Epsilon Energy Ltd.
TSX : EPS

Epsilon Energy Ltd.

April 21, 2017 13:48 ET

Epsilon Completes Rights Offering for $24.5M

CALGARY, ALBERTA--(Marketwired - April 21, 2017) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES NEWS WIRE SERVICES.

Epsilon Energy Ltd. ("Epsilon" or the "Corporation") (TSX:EPS) is pleased to announce that it has completed its previously announced rights offering (the "Rights Offering"). The Rights Offering was over-subscribed and at closing, Epsilon issued 9,167,617 Common Shares of Epsilon at a price of $2.68 per share for gross proceeds of $24,569,214.

A total of 7,576,916 Common Shares were issued pursuant to the basic subscription privilege of the Rights Offering, none of which were issued to insiders of Epsilon. A total of 1,590,701 Common Shares were issued pursuant to the additional subscription privilege of the Rights Offering, none of which were issued to insiders of Epsilon. Following completion of the Rights Offering, Epsilon has a total of 55,005,705 Common Shares issued and outstanding.

JVL Advisors, LLC ("JVL"), a limited liability company owned and controlled by John Lovoi, the Corporation's Chairman of the Board, acted as stand-by guarantor of the Rights Offering, having agreed to purchase from Epsilon all of the 9,167,617 Common Shares not otherwise subscribed for under the Rights Offering (the "Backstop Commitment"). As the Rights Offering was over-subscribed, JVL was not required to fulfill its obligations under the Backstop Commitment. However, to Epsilon's knowledge, JVL did exercise its basic subscription privilege and additional subscription privilege under the Rights Offering. There were no fees or other remuneration paid by the Corporation in connection with the Backstop Commitment.

To the knowledge of Epsilon, after reasonably inquiry, no person that was not an insider became an insider of Epsilon as a result of the distribution under the Rights Offering.

The funds raised in the Rights Offering will be held by Epsilon as a reserve for future capital expenditures, which will provide the Corporation with funds to finance the growth of its business and allow it to be able to react and respond to changing market conditions and potential acquisition opportunities.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in the United States or in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under securities laws of any such province, state or jurisdiction. The securities referenced herein may not be offered or sold in the United States except in transaction exempt from or not subject to the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

About Epsilon Energy Ltd.

Epsilon Energy Ltd. is a North American natural gas development, production and midstream company with a current focus on the Marcellus Shale of Pennsylvania.

READER ADVISORY

Forward Looking Statements. This news release contains certain forward-looking information and statements within the meaning of applicable Canadian securities legislation. Certain statements contained in this news release may contain such words as "anticipate", "could", "Continue", "should", "seek", "may", "intend", "likely", "plan", "estimate", "believe", "expect", "will", "objective", "ongoing", "project" and similar expressions are intended to identify forward-looking information or statements. In particular, this news release contains forward-looking statements including the intended use of proceeds of the Rights Offering and expectations regarding the business, operations and revenue of the Corporation in addition to general economic conditions. Although the Corporation believes that the expectations and assumptions on which such forward-looking information and statements are based are reasonable, undue reliance should not be placed on the forward-looking information and statements because the Corporation can give no assurances that they will prove to be correct. Since forward-looking information and statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oilfield services sector (i.e. demand, pricing and terms for oilfield services; current and expected oil and gas prices; exploration and development programs, weather, health, safety and environmental risks), competition, and uncertainties resulting from potential delays or changes in plans with respect to development projects or capital expenditures and changes in legislation, including but not limited to tax laws, royalties and environmental regulations, stock market volatility and inability to access sufficient capital from external and internal sources. Accordingly, readers should not place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Corporation's financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through SEDAR at www.sedar.com. The forward-looking information and statements contained in this news release are made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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