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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of segment financial information


		Upstream			Gas Gathering			Corporate			Elimination			Consolidated
As of and for the six months ended June 30, 2024
Operating revenue
Natural gas		$	4,924,209		$	—		$	—		$	—		$	4,924,209
Natural gas liquids			761,407			—			—			—			761,407
Oil and condensate			6,228,799			—			—			—			6,228,799
Gathering and compression fees			—			3,972,053			—			(591,907)			3,380,146
Total operating revenue ⁽¹⁾			11,914,415			3,972,053			—			(591,907)			15,294,561

Operating costs
Operating costs			4,010,236			1,202,537			3,672,396			(591,907)			8,293,262
Depletion, depreciation, amortization and accretion			4,007,320			421,509			—			—			4,428,829
Operating income (loss)			3,896,859			2,348,007			(3,672,396)			—			2,572,470

Other income (expense)
Interest income			—			—			375,215			—			375,215
Interest expense			(17,519)			—			—			—			(17,519)
Gain on derivative contracts			(195,617)			—			—			—			(195,617)
Other income			101,643			—			(570)			—			101,073
Other (expense) income, net			(111,493)			—			374,645			—			263,152
Net income (loss) before income tax expense		$	3,785,366		$	2,348,007		$	(3,297,751)		$	—		$	2,835,622

Segment assets
Current assets, net		$	—		$	—		$	15,877,407		$	—		$	15,877,407
Proved properties			67,634,185			—			—			—			67,634,185
Unproved properties			28,498,028			—			—			—			28,498,028
Gathering system			—			6,896,509			—			—			6,896,509
Other property and equipment			1,846,035			—			—			—			1,846,035
Operating lease right-of-use asset			—			—			392,792			—			392,792
Total segment assets		$	97,978,248		$	6,896,509		$	16,270,199		$	—		$	121,144,956

Capital expenditures ⁽²⁾		$	26,915,782		$	116,098		$	1,044,317		$	—		$	28,076,197

As of and for the six months ended June 30, 2023
Operating revenue
Natural gas		$	9,262,873		$	—		$	—		$	—		$	9,262,873
Natural gas liquids			441,283			—			—			—			441,283
Oil and condensate			1,563,497			—			—			—			1,563,497
Gathering and compression fees			—			5,328,617			—			(739,858)			4,588,759
Total operating revenue ⁽¹⁾			11,267,653			5,328,617			—			(739,858)			15,856,412

Operating costs
Operating costs			5,034,529			1,222,305			3,979,865			(739,858)			9,496,841
Depletion, depreciation, amortization and accretion			2,859,358			529,376			—			—			3,388,734
Operating income (loss)			3,373,766			3,576,936			(3,979,865)			—			2,970,837

Other income (expense)
Interest income			—			—			923,963			—			923,963
Interest expense			(62,859)			—			—			—			(62,859)
Loss on derivative contracts			1,696,838			—			—			—			1,696,838
Other (expense) income			3,714			—			987			—			4,701
Other income, net			1,637,693			—			924,950			—			2,562,643
Net income (loss) before income tax expense		$	5,011,459		$	3,576,936		$	(3,054,915)		$	—		$	5,533,480

Segment assets
Current assets, net		$	—		$	—		$	44,053,398		$	—		$	44,053,398
Proved properties			42,017,615			—			—			—			42,017,615
Unproved properties			25,989,679			—			—			—			25,989,679
Gathering system			—			7,646,776			—			—			7,646,776
Other property and equipment			950,594			—			—			—			950,594
Operating lease right-of-use asset			—			—			495,842			—			495,842
Total segment assets		$	68,957,888			7,646,776			44,549,240			—			121,153,904

Capital expenditures ⁽²⁾		$	13,595,464			34,504			—			—			13,629,968

(1)

Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the six months ended June 30, 2024 and 2023 have been eliminated upon consolidation. For the six months ended June 30, 2024, Epsilon sold natural gas to 29 unique customers. The three customers over 10% comprised 14%, 11%, and 10% of total revenue. For the six months ended June 30, 2023, Epsilon sold natural gas to 30 unique customers. The two customers over 10% comprised 15% and 10% of total revenue.

(2)

Capital expenditures for the Upstream segment consist primarily of the acquisition of properties, and the drilling and completing of wells while Gas Gathering consists of expenditures relating to the expansion, completion, and maintenance of the gathering and compression facility.


		Upstream			Gas Gathering			Corporate			Elimination			Consolidated
For the three months ended June 30, 2024
Operating revenue
Natural gas		$	1,961,230		$	—		$	—		$	—		$	1,961,230
Natural gas liquids			388,423			—			—			—			388,423
Oil and condensate			3,513,717			—			—			—			3,513,717
Gathering and compression fees			—			1,721,957			—			(277,509)			1,444,448
Total operating revenue⁽¹⁾			5,863,370			1,721,957			—			(277,509)			7,307,818

Operating costs
Operating costs			1,927,376			649,967			1,791,804			(277,509)			4,091,638
Depletion, depreciation, amortization and accretion			1,877,611			170,792			—			—			2,048,403
Operating income (loss)			2,058,383			901,198			(1,791,804)			—			1,167,777

Other income (expense)
Interest income			—			—			108,943			—			108,943
Interest expense			(8,759)			—			—			—			(8,759)
Loss on derivative contracts			(94,891)			—			—			—			(94,891)
Other income			101,606			—			—			—			101,606
Other (expense) income, net			(2,044)			—			108,943			—			106,899
Net income (loss) before income tax expense		$	2,056,339		$	901,198		$	(1,682,861)		$	—		$	1,274,676

Capital expenditures ⁽²⁾		$	3,654,972		$	97,072		$	1,036,271		$	—		$	4,788,315

For the three months ended June 30, 2023
Operating revenue
Natural gas		$	3,006,695		$	—		$	—		$	—		$	3,006,695
Natural gas liquids			244,988			—			—			—			244,988
Oil and condensate			1,046,389			—			—			—			1,046,389
Gathering and compression fees			—			2,578,114			—			(376,050)			2,202,064
Total operating revenue⁽¹⁾			4,298,072			2,578,114			—			(376,050)			6,500,136

Operating costs
Operating costs			3,266,442			570,934			1,776,374			(376,050)			5,237,700
Depletion, depreciation, amortization and accretion			1,365,603			250,125			—			—			1,615,728
Operating (loss) income			(333,973)			1,757,055			(1,776,374)			—			(353,292)

Other income (expense)
Interest income			—			—			433,201			—			433,201
Interest expense			(34,422)			—			—			—			(34,422)
Loss on derivative contracts			628,178			—			—			—			628,178
Other income			3,062			—			4			—			3,066
Other income, net			596,818			—			433,205			—			1,030,023
Net income (loss) before income tax expense		$	262,845		$	1,757,055		$	(1,343,169)		$	—		$	676,731

Capital expenditures ⁽²⁾		$	12,450,319		$	12,880		$	—		$	—		$	12,463,199

(1)

Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended June 30, 2024 and 2023 have been eliminated upon consolidation. For the three months ended June 30, 2024, Epsilon sold natural gas to 26 unique customers. The three customers over 10% comprised 20%, 15%, and 14% of total

revenue. For the three months ended June 30, 2023, Epsilon sold natural gas to 21 unique customers. The three customers over 10% comprised 25%, 14%, and 13% of total revenue.

(2)

Capital expenditures for the Upstream segment consist primarily of the acquisition of properties, and the drilling and completing of wells while Gas Gathering consists of expenditures relating to the expansion, completion, and maintenance of the gathering and compression facility.