Epsilon Energy Ltd.

Epsilon Energy Ltd.

October 24, 2007 09:17 ET

Epsilon Energy Ltd. Completes Initial Public Offering of Common Shares and Begins Trading on the Toronto Stock Exchange

CONCORD, ONTARIO--(Marketwire - Oct. 24, 2007) -


Epsilon Energy Ltd. ("Epsilon" or the "Corporation") (TSX:EPS) announced today that it has closed its initial public offering of 18,000,000 common shares at a price of $4.00 per share for gross proceeds of $72,000,000 (the "Offering"). The Offering closed pursuant to a final prospectus (the "Prospectus") filed by the Corporation and receipted by the securities regulatory authorities in the provinces of British Columbia, Alberta, Manitoba and Ontario on October 12, 2007. Upon completion of the Offering, the Epsilon will be a publicly traded company with 44,241,588 common shares outstanding, engaged in the acquisition, exploration, development and production of oil and natural gas reserves in the Middle East and North America.

The common shares of Epsilon will commence trading on the Toronto Stock Exchange at market opening today under the symbol "EPS".

The underwriting syndicate was co-led by Clarus Securities Inc. and Cormark Securities Inc. and included Blackmont Capital Inc. Epsilon has granted the underwriters an over-allotment option, exercisable in whole or in part for a period of up to 30 days following closing of the Offering, to purchase up to an additional 2,125,000 common shares from treasury.

Epsilon is also pleased to announce that, on October 20, 2007, the Ministry of Oil and Minerals of the Republic of Yemen approved the assignment of a 57.14% paying interest and a 50% undivided percentage interest in the rights, duties, interests and obligations under the Block 41 Production Sharing Agreement (the "Block 41 Participating Interest") to Epsilon. Epsilon entered into a farm-in agreement with Oil and Gas Mining Company on September 10, 2007, to acquire the Block 41 Participating Interest for total consideration of approximately US$30 million.

This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the Offering has been qualified for distribution. The securities under the Offering have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold within the United States unless an exemption from registration is available.

An electronic copy of the Prospectus may be obtained on SEDAR at www.sedar.com.

About Epsilon Energy Ltd.

Epsilon is engaged in the acquisition, exploration, development and production of oil and natural gas reserves in the Middle East and North America. The Corporation has exploration, development and production rights to approximately 902,000 gross (270,000 net) leasehold acres in the United States and Canada and recently acquired approximately 1,400,000 (791,000 net) leasehold acres in the Republic of Yemen. The Corporation's strategy involves developing a well-balanced inventory of oil and natural gas projects in the Middle East and North America, including high potential oil properties in the Republic of Yemen coupled with lower risk natural gas properties within the Appalachian basin in the United States. The Corporation employs the strategy of acquiring oil and natural gas leasehold rights near areas of existing established production, with the goal of converting the acquired leasehold rights into proven oil and natural gas reserves, followed by production that optimizes cash flow and return on investment.

Forward-Looking Statements

Certain statements contained in this new release and the Prospectus 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 assumptions but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this new release and the Prospectus should not be unduly relied upon.

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