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Property and Equipment

6 Months Ended

Jun. 30, 2021

Property and Equipment

Property and Equipment

4.  Property and Equipment

The following table summarizes the Company’s property and equipment as of June 30, 2021 and December 31, 2020:

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​	​	​	​	​	​	​
​		June 30,			December 31,
​	​	2021		​	2020
Property and equipment:	​	​	​	​	​	​
Oil and gas properties, successful efforts method	​	​	​	​	​	​
Proved properties	​	$	135,256,824	​	$	133,902,723
Unproved properties	​	​	21,557,121	​	​	21,552,063
Accumulated depletion, depreciation, amortization and impairment	​	​	(100,725,088)	​	​	(98,200,111)
Total oil and gas properties, net	​	​	56,088,857	​	​	57,254,675
Gathering system	​	​	42,273,148	​	​	42,202,644
Accumulated depletion, depreciation, amortization and impairment	​	​	(32,835,561)	​	​	(32,101,624)
Total gathering system, net	​	​	9,437,587	​	​	10,101,020
Land	​	​	637,764	​	​	637,764
Buildings and other property and equipment, net	​	​	326,671	​	​	338,419
Total property and equipment, net	​	$	66,490,879	​	$	68,331,878

​

Property Impairment

Epsilon performs a quantitative impairment test quarterly or whenever events or changes in circumstances indicate that an asset group's carrying amount may not be recoverable, over proved properties using the published NYMEX forward prices, timing, methods and other assumptions consistent with historical periods. When indicators of impairment are present, GAAP requires that the Company first compares expected future undiscounted cash flows by asset group to their respective carrying values. If the carrying amount exceeds the estimated undiscounted future cash flows, a reduction of the carrying amount of the oil and natural gas properties to their estimated fair values is required, which is determined based on discounted cash flow techniques using significant assumptions including projected revenues, future commodity prices, and a market-specific weighted average cost of capital which are affected by expectations about future market and economic conditions.

During the three and six months ended June 30, 2021, no impairment was required. During the three months ended March 31, 2020, Epsilon recognized certain indicators of impairments specific to our Oklahoma assets related to historically low oil and NGL prices and determined that the carrying value of those assets was not recoverable. As a result of this assessment, a $1.76 million impairment was recorded on the Company’s Oklahoma assets during the three months ended March 31, 2020. No further impairment was required at June 30, 2020.

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- Definition

The entire disclosure for properties used in normal conduct of oil and gas exploration and producing operations. This disclosure may include property accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 932
-SubTopic 360
-URI http://asc.fasb.org/subtopic&trid=2145654

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- References

No definition available.

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