Epsilon Energy Ltd.

TSX : EPS


Epsilon Energy Ltd.

February 12, 2013 11:09 ET

Epsilon Energy Ltd. Engages Strategic Advisor

CONCORD, ONTARIO--(Marketwire - Feb. 12, 2013) - Epsilon Energy Ltd. ("Epsilon" or the "Company") (TSX:EPS) today announced that the Board of Directors has formally engaged Evercore Group L.L.C. as its exclusive financial advisor to lead the process of soliciting and evaluating offers to acquire the Company.

Zoran Arandjelovic, Chairman and Chief Executive Officer, said, "In November 2012, as part of our Board's commitment to exploring all avenues for maximizing shareholder value, we announced that we would be conducting a formal review of strategic alternatives, including a possible sale of the Company. The appointment of Evercore as our exclusive financial advisor is the next step in this process.

Epsilon's recent reserve and production growth and both strategic and operation developments have driven a substantial narrowing of the gap between market price and analyst valuations of the Company. Our stock has rebounded over the last months, significantly outperforming the market and our peers. Considering the high quality asset base comprised of Marcellus midstream and upstream operations, Canadian oil development opportunities and solid cash flow generation we feel there is significant value in our Company that has not been recognized fully by the market that could be realized via a sale process. Our operations and financial strength have never been stronger and if a substantial premium can be realized through the sale of the Company we want to provide our shareholders the opportunity to maximize their returns.

Although there can be no assurance of any transaction at the end of the process, we expect Evercore to leverage its significant financial advisory experience and expertise in the energy M&A markets in assisting and advising us during the potential sale process. At the same time, we remain focused on our continued execution of our operating strategies for growing the Company."

The Company does not intend to disclose developments with respect to the progress of its sale process until such time as the Board has approved a transaction or otherwise deems disclosure appropriate.

Epsilon Energy Ltd. is a North American onshore exploration and production company with a current focus in the Marcellus Shale in Pennsylvania, Bakken Shale in Saskatchewan and Basal Belly River in Alberta.

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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