Epsilon Energy (EPSN) 10-Q 13 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Mar. 31, 2020shares
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	EPSILON ENERGY LTD.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	26,302,956
Entity Central Index Key	0001726126
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 15,410,599	$ 14,052,417
Accounts receivable	3,766,761	4,296,917
Fair value of derivatives	2,374,878	1,999,802
Prepaid income taxes	1,250,912	1,641,501
Other current assets	345,736	433,687
Total current assets	23,148,886	22,424,324
Property and equipment:
Proved properties	131,965,089	130,819,256
Unproved properties	21,109,490	21,047,512
Accumulated depletion, depreciation, amortization and impairment	(92,842,748)	(89,255,035)
Total oil and gas properties, net	60,231,831	62,611,733
Gathering system	41,525,671	41,445,225
Accumulated depletion, depreciation, amortization and impairment	(30,493,041)	(29,961,690)
Total gathering system, net	11,032,630	11,483,535
Land	375,314	375,314
Buildings and other property and equipment, net	352,302	211,879
Total property and equipment, net	71,992,077	74,682,461
Other assets:
Restricted cash	562,647	561,294
Prepaid drilling costs	880	1,124
Total non-current assets	72,555,604	75,244,879
Total assets	95,704,490	97,669,203
Current liabilities
Accounts payable trade	2,820,603	2,828,495
Royalties payable	1,102,167	1,306,922
Accrued capital expenditures	93,930	627,356
Accrued gathering fees	476,448	373,929
Other accrued liabilities	567,958	858,188
Asset retirement obligation	1,529,313	1,503,978
Total current liabilities	6,590,419	7,498,868
Non-current liabilities
Asset retirement obligation	1,434,573	1,405,877
Deferred income taxes	12,331,986	12,401,464
Total non-current liabilities	13,766,559	13,807,341
Total liabilities	20,356,978	21,306,209
Commitments and contingencies (Note 10)
Shareholders' equity
Common shares, no par value, unlimited shares authorized and 26,790,985 issued and 26,302,956 shares outstanding at March 31, 2020 and 26,790,985 shares issued and outstanding at December 31, 2019	140,808,923	140,808,923
Treasury shares, 488,029 at March 31, 2020	(1,499,586)
Additional paid-in capital	7,203,407	7,029,488
Accumulated deficit	(80,975,596)	(81,285,895)
Accumulated other comprehensive income	9,810,364	9,810,478
Total shareholders' equity	75,347,512	76,362,994
Total liabilities and shareholders' equity	$ 95,704,490	$ 97,669,203

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Unaudited Condensed Consolidated Balance Sheets
Par value	$ 0	$ 0
Common shares authorized	Unlimited	Unlimited
Common shares issued	26,790,985	26,790,985
Common shares outstanding	26,302,956	26,790,985
Treasury shares	488,029

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues from contracts with customers:
Total revenue	$ 6,427,846	$ 7,946,014
Operating costs and expenses:
Lease operating expenses	2,047,767	1,718,293
Gathering system operating expenses	97,778	312,787
Development geological and geophysical expenses	2,629
Depletion, depreciation, amortization, and accretion	2,414,376	1,825,731
Impairment of proved properties	1,760,000
General and administrative expenses:
Stock based compensation expense	173,919	133,720
Other general and administrative expenses	1,008,113	1,339,562
Total operating costs and expenses	7,504,582	5,330,093
Operating income	(1,076,736)	2,615,921
Other income (expense):
Interest income	21,529	42,691
Interest expense	(28,006)	(27,609)
Gain (loss) on derivative contracts	1,721,018	(510,754)
Other income (expense)	(2,225)	23
Other income (expense), net	1,712,316	(495,649)
Income before income tax expense	635,580	2,120,272
Income tax expense	325,281	746,596
NET INCOME	310,299	1,373,676
Currency translation adjustments	(114)	10,792
NET COMPREHENSIVE INCOME	$ 310,185	$ 1,384,468
Net income per share, basic	$ 0.01	$ 0.05
Net income per share, diluted	$ 0.01	$ 0.05
Weighted average number of shares outstanding, basic	26,565,084	27,392,755
Weighted average number of shares outstanding, diluted	26,565,084	27,408,374
Gas, oil, NGLs and condensate
Revenues from contracts with customers:
Total revenue	$ 4,111,144	$ 5,507,663
Gas gathering and compression
Revenues from contracts with customers:
Total revenue	$ 2,316,702	$ 2,438,351

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity - USD ($)	Common stock	Treasury Shares	Additional paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 143,705,441	$ (94,418)	$ 6,519,028	$ 9,797,930	$ (89,983,894)	$ 69,944,087
Balance (in shares) at Dec. 31, 2018	27,439,300	(26,953)
Increase (Decrease) in Stockholders' Equity
Net income					1,373,676	1,373,676
Stock-based compensation expenses			133,720			133,720
Retirement of treasury shares	$ (94,418)	$ 94,418
Retirement of treasury shares (in shares)	(26,953)	26,953
Buyback and retirement of common shares	$ (248,381)					(248,381)
Buyback and retirement of common shares (Shares)	(57,100)
Other comprehensive income (loss)				10,792		10,792
Balance at Mar. 31, 2019	$ 143,362,642		6,652,748	9,808,722	(88,610,218)	71,213,894
Balance (in shares) at Mar. 31, 2019	27,355,247
Balance at Dec. 31, 2018	$ 143,705,441	$ (94,418)	6,519,028	9,797,930	(89,983,894)	69,944,087
Balance (in shares) at Dec. 31, 2018	27,439,300	(26,953)
Balance at Dec. 31, 2019	$ 140,808,923		7,029,488	9,810,478	(81,285,895)	76,362,994
Balance (in shares) at Dec. 31, 2019	26,790,985
Increase (Decrease) in Stockholders' Equity
Net income					310,299	310,299
Stock-based compensation expenses			173,919			173,919
Buyback of common shares		$ (1,499,586)				(1,499,586)
Buyback of common shares (in shares)		(488,029)
Other comprehensive income (loss)				(114)		(114)
Balance at Mar. 31, 2020	$ 140,808,923	$ (1,499,586)	$ 7,203,407	$ 9,810,364	$ (80,975,596)	$ 75,347,512
Balance (in shares) at Mar. 31, 2020	26,790,985	(488,029)

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 310,299	$ 1,373,676
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion, depreciation, amortization, and accretion	2,414,376	1,825,731
Impairment of proved properties	1,760,000
(Gain) loss on derivative contracts	(1,721,018)	510,754
Cash received from (paid for) settlements of derivative contracts	1,345,942	(184,244)
Stock-based compensation expense	173,919	133,720
Deferred income tax expense (benefit)	(69,478)	746,596
Changes in assets and liabilities:
Accounts receivable	530,156	1,060,359
Prepaid income taxes and other current assets	478,540	(754,996)
Accounts payable, royalties payable and other accrued liabilities	(9,215)	(772,879)
Net cash provided by operating activities	5,213,521	3,938,717
Cash flows from investing activities:
Acquisition of unproved oil and gas properties		(596,500)
Additions to unproved oil and gas properties	(61,978)	(262,107)
Additions to proved oil and gas properties	(2,045,440)	(586,815)
Additions to gathering system properties	(101,472)	(65,296)
Additions to land, buildings and property and equipment	(145,640)
Prepaid drilling costs	244
Net cash used in investing activities	(2,354,286)	(1,510,718)
Cash flows from financing activities:
Buyback of common shares	(1,499,586)	(248,381)
Net cash used in financing activities	(1,499,586)	(248,381)
Effect of currency rates on cash, cash equivalents and restricted cash	(114)	10,792
Increase in cash, cash equivalents and restricted cash	1,359,535	2,190,410
Cash, cash equivalents and restricted cash, beginning of period	14,613,711	14,959,518
Cash, cash equivalents and restricted cash, end of period	15,973,246	17,149,928
Supplemental cash flow disclosures:
Income taxes paid		580,000
Interest paid	28,006	31,391
Non-cash investing activities:
Change in proved properties accrued in accounts payable and accrued liabilities	(903,544)	741,406
Change in gathering system accrued in accounts payable and accrued liabilities	(21,026)	(40,187)
Asset retirement obligation asset additions and adjustments	$ 3,937	$ 2

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2020
Description of Business
Description of Business	1. Description of Business Epsilon Energy Ltd. (the “Company” or “Epsilon” or “we”) was incorporated under the laws of the Province of Alberta, Canada on March 14, 2005. On October 24, 2007, the Company became a publicly traded entity trading on the Toronto Stock Exchange (“TSX”) in Canada. On February 14, 2019, Epsilon’s registration statement on Form 10 was declared effective by the United States Securities and Exchange Commission and on February 19, 2019, the Company began trading in the United States on the NASDAQ Global Market under the trading symbol “EPSN.” Effective as of the close of trading on March 15, 2019, Epsilon voluntarily delisted its common shares from the TSX. The Company is engaged in the acquisition, development, gathering and production of primarily natural gas reserves in the United States. Recent Developments The significant demand declines caused by the global response to the coronavirus 2019 pandemic (“COVID-19”) as well as the actions taken by a number of global oil producers has contributed to steep declines in the demand and pricing for oil, natural gas and NGLs, negatively impacting U.S. producers. The commodity price environment is expected to remain depressed based on over-supply, decreased demand and a potential global economic recession. While Epsilon did not incur significant disruptions to operations during the three months ended March 31, 2020 as a result of the COVID-19 pandemic, the Company did need to recognize an impairment on its legacy Oklahoma producing assets due to the historically low commodity prices. Additionally, the Company is unable to predict the impact that the COVID-19 pandemic will have on it, including our financial position, operating results, liquidity and ability to obtain financing in future reporting periods, due to numerous uncertainties. The federal government has passed a series of relief and stimulus packages, including the CAREs Act, for the country but Epsilon has not and will not need to avail itself of them and as such, these programs have no effect on Epsilon’s financial statements.

Basis of Preparation

Basis of Preparation	3 Months Ended
	Mar. 31, 2020
Basis of Preparation
Basis of Preparation	2. Basis of Preparation Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the appropriate rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. All adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods presented have been included. The interim financial information and notes hereto should be read in conjunction with the Company’s consolidated financial statements as of and for the years ended December 31, 2019 and 2018. The results of operations for interim periods are not necessarily indicative of results to be expected for a full fiscal year. Principles of Consolidation The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Epsilon Energy USA, Inc. and its wholly owned subsidiaries, Epsilon Midstream, LLC, Dewey Energy GP, LLC, and Dewey Energy Holdings, LLC. With regard to the gathering system, in which Epsilon owns an undivided interest in the asset, proportionate consolidation accounting is used. All inter-company transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates pertain to proved natural gas and oil reserves and related cash flow estimates used in impairment tests of natural gas and oil, and gathering system properties, asset retirement obligations, accrued natural gas and oil revenues and operating expenses, accrued gathering system revenues and operating expenses, as well as the valuation of commodity derivative instruments. Actual results could differ from those estimates. Recently Issued Accounting Standards The Company, an emerging growth company (“EGC”), has elected to take advantage of the benefits of the extended transition period provided for in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards which allows the Company to defer adoption of certain accounting standards until those standards would otherwise apply to private companies. In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates (“IBORs”) to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. The Company is currently assessing the impact of adopting this new guidance. In December 2019, the Financial Accounting Standards Board ( “FASB” ) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. In June 2016 the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, and must be applied retrospectively. Early adoption is permitted. Epsilon will adopt ASU 2016-13 as of January 1, 2023. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (ASU 2016-02), which significantly changes accounting for leases by requiring that lessees recognize a right of use asset and a related lease liability representing the obligation to make lease payments, for all lease transactions with terms greater than one year. Additional disclosures about an entity’s lease transactions will also be required. ASU 2016-02 defines a lease as “a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.” ASU 2016-02 is effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. In July, the FASB voted to extend the adoption date by one year for private and non-profit companies, and thus emerging growth companies as well. As an emerging growth company, Epsilon plans to defer adoption of ASU 2016-02 until the fiscal year beginning after December 15, 2021. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented in the financial statements using a modified retrospective approach. Epsilon is reviewing the provisions of ASU 2016-02 to determine the impact on its consolidated financial statements and related disclosures. Epsilon is evaluating the impact of the adoption of ASU 2016-02 on the financial statements.

Cash, Cash Equivalents, and Res

Cash, Cash Equivalents, and Restricted Cash	3 Months Ended
	Mar. 31, 2020
Cash, Cash Equivalents, and Restricted Cash
Cash, Cash Equivalents, and Restricted Cash	3. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash on hand and short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Restricted cash consists of amounts deposited to back bonds or letters of credit for potential well liabilities. The Company presents restricted cash with cash and cash equivalents in the Consolidated Statements of Cash Flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts in the Consolidated Statements of Cash Flows as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Cash and cash equivalents $ 15,410,599 $ 14,052,417 Restricted cash included in other assets 562,647 561,294 Cash, cash equivalents and restricted cash in the statement of cash flows $ 15,973,246 $ 14,613,711

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2020
Property and Equipment
Property and Equipment	4. Property and Equipment The following table summarizes the Company’s property and equipment as at March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Property and equipment: Oil and gas properties, successful efforts method Proved properties $ 131,965,089 $ 130,819,256 Unproved properties 21,109,490 21,047,512 Accumulated depletion, depreciation, amortization and impairment (92,842,748) (89,255,035) Total oil and gas properties, net 60,231,831 62,611,733 Gathering system 41,525,671 41,445,225 Accumulated depletion, depreciation, amortization and impairment (30,493,041) (29,961,690) Total gathering system, net 11,032,630 11,483,535 Land 375,314 375,314 Buildings and other property and equipment, net 352,302 211,879 Total property and equipment, net $ 71,992,077 $ 74,682,461 Property Additions and Acquisitions No acquisitions were made during the three months ended March 31, 2020. During the year ended December 31, 2019, the Company acquired additional acres in the Anadarko Basin for $596,500. Property Sale In June 2019, the Company completed the first part of a sale of undeveloped, stranded leases in Pennsylvania. At that time, the Company received $1.0 million. The sale was completed in July 2019 with a final payment of $0.4 million for a total of $1.4 million received for the stranded leases. Property Impairment Epsilon performs a quantitative impairment test quarterly or whenever events or changes in circumstances indicate that an asset group's carrying amount may not be recoverable, over proved properties using the published NYMEX forward prices, timing, methods and other assumptions consistent with historical periods. When indicators of impairment are present, tests require that the Company first compare 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 of the natural gas properties to their estimated fair values is required, which is determined based on discounted cash flow techniques using significant assumptions including projected revenues, future commodity prices, and a market-specific weighted average cost of capital which are affected by expectations about future market and economic conditions. During the three months ended March 31, 2020, Epsilon recognized certain indicators of impairments specific to our Oklahoma assets related to historically low oil and NGL prices and determined that the carrying value of those assets was not recoverable, based on the current indicators. As a result of this assessment, a $1.76 million impairment was assessed on the Company’s Oklahoma assets at March 31, 2020. No impairment was required as of December 31, 2019.

Revolving Line of Credit

Revolving Line of Credit	3 Months Ended
	Mar. 31, 2020
Revolving Line of Credit
Revolving Line of Credit	5 . Revolving Line of Credit Effective July 30, 2013, Epsilon Energy USA Inc., a wholly owned subsidiary of the Company, executed a three-year senior secured revolving credit facility with a bank (‘‘Credit Facility’’) for a total commitment of up to $100 million. Upon each advance, interest is charged at the rate of LIBOR plus an ‘‘applicable margin’’. The applicable margin ranges from 2.75 - 3.75% and is based on the percent of the line of credit utilized. The terms “Borrowing Base” and “Mortgaged Properties” include the Company’s gathering system assets in addition to the natural gas and oil properties. The “Required Reserve Value” is the lesser of 90% of the recognized value of all proved natural gas and oil properties or 150% of the then current borrowing base. On January 7, 2019, the maturity date of the Credit Facility was extended to March 1, 2022 and the borrowing base was increased from $13.5 million to $23 million. The borrowing base is subject to twice per annum redetermination by the lenders based on, among other things, their evaluation of the Company’s natural gas reserves. Additionally, the Company is required to maintain acceptable commodity hedging agreements covering at least 25% of projected production of natural gas for the succeeding calendar year, along with the 50% for the current calendar year. On August 14, 2019 the borrowing base was reaffirmed at $23 million. Additionally, the commodity hedging requirements were updated. Currently, when the Company’s utilization exceeds 25%, the Company must have in place acceptable commodity hedging agreements covering at least 75% of projected production for the first full twelve months after such occurrence and 50% of projected production of natural gas for the succeeding six months. On February 11, 2020 the borrowing base was reaffirmed at $23 million and hedging requirements remained unchanged. The lender under the Credit Facility has a first priority security interest in the tangible and intangible assets, including the gathering system, of Epsilon Energy USA, Inc. to secure any outstanding amounts under the agreement. Under the terms of the agreement, the Company must maintain the following covenants:  Interest coverage ratio greater than 3 based on income adjusted for interest, taxes and non-cash amounts.  Current ratio, adjusted for line of credit amounts used and available and non-cash amounts, greater than 1.  Leverage ratio less than 3.5 based on income adjusted for interest, taxes and non-cash amounts. The Company was in compliance with the financial covenants of the Credit Facility as of March 31, 2020 and December 31, 2019 and Epsilon expects to be in compliance with the financial covenants for the next 12 months. A commitment fee of 0.50% is assessed quarterly on the daily average unused borrowing base on the Credit Facility. Balance at Balance at March 31, December 31, Current Interest Rate 2020 2019 Borrowing Base 3 mo. Revolving line of credit $ — $ — $ 23,000,000 LIBOR + 2.75% (1) (1) At March 31, 2020, the weighted average interest rate was 4.2%.

Shareholders Equity

Shareholders Equity	3 Months Ended
	Mar. 31, 2020
Shareholders' Equity
Shareholders' Equity	6. Shareholders’ Equity (a) Authorized shares The Company is authorized to issue an unlimited number of Common Shares with no par value and an unlimited number of Preferred Shares with no par value. (b) Purchases of Equity Shares Prior to moving the Company listing from the TSX to the NASDAQ, and prior to the purchase of the equity shares on the NASDAQ shown below, the Company purchased shares through a normal-course issuer bid (“NCIB”) program with the TSX, which expired February 28, 2019. On the TSX the Company repurchased and retired 57,100 shares of common stock through the year ended December 31, 2019. The repurchased stock had an average price of $4.26 per share. The average share price (converted to US$ using a rate of Cdn$1.33 to US$1) on the TSX from January 1, 2019 through the last day of trading on the TSX, March 15, 2019, was $4.22. Commencing on May 20, 2019, the Company entered into a share repurchase program on the NASDAQ conducted in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934. The Company is authorized to repurchase up to 1,367,762 of its outstanding common shares, representing 5% of the outstanding common shares of Epsilon as of May 20, 2019, for an aggregate purchase price of not more than $5.0 million. The program will end on May 19, 2020 unless the maximum amount of common shares is purchased before then or Epsilon provides earlier notice of termination. Repurchases may be made at management’s discretion from time to time through the facilities of the NASDAQ Global Market. The price paid for the common shares will be, subject to applicable securities laws, the prevailing market price of such common shares on the NASDAQ Global Market at the time of such purchase. The Company intends to fund the purchase out of available cash and does not expect to incur debt to fund the share repurchase program. The following table contains information about our acquisition of equity securities during the three months ended March 31, 2020: Total number Maximum number of shares of shares that purchased as may yet be Total number Average price part of publicly purchased under of shares paid per announced plans the plans or purchased share or programs programs Beginning balance at May 20, 2019 1,367,762 Shares purchased thru December 31, 2019 696,096 $ 3.72 January 2020 102,051 $ 2.95 February 2020 261,519 $ 3.11 March 2020 124,459 $ 2.98 Total as of March 31, 2020 1,184,125 $ 3.44 1,184,125 183,637 (c) Stock Options The Company maintains a stock option plan for directors, officers, employees and consultants of the Company and its subsidiaries. Through March 31, 2020, the Company had outstanding stock options covering 245,000 Common Shares at an overall average exercise price of $5.27 per Common Share to directors, officers, and employees of the Company and its subsidiaries. A maximum amount of 755,000 Common Shares is available for future issuances. The following table summarizes stock option activity for the three months ended March 31, 2020 and the year ended December 31, 2019: Three months ended Year ended March 31, 2020 December 31, 2019 Weighted Weighted Number of Average Number of Average Options Exercise Options Exercise Exercise price in US$ Outstanding Price (1) Outstanding Price (1) Balance at beginning of period 245,000 $ 5.27 290,750 $ 5.02 Exercised — (25,000) 2.17 Expired/Forfeited — (20,750) 5.37 Balance at period-end 245,000 $ 5.27 245,000 $ 5.27 Exercisable at period-end 245,000 $ 5.27 206,670 $ 5.32 (1) Exercise price has been converted to US$ using the rate of Cdn$1.33 to US$1, the rate on March 15, 2019, the date Epsilon Energy, Ltd was delisted from the TSX . At March 31, 2020, using the Black Scholes model, the Company had unrecognized stock based compensation, of nil (at December 31, 2019: $1,867 over 0.08 years). The aggregate intrinsic value at March 31, 2020 was nil (at December 31, 2019: nil). For the three months ended March 31, 2020, $1,867 of stock compensation expense was recognized (for the three months ended March 31, 2019, $6,301). During the three months ended March 31, 2020 and the year ended December 31, 2019, the Company awarded n o stock options. (d) Share Compensation Plan A Share Compensation Plan (the “Plan”) was adopted by the Board on April 13, 2017 and approved by the shareholders at the Annual General Meeting in April 2017. The Plan provides that designated participants may, as determined by the Board, be issued Common Shares in an amount up to 100% of the participant’s compensation paid by the Company in consideration of the participant’s service for the current year divided by the market price of the Common Shares on the NASDAQ at the date of issuance of the Common Shares in the current year. For the three months ended March 31, 2020, no shares of Restricted Stock were awarded. For the year ended December 31, 2019, 184,500 common shares of Restricted Stock were awarded to the Company’s officers, employees, and board of directors. These shares vest over a three-year period, with one-third of the shares being issued per period on the anniversary of the award resolution. The vesting of the shares is contingent on the individuals’ continued employment or service. The Company determined the fair value of the granted Restricted Stock based on the market price of the common shares of the Company on the date of grant. Stock compensation expense for the granted Restricted Stock is recognized over the vesting period. Stock compensation expense recognized during the three months ended March 31, 2020 was $172,052 (for the three months ended March 31, 2019, $127,419). At March 31, 2020, the Company had unrecognized stock based compensation related to these shares of $1,137, 542 to be recognized over a weighted average period of 1.17 years (at December 31, 2019: $1,309,594 over 1.34 years). The following table summarizes Restricted Stock activity for the three months ended March 31, 2020, and the year ended December 31, 2019: Three months ended Year ended March 31, 2020 December 31, 2019 Weighted Weighted Number of Average Number of Average Shares Remaining Life Shares Remaining Life Outstanding (years) Outstanding (years) Balance non-vested Restricted Stock at beginning of period 346,499 1.67 282,833 2.56 Granted — — 184,500 3.00 Vested — — (106,834) — Forfeited — — (14,000) 2.64 Balance non-vested Restricted Stock at end of period 346,499 1.42 346,499 1.67

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2020
Revenue Recognition
Revenue Recognition	7. Revenue Recognition Revenues are comprised primarily of sales of natural gas along with the revenue generated from the Company’s ownership interest in the gas gathering system in the Auburn field in Northeastern Pennsylvania. Also included to a much lesser degree is natural gas, crude oil and NGLs from Oklahoma. The following table details revenue for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 2019 Operating revenue Natural gas $ 4,019,764 $ 5,434,935 Natural gas liquids 31,658 13,491 Oil and condensate 59,722 59,237 Gathering and compression fees 2,316,702 2,438,351 Total operating revenue $ 6,427,846 $ 7,946,014 Revenue is recorded in the month when contractual performance obligations are satisfied. However, settlement statements from the purchasers, and the related cash consideration are received within 30 days for natural gas, NGLs, oil, or condensate sold, and 60 days for gas gathering revenues. As a result, the Company must estimate the amount of production delivered to the customer and the consideration that will ultimately be received for sale of the natural gas, NGLs, oil, or condensate. Estimated revenue due to the Company is recorded within the receivables line item on the accompanying consolidated balance sheets until payment is received. The accounts receivable balances from contracts with customers within the accompanying balance sheets as of March 31, 2020 and December 31, 2019 were $2.0 million and $2.4 million, respectively. The settlement statement from the operator of the Auburn GGS is received two months after transmission and compression has occurred. As a result, the Company must estimate the amount of production that was transmitted and compressed within the system. The accounts receivable balances from the operator of the Auburn GGS within the accompanying balance sheets as of March 31, 2020 and December 31, 2019 were $1.7 million and $1.9 million, respectively.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	3 Months Ended
	Mar. 31, 2020
Accumulated Other Comprehensive Income.
Accumulated Other Comprehensive Income	8. Accumulated Other Comprehensive Income Accumulated other comprehensive income (loss) includes certain transactions that have generally been reported in the condensed consolidated statements of changes in shareholders’ equity, including translation gains (losses) related to the convertible debentures that will remain frozen in accumulated other comprehensive income until such time Epsilon Energy Ltd. is liquidated. Activity within Accumulated other comprehensive income (loss) for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, 2020 2019 Balance at beginning of period $ 9,810,478 $ 9,797,930 Translation gain (loss) other (114) 10,792 Balance at end of period $ 9,810,364 $ 9,808,722

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Taxes
Income Taxes	9. Income Taxes Income tax provisions for the three months ended March 31, 2020 and 2019 are as follows: Three months ended March 31, 2020 2019 Current: Federal $ 297,863 $ — State 96,896 — Total current income tax expense 394,759 — Deferred: Federal (131,081) 537,040 State 61,603 209,556 Total deferred tax expense (benefit) (69,478) 746,596 Income tax expense $ 325,281 $ 746,596 The Company files federal income tax returns in the United States and Canada, and various returns in state and local jurisdictions. The Company believes it has appropriate support for the income tax positions taken and to be taken on our tax returns and that the accruals for tax liabilities are adequate for all open years based on our assessment of various factors including past experience and interpretations of tax law applied to the facts of each matter. The Company's tax returns are open to audit under the statute of limitations for the years ending December 31, 2016 through December 31, 2019. To the extent we utilize net operating losses generated in earlier years, such earlier years may also be subject to audit. Our effective tax rate will typically differ from the statutory federal rate primarily as a result of state income taxes and the valuation allowance against the Canadian net operating loss. The effective tax rate for the three months ended March 31, 2020 was slightly higher than the statutory federal rate as a result of the state income taxes and the valuation allowance against the Canadian net operating loss.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies
Commitments and Contingencies	10. Commitments and Contingencies The Company’s future minimum lease commitments as of March 31, 2020 are summarized in the following table: Year ended December 31, Payments 2020 75,441 2021 103,693 2022 107,419 2023 18,007 $ 304,560 The Company enters into commitments for capital expenditures in advance of the expenditures being made. As of March 31, 2020, the Company had commitments of $3.15 million for capital expenditures. Litigation The Company is not currently involved in any litigation. Management is of the opinion that the potential for litigation is remote.

Net Income Per Share

Net Income Per Share	3 Months Ended
	Mar. 31, 2020
Net Income Per Share
Net Income Per Share	11. Net Income Per Share Basic net income per share is computed on the basis of the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed based upon the weighted-average number of common shares outstanding during the period plus the assumed issuance of common shares for all potentially dilutive securities. The net income used in the calculation of basic and diluted net income per share is as follows: Three months ended March 31, 2020 2019 Net income available to shareholders $ 310,299 $ 1,373,676 In calculating the net income per share, basic and diluted, the following weighted-average shares were used: Three months ended March 31, 2020 2019 Basic weighted-average number of shares outstanding 26,565,084 27,392,755 Dilutive stock options — 12,204 Unvested restricted shares granted — 3,415 Diluted weighted average shares outstanding 26,565,084 27,408,374 The Company excluded the following shares from the diluted EPS because their inclusion would have been anti-dilutive. Three months ended March 31, 2020 2019 Anti-dilutive options 245,000 267,796 Anti-dilutive unvested restricted shares 346,499 279,418 Total Anti-dilutive shares 591,499 547,214

Operating Segments

Operating Segments	3 Months Ended
	Mar. 31, 2020
Operating Segments.
Operating Segments	12. Operating Segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as executive management. Segment performance is evaluated based on operating profit or loss as shown in the table below. Interest income and expense, and income taxes are managed separately on a group basis. The Company’s reportable segments are as follows: a. The Upstream segment activities include acquisition, development and production of oil, natural gas, and other liquid reserves on properties within the United States; b. The Gas Gathering segment partners with two other companies to operate a natural gas gathering system; and c. The Canada segment activities include corporate listing and governance functions of the Company. Segment activity as of, and for the three months ended March 31, 2020 and 2019 is as follows: Upstream Gas Gathering Corporate Elimination Consolidated As of and for the three months ended March 31, 2020 Operating revenue Natural gas $ 4,019,764 $ — $ — $ — $ 4,019,764 Natural gas liquids 31,658 — — — 31,658 Oil and condensate 59,722 — — — 59,722 Gathering and compression fees — 2,736,138 — (419,436) 2,316,702 Total operating revenue $ 4,111,144 (1) $ 2,736,138 $ — $ (419,436) 6,427,846 Net earnings for the period $ (1,580,897) $ 1,686,193 $ 205,003 (3) $ — $ 310,299 Operating costs 2,047,767 517,214 — (419,436) 2,145,545 Development geological and geophysical expenses 2,629 — — — 2,629 Depletion, deprec., amortization and accretion 1,881,645 532,731 — — 2,414,376 Impairment 1,760,000 — — — 1,760,000 Segment assets $ 80,725,283 $ 14,907,581 $ 71,626 $ — $ 95,704,490 Capital expenditures (2) 1,349,514 80,446 — — 1,429,960 Proved properties 39,122,341 — — — 39,122,341 Unproved properties 21,109,490 — — — 21,109,490 Gathering system — 11,032,630 — — 11,032,630 Other property and equipment 727,616 — — — 727,616 As of and for the three months ended March 31, 2019 Operating revenue Natural gas $ 5,434,935 $ — $ — $ — $ 5,434,935 Natural gas liquids 13,491 — — — 13,491 Oil and condensate 59,237 — — — 59,237 Gathering and compression fees — 2,701,244 — (262,893) 2,438,351 Total operating revenue $ 5,507,663 (1) $ 2,701,244 $ — $ (262,893) 7,946,014 Net earnings for the period $ 2,435,906 $ 1,653,297 $ (2,715,527) (3) $ — $ 1,373,676 Operating costs 1,718,293 575,680 — (262,893) 2,031,080 Depletion, deprec., amortization and accretion 1,353,464 472,267 — — 1,825,731 Segment assets $ 75,381,033 $ 14,813,978 $ 194,166 $ — $ 90,389,178 Capital expenditures (2) 2,186,828 25,109 — — 2,211,937 Proved properties 35,048,675 — — — 35,048,675 Unproved properties 20,357,273 — — — 20,357,273 Gathering system — 12,456,159 — — 12,456,159 (1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended March 31, 2020 and 2019 have been eliminated upon consolidation. For the three months ended March 31, 2020, Epsilon sold natural gas to 16 unique customers. The three customers over 10% comprised 62%, 13% and 12% of total revenue. For the three months ended March 31, 2019, Epsilon sold natural gas to 20 unique customers. The two customers over 10% comprised 53% and 34% of total revenue. (2) Capital expenditures for 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 and completion of the gathering and compression facility. (3) Segment reporting for net earnings for the period does not include non-monetary compensation, general and administrative expense, interest income, interest expense, both gains and (losses) on derivative contracts, or income tax amounts as they are managed on a group basis and are instead included in the corporate column for reconciliation purposes.

Commodity Risk Management Activ

Commodity Risk Management Activities	3 Months Ended
	Mar. 31, 2020
Commodity Risk Management Activities
Commodity Risk Management Activities	13. Commodity Risk Management Activities Commodity Price Risks Epsilon engages in price risk management activities from time to time. These activities are intended to manage Epsilon’s exposure to fluctuations in commodity prices for natural gas by securing fixed price contracts for a portion of expected sales volumes. Inherent in the Company’s fixed price contracts, are certain business risks, including market risk and credit risk. Market risk is the risk that the price of natural gas and oil will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the Company’s counterparty to a contract. The Company does not currently require collateral from any of its counterparties nor does its counterparties require collateral from the Company. The Company enters into certain commodity derivative instruments to mitigate commodity price risk associated with a portion of its future natural gas production and related cash flows. The natural gas revenues and cash flows are affected by changes in commodity product prices, which are volatile and cannot be accurately predicted. The objective for holding these commodity derivatives is to protect the operating revenues and cash flows related to a portion of the future natural gas sales from the risk of significant declines in commodity prices, which helps ensure the Company’s ability to fund the capital budget. Epsilon has historically elected not to designate any of its financial commodity derivative contracts as accounting hedges and, accordingly, accounts for these financial commodity derivative contracts using the mark-to-market accounting method. Under this accounting method, changes in the fair value of outstanding financial instruments are recognized as gains or losses in the period of change and are recorded as gain (loss) on derivative contracts on the condensed consolidated statements of operations and comprehensive income. The related cash flow impact is reflected in cash flows from operating activities. During the three months ended March 31, 2020, Epsilon recognized gains on commodity derivative contracts of $1,721,018. This amount included cash received on settlements of these contracts of $1,345,942. For the three months ended March 31, 2019, Epsilon recognized losses on financial commodity derivative contracts of $510,754. This amount included cash paid on settlements of these contracts of $184,244. Commodity Derivative Contracts Presented below is a summary of Epsilon’s natural gas price and basis swap contracts as of March 31, 2020. Weighted Average Price ($/MMbtu) Fair Value Volume Basis March 31, Derivative Type (MMbtu) Swaps Differential 2020 2021 Fixed price swap 3,062,500 $ 2.73 $ — 2,134,184 Basis swap 4,902,500 $ — $ (0.46) 240,694 $ 2,374,878 As of March 31, 2020 and 2019, all of the Company’s economic derivative hedge positions were with large financial institutions, which are not known to the Company to be in default on their derivative positions. The Company is exposed to credit risk to the extent of non-performance by the counterparties in the derivative contracts discussed above; however, the Company does not anticipate non-performance by such counterparties. None of the Company’s derivative instruments contains credit-risk related contingent features. Derivatives are net on the balance sheet as they are subject to the right to offset the liabilities with the assets. The following tables summarize the gross fair values of our derivative instruments, presenting the impact of offsetting the derivative assets and liabilities on our condensed consolidated balance sheets as of the dates indicated below: Fair Value of Derivative March 31, March 31, 2020 2019 Current Basis swap $ 342,998 $ 34,781 Fixed price swap 2,134,184 260,239 Long-term Basis swap — 67,677 Fixed price swap — 225,619 $ 2,477,182 $ 588,316 Fair Value of Derivative March 31, March 31, 2020 2019 Current Basis swap $ (102,304) $ (620,143) Fixed price swap — (488,838) Long-term Basis swap — (76,138) Fixed price swap — (26,730) $ (102,304) $ (1,211,849) Net Fair Value of Derivatives $ 2,374,878 $ (623,533) The following table presents the changes in the fair value of Epsilon’s commodity derivatives for the periods indicated: Three months ended March 31, 2020 2019 Fair value of asset (liability), beginning of year $ 1,999,802 $ (297,023) Gains (losses) on derivative contracts included in earnings 1,721,018 (510,754) Settlement of commodity derivative contracts (1,345,942) 184,244 Fair value of asset (liability), end of year $ 2,374,878 $ (623,533)

Asset Retirement Obligations

Asset Retirement Obligations	3 Months Ended
	Mar. 31, 2020
Asset Retirement Obligations
Asset Retirement Obligations	14. Asset Retirement Obligations Asset retirement obligations were estimated by management based on Epsilon’s net ownership interest in all wells and the gathering system, estimated costs to reclaim and abandon such assets and the estimated timing of the costs to be incurred in future periods. The following tables summarize the changes in asset retirement obligations for the periods indicated: Three Months Ended Year ended March 31, December 31, 2020 2019 Balance beginning of period $ 2,909,855 $ 1,625,154 Liabilities from drilling of new wells 1,756 16,163 Change in estimates 2,181 1,153,740 Accretion 50,094 114,798 Balance end of period $ 2,963,886 $ 2,909,855

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
Fair Value Measurements
Fair Value Measurements	15. Fair Value Measurements The methodologies used to determine the fair value of our financial assets and liabilities at March 31, 2020 were the same as those used at December 31, 2019. Cash, cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates their fair value because of the short-term maturity of these instruments. The Company’s revolving line of credit has a recorded value that approximates its fair value since its variable interest rate is tied to current market rates and the applicable margins represent market rates. Commodity derivative instruments consist of fixed-price swaps and basis swap contracts for natural gas. The Company’s derivative contracts are valued based on an income approach. The model considers various assumptions, such as quoted forward prices for commodities, time value and volatility factors. These assumptions are observable in the marketplace throughout the full term of the contract, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace, and are therefore designated as Level 2 within the valuation hierarchy. The Company utilizes its counterparties’ valuations to assess the reasonableness of its own valuations.

Basis of Preparation (Policies)

Basis of Preparation (Policies)	3 Months Ended
	Mar. 31, 2020
Basis of Preparation
Interim Financial Statements	Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the appropriate rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. All adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods presented have been included. The interim financial information and notes hereto should be read in conjunction with the Company’s consolidated financial statements as of and for the years ended December 31, 2019 and 2018. The results of operations for interim periods are not necessarily indicative of results to be expected for a full fiscal year.
Principles of Consolidation	Principles of Consolidation The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Epsilon Energy USA, Inc. and its wholly owned subsidiaries, Epsilon Midstream, LLC, Dewey Energy GP, LLC, and Dewey Energy Holdings, LLC. With regard to the gathering system, in which Epsilon owns an undivided interest in the asset, proportionate consolidation accounting is used. All inter-company transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates pertain to proved natural gas and oil reserves and related cash flow estimates used in impairment tests of natural gas and oil, and gathering system properties, asset retirement obligations, accrued natural gas and oil revenues and operating expenses, accrued gathering system revenues and operating expenses, as well as the valuation of commodity derivative instruments. Actual results could differ from those estimates.
Recently Issued Accounting Standards	Recently Issued Accounting Standards The Company, an emerging growth company (“EGC”), has elected to take advantage of the benefits of the extended transition period provided for in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards which allows the Company to defer adoption of certain accounting standards until those standards would otherwise apply to private companies. In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates (“IBORs”) to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. The Company is currently assessing the impact of adopting this new guidance. In December 2019, the Financial Accounting Standards Board ( “FASB” ) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. In June 2016 the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, and must be applied retrospectively. Early adoption is permitted. Epsilon will adopt ASU 2016-13 as of January 1, 2023. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (ASU 2016-02), which significantly changes accounting for leases by requiring that lessees recognize a right of use asset and a related lease liability representing the obligation to make lease payments, for all lease transactions with terms greater than one year. Additional disclosures about an entity’s lease transactions will also be required. ASU 2016-02 defines a lease as “a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.” ASU 2016-02 is effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. In July, the FASB voted to extend the adoption date by one year for private and non-profit companies, and thus emerging growth companies as well. As an emerging growth company, Epsilon plans to defer adoption of ASU 2016-02 until the fiscal year beginning after December 15, 2021. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented in the financial statements using a modified retrospective approach. Epsilon is reviewing the provisions of ASU 2016-02 to determine the impact on its consolidated financial statements and related disclosures. Epsilon is evaluating the impact of the adoption of ASU 2016-02 on the financial statements.

Cash, Cash Equivalents, and R_2

Cash, Cash Equivalents, and Restricted Cash (Tables)	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Schedule of cash, cash equivalents and restricted cash	March 31, December 31, 2020 2019 Cash and cash equivalents $ 15,410,599 $ 14,052,417 Restricted cash included in other assets 562,647 561,294 Cash, cash equivalents and restricted cash in the statement of cash flows $ 15,973,246 $ 14,613,711

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2020
Property and Equipment
Schedule of property and equipment	March 31, December 31, 2020 2019 Property and equipment: Oil and gas properties, successful efforts method Proved properties $ 131,965,089 $ 130,819,256 Unproved properties 21,109,490 21,047,512 Accumulated depletion, depreciation, amortization and impairment (92,842,748) (89,255,035) Total oil and gas properties, net 60,231,831 62,611,733 Gathering system 41,525,671 41,445,225 Accumulated depletion, depreciation, amortization and impairment (30,493,041) (29,961,690) Total gathering system, net 11,032,630 11,483,535 Land 375,314 375,314 Buildings and other property and equipment, net 352,302 211,879 Total property and equipment, net $ 71,992,077 $ 74,682,461

Revolving Line of Credit (Table

Revolving Line of Credit (Tables)	3 Months Ended
	Mar. 31, 2020
Revolving Line of Credit
Schedule of revolving line of credit	Balance at Balance at March 31, December 31, Current Interest Rate 2020 2019 Borrowing Base 3 mo. Revolving line of credit $ — $ — $ 23,000,000 LIBOR + 2.75% (1) (1) At March 31, 2020, the weighted average interest rate was 4.2%.

Shareholders Equity (Tables)

Shareholders Equity (Tables)	3 Months Ended
	Mar. 31, 2020
Shareholders' Equity
Schedule of purchases of equity Shares	The following table contains information about our acquisition of equity securities during the three months ended March 31, 2020: Total number Maximum number of shares of shares that purchased as may yet be Total number Average price part of publicly purchased under of shares paid per announced plans the plans or purchased share or programs programs Beginning balance at May 20, 2019 1,367,762 Shares purchased thru December 31, 2019 696,096 $ 3.72 January 2020 102,051 $ 2.95 February 2020 261,519 $ 3.11 March 2020 124,459 $ 2.98 Total as of March 31, 2020 1,184,125 $ 3.44 1,184,125 183,637
Summary of stock option activity	Three months ended Year ended March 31, 2020 December 31, 2019 Weighted Weighted Number of Average Number of Average Options Exercise Options Exercise Exercise price in US$ Outstanding Price (1) Outstanding Price (1) Balance at beginning of period 245,000 $ 5.27 290,750 $ 5.02 Exercised — (25,000) 2.17 Expired/Forfeited — (20,750) 5.37 Balance at period-end 245,000 $ 5.27 245,000 $ 5.27 Exercisable at period-end 245,000 $ 5.27 206,670 $ 5.32 (1) Exercise price has been converted to US$ using the rate of Cdn$1.33 to US$1, the rate on March 15, 2019, the date Epsilon Energy, Ltd was delisted from the TSX .
Schedule of restricted stock activity	Three months ended Year ended March 31, 2020 December 31, 2019 Weighted Weighted Number of Average Number of Average Shares Remaining Life Shares Remaining Life Outstanding (years) Outstanding (years) Balance non-vested Restricted Stock at beginning of period 346,499 1.67 282,833 2.56 Granted — — 184,500 3.00 Vested — — (106,834) — Forfeited — — (14,000) 2.64 Balance non-vested Restricted Stock at end of period 346,499 1.42 346,499 1.67

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2020
Revenue Recognition
Summary of revenue	Three Months Ended March 31, 2020 2019 Operating revenue Natural gas $ 4,019,764 $ 5,434,935 Natural gas liquids 31,658 13,491 Oil and condensate 59,722 59,237 Gathering and compression fees 2,316,702 2,438,351 Total operating revenue $ 6,427,846 $ 7,946,014

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Tables)	3 Months Ended
	Mar. 31, 2020
Accumulated Other Comprehensive Income.
Schedule of Accumulated Other Comprehensive Income	Three Months Ended March 31, 2020 2019 Balance at beginning of period $ 9,810,478 $ 9,797,930 Translation gain (loss) other (114) 10,792 Balance at end of period $ 9,810,364 $ 9,808,722

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2020
Income Taxes
Schedule of current and deferred tax expense (benefit)	Three months ended March 31, 2020 2019 Current: Federal $ 297,863 $ — State 96,896 — Total current income tax expense 394,759 — Deferred: Federal (131,081) 537,040 State 61,603 209,556 Total deferred tax expense (benefit) (69,478) 746,596 Income tax expense $ 325,281 $ 746,596

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies
Schedule of future minimum lease commitments	Year ended December 31, Payments 2020 75,441 2021 103,693 2022 107,419 2023 18,007 $ 304,560

Net Income Per Share (Tables)

Net Income Per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Net Income Per Share
Schedule of net income used in the calculation of basic and diluted net income per share	Three months ended March 31, 2020 2019 Net income available to shareholders $ 310,299 $ 1,373,676
Schedule of weighted-average shares used in calculation of net income per share	Three months ended March 31, 2020 2019 Basic weighted-average number of shares outstanding 26,565,084 27,392,755 Dilutive stock options — 12,204 Unvested restricted shares granted — 3,415 Diluted weighted average shares outstanding 26,565,084 27,408,374
Schedule of anti-dilutive shares	Three months ended March 31, 2020 2019 Anti-dilutive options 245,000 267,796 Anti-dilutive unvested restricted shares 346,499 279,418 Total Anti-dilutive shares 591,499 547,214

Operating Segments (Tables)

Operating Segments (Tables)	3 Months Ended
	Mar. 31, 2020
Operating Segments.
Schedule of segment financial information	Upstream Gas Gathering Corporate Elimination Consolidated As of and for the three months ended March 31, 2020 Operating revenue Natural gas $ 4,019,764 $ — $ — $ — $ 4,019,764 Natural gas liquids 31,658 — — — 31,658 Oil and condensate 59,722 — — — 59,722 Gathering and compression fees — 2,736,138 — (419,436) 2,316,702 Total operating revenue $ 4,111,144 (1) $ 2,736,138 $ — $ (419,436) 6,427,846 Net earnings for the period $ (1,580,897) $ 1,686,193 $ 205,003 (3) $ — $ 310,299 Operating costs 2,047,767 517,214 — (419,436) 2,145,545 Development geological and geophysical expenses 2,629 — — — 2,629 Depletion, deprec., amortization and accretion 1,881,645 532,731 — — 2,414,376 Impairment 1,760,000 — — — 1,760,000 Segment assets $ 80,725,283 $ 14,907,581 $ 71,626 $ — $ 95,704,490 Capital expenditures (2) 1,349,514 80,446 — — 1,429,960 Proved properties 39,122,341 — — — 39,122,341 Unproved properties 21,109,490 — — — 21,109,490 Gathering system — 11,032,630 — — 11,032,630 Other property and equipment 727,616 — — — 727,616 As of and for the three months ended March 31, 2019 Operating revenue Natural gas $ 5,434,935 $ — $ — $ — $ 5,434,935 Natural gas liquids 13,491 — — — 13,491 Oil and condensate 59,237 — — — 59,237 Gathering and compression fees — 2,701,244 — (262,893) 2,438,351 Total operating revenue $ 5,507,663 (1) $ 2,701,244 $ — $ (262,893) 7,946,014 Net earnings for the period $ 2,435,906 $ 1,653,297 $ (2,715,527) (3) $ — $ 1,373,676 Operating costs 1,718,293 575,680 — (262,893) 2,031,080 Depletion, deprec., amortization and accretion 1,353,464 472,267 — — 1,825,731 Segment assets $ 75,381,033 $ 14,813,978 $ 194,166 $ — $ 90,389,178 Capital expenditures (2) 2,186,828 25,109 — — 2,211,937 Proved properties 35,048,675 — — — 35,048,675 Unproved properties 20,357,273 — — — 20,357,273 Gathering system — 12,456,159 — — 12,456,159 (1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended March 31, 2020 and 2019 have been eliminated upon consolidation. For the three months ended March 31, 2020, Epsilon sold natural gas to 16 unique customers. The three customers over 10% comprised 62%, 13% and 12% of total revenue. For the three months ended March 31, 2019, Epsilon sold natural gas to 20 unique customers. The two customers over 10% comprised 53% and 34% of total revenue. (2) Capital expenditures for 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 and completion of the gathering and compression facility. (3) Segment reporting for net earnings for the period does not include non-monetary compensation, general and administrative expense, interest income, interest expense, both gains and (losses) on derivative contracts, or income tax amounts as they are managed on a group basis and are instead included in the corporate column for reconciliation purposes.

Commodity Risk Management Act_2

Commodity Risk Management Activities (Tables)	3 Months Ended
	Mar. 31, 2020
Commodity Risk Management Activities
Schedule of natural gas price and basis swap contracts	Weighted Average Price ($/MMbtu) Fair Value Volume Basis March 31, Derivative Type (MMbtu) Swaps Differential 2020 2021 Fixed price swap 3,062,500 $ 2.73 $ — 2,134,184 Basis swap 4,902,500 $ — $ (0.46) 240,694 $ 2,374,878
Schedule of fair value of derivatives	Fair Value of Derivative March 31, March 31, 2020 2019 Current Basis swap $ 342,998 $ 34,781 Fixed price swap 2,134,184 260,239 Long-term Basis swap — 67,677 Fixed price swap — 225,619 $ 2,477,182 $ 588,316 Fair Value of Derivative March 31, March 31, 2020 2019 Current Basis swap $ (102,304) $ (620,143) Fixed price swap — (488,838) Long-term Basis swap — (76,138) Fixed price swap — (26,730) $ (102,304) $ (1,211,849) Net Fair Value of Derivatives $ 2,374,878 $ (623,533)
Schedule of fair value of derivatives rollforward	Three months ended March 31, 2020 2019 Fair value of asset (liability), beginning of year $ 1,999,802 $ (297,023) Gains (losses) on derivative contracts included in earnings 1,721,018 (510,754) Settlement of commodity derivative contracts (1,345,942) 184,244 Fair value of asset (liability), end of year $ 2,374,878 $ (623,533)

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	3 Months Ended
	Mar. 31, 2020
Asset Retirement Obligations
Schedule of activity in asset retirement obligations	Three Months Ended Year ended March 31, December 31, 2020 2019 Balance beginning of period $ 2,909,855 $ 1,625,154 Liabilities from drilling of new wells 1,756 16,163 Change in estimates 2,181 1,153,740 Accretion 50,094 114,798 Balance end of period $ 2,963,886 $ 2,909,855

Cash, Cash Equivalents and Rest

Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 15,410,599	$ 14,052,417
Restricted cash included in other assets	562,647	561,294
Cash, cash equivalents and restricted cash in the statement of cash flows	$ 15,973,246	$ 14,613,711	$ 17,149,928	$ 14,959,518

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	1 Months Ended		3 Months Ended	12 Months Ended
	Jul. 31, 2019	Jun. 30, 2019	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Property and equipment:
Proved properties			$ 131,965,089	$ 130,819,256
Unproved properties			21,109,490	21,047,512	$ 20,357,273
Accumulated depletion, depreciation, amortization and impairment			(92,842,748)	(89,255,035)
Total oil and gas properties, net			60,231,831	62,611,733
Gathering system			41,525,671	41,445,225
Accumulated depletion, depreciation, amortization and impairment			(30,493,041)	(29,961,690)
Total gathering system, net			11,032,630	11,483,535	$ 12,456,159
Land			375,314	375,314
Buildings and other property and equipment, net			352,302	211,879
Total property and equipment, net			71,992,077	74,682,461
Payment for land acquired			0	596,500
Proceeds from sale of leases	$ 400,000	$ 1,000,000		1,400,000
Impairment of oil and gas properties			$ 1,760,000	$ 0

Revolving Line of Credit (Detai

Revolving Line of Credit (Details) - Revolving Credit Facility - USD ($)	Aug. 14, 2019	Jan. 07, 2019	Jul. 30, 2013	Mar. 31, 2020	Feb. 11, 2020	Jan. 06, 2019
Revolving Credit Facility
Debt term			3 years
Total commitments			$ 100,000,000
Current borrowing base	$ 23,000,000	$ 23,000,000		$ 23,000,000	$ 23,000,000	$ 13,500,000
Minimum utilization percentage	25.00%
Hedging percentage on production for succeeding six months	50.00%
Percentage of commodity hedge of natural gas		50.00%
Reserve percentage on proved oil and gas properties			90.00%
Minimum
Revolving Credit Facility
Percentage of commodity hedge of natural gas for the succeeding calendar year		25.00%
Hedging percentage on production for first twelve months	75.00%
Maximum
Revolving Credit Facility
Reserve percentage on borrowing base			150.00%
LIBOR
Revolving Credit Facility
Margin added to variable interest rate				2.75%
LIBOR | Minimum
Revolving Credit Facility
Margin added to variable interest rate			2.75%
LIBOR | Maximum
Revolving Credit Facility
Margin added to variable interest rate			3.75%

Revolving Line of Credit - Rati

Revolving Line of Credit - Ratios (Details) - Revolving Credit Facility	3 Months Ended
	Mar. 31, 2020USD ($)	Feb. 11, 2020USD ($)	Aug. 14, 2019USD ($)	Jan. 07, 2019USD ($)	Jan. 06, 2019USD ($)
Revolving Credit Facility
Interest coverage ratio	3
Current ratio	1
Leverage ratio	3.5
Commitment fee assessed quarterly on the daily average unused commitments	0.50%
Current borrowing base	$ 23,000,000	$ 23,000,000	$ 23,000,000	$ 23,000,000	$ 13,500,000
Weighted average interest rate (as a percent)	4.20%
LIBOR
Revolving Credit Facility
Margin added to variable interest rate	2.75%

Shareholders Equity - Share Cap

Shareholders Equity - Share Capital (Details)	2 Months Ended	12 Months Ended
	Mar. 15, 2019$ / shares$ / $	Dec. 31, 2019$ / sharesshares	Mar. 31, 2020$ / shares
Components of share capital:
Common Stock, No Par Value		$ 0	$ 0
Preferred Stock, No Par Value			$ 0
NCIB Program
Components of share capital:
Buyback and retirement of common shares | shares		57,100
Shares repurchased average price (in dollars per share)		$ 4.26
Average share price, converted to US$ using rate | $ / $	1.33
Average share price on the TSX	$ 4.22

Shareholders Equity - Purchases

Shareholders Equity - Purchases of Equity Shares (Details) - USD ($) $ / shares in Units, $ in Millions	May 20, 2019	Mar. 31, 2020	Feb. 29, 2020	Jan. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Shareholders' Equity
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	1,367,762
Shares Repurchased As A Percentage Of Outstanding Common Shares	5.00%
Stock Repurchase Program, Authorized Amount	$ 5
Total number of shares purchased		124,459	261,519	102,051	1,184,125	696,096
Average price paid per share		$ 2.98	$ 3.11	$ 2.95	$ 3.44	$ 3.72
Maximum number of shares that may yet be purchased under the plans or programs	1,367,762	183,637			183,637

Shareholders Equity - Stock Opt

Shareholders Equity - Stock Option Activity (Details) - Stock options	3 Months Ended	12 Months Ended
	Mar. 31, 2020$ / sharesshares	Dec. 31, 2019$ / sharesshares	Mar. 15, 2019$ / $
Share Compensation Plan
Common Shares available for future option issuances	755,000
Average share price, converted to US$ using rate | $ / $			1.33
Number of Options Outstanding
Balance at beginning of period (in shares)	245,000	290,750
Exercised (in shares)	0	(25,000)
Expired/Forfeited (in shares)	0	(20,750)
Options outstanding, end of period (in shares)	245,000	245,000
Exercisable at period-end (in shares)	245,000	206,670
Weighted average exercise price
Balance at beginning of period (in dollars per share) | $ / shares	$ 5.27	$ 5.02
Exercised (in dollars per share) | $ / shares	0	2.17
Expired/Forfeited (in dollars per share) | $ / shares	0	5.37
Balance at period-end (in dollars per share) | $ / shares	5.27	5.27
Exercisable at period-end (in dollars per share) | $ / shares	$ 5.27	$ 5.32

Shareholders Equity - Stock O_2

Shareholders Equity - Stock Option Activity, Narrative (Details) - Stock options - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Share Compensation Plan
Unrecognized stock based compensation to be recognized over a period	$ 0		$ 1,867
Weighted average period for recognition			29 days
Aggregate intrinsic value of options outstanding	0		$ 0
Stock based compensation expense	$ 1,867	$ 6,301
Granted (in shares)	0		0

Shareholders Equity - Share Com

Shareholders Equity - Share Compensation Plan (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Plan
Share Compensation Plan
Maximum participant's compensation percentage	100.00%
Restricted stock awards
Share Compensation Plan
Vesting period			3 years
Vesting percentage			33.00%
Stock based compensation expense	$ 172,052	$ 127,419
Compensation cost not yet recognized	$ 1,137,542		$ 1,309,594
Weighted average period for recognition	1 year 2 months 1 day		1 year 4 months 2 days
Number outstanding
Balance non-vested Restricted Stock at beginning of period (in shares)	346,499	282,833	282,833
Granted (in shares)	0		184,500
Vested (in shares)			(106,834)
Forfeited (in shares)			(14,000)
Balance non-vested Restricted Stock at end of period (in shares)	346,499		346,499	282,833
Weighted Average Remaining Life
Granted (in years)			3 years
Forfeited (in years)			2 years 7 months 21 days
Balance non-vested Restricted Stock at end of period (in years)	1 year 5 months 1 day		1 year 8 months 1 day	2 years 6 months 22 days

Revenue Recognition - Summary o

Revenue Recognition - Summary of revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue recognition
Total operating revenue	$ 6,427,846	$ 7,946,014
Natural gas
Revenue recognition
Total operating revenue	4,019,764	5,434,935
Natural gas liquids
Revenue recognition
Total operating revenue	31,658	13,491
Oil and condensate
Revenue recognition
Total operating revenue	59,722	59,237
Gas gathering and compression
Revenue recognition
Total operating revenue	$ 2,316,702	$ 2,438,351

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Revenue recognition
Accounts receivable balances	$ 2	$ 2.4
Auburn Gas Gathering System
Revenue recognition
Accounts receivable balances	$ 1.7	$ 1.9
Period settlement statement received	2 months
Gas, oil, NGLs and condensate
Revenue recognition
Receivable collection period	30 days
Gas gathering and compression
Revenue recognition
Receivable collection period	60 days

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss)
Balance	$ 76,362,994	$ 69,944,087
Translation gain (loss) other	(114)	10,792
Balance	75,347,512	71,213,894
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss)
Balance	9,810,478	9,797,930
Translation gain (loss) other	(114)	10,792
Balance	$ 9,810,364	$ 9,808,722

Income Taxes - Current and Defe

Income Taxes - Current and Deferred Tax Expense (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Current:
Federal	$ 297,863
State	96,896
Total current income tax expense	394,759
Deferred:
Federal	(131,081)	$ 537,040
State	61,603	209,556
Total deferred tax expense (benefit)	(69,478)	746,596
Income tax expense	$ 325,281	$ 746,596

Commitments and Contingencies_2

Commitments and Contingencies (Details)	Mar. 31, 2020USD ($)
Future minimum lease commitments
2020	$ 75,441
2021	103,693
2022	107,419
2023	18,007
Total future minimum lease commitments	304,560
Commitments for capital expenditures	$ 3,150,000

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net income available to shareholders	$ 310,299	$ 1,373,676
Weighted average number of shares - basic and diluted
Basic weighted-average number of shares outstanding	26,565,084	27,392,755
Diluted weighted average shares outstanding	26,565,084	27,408,374
Total Anti-dilutive shares	591,499	547,214
Stock options
Weighted average number of shares - basic and diluted
Incremental common shares		12,204
Total Anti-dilutive shares	245,000	267,796
Restricted stock awards
Weighted average number of shares - basic and diluted
Incremental common shares		3,415
Total Anti-dilutive shares	346,499	279,418

Operating Segments - Segments (

Operating Segments - Segments (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020USD ($)segment	Mar. 31, 2019USD ($)	Dec. 31, 2019USD ($)
Segment information
Total operating revenue	$ 6,427,846	$ 7,946,014
Net earnings for the period	310,299	1,373,676
Operating costs	2,145,545	2,031,080
Development geological and geophysical expenses	2,629
Depletion, deprec., amortization and accretion	2,414,376	1,825,731
Impairment of oil and gas properties	1,760,000		$ 0
Segment assets	95,704,490	90,389,178
Capital expenditures	1,429,960	2,211,937
Proved properties	39,122,341	35,048,675
Unproved properties	21,109,490	20,357,273	21,047,512
Gathering system	11,032,630	12,456,159	$ 11,483,535
Other property and equipment	727,616
Corporate
Segment information
Net earnings for the period	205,003	(2,715,527)
Segment assets	71,626	194,166
Elimination
Segment information
Total operating revenue	(419,436)	(262,893)
Operating costs	(419,436)	(262,893)
Natural gas
Segment information
Total operating revenue	4,019,764	5,434,935
Natural gas liquids
Segment information
Total operating revenue	31,658	13,491
Oil and condensate
Segment information
Total operating revenue	59,722	59,237
Gas gathering and compression
Segment information
Total operating revenue	2,316,702	2,438,351
Gas gathering and compression | Elimination
Segment information
Total operating revenue	(419,436)	(262,893)
Upstream | Operating Segments
Segment information
Total operating revenue	4,111,144	5,507,663
Net earnings for the period	(1,580,897)	2,435,906
Operating costs	2,047,767	1,718,293
Development geological and geophysical expenses	2,629
Depletion, deprec., amortization and accretion	1,881,645	1,353,464
Impairment of oil and gas properties	1,760,000
Segment assets	80,725,283	75,381,033
Capital expenditures	1,349,514	2,186,828
Proved properties	39,122,341	35,048,675
Unproved properties	21,109,490	20,357,273
Other property and equipment	727,616
Upstream | Natural gas | Operating Segments
Segment information
Total operating revenue	4,019,764	5,434,935
Upstream | Natural gas liquids | Operating Segments
Segment information
Total operating revenue	31,658	13,491
Upstream | Oil and condensate | Operating Segments
Segment information
Total operating revenue	$ 59,722	59,237
Gas Gathering | Operating Segments
Operating Segments
Number of companies partnered to operate natural gas gathering system | segment	2
Segment information
Total operating revenue	$ 2,736,138	2,701,244
Net earnings for the period	1,686,193	1,653,297
Operating costs	517,214	575,680
Depletion, deprec., amortization and accretion	532,731	472,267
Segment assets	14,907,581	14,813,978
Capital expenditures	80,446	25,109
Gathering system	11,032,630	12,456,159
Gas Gathering | Gas gathering and compression | Operating Segments
Segment information
Total operating revenue	$ 2,736,138	$ 2,701,244

Operating Segments - Customers

Operating Segments - Customers (Details) - customer	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Concentration risk
Number of customers	16	20
Customer Concentration risk
Concentration risk
Number of customers	3	2
Threshold concentration risk for reporting (as a percent)	10.00%	10.00%
Customer Concentration risk | Customer One
Concentration risk
Concentration risk (as a percent)	62.00%	53.00%
Customer Concentration risk | Customer Two
Concentration risk
Concentration risk (as a percent)	13.00%	34.00%
Customer Concentration risk | Customer Three
Concentration risk
Concentration risk (as a percent)	12.00%

Commodity Risk Management Act_3

Commodity Risk Management Activities - Commodity Price Risks (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Commodity Risk Management Activities
Unrealized gains (losses) on derivatives included in earnings	$ 1,721,018	$ (510,754)
Cash received from (paid for) settlements of derivative contracts	$ 1,345,942	$ (184,244)

Commodity Risk Management Act_4

Commodity Risk Management Activities - Commodity Derivative Contracts (Details)	3 Months Ended
	Mar. 31, 2020USD ($)MMBTU$ / MMBTU	Mar. 31, 2019USD ($)
Risk Management Activities
Fair Value	$ 2,374,878	$ (623,533)
Fixed price swap
Risk Management Activities
Volume (Mmbtu) | MMBTU	3,062,500
Swaps | $ / MMBTU	2.73
Fair Value	$ 2,134,184
Basis swap
Risk Management Activities
Volume (Mmbtu) | MMBTU	4,902,500
Basis Differential | $ / MMBTU	(0.46)
Fair Value	$ 240,694

Commodity Risk Management Act_5

Commodity Risk Management Activities - Fair Value of Derivative Instruments (Details)	Mar. 31, 2020USD ($)DerivativeInstrument	Dec. 31, 2019USD ($)	Mar. 31, 2019USD ($)
Risk Management Activities
Number of credit risk derivatives held | DerivativeInstrument	0
Fair value of derivative assets, current	$ 2,374,878	$ 1,999,802
Fair Value of Derivative Assets	2,477,182		$ 588,316
Fair Value of Derivative Liabilities	(102,304)		(1,211,849)
Net Fair Value of Derivatives	2,374,878		(623,533)
Basis swap
Risk Management Activities
Fair value of derivative assets, current	342,998		34,781
Fair value of derivative assets, long-term			67,677
Fair value of derivative liabilities, current	(102,304)		(620,143)
Fair value of derivative liabilities, long-term			(76,138)
Net Fair Value of Derivatives	240,694
Fixed price swap
Risk Management Activities
Fair value of derivative assets, current	2,134,184		260,239
Fair value of derivative assets, long-term			225,619
Fair value of derivative liabilities, current			(488,838)
Fair value of derivative liabilities, long-term			$ (26,730)
Net Fair Value of Derivatives	$ 2,134,184

Commodity Risk Management Act_6

Commodity Risk Management Activities - Fair value of asset (liability) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Commodity Risk Management Activities
Fair value of asset (liability), beginning of year	$ 1,999,802	$ (297,023)
Gains (losses) on derivatives included in earnings	1,721,018	(510,754)
Settlement of commodity derivative contracts	(1,345,942)	184,244
Fair value of asset (liability), end of year	$ 2,374,878	$ (623,533)

Asset Retirement Obligations (D

Asset Retirement Obligations (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Reconciliation of provision for asset retirement obligations
Balance beginning of period	$ 2,909,855	$ 1,625,154
Liabilities from drilling of new wells	1,756	16,163
Change in estimates	2,181	1,153,740
Accretion	50,094	114,798
Balance end of period	$ 2,963,886	$ 2,909,855