Operating Segments (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of segment financial information

	Upstream		Gas Gathering		Corporate		Elimination		Consolidated
As of and for the nine months ended September 30, 2023
Operating revenue
Natural gas	$	11,351,618	$	—	$	—	$	—	$	11,351,618
Natural gas liquids		669,295		—		—		—		669,295
Oil and condensate		2,488,271		—		—		—		2,488,271
Gathering and compression fees		—		8,694,987		—		(1,037,232)		7,657,755
Total operating revenue (1)		14,509,184		8,694,987		—		(1,037,232)		22,166,939
Operating costs
Operating costs		6,891,860		1,854,030		5,959,876		(1,037,232)		13,668,534
Depletion, depreciation, amortization and accretion		4,034,760		746,006		—		—		4,780,766
Operating income (loss)		3,582,564		6,094,951		(5,959,876)		—		3,717,639
Other income (expense)
Interest income		—		—		1,308,695		—		1,308,695
Interest expense		(71,619)		—		—		—		(71,619)
Gain on derivative contracts		1,672,535		—		—		—		1,672,535
Other income		4,083		—		1,086		—		5,169
Other income (expense), net		1,604,999		—		1,309,781		—		2,914,780
Net income (loss) before income tax expense	$	5,187,563	$	6,094,951	$	(4,650,095)	$	—	$	6,632,419
Segment assets
Current assets, net	$	—	$	—	$	38,786,814	$	—	$	38,786,814
Proved properties		43,047,938		—		—		—		43,047,938
Unproved properties		26,185,843		—		—		—		26,185,843
Gathering system		—		7,452,917		—		—		7,452,917
Other property and equipment		3,832,225		—		—		—		3,832,225
Operating lease right-of-use asset		—		—		468,833		—		468,833
Total segment assets	$	73,066,006	$	7,452,917	$	39,255,647	$	—	$	119,774,570
As of and for the nine months ended September 30, 2022
Operating revenue
Natural gas	$	44,581,254	$	—	$	—	$	—	$	44,581,254
Natural gas liquids		1,500,668		—		—		—		1,500,668
Oil and condensate		2,484,360		—		—		—		2,484,360
Gathering and compression fees		—		7,290,507		—		(1,109,760)		6,180,747
Total operating revenue (1)		48,566,282		7,290,507		—		(1,109,760)		54,747,029
Operating costs
Operating costs		6,577,013		1,666,275		5,488,496		(1,109,760)		12,622,024
Depletion, depreciation, amortization and accretion		4,075,282		823,706		—		—		4,898,988
Operating income (loss)		37,913,987		4,800,526		(5,488,496)		—		37,226,017
Other income (expense)
Interest income		—		—		126,804		—		126,804
Interest expense		(33,565)		—		—		—		(33,565)
Loss on derivative contracts		(1,124,547)		—		—		—		(1,124,547)
Other (expense) income		(100,315)		—		419		—		(99,896)
Other income (expense), net		(1,258,427)		—		127,223		—		(1,131,204)
Net income (loss) before income tax expense	$	36,655,560	$	4,800,526	$	(5,361,273)	$	—	$	36,094,813
Segment assets
Current assets, net	$	—	$	—	$	51,702,041	$	—	$	51,702,041
Proved properties		40,738,961		—		—		—		40,738,961
Unproved properties		18,085,385		—		—		—		18,085,385
Gathering system		—		8,355,116		—		—		8,355,116
Other property and equipment		933,210		—		—		—		933,210
Total segment assets	$	59,757,556		8,355,116		51,702,041		—		119,814,713

(1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the nine months ended September 30, 2023 and 2022 have been eliminated upon consolidation. For the nine months ended September 30, 2023, Epsilon sold natural gas to 34 unique customers. The one customer over 10% comprised 20% of total revenue. For the nine months ended September 30, 2022, Epsilon sold natural gas to 26 unique customers. The two customers over 10% comprised 34% and 12% of total revenue.

	Upstream		Gas Gathering		Corporate		Elimination		Consolidated
For the three months ended September 30, 2023
Operating revenue
Natural gas	$	2,088,745	$	—	$	—	$	—	$	2,088,745
Natural gas liquids		228,012		—		—		—		228,012
Oil and condensate		924,774		—		—		—		924,774
Gathering and compression fees		—		3,366,370		—		(297,374)		3,068,996
Total operating revenue (1)		3,241,531		3,366,370		—		(297,374)		6,310,527
Operating costs
Operating costs		1,857,331		631,725		1,980,011		(297,374)		4,171,693
Depletion, depreciation, amortization and accretion		1,175,402		216,630		—		—		1,392,032
Operating income (loss)		208,798		2,518,015		(1,980,011)		—		746,802
Other income (expense)
Interest income		—		—		384,732		—		384,732
Interest expense		(8,760)		—		—		—		(8,760)
Loss on derivative contracts		(24,303)		—		—		—		(24,303)
Other income		369		—		99		—		468
Other income (expense), net		(32,694)		—		384,831		—		352,137
Net income (loss) before income tax expense	$	176,104	$	2,518,015	$	(1,595,180)	$	—	$	1,098,939
Capital expenditures (2)	$	12,450,319	$	12,880	$	—	$	—	$	12,463,199
For the three months ended September 30, 2022
Operating revenue
Natural gas	$	17,893,822	$	—	$	—	$	—	$	17,893,822
Natural gas liquids		497,843		—		—		—		497,843
Oil and condensate		779,456		—		—		—		779,456
Gathering and compression fees		—		2,447,669		—		(374,863)		2,072,806
Total operating revenue (1)		19,171,121		2,447,669		—		(374,863)		21,243,927
Operating costs
Operating costs		2,401,479		600,672		2,515,869		(374,863)		5,143,157
Depletion, depreciation, amortization and accretion		1,436,870		269,160		—		—		1,706,030
Operating income (loss)		15,332,772		1,577,837		(2,515,869)		—		14,394,740
Other income (expense)
Interest income		—		—		89,638		—		89,638
Interest expense		(17,501)		—		—		—		(17,501)
Loss on derivative contracts		(929,637)		—		—		—		(929,637)
Other (expense) income		(37,527)		—		4,750		—		(32,777)
Other income (expense), net		(984,665)		—		94,388		—		(890,277)
Net income (loss) before income tax expense	$	14,348,107	$	1,577,837	$	(2,421,481)	$	—	$	13,504,463
Capital expenditures (2)	$	1,390,908	$	76,016	$	—	$	—	$	1,466,924

(1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended September 30, 2023 and 2022 have been eliminated upon consolidation. For the three months ended September 30, 2023, Epsilon sold natural gas to 28 unique customers. The two customers over 10% comprised 36% and 24% of total revenue. For the three months ended September 30, 2022, Epsilon sold natural gas to 17 unique customers. The seven customers over 10% comprised 13.5%, 13.29%, 13.27%, 11.04%, 10.84%, 10.51%, and 10.25% 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.