EPSN

New in FY2025

• If the oil and natural gas industry experiences low prices, we may, among other things, be unable to meet all our financial obligations or make planned expenditures.
• Substantial and extended declines in oil and natural gas prices may result in impairments of proved natural gas and oil properties or undeveloped acreage and may materially and adversely affect our future business, financial condition, cash flows, results of operations, liquidity or ability to finance planned capital expenditures.
• In accordance with applicable securities laws, the technical report on our oil and natural gas reserves prepared by DeGolyer and MacNaughton, independent petroleum consultants, as of December 31, 2025 and 2024 (“DeGolyer Reserve Report”), and the report by Cawley, Gillespie & Associates as of December 31, 2025 (“CGA Reserve Report”), used SEC guideline prices and cost estimates in calculating net cash flows from oil and natural gas reserve quantities included within the report.
• Actual production and revenues derived therefrom will vary from the estimates contained in the DeGolyer Reserve Report and CGA Reserve Report, and such variations could be material.
• The DeGolyer Reserve Report and the CGA Reserve Report are based in part on the assumed success of activities that we intend to undertake in future years.
• The oil and natural gas reserves and estimated cash flows to be derived therefrom contained in these reserve reports will be reduced to the extent that such activities do not achieve the level of success assumed in these reserve reports. ​ ​ Our future oil and natural gas reserves, production, and derived cash flows are highly dependent on our successfully acquiring or discovering and developing new reserves.
• We may be unable to obtain additional capital required to implement our business plan, which could restrict our ability to sustain or grow our business.
• During 2025 and 2024, there was tremendous volatility in prices and available financing for oil and gas projects.
• Additional capital raised through the issuance of common shares or other securities convertible into common shares may result in a change of control and dilution to shareholders.
• The borrowing base under our credit facility may be reduced in light of commodity price declines or reserve changes, which could limit us in the future.
• Lower commodity volumes and prices may reduce the amount of our borrowing base under our credit agreement, which is determined at the discretion of our lenders primarily based on the collateral value of our Proved Developed Reserves that have been mortgaged to the lenders, and is subject to semiannual redeterminations.
• Upon a redetermination, if borrowings in excess of the revised borrowing capacity were outstanding, we could be forced to immediately repay a portion of the debt outstanding. ​ ​ The terms of our revolving credit facility may restrict our operations, particularly our ability to respond to changes or to take certain actions.
• The agreement that governs our revolving credit facility contains covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long term best interest, including restrictions on our ability, subject to satisfaction of certain conditions, to incur additional indebtedness, sell assets, enter into transactions with affiliates, and enter into or refrain from entering into hedging contracts.
• Such a default may allow the creditors to accelerate the repayment of the outstanding indebtedness.
• In the event our lenders accelerate the repayment of our borrowings, we may not have sufficient resources to repay that indebtedness.
• The proceeds of any such sale would be applied to satisfy amounts owed to our lenders and other creditors, and only the remainder, if any, would be available to us.
• Future equity transactions could result in dilution to existing stockholders.
• Approximately 67% and 50% of our revenue during fiscal years 2025 and 2024, respectively, was derived from natural gas production and gathering system revenues in the state of Pennsylvania.
• 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.
• In November 2025, the Company completed the acquisition of oil and gas assets in the Powder River Basin, Wyoming which could provide the Company the 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 these areas 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.
• Approximately 50% of our oil and natural gas properties are operated by third-party operators.
• The failure of an operator of our wells to adequately perform operations, an operator’s breach of the applicable agreements or an operator’s failure to act in ways that are in our best interests could reduce our production and revenues from our assets or could increase costs or create liability for the operator’s failure to properly maintain the well and facilities and to adhere to applicable safety and environmental standards.
• Our success will depend in large measure on certain key personnel.
• Our involvement in the exploration for and development of oil and natural gas properties may result in our becoming subject to liability for pollution, blowouts, property damage, personal injury or other hazards.
• A sustained material decline in prices from historical average prices could reduce our borrowing base, thereby reducing the bank credit available to us, which could require that a portion, or all, of our bank debt be repaid. ​ ​ Hedging transactions may limit our potential gains or cause us to lose money.
• If this occurs, our revenue could be adversely affected due to the necessity of buying oil and natural gas at the current market rate in order to fulfill hedging sales obligations.
• Our ability to market our oil and natural gas may depend upon our ability to acquire space on pipelines that deliver crude oil and natural gas to commercial markets.
• This risk is somewhat mitigated in Pennsylvania by our 35% ownership of a gathering system in northeast Pennsylvania.
• We depend upon two significant purchasers for the sale of most of our oil and natural gas production in Wyoming.
• The loss of one or more of these purchasers could, among other factors, limit our access to suitable markets for the oil and natural gas we produce. ​ For year ended December 31, 2025, HF Sinclair Refining & Marketing LLC and WGR Operating, LP accounted for approximately 68.4% and 27.3% of our total revenues in Wyoming, respectively, excluding the impact of our commodity derivatives.
• No other purchaser accounted for more than 10% of our revenue during such periods.
• We do not have long term contracts with our purchasers but rather we sell the substantial majority of our production under arm’s length contracts with terms of 12 months or less, potentially including on a month-to-month basis, to a relatively small number of purchasers.
• We do not believe that the loss of a single purchaser would materially affect our business because there are numerous other potential purchasers in the area in which we sell our production.
• However, the loss of any one of these significant purchasers, our ability to sell our production to other purchasers on terms we consider acceptable, the inability or failure of our significant purchasers to meet their obligations to us or their insolvency or liquidation could have a short term impact on our financial condition and results of operations.
• We cannot assure you that any of our purchasers will continue to do business with us or that we will continue to have ready access to suitable markets for our future production. ​ Investor sentiment towards climate change, fossil fuels, and sustainability could adversely affect our business and our share price.
• In Wyoming, we conduct oil and natural gas exploration, development and production activities on federal lands, including lands administered by the BLM and in some cases, United States Forest Service.
• Operations on federal lands are frequently subject to permitting delays.
• Operations on these lands are also subject to the National Environmental Policy Act ("NEPA”) which requires federal agencies, including the BLM, to evaluate major agency actions having the potential to significantly impact the environment.
• In the course of such evaluations, an agency will prepare an Environmental Assessment that assesses the potential direct, indirect and cumulative impacts of a proposed project and, if necessary, will prepare a more detailed Environmental Impact Statement that may be made available for public review and comment.

and 16 more.

Gone since FY2024

• If the oil and natural gas industry continues to experience low prices, we may, among other things, be unable to meet all our financial obligations or make planned expenditures. ​ ​ Substantial and extended declines in oil and natural gas prices may result in impairments of proved natural gas and oil properties or undeveloped acreage and may materially and adversely affect our future business, financial condition, cash flows, results of operations, liquidity or ability to finance planned capital expenditures.
• In accordance with applicable securities laws, the technical report on our oil and natural gas reserves prepared by DeGolyer and MacNaughton, independent petroleum consultants, as of December 31, 2024 and 2023, or the DeGolyer Reserve Report, used SEC guideline prices and cost estimates in calculating net cash flows from oil and natural gas reserve quantities included within the report.
• Actual production and revenues derived therefrom will vary from the estimates contained in the DeGolyer Reserve Report, and such variations could be material.
• The DeGolyer Reserve Report is based in part on the assumed success of activities that we intend to undertake in future years.
• The oil and natural gas reserves and estimated cash flows to be derived therefrom contained in the DeGolyer Reserve Report will be reduced to the extent that such activities do not achieve the level of success assumed in the DeGolyer Reserve Report.
• Our future oil and natural gas reserves, production, and derived cash flows are highly dependent on our successfully acquiring or discovering and developing new reserves.
• We may be unable to obtain additional capital required to implement our business plan, which could restrict our ability to grow.
• During 2024 and 2023, there was tremendous volatility in prices and available financing for oil and gas projects.
• Additional capital raised through the issuance of common shares or other securities convertible into common shares may result in a change of control of us and dilution to shareholders.
• The borrowing base under our credit facility may be reduced in light of commodity price declines, which could limit us in the future.
• Lower commodity volumes and prices may reduce the amount of our borrowing base under our credit agreement, which is determined at the discretion of our lenders based on the collateral value of our proved reserves that have been mortgaged to the lenders, and is subject to twice yearly redeterminations, as well as special redeterminations described in the credit agreement.
• Upon a redetermination, if borrowings in excess of the revised borrowing capacity were outstanding, we could be forced to immediately repay a portion of the debt outstanding under our credit agreement.
• In addition, we may be unable to access the equity or debt capital markets to meet our obligations, including any such debt repayment obligations.
• The terms of our revolving credit facility may restrict our operations, particularly our ability to respond to changes or to take certain actions.
• The contract that governs our revolving credit facility contains covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability, subject to satisfaction of certain conditions, to incur additional indebtedness, sell assets, enter into transactions with affiliates, and enter into or refrain from entering into hedging contracts.
• Such a default may allow the creditors to accelerate the related debt.
• In the event our lenders accelerate the repayment of our borrowings, we may not have sufficient assets to repay that indebtedness.
• The proceeds of any such sale would be applied to satisfy amounts owed to our lenders and other creditors, and only the remainder, if any, would be available to us. ​ ​ Future equity transactions could result in dilution to existing stockholders.
• Approximately 50% and 77% of our revenue during fiscal years 2024 and 2023, respectively, was derived from natural gas production and gathering system revenues in the state of Pennsylvania.
• Approximately 40% and 6% of our revenue during fiscal years 2024 and 2023, 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 this 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.
• Approximately 99% of our oil and natural gas properties are operated by third-party operators.
• The failure of an operator of our wells to adequately perform operations, an operator’s breach of the applicable agreements or an operator’s failure to act in ways that are in our best interests could reduce our production and revenues from our assets or could increase costs or create liability for the operator’s failure to properly maintain the well and facilities and to adhere to applicable safety and environmental standards. ​ ​ In addition to the operator, our success will depend in large measure on certain key personnel.
• Our involvement in the exploration for and development of oil and natural gas properties may result in our becoming subject to liability for pollution, blow outs, property damage, personal injury or other hazards.
• A sustained material decline in prices from historical average prices could reduce our borrowing base, thereby reducing the bank credit available to us, which could require that a portion, or all, of our bank debt be repaid.
• Hedging transactions may limit our potential gains or cause us to lose money.
• If this occurs, our revenue could be adversely affected due to the necessity of buying gas at the current market rate in order to fulfill hedging sales obligations.
• Our ability to market our natural gas may depend upon our ability to acquire space on pipelines that deliver crude oil and natural gas to commercial markets.
• This risk is somewhat mitigated by our 35% ownership of a gathering system in the Marcellus Shale in Pennsylvania.
• Investor sentiment towards climate change, fossil fuels, and sustainability could adversely affect our business and our share price.
• The failure of any of our information technology systems may cause disruptions in our operations, which could adversely affect our revenue and profitability.
• We are a “smaller reporting company” as defined under the Exchange Act, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.
• If we fail to maintain effective controls, investors may lose confidence in our operating results, the price of our common shares could decline and we may be subject to litigation or regulatory enforcement actions.
• Risks Related to Gathering System Because of the natural decline in production from existing wells, our success depends on the Anchor Shippers’ economically developing the remaining Marcellus Shale reserves.
• Although gross throughput at the Auburn CF has declined from 2018-2024, the share of Anchor Shipper gas has increased.
• Because of the large supply of gas, and limited availability of transportation out of the Marcellus Shale area, our gas is subject to a price differential.
• In the Marcellus Shale, natural gas is significantly discounted to Henry Hub pricing and the size of the differential can be volatile.
• Any significant increase in these expenditures could adversely affect our gathering rate and competitive position.
• We are exposed to the credit risk of our customers and counterparties, and our credit risk management will not be able to completely eliminate such risk.