Epsilon Energy Ltd.
TSX : EPS

Epsilon Energy Ltd.

March 17, 2017 16:33 ET

Epsilon Launches Rights Offering

CALGARY, ALBERTA--(Marketwired - March 17, 2017) -

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

Epsilon Energy Ltd. ("Epsilon" or the "Corporation") (TSX:EPS) announces that, further to its news release dated March 15, 2017, the offering of rights (the "Rights Offering") to holders of its common shares (the "Common Shares") of record at the close of business on March 24, 2017 (the "Record Date") has launched today. Pursuant to the Rights Offering, each holder of Common Shares (a "Shareholder") will receive one transferable right (each, a "Right") for each Common Share held as of the Record Date. Five (5) Rights will entitle the holder thereof to subscribe for one (1) Common Share upon payment of $2.68 per Common Share until 4:30 p.m. (Toronto time) (the "Expiry Time") on April 19, 2017.

There are currently 45,838,088 Common Shares issued and outstanding. Assuming the exercise of (i) all Rights or (ii) the entire take-up of the Backstop Commitment (as defined in the Circular and discussed in the March 15 news release), the Rights Offering will raise net proceeds of approximately C$24.5 million. Epsilon intends to hold the net proceeds of the Rights Offering 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.

Complete details of the Rights Offering are set out in the Circular and the rights offering notice (the "Notice"), which have been filed under the Corporation's profile at www.sedar.com. Registered Shareholders who wish to exercise their Rights must complete and forward the Rights Certificate (as defined in the Circular), together with applicable funds, to Computershare Investor Services Inc., the depositary for the Rights Offering, on or before the Expiry Time of the Rights Offering. Shareholders who own their Common Shares through an intermediary, such as a bank, trust corporation, securities dealer or broker, will receive materials and instructions from their intermediary.

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 amount of funds to be raised pursuant to the Rights Offering, 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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