Epsilon Energy Ltd (EPSN) 2025 Q1 法說會逐字稿

Good morning, everyone and welcome to the Epsilon Energy First Quarter 2025 Earnings Conference Call. (Operator Instructions)

大家早安，歡迎參加 Epsilon Energy 2025 年第一季財報電話會議。（操作員指示）

At this time, I'd like to turn the floor over to Andrew Williamson, Chief Financial Officer. Sir, please go ahead.

現在，我想把發言權交給財務長安德魯威廉森 (Andrew Williamson)。先生，請繼續。

Thank you, operator, and on behalf of the management team, I would like to welcome all of you to today's conference call to review Epsilon's First Quarter 2025 Financial and Operational Results. Before we begin, I would like to remind you that our comments may include forward-looking statements. It should be noted that a variety of factors could cause Epsilon's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Today's call may also contain certain non-GAAP financial measures. Please refer to the Earnings Release that we issued yesterday for disclosures on forward-looking statements and reconciliations of non-GAAP measures. With that, I'd like to turn the call over to Jason Stabell, our Chief Executive Officer.

謝謝接線員，我謹代表管理團隊歡迎大家參加今天的電話會議，回顧 Epsilon 2025 年第一季的財務和營運表現。在我們開始之前，我想提醒您，我們的評論可能包含前瞻性陳述。值得注意的是，多種因素可能導致 Epsilon 的實際結果與這些前瞻性陳述中表達的預期結果或期望有重大差異。今天的電話會議可能還包含某些非公認會計準則財務指標。請參閱我們昨天發布的收益報告，以了解前瞻性聲明和非公認會計準則指標的對帳資訊。說到這裡，我想把電話轉給我們的執行長 Jason Stabell。

Thank you, Andrew. Good morning and thank you for participating in our 2025 First Quarter Conference Call. Joining me today are Andrew Williamson, our CFO and Henry Clanton, our COO. We will be available to answer questions later in the call. The company delivered strong results this quarter, primarily attributed to the performance of our Pennsylvania business. Marcellus upstream cash flows were up sequentially over 200% due to a 58% increase in production and a 70% increase in realized pricing. In addition, midstream cash flows increased 140% sequentially on higher throughput volumes. In light of the current oil price volatility, we have been working with our operators to minimize near-term activity.

謝謝你，安德魯。早安，感謝您參加我們的 2025 年第一季電話會議。今天與我一起出席的還有我們的財務長 Andrew Williamson 和營運長 Henry Clanton。我們將在稍後的電話會議中回答問題。本季公司業績表現強勁，主要歸功於我們賓州業務的出色表現。由於產量增加 58% 且實際價格上漲 70%，Marcellus 上游現金流較上季成長超過 200%。此外，由於吞吐量增加，中游現金流較上季成長了 140%。鑑於當前油價波動，我們一直在與業者合作，盡量減少近期活動。

Based on these discussions, we are planning 0.5 net wells in both Texas and Alberta for total capital expenditures of $9million to $12 million over the balance of this year, including a $1.5 million drilling carry in favor of our operator in Alberta. We don't expect additional investments this year in Pennsylvania.

根據這些討論，我們計劃在今年餘下時間內在德克薩斯州和阿爾伯塔省各鑽探 0.5 口淨井，總資本支出為 900 萬至 1200 萬美元，其中包括為阿爾伯塔省的運營商提供的 150 萬美元的鑽井費用。我們預計今年賓州不會有額外的投資。

Our diversified portfolio has performed well in the current volatile environment. Our strong balance sheet and projected cash flows leave us well positioned to capitalize on attractive opportunities while maintaining our dividend. I will now pass the call to Andrew and Henry for further details on our finances and operations.

我們的多元化投資組合在當前動盪的環境中表現良好。我們強勁的資產負債表和預計的現金流使我們能夠充分利用有吸引力的機會，同時保持我們的股息。我現在將把電話轉給安德魯和亨利，以了解有關我們的財務和營運的更多詳細資訊。

Thanks, Jason. The performance in the Marcellus this quarter demonstrates our assets leveraged to incremental development there in a strong pricing environment both on the upstream and midstream side of the business. As Jason mentioned, we don't expect incremental development there this year, but we have substantial remaining undeveloped inventory, roughly 500,000 completed lateral length feet gross, which we expect to be developed starting late next year or early in 2027. I will caveat that by saying, the operators stated plans are of course subject to change based on gas market conditions and other factors.

謝謝，傑森。本季馬塞勒斯的表現表明，我們的資產在業務上游和中游強勁的定價環境下得到了充分利用，實現了增量開發。正如 Jason 所提到的，我們預計今年那裡不會出現增量開發，但我們仍有大量未開發的庫存，已完成的橫向長度約為 500,000 英尺，我們預計將於明年年底或 2027 年初開始開發。我要提醒的是，營運商所述的計劃當然會根據天然氣市場狀況和其他因素而改變。

In Texas, our Barnett type curve is economic and that it delivers above a 15% rate of return down to $55 WTI. We are aligned with the operator in limiting capital spending there to our leasehold obligations, which includes 2 grosswells over the remainder of the year. Incremental activity will warrant sustained oil prices above $65 WTI.

在德州，我們的巴奈特曲線是經濟的，並且它能提供高於 15% 的回報率，直到 WTI 價格下跌至 55 美元。我們與營運商保持一致，將資本支出限制在我們的租賃義務範圍內，其中包括今年剩餘時間內的 2 口大井。增量活動將保證油價維持在 65 美元 WTI 以上。

On the hedge book we're approximately 45% hedged on forecasted PDP oil production for the remainder of the year from May at just over $71 WTI. For gas, we're approximately 30% hedged on forecasted PDP production for the same period at $3.33 in NYMEX. We will look to add the gas hedges, assuming attractive prices for this winter and summer 2026. Keeping a 30% to 40% of PDP production target in this environment. Of course, that target can change with market conditions, capital plans, and other factors. Now to Henry.

在對沖帳簿上，我們對今年剩餘時間預測的 PDP 石油產量進行了約 45% 的對沖，價格從 5 月開始略高於 71 美元的 WTI 價格。對於天然氣，我們對同期預測的 PDP 產量進行了約 30% 的避險，紐約商品交易所的價格為 3.33 美元。我們將考慮增加天然氣對沖，假設今年冬季和 2026 年夏季的價格具有吸引力。在此環境下維持 30% 至 40% 的 PDP 生產目標。當然，該目標會隨著市場條件、資本計畫和其他因素而改變。現在輪到亨利了。

Thank you, Jason and Andrew. To add further to Jason's comments regarding development this year in Texas, the current plan calls for 2 wells to be drilled to satisfy the least development obligations. Both of these wells are expected to be 2-mile laterals or longer. The first well is planned to spud in late May with the completion planned for the third quarter. In Canada, our 1st two horizontal Manville wells in the Gerrington area were completed in the first quarter. The initial well was completed as a 1-mile lateral, and the second well was completed as 1.5-mile lateral. Both wells are currently on production with sales commencing in April.

謝謝你，傑森和安德魯。進一步補充傑森關於今年德克薩斯州發展的評論，目前的計劃要求鑽 2 口井以滿足最低開發義務。預計這兩口井的水平段長度均為 2 英里或更長。第一口井計劃於五月下旬開鑽，並計劃於第三季完井。在加拿大，我們位於 Gerrington 地區的前兩口水平 Manville 井於第一季完井。第一口井完井長度為 1 英里，第二口井完井長度為 1.5 英里。兩口油井目前均已投產，並於四月開始販售。

Efforts to optimize production with artificial lift are in progress. Additionally, we continue to work with the operator about the location and timing of the next two wells in the project, which are planned for this year. Thank you. Now back to Jason.

目前，利用人工舉升優化生產的努力正在進行中。此外，我們將繼續與營運商合作，確定該專案計劃於今年鑽探的另外兩口井的位置和時間。謝謝。現在回到傑森。

Thanks guys, operator, we can now open the lines for questions.

謝謝大家，接線員，我們現在可以開始回答問題了。

(Operator Instructions)

（操作員指示）

And our first question today comes from John White from Roth Capital. Please go ahead with your question.

今天我們的第一個問題來自羅斯資本的約翰懷特。請繼續提問。

Good morning, and congratulations on the very strong production results out of your Marcellus asset. I'm sure you're glad to get these curtailments behind you, that you had to endure for most of the last year. You said there's not going to be any more development drilling in the Marcellus this year. Do you want to offer any additional details on the first two wells in Alberta and how those are doing?

早安，恭喜您的 Marcellus 資產取得了非常強勁的生產成果。我確信你們很高興擺脫這些限制，去年大部分時間你們都必須忍受這些限制。您說過今年馬塞勒斯不會再進行任何開發鑽探。您是否想提供有關阿爾伯塔省前兩口油井的更多詳細資訊以及它們的運作？

Hey John, it's Jason. Thanks for the question. A little early to offer too much there, other than to say we, we've got oil and gas started flowing that to sales in early April, so we're kind of in that first 30 days, working with the operator to get artificial lift installed and get some facilities. A tied down, so I think probably the most helpful thing is, yeah, we're producing cash flow up there right now, but we're really going to have more definitive comments as we march through the second quarter into the third quarter. So, either if there's something meaningful on an interim basis, obviously we'll communicate that with the market, but certainly I'd expect a fulsome update on that for our next quarterly report.

嘿，約翰，我是傑森。謝謝你的提問。現在提供太多資訊還為時過早，只能說我們在 4 月初就開始向銷售輸送石油和天然氣，所以我們在前 30 天與營運商合作安裝人工舉升設備並獲得一些設施。受到限制，所以我認為最有幫助的事情是，是的，我們現在正在產生現金流，但隨著我們從第二季度進入第三季度，我們將會得到更明確的評論。因此，如果中期有什麼有意義的事情，我們顯然會與市場溝通，但我當然希望在下一份季度報告中對此進行全面的更新。

Okay, given the timing, that's understandable, and thanks for taking my question. I'll turn it back to the operator.

好的，考慮到時間，這是可以理解的，感謝您回答我的問題。我會將其轉回給接線生。

Great, thanks.

太好了，謝謝。

(Operator Instructions)

（操作員指示）

And at this time and showing no additional questions, I'd like to turn the floor back over to management for any closing remarks.

現在沒有其他問題了，我想把發言權交還給管理階層，請他們做最後發言。

Thank you, operator. I appreciate everybody's continued interest and support of Epsilon. As always, we're here to answer questions if any come to you after we conclude this meeting, and everybody have a great day and look forward to speaking to you in the future. Thank you.

謝謝您，接線生。我感謝大家對 Epsilon 的持續關注和支持。像往常一樣，會議結束後，如果您有任何問題，我們會在這裡回答，祝大家度過愉快的一天，並期待將來與您交談。謝謝。

And with that, ladies and gentlemen, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

女士們、先生們，今天的電話會議和演講就到此結束。感謝您的加入。現在您可以斷開線路了。