Epsilon Energy Ltd.

Epsilon Energy Ltd.

February 28, 2012 08:40 ET

Epsilon Energy Announces Closing of $40 Million Offering

CONCORD, ONTARIO--(Marketwire - Feb. 28, 2012) -


Epsilon Energy Ltd. ("Epsilon" or the "Company") (TSX:EPS) is pleased to announce that it has completed its previously announced bought deal offering (the "Offering") of 7.75% convertible unsecured subordinated debentures (the "Debentures") for aggregate gross proceeds of $40.0 million. The Offering was conducted by way of a short form prospectus dated February 21, 2012 through a syndicate of underwriters co-led by Cormark Securities Inc. and Clarus Securities Inc. and including CIBC World Markets Inc., Raymond James Ltd., Global Hunter Services LLC and Stonecap Securities Inc., who purchased a total of 40,000 Debentures at a price of $1,000 per Debenture.

Epsilon intends to use the net proceeds of the Offering to fund capital expenditures associated with Epsilon's previously announced exploration and development programs. The Debentures will be listed for trading on the Toronto Stock Exchange under the symbol EPS.DB.

About Epsilon Energy Ltd.

Epsilon is engaged in the exploration and production of oil and natural gas reserves. Established in 2005, the Company has been a producer of natural gas and oil since 2006. Epsilon's ongoing business strategy involves a focused approach on targeting low risk natural gas properties within the Marcellus Shale in Pennsylvania and New York, oil properties within the Bakken Shale is Saskatchewan as well as additional unconventional reservoirs throughout Canada and the United States.

ADVISORY: This press release contains forward-looking statements which may include statements concerning completion of any proposed capital programs and the use of proceeds of the Offering. Although Epsilon believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Epsilon can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Any proposed capital program may not be completed due to external factors outside of Epsilon's control or if Epsilon determines proceeding as currently contemplated is not in the best interests of Epsilon. Accordingly, the intended use of the net proceeds of the Offering by Epsilon might change if the board of directors of Epsilon determines that it would be in the best interests of Epsilon to deploy the proceeds for some other purpose.

The forward-looking statements contained in this press release are made as of the date hereof and Epsilon undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The TSX has neither approved nor disapproved the contents of this press release.

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