Last Friday Canadian driller and midstream company Epsilon Energy issued its fourth quarter and full year 2016 update. Epsilon, you may recall, 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. Friday’s update shows Epsilon did not drill any new new Marcellus wells in 2016. They spent just $300,000 on capital expenditures for all of 2016, and that was money spent on the Auburn Gas Gathering system in northeast PA (they own a 35% interest in the system). What about 2017? Epsilon plans to spend $1 million in capex in the Marcellus–half of it “for the ongoing development of the midstream system” (i.e. the Auburn system) and the other half to complete four Marcellus wells previously drilled. In 2015 Epsilon lost $25 million. Last year they lost $3 million–so the bleeding has almost stopped. Here’s Epsilon’s 2016 update…
