Epsilon Energy (EPSN)

What Moves the Stock

1. 01Henry Hub natural gas spot prices and forward curve shape (primary revenue driver for Marcellus production)
2. 02Quarterly production volumes and well performance in Marcellus and Anadarko assets
3. 03Capital allocation decisions between drilling, acquisitions, and shareholder returns given negative FCF
4. 04Basis differentials between Appalachian gas prices and Henry Hub (transportation constraints impact realizations)
5. 05M&A speculation given micro-cap status and consolidation trends in Appalachian gas
6. 06Natural gas production from Marcellus Shale assets (estimated 60-70% of revenue based on basin economics)
7. 07Crude oil and NGL production from Anadarko Basin properties (estimated 25-35% of revenue)
8. 08Potential gathering and processing fees from midstream infrastructure (minor contribution)

EPSN Chart

My Notes

• value/speculative - The stock attracts deep value investors seeking exposure to natural gas price recovery with minimal debt risk…
• Moderate sensitivity through multiple channels.
• Watch on earnings: Henry Hub natural gas spot price and NYMEX futures curve (primary revenue driver), Appalachian basis differentials (TCO, Dominion South pricing versus Henry Hub), Quarterly production volumes in Mcfe/d and production decline rates.