahoma;

and oil production in the Western Canadian Sedimentary Basin in Alberta, Canada.

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;

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Dewey Energy GP LLC, a Delaware limited liability company;

Dewey Energy Holdings 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 (4,807 net) is dedicated to the Auburn Gas Gathering System, or the 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.

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.

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Our registered office in Alberta, Canada is located at 14505 Bannister Road SE, Suite 300, Calgary, AB, Canada T2X 3J3.

Business highlights of 2024

Operational Highlights

Marcellus Shale—Pennsylvania

● During the year ended December 31, 2024, Epsilon’s realized natural gas price was $1.80 per Mcf, excluding the impact of hedges, a 4% increase from $1.74 for the year ended December 31, 2023.

● Total natural gas sales for the year ended December 31, 2024 were 5.7 Bcf, a 28% decrease from the 7.9 Bcf for the year ended December 31, 2023, driven by curtailed production volumes.

Operational Highlights of 2025

Appalachian Basin—Pennsylvania

● During the year ended December 31, 2025, Epsilon’s realized natural gas price was $2.98 per Mcf,

excluding the impact of hedges, a 66% increase from $1.80 for the year ended December 31, 2024.

● Total natural gas sales for the year ended December 31, 2025 were 9.4 Bcf, a 65% increase from the 5.7 Bcf sold for the year ended December 31, 2024, driven by new wells and curtailed wells returning to production.

● Gathered and delivered 40.5 Bcf gross (14.2 Bcf net to Epsilon’s interest) during the year, or 111 MMcf/d through the Auburn GGS.

● We participated in the drilling of 3 gross (0.04 net) and the completion of 10 gross (0.82 net) Marcellus wells in 2024.

Three completed wells went into production in October 2024.

● At year end, the Company had 7 gross (0.27 net) wells waiting to turn on line.

● In 2025, 4 gross (0.24 net) wells were turned on line in January 2025 and 3 gross (0.04) wells were turned on line in March 2025.

Permian Basin—Texas and New Mexico

● During the year ended December 31, 2024, Epsilon’s realized price for all Permian Basin production was $53.52 per BOE, excluding the impact of hedges, a 2% increase from the $52.49 for the year ended December 31, 2023 .

● Total sales for the year ended December 31, 2024, including oil, natural gas, and other liquids, were 259 MBOE, a 242% increase from the 75.7 MBOE for the year ended December 31, 2023.

● In 2024, the Company acquired a 25% working interest in three producing wells and 3,246 gross undeveloped acres in Ector County, Texas.

● During the year ended December 31, 2025, Epsilon’s realized price for all Permian Basin production was $49.19 per Boe, excluding the impact of hedges, an 8% decrease from the $53.52 per Boe for the year ended December 31, 2024 .

● Total sales for the year ended December 31, 2025, including oil, natural gas, and natural gas liquids, were 212 Mboe, an 18% decrease from the 259 MBoe sold for the year ended December 31, 2024.

● In 2025, the Company participated in the drilling and completion of 1 gross (0.25 net) wells in Texas.

These wells went into production in May 2024 and July 2024.

Anadarko, NW STACK Trend—Oklahoma

● During the year ended December 31, 2024, Epsilon’s realized price for all Oklahoma production was $4.34 per Mcfe, excluding the impact of hedges, a 19% decrease from $5.35 for the year ended December 31, 2023.

● Total sales for the year ended December 31, 2024, including natural gas, oil, and other liquids, were 0.41 Bcfe, a 32% decrease from 0.60 Bcfe for the year ended December 31, 2023.

This well went into production in July 2025.

Anadarko Basin—Oklahoma

● During the year ended December 31, 2025, Epsilon’s realized price for all Oklahoma production was $4.33 per Mcfe, excluding the impact of hedges, a 0.2% decrease from $4.34 realized for the year ended December 31, 2024.

● Total sales for the year ended December 31, 2025, including oil, natural gas, and natural gas liquids, were 0.34 Bcfe, a 17% decrease from 0.41 Bcfe sold for the year ended December 31, 2024.

● In 2025, there was no development activity in Oklahoma.

The Company sold all of its assets in the Anadarko Basin in December 2025.

Powder River Basin—Wyoming

● The Powder River Basin assets were acquired on November 14, 2025.

● During the period ended December 31, 2025, Epsilon’s realized price for all Wyoming production was $36.91 per Boe, excluding the impact of hedges.

● Total sales for the period ended December 31, 2025, including oil, natural gas, and natural gas liquids, were 108.5 MBoe.

Western Canadian Sedimentary Basin—Alberta, Canada

● During the year ended December 31, 2024, Epsilon’s realized price for Canada oil production was $46.04 per Bbl.

● Total oil sales for the year ended December 31, 2024 were 2.5 M Bbl.

● In 2024, the Company participated in the drilling of 4 gross (1.5 net) wells in Canada.

One well went into production in September 2024.

As of December 31, 2024, one well was deemed non-commercial, one well was still being drilled, and one well was waiting on completion.

As of December 31, 2024, Epsilon’s 102,506 gross (23,602 net) acres are located in the United States and Canada and include 368 gross (37.90 net) wells.

● During the year ended December 31, 2025, Epsilon’s realized price for all Canada production was $36.07 per Boe, excluding the impact of hedges, a 22% decrease from the $46.07 per Boe realized for the year ended December 31, 2024.

● Total sales for the year ended December 31, 2025, including oil, natural gas, and natural gas liquids, were 27.4 MBoe , a 996% increase from 2.5 MBoe sold for the year ended December 31, 2024.

● In 2025, the Company participated in the completion of 2 gross (0.5 net) wells in Canada.

The two wells turned on line in March 2025.

As of December 31, 2025, Epsilon’s 101,265 gross (54,044 net) acres are located in the United States and Canada

and include 540 gross (90.69 net) wells.

Of these wells, 105 gross (45 net) wells are operated.

Producing Wells

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Non-Producing Wells

As of December 31, 2024, our leasehold inventory consisted of the following acreage amounts, rounded to the

nearest acre:

As of December 31, 2025, our leasehold inventory consisted of the following acreage amounts, rounded to the nearest acre:

Developed Acres

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Interest in a natural gas gathering system.

For information about our segment’s revenues, profits and losses, total assets, and total liabilities, see Note 14 “Operating Segments” in the Notes to Consolidated Financial Statements.

For information about our segment’s revenues, profits and losses, total capital expenditures, and total assets, see Note 14 “Operating Segments” in the Notes to Consolidated Financial Statements.

Oil and Natural Gas Production and Revenues and Gathering System Revenues

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Natural gas liquids (MBoe)

Oil & other liquids (MBbl)

Total (MMcfe)

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Natural gas liquids (MBoe)

Oil & other liquids (MBbl)

Total (MMcfe)

Oil & other liquids (MBbl)

Natural gas (MMcf)

Natural gas liquids (MBoe)

Total (MMcfe)

Natural gas (MMcf)

Natural gas liquids (MBoe)

Total (MMcfe)

Company Total

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Natural gas liquids (MBoe)

Oil & other liquids (MBbl)

Total (MMcfe)

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Total OK Revenues

Natural gas revenue

Price ($/Mcf)

Natural gas liquids revenue

Price ($/Bbl)

Oil and condensate revenue

Price ($/Bbl)

Total WY Revenues

Natural gas revenue

Price ($/Mcf)

Natural gas liquids revenue

Price ($/Bbl)

Oil and condensate revenue

Price ($/Bbl)

Total Canada Revenues

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Epsilon Energy USA is the 100% owner of Epsilon Midstream, which owns a 35% undivided interest in the Auburn GGS, located in Susquehanna County, Pennsylvania, with partners Appalachia Midstream Services, LLC (43.875%) and Equinor Pipelines, LLC (21.125%).

The Anchor Shippers, consisting of Epsilon Energy USA, Equinor USA Onshore Properties, Inc., and Expand Energy Corporation, dedicated approximately 18,000 mineral acres to the Auburn GGS on January 1, 2012 for an initial term of 15 years under an Anchor Shopper Gas Gathering Agreement for Northern Pennsylvania whereby the Auburn GGS owners receive a fixed percentage rate of return on the total capital invested in the construction of the system.

On May 17, 2024, Epsilon Energy USA, Inc.

(“Epsilon”) executed a new Anchor Shipper Gas Gathering Agreement for Northern Pennsylvania (the “ASGGA”) with operator Appalachia Midstream Services, LLC for a primary term of ten years and an effective date of January 1, 2024.

Epsilon simultaneously terminated the prior agreement.

The Anchor Shippers, consisting of Epsilon Energy USA, Equinor USA Onshore Properties, Inc., and Expand Energy Corporation, dedicated approximately 18,000 mineral acres to the Auburn GGS on January 1, 2012 for an initial term of 15 years under an Anchor Shipper Gas Gathering Agreement for northern Pennsylvania whereby the Auburn GGS owners received a fixed percentage rate of return on the total capital invested in the construction of the system.

On May 17, 2024, Epsilon Energy USA executed a new Anchor Shipper Gas Gathering Agreement for northern Pennsylvania (the “ASGGA”) with operator Appalachia Midstream Services, LLC for a primary term of ten years and an

effective date of January 1, 2024.

Epsilon Energy USA simultaneously terminated the prior agreement.

The new ASGGA establishes fixed gathering, compression and cross-flow rates for all shippers on each system into which Epsilon produces natural gas.

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The relative mix of Anchor Shipper gas and cross-flow gas is critical to the revenue and earnings of the Auburn GGS because the cross-flow gathering rate is only 25% of the Anchor Shipper rate.

Shippers cross-flowing gas must pay

the gathering rate of the originating gathering system plus 25% of the Auburn GGS gathering rate.

Shippers cross-flowing gas must pay the gathering rate of the originating gathering system plus 25% of the Auburn GGS gathering rate.

The purpose of the reduced rate is to attract additional volumes that require delivery to Tennessee Gas Pipeline when there is spare capacity at the Auburn compression facility, or the “Auburn CF”.

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This request served to minimize throughput decline during a period of low pricing in which the drilling of new wells was undesirable.

The design suction pressure at the Auburn compression facility was reduced further from 550 psig to 450 psig in January 2025.

The design suction pressure at the Auburn compression facility was reduced further from 550 psig to 450 psig in January 2025 and from 450 psig to 400 psig in December 2025.

Operating at the lower design suction pressure has the benefit of reducing hydrate occurrences in the system which can pose an operational hazard.

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The Auburn GGS is connected with the adjacent Rome GGS, which allows for the receipt of additional natural gas to maximize utilization of the Auburn CF and Tennessee Gas Pipeline meter capacity.

During the years ended December 31, 2024 and 2023, the Auburn GGS delivered 36.9 Bcf and 66.2 Bcf respectively, of natural gas, or 101 and 181 MMcf per day.

Gathering system revenues derived from Epsilon’s production, which have been eliminated from total gathering system revenues (“elimination entry”), amounted to $1.1 million and $1.4 million, respectively, for the years ended December 31, 2024 and 2023.

During the years ended December 31, 2025 and 2024, the Auburn GGS delivered 40.5 Bcf and 36.9 Bcf respectively, of natural gas, or 111,000 Mcf per day and 101,000 Mcf per day.

Gathering system revenues derived from Epsilon’s production, which have been eliminated from total gathering system revenues (“elimination entry”), amounted to $1.9 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively.

Proved Reserves

Per our reserve report prepared by independent petroleum consultants, DeGolyer and MacNaughton, our estimated proved reserves as of December 31, 2024, are summarized in the table below.

Per our reserve reports prepared by independent petroleum consultants, DeGolyer and MacNaughton and Cawley, Gillespie & Associates (Powder River Basin assets only), our estimated proved reserves as of December 31, 2025, are summarized in the table below.

See Risk Factors for information relating to the uncertainties surrounding these reserve categories.

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Proved undeveloped reserves at December 31, 2025

Revisions to previous estimates for total proved undeveloped reserves for 2024 include additions of 10,244 MMcfe related to changes to the previously adopted development plan and reductions of 182 MMcfe related to well performance and reductions of 61 MMcfe related to commodity pricing.

Acquisitions of 6,268 MMcfe relates to acreage acquired in Texas.

Transfers to proved developed of 16,625 MMcfe relates to the development of wells in Pennsylvania and the Permian Basin.

Revisions to previous estimates for total proved undeveloped reserves for 2025 include reductions of 6,340 MMcfe related to changes to the previously adopted development plan and reductions of 269 MMcfe related to technical revisions and reductions of 19 MMcfe related to commodity pricing.

Acquisitions of 38,041 MMcfe relate to reserves acquired in Wyoming from the Peak acquisition.

Divestitures of 2,715 MMcfe relate to the selling of all interests in Oklahoma.

Transfers to Proved Developed Reserves of 1,330 MMcfe relates to the development of wells in the Permian Basin.

Our development capital spending to convert Proved Undeveloped Reserves to Proved Developed Reserves for the periods indicated is as follows:

● In 2025 in Pennsylvania, 4 gross (0.24) wells were turned on line in January 2025 and 3 gross (0.04) wells were turned on line in March 2025.

● In 2024 in Pennsylvania, we drilled 3 gross (0.04 net) wells and participated in the completion of 10 gross (0.82 net) wells.

The three wells turned online in October 2024.

● In 2023 in Pennsylvania, we drilled 7 gross (0.74 net) wells and completed 2 gross (0.02 net) wells.

The two wells turned online in January 2023.

● In 2024 in the Permian Basin, the Company participated in the drilling and completion of 2 gross (0.5 net) wells.

These wells went into production in Texas in May 2024 and July 2024.

The three wells turned on line in October 2024.

● In 2025 in the Permian Basin, the Company participated in the drilling and completion of 1 gross (.25 net) well.

This well went into production in Texas in July 2025.

● In 2024 in the Permian Basin, the Company participated in the drilling and completion of 2 gross (0.5 net) wells.

These wells went into production in April 2023 (1 – New Mexico), May 2023 (1 – New Mexico) and October 2023 (2 – Texas).

● In 2024 in Oklahoma, there was no development activity.

● In 2023 in Oklahoma, we completed 1 gross (0.11 net) well.

(Net development capital $0.7 million).

The well turned online in May 2023.

These wells went into production in May 2024 and July 2024.

● In 2025 in Canada, we participated in the completion of 2 gross (0.5 net) wells.

The two wells turned on line in March 2025.

● In 2024 in Canada, we participated in the drilling and completion of 2 gross (0.5 net) wells.

One well was put on production in September 2024.

One well was deemed non-commercial.

● In 2025 and 2024 in Oklahoma, there was no development activity.

The Company sold all of its assets in Oklahoma in December 2025.

Internal Controls Over Reserves Estimation Process and Qualifications of Technical Persons with Oversight for the Company’s Overall Reserve Estimation Process

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Our Chief Operating Officer holds a Bachelor of Science degree in Petroleum Engineering and received a Master’s Degree of Business Administration.

He has over 30 years of experience in upstream exploration and production, and has managed all phases of drilling, completions, production and field operations.

The reserve information in this report is based on estimates prepared by DeGolyer and MacNaughton, our independent petroleum consultants.

He has over 30 years of

experience in upstream exploration and production, and has managed all phases of drilling, completions, production and field operations.

The reserve information in this report is based on estimates prepared by DeGolyer and MacNaughton and Cawley, Gillespie & Associates, our independent petroleum consultants.

Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principles and techniques that are in accordance with the reserves definitions of Rules 4-10(a) (1)-(32) of Regulation S-X of the SEC and with practices generally recognized by the petroleum industry as presented in the publication of the Society of Petroleum Engineers entitled “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (revised June 2019) Approved by the SPE Board on 25 June 2019” and in Monograph 3 and Monograph 4 published by the Society of Petroleum Evaluation Engineers.

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These analyses were performed for all well groupings (or type-curve areas).

The person responsible for preparing the reserve report, Dilhan Ilk, is a Registered Professional Engineer (No.139334) in the State of Texas and a Senior Vice President of the firm.

The person responsible for preparing the DeGolyer and MacNaughton reserve report, Dilhan Ilk, is a Registered Professional Engineer (No.139334) in the State of Texas and a Senior Vice President of the firm.

Ilk graduated from Texas A&M University with a Doctor in Philosophy degree in Petroleum Engineering, is a member of the Society of Petroleum Engineers, and has in excess of 15 years of experience in oil and gas reservoir studies and reserves evaluations.

Cawley Gillespie & Associates is a Texas Registered Engineering Firm (F-693), made up of independent registered professional engineers and geologists that have provided petroleum consulting services to the oil and gas industry for over 60 years.

The lead evaluator that prepared the reserve report was Zane Meekins, P.E., Executive Vice President at Cawley Gillespie.

Meekins has been with Cawley Gillespie since 1989 and graduated from Texas A&M University in 1987 with a Bachelor of Science degree in Petroleum Engineering.

Meekins is a State of Texas registered professional engineer (License #71055) and a member of the Society of Petroleum Evaluation Engineers and the Society of Petroleum Engineers.

Meekins meets or exceeds the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers.

Meekins is proficient in judiciously applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserves definitions and guidelines.

Marketing and Major Customers

Natural gas marketing is competitive in northeast Pennsylvania because of the limited interstate transportation

capacity and ample natural gas supply.

Natural gas marketing is competitive in northeast Pennsylvania because of the limited interstate transportation capacity and ample natural gas supply.

We do not currently own any firm transportation on interstate pipelines that would enable us to diversify our natural gas sales to downstream locations.

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Direct Energy Business Marketing, LLC and EQT Energy, LLC each accounted for 10% or more of our total revenue.

In Wyoming, for our operated oil and gas production, two customers accounted for 95.7% of our total revenues.

Geographic Locations of Operations

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Approximately 19% and 40% of our revenue during fiscal years 2025 and 2024, respectively, was derived from oil, natural gas, and natural gas liquids revenues in the state of Texas.

Epsilon’s management expects to continue to seek opportunities in other North American basins to provide the Company the flexibility to respond to market conditions by allocating capital across multiple basins and commodities.

As a result of the geographic concentration, we may be disproportionately exposed to the effect of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, weather events or interruption of the processing or transportation of crude oil or natural gas.

In November 2025, the Company completed the acquisition of oil and gas assets in the Powder River Basin, Wyoming which will materially increase the geographic diversification of our revenues going forward and could provide enhanced flexibility to respond to market conditions by allocating capital across multiple basins and commodities.

However, the Company is still subject to geographic concentration, and we may be disproportionately exposed to the effect of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, weather events or interruption of the processing or transportation of crude oil or natural gas.

It is not uncommon in the oil and natural gas industry to experience shortages of drilling and completion rigs, equipment, pipe, services, and personnel, which can cause both delays in development drilling activities and significant cost increases.

We are exposed to the risk of industry competition for drilling rigs, completion rigs and availability of related equipment and services, among other goods and services required in our business.

As of December 31, 2024, we had ten full-time employees (including executive officers) in Houston, Texas.

As of December 31, 2025, we had twenty-seven full-time employees (including executive officers) in Texas, Colorado, and Wyoming.

None of our employees are subject to a collective bargaining agreement or represented by a union.

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Numerous governmental agencies, such as the U.S.

Environmental Protection Agency, or the EPA, issue regulations to implement and enforce such laws, which often require difficult and costly compliance measures that

carry substantial administrative, civil and criminal penalties or that may result in injunctive relief for failure to comply.

Environmental Protection Agency (“EPA”), or the Bureau of Land Management (“BLM”) issue regulations to implement and enforce such laws, which often require difficult and costly compliance measures that carry substantial administrative, civil and criminal penalties or that may result in injunctive relief for failure to comply.

These laws and regulations may:

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In the United States, federal proposals are rooted in the EPA’s “endangerment finding,” that was upheld by the Supreme Court.

Simply, EPA has concluded that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment.

Simply, the EPA has concluded that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment.

For example, the EPA adopted regulations that require Prevention of Significant Deterioration (“PSD”) construction under Title V operating permit reviews for GHG emissions from certain large stationary sources that constitute major sources of emissions.

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However, on January 20, 2021, President Biden issued an Executive Order directing EPA to consider suspending, revising or rescinding the September 15, 2020 amendments and also to consider proposing new regulations governing methane and volatile organic compound emissions from existing oil and gas sector operations.

In November 2016, the Bureau of Land Management (“BLM”) published a final rule to reduce methane emissions

by regulating venting, flaring, and leaking from oil and natural gas operations on public lands.

In November 2016, the BLM published a final rule to reduce methane emissions by regulating venting, flaring, and leaking from oil and natural gas operations on public lands.

A federal district court vacated much of that rule in October 2020 and that decision is now subject to an appeal.

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Ultimately, this could make it more difficult to secure funding for exploration and production or midstream activities.

Epsilon is unable to predict the timing, scope and effect of any currently proposed or future, laws, regulations or treaties regarding climate change and GHG emissions.

Epsilon is unable to predict the timing, scope and effect of any currently proposed or future, laws, regulations or

treaties regarding climate change and GHG emissions.

Any limits on GHG emissions, however, could adversely affect demand for the oil and natural gas that production operators produce, some of whom are our customers, which could thereby reduce demand for our gas gathering services.

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The Department of the Interior had released final regulations governing hydraulic fracturing on federal and Native American oil and natural gas leases which require lessees to file for approval of well stimulation work before commencement of operations and require well operators to disclose the trade names and purposes of additives used in the fracturing fluids.

However, in December 2017, the Bureau of Land Management published a final rule rescinding the March 26, 2015 rule (“BLM 2015 Rule”), entitled “Natural gas and oil;

However, in December 2017, the BLM published a final rule rescinding the March 26, 2015 rule (“BLM 2015 Rule”), entitled “Natural gas and oil;

Hydraulic Fracturing on Federal and Indian Lands.” The primary purposes of the BLM 2015 Rule were to ensure that wells were constructed so as to protect water supplies, to ensure environmentally responsible management of fluids displaced by fracturing, and to provide public disclosure of chemicals used in fracturing operations.

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The FERC regulates interstate natural gas transportation rates, terms and conditions of service, which affects the marketing of natural gas produced by Epsilon, as well as the revenues received for sales of Epsilon’s natural gas.

The transportation and sale for resale of natural gas in interstate commerce is regulated primarily under the

Natural Gas Act, or the NGA, and by regulations and orders promulgated under the NGA by the FERC.

The transportation and sale for resale of natural gas in interstate commerce is regulated primarily under the Natural Gas Act, or the NGA, and by regulations and orders promulgated under the NGA by the FERC.

In certain limited circumstances, intrastate transportation, gathering, and wholesale sales of natural gas may also be affected directly or indirectly by laws enacted by the U.S.

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Epsilon made aggregate quarterly distributions of $6.0 million ($0.25 per share) during the year ended December 31, 2025.

The dividend is well supported and the Company intends to maintain it going forward.

The dividend is well supported and the Company intends to maintain it going forward, subject to quarterly approval by the Board.

Securities Authorized for Issuance under Equity Incentive Plans.

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As of that date, we had 1,859,363 common shares granted under the 2020 Plan.

December 31, 2024

December 31, 2023

Balance at beginning of period

Expired/Forfeited

Balance at period-end

Exercisable at period-end

For the years ended December 31, 2024 and 2023, we had no warrants or other common share related rights outstanding.

The following table sets out the number of time restricted common shares available to be issued upon vesting over the next three years and the changes during the year pursuant to our share compensation plans and the weighted average market price at date of issue for outstanding shares for the periods indicated:

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Balance non-vested Restricted Stock at end of period

The following table sets out the number of performance-based common shares available to be issued upon vesting over the next three years and the changes during the year pursuant to our share compensation plans and the weighted average market price at date of issue for outstanding shares for the periods indicated:

December 31, 2024

December 31, 2023

Balance non-vested Performance Shares at beginning of period

Balance non-vested Performance Shares at end of period

Recent Developments

Business Combination

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.

The acquired Proved Reserves include 16.8 Bcf of natural gas, 8.2 MMBbls of oil, and 2.0 MMBbls of natural gas liquids, according to the report by Cawley Gillespie & Associates as of December 31, 2025.

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.

On December 11, 2025, Epsilon divested Dewey Energy Holdings, LLC, a wholly owned subsidiary of the Company to an undisclosed private buyer for $2.5 million.

The assets sold included approximately 964 Mcfe/d (60% natural gas) of production (Q4 2025 figure) and approximately 6,400 net deep acres and 2,200 net shallow acres of leasehold, all located in Dewey County, Oklahoma.

Credit Facility

On October 10, 2025, the Company closed a new senior secured reserve based revolving credit facility with Frost Bank as administrative agent and Frost Bank and Texas Capital Bank as lenders.

This replaced the Company’s previous credit facility.

As of December 31, 2025, the borrowing base was $80 million, supported by the Company’s producing reserves and is subject to semi-annual redeterminations with a maturity date of October 10, 2029.

Interest will be charged at the 3-month Term SOFR rate plus a margin of 3-4% (depending on facility utilization), payable quarterly.

The facility is secured by the assets of the Company’s Epsilon Energy USA subsidiary.

During March 2026, the Company made a $5 million repayment on the outstanding credit facility.

The current balance as of March 25, 2026 is $45.5 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business