HOUSTON, TEXAS–(Marketwired – Oct. 5, 2015) – Epsilon Energy Ltd. (TSX:EPS)(TSX:EPS.DB) (“Epsilon” or the “Corporation“) announced today that it has received Toronto Stock Exchange (“TSX“) approval to commence a normal course issuer bid through the facilities of the TSX, permitting the Corporation to repurchase, for cancellation, up to 3,140,543 of the 47,043,264 common shares issued and outstanding as at September 30, 2015 (the “common share NCIB“). This represents 10% of the total public float, being 31,405,432 common shares as at September 30, 2015. The average daily trading volume for the last six completed calendar months was 28,875 common shares. The number of common shares to be purchased in any one day will not exceed 7,218 common shares (being 25% of the average daily trading volume). The common share NCIB will commence on October 7, 2015, and run until the earlier of the date on which purchases under the normal course issuer bid have been completed and October 6, 2016.
Epsilon also announced that it has received TSX approval to commence a normal course issuer bid through the facilities of the TSX, permitting the Corporation to repurchase, for cancellation, up to $3,896,500 of the $38,965,000 aggregate principal amount of the Corporation’s 7.75% convertible unsecured subordinated debentures (“convertible debentures“) issued and outstanding as at September 30, 2015 (the “debenture NCIB“). This represents 10% of the total public float of convertible debentures, being $38,965,000 aggregate principal amount of convertible debentures as at September 30, 2015. The average daily trading volume for the last six completed calendar months was $12,900 aggregate principal amount. The number of convertible debentures to be purchased in any one day will not exceed $3,200
aggregate principal amount (being 25% of the average daily trading volume). The debenture NCIB will commence on October 7, 2015, and run until the earlier of the date on which purchases under the normal course issuer bid have been completed and October 6, 2016. 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 the debenture NCIB purchases are to be made through the facilities of the TSX in accordance with the rules of the TSX regarding normal course issuer bids. Purchases may also be made through alternative trading platforms. The price that 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, 2015, and will terminate no later than October 6, 2016.
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 course of the normal course issuer bid. During the past 12 months, the Corporation purchased 2,425,300 common shares, at an average price of $3.50 per common share and $1,000,000 aggregate principal amount of convertible debentures, at an average price of $98.00 per $100 aggregate principal amount of convertible debentures, pursuant to a normal course issuer bid which will expire on October 6, 2015.
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 purchases 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.
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 and 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.
Epsilon Energy Ltd.
Chief Executive Officer