Epsilon Energy Ltd.

Small gas/oil E&P with sharp revenue growth from an acquisition but a net loss this year from a one-time asset-sale charge.

Strengths

• Revenue up 64% and reserves up 86% on the Peak (Powder River) acquisition; adequate liquidity (current ratio 1.3)
• Discounted future net cash flows tripled to $156M; disciplined balance-sheet/capital-allocation posture

Risks

• Net loss of $5.8M with negative ROA -2.5% (39th pct) and ROE -4.6% (27th pct); net income growth -400% (10th pct)
• Commodity-price sensitivity, low cash ($9M), and integration risk from recent M&A activity

Notable findings

• Buying back stockNet buyback — share count -3%/yr over 4y
• Revenue declineRevenue -28.0% YoY