Epsilon Energy Expands Financial Flexibility with New Credit Facility

Author: Owen Jenkins Updated: 10-13-2025 01:59 PM

Epsilon Energy Secures Enhanced Credit Facility

Today, Epsilon Energy Ltd. (NASDAQ: EPSN) announced the successful closing of its new and revised senior secured reserve-based revolving credit facility, providing greater financial capacity for the company. This pivotal move is supported by Frost Bank serving as the administrative agent, along with participation from Frost Bank and Texas Capital Bank as lenders.

Key Features of the Credit Facility

This updated credit facility replaces the previous arrangement and introduces several vital terms that are central to Epsilon's operational strategy moving forward.

Borrowing Structure

The credit facility designates Epsilon Energy USA Inc. and Epsilon Energy Ltd. as co-borrowers, facilitating a four-year term that matures on October 8, 2029. Initially, it offers a robust borrowing base of $47.5 million, which is anticipated to be re-evaluated and potentially elevated following the acquisition of the Peak companies in the latter part of the year.

Flexible Financial Management

To ensure effective management of resources, the facility incorporates semi-annual redeterminations. Moreover, interest on any drawings is set at the 3-Month Term SOFR rate plus a margin that ranges between 3% to 4%, depending on how much of the facility is utilized. Payments for interest will be made quarterly, enhancing liquidity management.

Utilization of Credit Proceeds

The new credit facility will be activated concurrently with the completion of the acquisition of the Peak companies, directly channeling funds towards settling Peak's existing term loan, which is projected to have a balance of $49.6 million at the closing.

Strategic Growth and Financial Stability

Andrew Williamson, the Chief Financial Officer of Epsilon, remarked on the critical nature of this facility, stating that it increases both commitment capacity and duration. This change positions Epsilon Energy to confidently proceed with planned acquisitions and maintain a solid financial footing and liquidity in the dynamic energy market.

About Epsilon Energy

Epsilon Energy Ltd. operates as an onshore natural gas and oil production and gathering company, focusing on operations across various regions such as Pennsylvania, Texas, Louisiana, and beyond. The company is strategically positioned for growth, utilizing its assets to maximize operational efficiencies and drive profitability.

Frequently Asked Questions

1. What is the significance of Epsilon's new credit facility?

The new credit facility enhances Epsilon's financial flexibility, facilitating strategic acquisitions while ensuring a robust liquidity position.

2. Who are the lenders associated with Epsilon's credit facility?

The facility is managed by Frost Bank and Texas Capital Bank, signifying a partnership that underpins Epsilon’s financial strategy.

3. How much is the initial borrowing base for the facility?

The initial borrowing base is $47.5 million, which is based on existing upstream assets, with plans for future adjustments.

4. What will Epsilon do with the proceeds from the credit facility?

Funds from the facility will be utilized to repay an existing term loan related to the recent acquisition of the Peak companies.

5. How does Epsilon plan to manage interest payments?

Interest on drawdowns will be paid quarterly, calculated based on the 3-Month Term SOFR rate plus a margin of 3-4%, promoting effective financial management.

About The Author

Hi there I'm 38-year-old author and financial consultant Owen Jenkins. Having worked in the financial sector for more than ten years, I am well-versed in the subtleties and complexity that mold our financial environment. Following a degree in finance, I worked in a number of financial institutions honing my abilities in market analysis, financial planning, and investment strategies.

My love is teaching others about investing and personal finance. My goal in writing many books and articles has been to demystify financial ideas and give readers the information they need to make wise financial decisions. I write with a direct, useful style that emphasizes doable suggestions for daily living.

Along with writing, I lead webinars and seminars where I impart knowledge on how to successfully negotiate the financial world. I also write for financial journals and show up as a guest expert on financial news programs a lot. Whether they are new to investing or want to improve their approach, my mission is to enable people to take charge of their financial futures.

Beyond work, I like to hike, play the guitar, and spend time with my family. I think that balance is crucial and want to encourage people to strike a balance between their financial aspirations and their hobbies. I want to help people succeed and achieve financial security through my work, so having a good influence.

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