Epsilon Energy Ltd.
TSX : EPS

Epsilon Energy Ltd.

October 03, 2014 09:25 ET

Epsilon Energy Ltd. Announces Normal Course Issuer Bid for Common Shares and Convertible Debentures

HOUSTON, TEXAS--(Marketwired - Oct. 3, 2014) - Epsilon Energy Ltd. ("Epsilon" or the "Corporation") (TSX:EPS), announces that it has received Toronto Stock Exchange ("TSX") approval to a Notice of Intention to commence a normal course issuer bid through the facilities of the TSX, permitting the Corporation to repurchase, for cancellation, up to 2,473,428 of the 49,468,564 common shares issued and outstanding as at September 30, 2014 (the "common share NCIB"). This represents 5.0% of the issued and outstanding common shares. The average daily trading volume for the last six completed calendar months was 69,310 common shares. The number of shares to be purchased in any one day shall not exceed 17,327 common shares (being 25% of the average daily trading volume). The common share NCIB will commence on October 7, 2014, and run until the earlier of the date on which purchases under the bid have been completed and October 6, 2015.

Epsilon also announces that it has received TSX approval to a Notice of Intention to commence a normal course issuer bid through the facilities of the TSX, permitting the Corporation to repurchase, for cancellation, up to $3,997,000 principal amount of the $39,965,000 principal amount 7.75% convertible unsecured subordinated debentures originally issued on February 28, 2012 ("convertible debentures") issued and outstanding as at September 30, 2014 (the "debenture NCIB"). This represents 10% of the public float of convertible debentures. The average daily trading volume for the last six completed calendar months was $49,730 principle amount. The number of convertible debentures to be purchased in any one day shall not exceed $12,432 principal amount (being 25% of the average daily trading volume). The bid will commence on October 7, 2014, and run until the earlier of the date on which purchases under the bid have been completed and October 6, 2015. By repurchasing convertible debentures, Epsilon will reduce interest payments, resulting in cash savings for the Corporation in the long term.

The common share NCIB and debenture NCIB purchases are to be made through the facilities of the TSX in accordance with its policy statements on normal course issuer bids. The price, which Epsilon will pay for any common shares or convertible debentures, will be the market price at the time of acquisition plus brokerage fees. Purchases may commence on October 7, 2014, and will terminate no later than October 6, 2015.

To the knowledge of the directors and officers of Epsilon, no director or officer, associate of a director or officer of the Corporation, no person acting jointly or in concert with the Corporation nor any person holding 10 percent or more of the common shares has any present intention to sell common shares or convertible debentures during the period of the normal course issuer bid. During the past 12 months, the Corporation previously purchased 1,296,710 common shares, at an average price of $3.73 per share, pursuant to a normal course issuer bid which expired on September 18, 2014.

Epsilon believes that the market price of the common shares does not fully reflect the value of its business and its future business prospects and represents an attractive investment opportunity. Epsilon currently has uncommitted cash available which it can use for these bids and the Corporation is of the view that long-term value for its remaining shareholders will be enhanced.

About Epsilon Energy Ltd.

Epsilon Energy Ltd. is a North American onshore exploration and production company with a current focus in the Marcellus Shale in Pennsylvania.

Forward-Looking Statements

Certain statements contained in this news release constitute forward looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", 'may", "will", "project", "should", 'believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements are based on reasonable assumption but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.

Special note for news distribution in the United States

The securities described in the news release have not been registered under the United Stated Securities Act of 1933, as amended, (the "1933 Act") or state securities laws. Any holder of these securities, by purchasing such securities, agrees for the benefit of Epsilon Energy Ltd. (the "Corporation") that such securities may not be offered, sold, or otherwise transferred only (A) to the Corporation or its affiliates; (B) outside the United States in accordance with applicable state laws and either (1) Rule 144(as) under the 1933 Act or (2) Rule 144 under the 1933 Act, if applicable.

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