Canadian driller and midstream company Epsilon Energy had a shareholder rebellion in 2013 and threw out the sitting board of directors (see Shareholder Rebellion at Epsilon Energy – New Board as of Today). Epsilon CEO Michael Raleigh announced at the time that the company had embarked on a turnaround strategy of focusing on the Marcellus Shale–less than a year after saying they would scale back in the Marcellus (see Epsilon Energy Makes “About-Face” on Marcellus Drilling). Epsilon was and remains a very small player in the Marcellus–but the Marcellus is the company’s entire focus. The company released its second quarter 2016 update in July (see Epsilon Energy: Still No Marcellus Drilling, Focused on NEPA Pipe). From what we could tell, the company has not drilled, and doesn’t plan to drill, a single Marcellus well since 2014. However, they do own a 35% interest in the Auburn Gas Gathering system in the northeast PA Marcellus (Williams is majority owner with 44%). Epsilon’s capital expenditures for 2Q16 were a grand total of $100,000, all of it spent on the Auburn system. Epsilon released an announcement yesterday that, unbeknownst to us, they had signed an agreement with one of their joint venture drilling partners back in February to pick up an additional 4% interest in the jv acreage. But, according to yesterday’s announcement, the PSA (production sharing agreement) to pick up the extra 4% has expired and the deal is, for now, dead…
