Epsilon Energy Ltd. (NASDAQ: EPSN)

Epsilon Energy Ltd. is a North American onshore focused independent natural gas and oil company engaged in the acquisition, development, gathering and production of natural gas and oil reserves. Its primary areas of operation include the Marcellus shale in Pennsylvania, the Permian Basin in Texas and New Mexico, the NW Anadarko Basin in Oklahoma, and the Western Canadian Sedimentary Basin in Alberta, Canada.

The company generates revenue from the sale of natural gas, crude oil, and natural gas liquids produced from its wells. Additionally, it earns gathering fees through its 35 percent interest in the Auburn Gas Gathering System which processes and transports gas from its Pennsylvania acreage.

Epsilon Energy Ltd. positions itself as a modest sized independent explorer and producer with a diversified basin portfolio that reduces reliance on any single region. It competes with larger private and public E&P firms such as Chesapeake Energy, EQT Corporation, and Williams Companies, while maintaining a competitive advantage through its ownership interest in a regional gathering system, disciplined capital allocation, and an active hedging program that stabilizes cash flows.

The company sells its natural gas and oil production to utilities, industrial users, and energy marketers across the United States and Canada. Its gathering system revenue is derived from third party shippers that pay fees to move gas through the Auburn Gas Gathering System.