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Property and Equipment

12 Months Ended

Dec. 31, 2022

Property and Equipment

Property and Equipment

4. Property and Equipment

The following table summarizes the Company’s property and equipment at December 31, 2022 and 2021:

​

​	​	​	​	​	​	​
​		December 31,			December 31,
​	​	2022		​	2021
Property and equipment:	​	​	​	​	​	​
Oil and gas properties, successful efforts method	​	​	​	​	​	​
Proved properties	​	$	148,326,265	​	$	138,032,413
Unproved properties	​	​	18,169,157	​	​	21,700,926
Accumulated depletion, depreciation, amortization and impairment	​	​	(107,729,293)	​	​	(102,480,972)
Total oil and gas properties, net	​	​	58,766,129	​	​	57,252,367
Gathering system	​	​	42,639,001	​	​	42,475,086
Accumulated depletion, depreciation, amortization and impairment	​	​	(34,500,740)	​	​	(33,443,949)
Total gathering system, net	​	​	8,138,261	​	​	9,031,137
Land	​	​	637,764	​	​	637,764
Buildings and other property and equipment, net	​	​	286,035	​	​	309,102
Total property and equipment, net	​	$	67,828,189	​	$	67,230,370

​

Property Sale

In April 2022, the Company completed a well bore only sale and conveyance and partial release of oil and gas leases in Oklahoma for $200,000.  In December 2021, the Company completed the sale of its shallow rights leases and wells in Oklahoma for $450,000.

Property Impairment

Epsilon performs a quantitative impairment test whenever events or changes in circumstances indicate that an asset group's carrying amount may not be recoverable. When indicators of impairment are present, 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 to the estimated fair values is required. This is determined based on discounted cash flow techniques using significant assumptions including production volumes, future commodity prices, and a market-specific weighted average cost of capital which are affected by expectations about future market and economic conditions. Additionally, GAAP requires that if an exploratory well is determined not to have found proved reserves, the costs incurred, net of any salvage value, are charged to expense. For unproved properties, such as leasehold, expected current and future market prices for similar assets are considered relative to carrying values in evaluating impairment.

No impairment was recorded for the year ended December 31, 2022. For the year ended December 31, 2021, the Company recognized dry hole costs of $0.15 million.

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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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