Epsilon Energy (EPSN) 10-Q 10 Nov 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 10, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Sep. 30, 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		23,859,136
Entity Central Index Key	0001726126
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 11,580,278	$ 14,052,417
Accounts receivable, net of allowance for doubtful accounts of $819,000 at September 30, 2020 and nil at December 31, 2019	3,652,036	4,296,917
Fair value of derivatives	20,258	1,999,802
Prepaid income taxes	2,091,399	1,641,501
Other current assets	511,483	433,687
Total current assets	17,855,454	22,424,324
Property and equipment:
Proved properties	133,138,412	130,819,256
Unproved properties	21,448,546	21,047,512
Accumulated depletion, depreciation, amortization and impairment	(96,864,983)	(89,255,035)
Total oil and gas properties, net	57,721,975	62,611,733
Gathering system	41,912,242	41,445,225
Accumulated depletion, depreciation, amortization and impairment	(31,697,749)	(29,961,690)
Total gathering system, net	10,214,493	11,483,535
Land	637,464	375,314
Buildings and other property and equipment, net	343,677	211,879
Total property and equipment, net	68,917,609	74,682,461
Other assets:
Restricted cash	565,049	561,294
Prepaid drilling costs	1,341	1,124
Total non-current assets	69,483,999	75,244,879
Total assets	87,339,453	97,669,203
Current liabilities
Accounts payable trade	1,638,763	2,828,495
Royalties payable	1,046,899	1,306,922
Accrued capital expenditures	95,237	627,356
Accrued gathering fees	529,722	373,929
Other accrued liabilities	1,427,489	858,188
Asset retirement obligation	1,581,561	1,503,978
Total current liabilities	6,319,671	7,498,868
Non-current liabilities
Asset retirement obligation	1,489,386	1,405,877
Deferred income taxes	12,201,046	12,401,464
Total non-current liabilities	13,690,432	13,807,341
Total liabilities	20,010,103	21,306,209
Commitments and contingencies (Note 10)
Shareholders' equity
Common shares, no par value, unlimited shares authorized and 23,817,470 issued and outstanding at September 30, 2020 and 26,790,985 shares issued and outstanding at December 31, 2019.	131,730,401	140,808,923
Additional paid-in capital	7,614,593	7,029,488
Accumulated deficit	(81,834,413)	(81,285,895)
Accumulated other comprehensive income	9,818,769	9,810,478
Total shareholders' equity	67,329,350	76,362,994
Total liabilities and shareholders' equity	$ 87,339,453	$ 97,669,203

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Unaudited Condensed Consolidated Balance Sheets
Allowance for doubtful accounts	$ 819,000	$ 0
Par value	$ 0	$ 0
Common shares authorized	Unlimited	Unlimited
Common shares issued	23,817,470	26,790,985
Common shares outstanding	23,817,470	26,790,985

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues from contracts with customers:
Total revenue	$ 5,810,611	$ 5,219,194	$ 18,517,244	$ 19,928,780
Operating costs and expenses:
Lease operating expenses	2,147,795	1,548,902	6,229,682	4,851,090
Gathering system operating expenses	43,711	461,036	221,191	1,012,709
Development geological and geophysical expenses	2,693		7,595	83,748
Depletion, depreciation, amortization, and accretion	2,769,193	1,851,466	7,761,339	5,630,368
Impairment of proved properties			1,760,000
Gain on sale of property		(445,173)		(1,375,000)
Bad debt expense			819,000
General and administrative expenses:
Stock based compensation expense	239,134	133,720	585,105	401,161
Other general and administrative expenses	1,330,604	952,503	3,575,445	3,213,371
Total operating costs and expenses	6,533,130	4,502,454	20,959,357	13,817,447
Operating income (loss)	(722,519)	716,740	(2,442,113)	6,111,333
Other income (expense):
Interest income	4,724	38,618	39,294	127,906
Interest expense	(28,629)	(29,416)	(84,952)	(86,035)
Gain on derivative contracts	419,879	1,270,494	2,055,548	3,494,727
Other income (expense)		1	(2,228)	456
Other income, net	395,974	1,279,697	2,007,662	3,537,054
Income (loss) before income tax expense	(326,545)	1,996,437	(434,451)	9,648,387
Income tax expense (benefit)	(33,762)	543,139	114,067	2,983,555
NET INCOME (LOSS)	(292,783)	1,453,298	(548,518)	6,664,832
Currency translation adjustments	2,273	(900)	8,291	10,944
NET COMPREHENSIVE INCOME (LOSS)	$ (290,510)	$ 1,452,398	$ (540,227)	$ 6,675,776
Net income (loss) per share, basic	$ (0.01)	$ 0.05	$ (0.02)	$ 0.24
Net income (loss) per share, diluted	$ (0.01)	$ 0.05	$ (0.02)	$ 0.24
Weighted average number of shares outstanding, basic	23,955,619	27,060,387	25,550,194	27,218,162
Weighted average number of shares outstanding, diluted	23,955,619	27,094,391	25,550,194	27,240,117
Gas, oil, NGLs and condensate revenue
Revenues from contracts with customers:
Total revenue	$ 3,590,706	$ 2,999,581	$ 11,716,897	$ 13,005,722
Gas gathering and compression revenue
Revenues from contracts with customers:
Total revenue	$ 2,219,905	$ 2,219,613	$ 6,800,347	$ 6,923,058

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 (loss)					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)
Increase (Decrease) in Stockholders' Equity
Net income (loss)						6,664,832
Balance at Sep. 30, 2019	$ 143,416,892	$ (1,465,910)	6,920,189	9,808,874	(83,319,062)	75,360,983
Balance (in shares) at Sep. 30, 2019	27,380,247	(363,530)
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
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
Increase (Decrease) in Stockholders' Equity
Net income (loss)					3,837,858	3,837,858
Stock-based compensation expenses			133,721			133,721
Buyback of common shares		$ (985,264)				(985,264)
Buyback of common shares (in shares)		(237,189)
Other comprehensive income (loss)				1,052		1,052
Balance at Jun. 30, 2019	$ 143,362,642	$ (985,264)	6,786,469	9,809,774	(84,772,360)	74,201,261
Balance (in shares) at Jun. 30, 2019	27,355,247	(237,189)
Increase (Decrease) in Stockholders' Equity
Net income (loss)					1,453,298	1,453,298
Stock-based compensation expenses			133,720			133,720
Buyback of common shares		$ (480,646)				(480,646)
Buyback of common shares (in shares)		(126,341)
Exercise of stock options	$ 54,250					54,250
Exercise of stock options (in shares)	25,000
Other comprehensive income (loss)				(900)		(900)
Balance at Sep. 30, 2019	$ 143,416,892	$ (1,465,910)	6,920,189	9,808,874	(83,319,062)	75,360,983
Balance (in shares) at Sep. 30, 2019	27,380,247	(363,530)
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 (loss)					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)
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 (loss)						(548,518)
Balance at Sep. 30, 2020	$ 131,730,401		7,614,593	9,818,769	(81,834,413)	67,329,350
Balance (in shares) at Sep. 30, 2020	23,817,470
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)
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(566,034)	(566,034)
Stock-based compensation expenses			172,052			172,052
Buyback of common shares		$ (427,612)				(427,612)
Buyback of common shares (in shares)		(169,285)
Other comprehensive income (loss)				6,132		6,132
Balance at Jun. 30, 2020	$ 140,808,923	$ (1,927,198)	7,375,459	9,816,496	(81,541,630)	74,532,050
Balance (in shares) at Jun. 30, 2020	26,790,985	(657,314)
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(292,783)	(292,783)
Stock-based compensation expenses			239,134			239,134
Retirement of treasury shares	$ (1,927,198)	$ 1,927,198
Retirement of treasury shares (in shares)	(657,314)	657,314
Shares retired through tender offer	$ (7,151,324)					(7,151,324)
Shares retired through tender offer (in shares)	(2,337,034)
Vesting of shares of stock (in shares)	20,833
Other comprehensive income (loss)				2,273		2,273
Balance at Sep. 30, 2020	$ 131,730,401		$ 7,614,593	$ 9,818,769	$ (81,834,413)	$ 67,329,350
Balance (in shares) at Sep. 30, 2020	23,817,470

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (548,518)	$ 6,664,832
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation, amortization, and accretion	7,761,339	5,630,368
Impairment of proved properties	1,760,000
Bad debt expense	819,000
Gain on sale/disposal of properties		(1,375,000)
Gain on derivative contracts	(2,055,548)	(3,494,727)
Cash received from settlements of derivative contracts	4,035,092	1,344,690
Stock-based compensation expense	585,105	401,161
Deferred income tax expense (benefit)	(200,418)	853,116
Changes in assets and liabilities:
Accounts receivable	(174,119)	1,869,411
Prepaid income taxes and other current assets	(527,694)	19,321
Accounts payable, royalties payable and other accrued liabilities	639,224	(1,422,238)
Income taxes payable		1,338,225
Net cash provided by operating activities	12,093,463	11,829,159
Cash flows from investing activities:
Acquisition of unproved oil and gas properties		(596,500)
Additions to unproved oil and gas properties	(401,034)	(919,873)
Additions to proved oil and gas properties	(4,238,580)	(5,452,166)
Additions to gathering system properties	(436,111)	(238,823)
Additions to land, buildings and property and equipment	(415,674)
Prepaid drilling costs	(217)	(1,739)
Proceeds from sale of leases		1,375,000
Net cash used in investing activities	(5,491,616)	(5,834,101)
Cash flows from financing activities:
Buyback of common shares	(9,078,522)	(1,714,291)
Exercise of stock options		54,250
Net cash used in financing activities	(9,078,522)	(1,660,041)
Effect of currency rates on cash, cash equivalents and restricted cash	8,291	10,944
Increase (decrease) in cash, cash equivalents and restricted cash	(2,468,384)	4,345,961
Cash, cash equivalents and restricted cash, beginning of period	14,613,711	14,959,518
Cash, cash equivalents and restricted cash, end of period	12,145,327	19,305,479
Supplemental cash flow disclosures:
Income taxes paid	760,000	733,200
Interest paid	84,952	89,817
Non-cash investing activities:
Change in proved properties accrued in accounts payable and accrued liabilities	(1,926,910)	1,129,972
Change in gathering system accrued in accounts payable and accrued liabilities	30,906	(1,142)
Asset retirement obligation asset additions and adjustments	$ 7,487	$ 9,997

Description of Business

Description of Business	9 Months Ended
	Sep. 30, 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.” 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 drastic global economic downturn. While Epsilon did not incur significant disruptions to operations during the nine months ended September 30, 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. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. As such, the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations is uncertain. Management is actively monitoring the impact of the COVID-19 pandemic on the Company's financial condition, liquidity, operations, suppliers, industry and ability to obtain financing in future reporting periods. Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company is currently not able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity for the future. However, if the pandemic and the low oil and gas price environment continue, it may have a material adverse effect on the Company’s operating cash flows, liquidity, and future development plans. The federal government has passed a series of relief and stimulus packages, including the CARES Act, for the country, but Epsilon has not and does not anticipate that it will apply for assistance under such programs. Accordingly, these programs have no effect on Epsilon’s financial statements. On June 28, 2020, Chesapeake Energy Corporation (“CHK”) filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code (“Petition”). Chesapeake Energy Marketing, Inc. is one of the Anchor Shippers under the Anchor Ship Gas Gathering Agreement (“ASGGA”) for the Auburn GGS with a 43.8750% voting percentage. The Williams Companies Inc. (“Williams”), including its subsidiary Appalachia Midstream Services, L.L.C. (“AMS”), is listed in the petition as a top 30 creditor of CHK, with an amount due by CHK under the ASGGA. On June 28, 2020 unpaid fees attributable to CHK for the ASGGA for May and June 2020 gathering fees were $1.1 million and $1.3 million respectively. As of September 30, 2020, Epsilon has recorded an allowance for doubtful accounts for the Company’s 35% share of these payments for a total bad debt expense of $0.8 million. Epsilon is a 35% owner in the ASGGA. Whether and when these pre-petition amounts are paid depends on how the bankruptcy proceeding unfolds related to the ASGGA. Pre-petition amounts are handled differently than post-petition amounts (amounts for services related to CHK’s production after June 28, 2020). The general rule post-petition is that, if CHK wants to receive the continued provision of services under the ASGGA, Williams is required to continue to perform under the ASGGA provided that Williams is paid for such performance. Currently, CHK continues to produce into the gathering system, and drill and complete wells in the areas covered by the ASGGA, as such, no further provision for amounts post-petition was required. In addition, one well that we have interest in began production in October 2020, and another is scheduled to begin in November. Accordingly, the Company is unable to predict the impact that the COVID-19 pandemic and the CHK bankruptcy will have on it, including our financial position, operating results, liquidity and ability to obtain financing in future reporting periods, due to numerous uncertainties.

Basis of Preparation

Basis of Preparation	9 Months Ended
	Sep. 30, 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, Dewey Energy Holdings, LLC, Epsilon Operating, LLC, and Altolisa 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. The Company is currently assessing the impact of adopting this new guidance. 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 and anticipates the addition of an insignificant asset and related liability associated with our office lease beginning in January 2022.

Cash, Cash Equivalents, and Res

Cash, Cash Equivalents, and Restricted Cash	9 Months Ended
	Sep. 30, 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 September 30, 2020 and 2019: September 30, September 30, 2020 2019 Cash and cash equivalents $ 11,580,278 $ 18,746,426 Restricted cash included in other assets 565,049 559,053 Cash, cash equivalents and restricted cash in the statement of cash flows $ 12,145,327 $ 19,305,479

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2020
Property and Equipment
Property and Equipment	4. Property and Equipment The following table summarizes the Company’s property and equipment as at September 30, 2020 and December 31, 2019: September 30, December 31, 2020 2019 Property and equipment: Oil and gas properties, successful efforts method Proved properties $ 133,138,412 $ 130,819,256 Unproved properties 21,448,546 21,047,512 Accumulated depletion, depreciation, amortization and impairment (96,864,983) (89,255,035) Total oil and gas properties, net 57,721,975 62,611,733 Gathering system 41,912,242 41,445,225 Accumulated depletion, depreciation, amortization and impairment (31,697,749) (29,961,690) Total gathering system, net 10,214,493 11,483,535 Land 637,464 375,314 Buildings and other property and equipment, net 343,677 211,879 Total property and equipment, net $ 68,917,609 $ 74,682,461 Property Additions and Acquisitions No acquisitions were made during the nine months ended September 30, 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. No subsequent sales have occurred. 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. This 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. As a result of this assessment, a $1.76 million impairment was assessed on the Company’s Oklahoma assets at March 31, 2020. No further impairment was required at September 30, 2020 and no impairment was required as of December 31, 2019.

Revolving Line of Credit

Revolving Line of Credit	9 Months Ended
	Sep. 30, 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 50% for the current calendar year. On August 14, 2019 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 nine 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 September 30, 2020 and December 31, 2019 and 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 September 30, December 31, Current Interest Rate 2020 2019 Borrowing Base 3 mo. Revolving line of credit $ — $ — $ 23,000,000 LIBOR + 2.75% (1) (1) At September 30, 2020, the weighted average interest rate was 2.98%.

Shareholders Equity

Shareholders Equity	9 Months Ended
	Sep. 30, 2020
Shareholders' Equity
Shareholders' Equity	6. Shareholders’ Equity (a) 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) Normal Course Issuer Bid 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 was 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 ended on May 19, 2020, but Epsilon’s final repurchase under this program occurred on May 8, 2020. Repurchases were made at management’s discretion from time to time through the facilities of the NASDAQ Global Market. The price paid for the common shares was, 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 funded the purchases out of available cash and did not incur debt to fund the share repurchase program. Substantial Issuer Bid/Issuer Tender Offer On May 14, 2020, the Company’s Board of Directors announced its intention to commence a substantial issuer bid/issuer tender offer to purchase for cash up to an aggregate of approximately $6.2 million of its common shares. In May 2020, upon the terms and subject to the conditions described in the Offer to Purchase dated May 19, 2020, as amended, the Company offered to repurchase up to 2,000,000 of its common shares for $3.06 per share, excluding taxes and interest, for a total cost of approximately $6.1 million, excluding expenses of the tender offer. As permitted under Rule 13e-4(f) and Rule 14e-1(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as stated in its Offer to Purchase, Epsilon was permitted to take up and pay for 2,000,000 Common Shares plus 2% of its issued and outstanding Common Shares, or an aggregate total of up to 2,522,673 Common Shares. The tender offer expired on June 30, 2020, and on July 6, 2020 the Company announced that it accepted 2,337,034 shares for repurchase under the terms of the Offer to Purchase for an aggregate consideration of $7,151,324, or $3.06 per share, excluding fees and expenses. The Company canceled all common shares taken up and paid for under the tender offer. The Company funded the repurchases under the tender offer with cash on hand. As of November 10, 2020, the Company has 23,859,136 shares issued and outstanding. The following table contains activity relating to our acquisition of equity securities during the nine months ended September 30, 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 (4) programs (5) Beginning of normal-course issuer bid, May 20, 2019 1,367,762 Shares purchased through December 31, 2019 (1) (2) 696,096 $ 3.72 January 2020 (2) 102,051 $ 2.95 February 2020 (2) 261,519 $ 3.11 March 2020 (2) 124,459 $ 2.98 April 2020 (2) 156,585 $ 2.48 May 2020 (2) 12,700 $ 2.91 July 2020 (3) 2,337,034 $ 3.06 2,337,034 Total as of September 30, 2020 3,690,444 $ 3.16 2,337,034 — (1) Shares purchased through December 31, 2019 were cancelled prior to the year ended December 31, 2019. (2) Epsilon repurchased these shares under its share repurchase program that commenced on May 20, 2019, as described above. (3) Epsilon repurchased these shares under its substantial issuer bid/issuer tender offer dated May 19, 2020, as described above. (4) The Company announced its intention to commence a substantial issuer bid/issuer tender offer on May 14, 2020, and the substantial issuer bid/issuer tender offer commenced May 19, 2020, as described above. (5) The normal-course issuer bid expired on May 19, 2020, and the substantial issuer bid/issuer tender offer expired on June 30, 2020. (c) Epsilon’s board of directors (the “Board”) adopted the 2020 Equity Incentive Plan (the “2020 Plan”) on July 22, subject to approval by Epsilon’s shareholders at Epsilon’s 2020 Annual General and Special Meeting of shareholders, which occurred on September 1, 2020 (the “Meeting”). Shareholders approved the 2020 Plan at the Meeting. Following Epsilon’s listing on the NASDAQ Global Market, the Board determined that it is in the best interest of the shareholders to approve a new incentive plan that is compliant with U.S. public company equity plan rules and practices that would replace Epsilon’s Amended and Restated 2017 Stock Option Plan (including its predecessors) and the Share Compensation Plan (collectively referred to as the “Predecessor Plans”). No further awards will be granted under the Predecessor Plans. The 2020 Plan provides for incentive compensation in the form of stock options, stock appreciation rights, restricted stock and stock units, performance shares and units, other stock-based awards and cash-based awards. Under the 2020 Plan, Epsilon will be authorized to issue up to 2,000,000 Common Shares. As of September 30, 2020, the Company granted, after the Compensation Committee approved the terms, target formulas, and peer group applicable to the performance incentive awards, and the shareholders approved the 2020 Plan at the Meeting on September 1, 2020, 125,000 awards to Mr. Raleigh, leaving 1,875,000 shares available to be granted under the 2020 Plan. No shares subject to awards currently outstanding under the Predecessor Plans that expire or are forfeited will become available for issuance under the 2020 Plan. Restricted and Performance Stock Units For the nine months ended September 30, 2020, 20,833 performance-based, restricted shares were awarded to Michael Raleigh, the Company’s chief executive officer, based on the approval by the Company’s independent compensation committee. Additionally, Mr. Raleigh was granted 104,167 Performance Stock Units (“PSU”) that will potentially vest over the next 3 years, with the potential to add another 125,000 bonus shares. These shares are based on certain terms, target formulas, and relative peer group performance, and Mr. Raleigh’s continued employment. Compensation related to these PSUs was immaterial for the three months ended September 30, 2020, and therefore was not recognized.. 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 and nine months ended September 30, 2020 was $239,134 and $583,238, respectively (for the three and nine months ended September 30, 2019, $127,419 and $382,258, respectively). At September 30, 2020, the Company had unrecognized stock based compensation related to these shares of $793,439 to be recognized over a weighted average period of 1.02 years (at December 31, 2019: $1,309,594 over 1.34 years). The following table summarizes Restricted Stock activity for the nine months ended September 30, 2020, and the year ended December 31, 2019: Nine months ended Year ended September 30, 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 20,833 — 184,500 3.00 Vested (20,833) — (106,834) — Forfeited — — (14,000) 2.64 Balance non-vested Restricted Stock at end of period 346,499 0.92 346,499 1.67 Stock Options Through September 30, 2020, the Company had outstanding stock options covering 245,000 Common Shares at an overall average exercise price of $5.27 per Common Share to directors, officers, and employees of the Company and its subsidiaries. These 245,000 options have a weighted average expected remaining term of approximately 2.5 years. The following table summarizes stock option activity for the nine months ended September 30, 2020 and the year ended December 31, 2019: Nine months ended Year ended September 30, 2020 December 31, 2019 Weighted Weighted Number of Average Number of Average Options Exercise Options Exercise Exercise price in US$ 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 September 30, 2020, using the Black Scholes model, the Company had unrecognized stock based compensation, related to these options, of nil (at December 31, 2019: $1,867 over 0.08 years). The aggregate intrinsic value at September 30, 2020 was nil (at December 31, 2019: nil). For the three and nine months ended September 30, 2020, nil and $1,867, respectively, of stock compensation expense, related to these options, was recognized (for the three and nine months ended September 30, 2019, $6,301 and $18,903, respectively). During the nine months ended September 30, 2020 and the year ended December 31, 2019, the Company awarded no stock options.

Revenue Recognition

Revenue Recognition	9 Months Ended
	Sep. 30, 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. Overall, product sales revenue generally is recorded in the month when contractual delivery obligations are satisfied, which occurs when control is transferred to the Company’s customers at delivery based on contractual terms and conditions. In addition, gathering and compression revenue generally is recorded in the month when contractual service obligations are satisfied, which occurs as control of those services is transferred to the Company’s customers. The following table details revenue for the three and nine months ended September 30, 2020 and 2019. Three months ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating revenue Natural gas $ 3,573,908 $ 2,933,695 $ 11,470,012 $ 12,698,643 Natural gas liquids 14,843 23,905 56,705 88,256 Oil and condensate 1,955 41,981 190,180 218,823 Gathering and compression fees 2,219,905 2,219,613 6,800,347 6,923,058 Total operating revenue $ 5,810,611 $ 5,219,194 $ 18,517,244 $ 19,928,780 Product Sales Revenue The Company enters into contracts with third party purchasers to sell its natural gas, oil, NGLs and condensate production. Under these product sales arrangements, the sale of each unit of product represents a distinct performance obligation. Product sales revenue is recognized at the point in time that control of the product transfers to the purchaser based on contractual terms which reflect prevailing commodity market prices. To the extent that marketing costs are incurred by the Company prior to the transfer of control of the product, those costs are included in lease operating expenses on the Company’s consolidated statements of operations. Settlement statements for product sales, and the related cash consideration, are received from the purchaser within 30 days. 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, oil, NGLs, 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. Gas Gathering and Compression Revenue The Company also provides natural gas gathering and compression services through its ownership interest in the gas gathering system in the Auburn field. For the provision of gas gathering and compression services, the Company collects its share of the gathering and compression fees per unit of gas serviced and recognizes gathering revenue over time using an output method based on units of gas gathered. The settlement statement from the operator of the Auburn Gas Gathering System 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. Estimated revenue due to the Company is recorded within the receivables line item on the accompanying consolidated balance sheets until payment is received. Allowance for Doubtful Accounts The Company records an allowance for doubtful accounts on a case by case basis once there is evidence that collection is not probable. Due to the bankruptcy filed by Chesapeake Energy Corporation (“CHK”) on June 28, 2020, the Company recorded an allowance for possible uncollectable fees. Unpaid fees attributable to CHK for May and June 2020 gathering system services were $1.1 million and $1.3 million respectively. As of September 30, 2020, Epsilon has recorded an allowance for doubtful accounts for the Company’s 35% share of these payments for a total bad debt expense of $0.8 million. Additional amounts of bad debt expense are not needed as CHK is currently paying all post-petition amounts. The following table details accounts receivable net of allowance for doubtful accounts as at September 30, 2020 and December 31, 2019. September 30, December 31, 2020 2019 Accounts receivable Natural gas and oil sales $ 1,792,828 $ 2,293,044 Joint interest billing 61,556 59,127 Gathering and compression fees 2,612,753 1,940,308 Other 3,899 4,438 Total accounts receivable 4,471,036 4,296,917 Less: allowance for doubtful accounts (819,000) — Total accounts receivable, net of allowance for doubtful accounts $ 3,652,036 $ 4,296,917

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	9 Months Ended
	Sep. 30, 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 for the three and nine months ended September 30, 2020 and 2019 consisted of the following: Three months ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Balance at beginning of period $ 9,816,496 $ 9,809,774 $ 9,810,478 $ 9,797,930 Translation gain other 2,273 (900) 8,291 10,944 Balance at end of period $ 9,818,769 $ 9,808,874 $ 9,818,769 $ 9,808,874

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
Income Taxes
Income Taxes	9. Income Taxes Income tax provisions for the three and nine months ended September 30, 2020 and 2019 are as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Current: Federal $ 159,626 $ 1,622,486 $ 272,016 $ 1,622,486 State 4,829 460,765 42,469 507,953 Total current income tax expense 164,455 2,083,251 314,485 2,130,439 Deferred: Federal (185,265) (1,256,553) (251,979) 509,308 State (12,952) (283,559) 51,561 343,808 Total deferred tax expense (benefit) (198,217) (1,540,112) (200,418) 853,116 Income tax expense (benefit) $ (33,762) $ 543,139 $ 114,067 $ 2,983,555 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 nine months ended September 30, 2020 was 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	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies
Commitments and Contingencies	10. Commitments and Contingencies The Company’s future minimum lease commitments as of September 30, 2020 are summarized in the following table: Year ended December 31, Payments 2020 25,147 2021 103,073 2022 106,797 2023 36,013 $ 271,030 The Company enters into commitments for capital expenditures in advance of the expenditures being made. As of September 30, 2020, the Company had commitments of $2.63 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 (Loss) Per Share

Net Income (Loss) Per Share	9 Months Ended
	Sep. 30, 2020
Net Income (Loss) Per Share
Net Income (Loss) Per Share	11. Net Income (Loss) Per Share Basic net income (loss) per share is computed on the basis of the weighted-average number of common shares outstanding during the period. Diluted net income (loss) 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 (loss) used in the calculation of basic and diluted net income (loss) per share is as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net income (loss) available to shareholders $ (292,783) $ 1,453,298 $ (548,518) $ 6,664,832 In calculating the net income (loss) per share, basic and diluted, the following weighted-average shares were used: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Basic weighted-average number of shares outstanding 23,955,619 27,060,387 25,550,194 27,218,162 Dilutive stock options — — — — Unvested restricted shares granted — 34,004 — 21,955 Diluted weighted average shares outstanding 23,955,619 27,094,391 25,550,194 27,240,117 The Company excluded the following shares from the diluted EPS because their inclusion would have been anti-dilutive. Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Anti-dilutive options 245,000 255,000 245,000 255,000 Anti-dilutive unvested restricted shares 346,499 248,829 346,499 260,878 Total Anti-dilutive shares 591,499 503,829 591,499 515,878

Operating Segments

Operating Segments	9 Months Ended
	Sep. 30, 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 Corporate segment activities include corporate listing and governance functions of the Company. Segment activity as of, and for the nine months ended September 30, 2020 and 2019 is as follows: Upstream Gas Gathering Corporate Elimination Consolidated As of and for the nine months ended September 30, 2020 Operating revenue Natural gas $ 11,470,012 $ — $ — $ — $ 11,470,012 Natural gas liquids 56,705 — — — 56,705 Oil and condensate 190,180 — — — 190,180 Gathering and compression fees — 8,210,255 — (1,409,908) 6,800,347 Total operating revenue $ 11,716,897 (1) $ 8,210,255 $ — $ (1,409,908) $ 18,517,244 Net earnings (loss) for the period $ (2,301,433) $ 4,019,870 $ (2,266,955) (3) $ — $ (548,518) Operating costs 6,229,682 1,631,099 — (1,409,908) 6,450,873 Development geological and geophysical expenses 7,595 — — — 7,595 Depletion, deprec., amortization and accretion 6,021,053 1,740,286 — — 7,761,339 Impairment 1,760,000 — — — 1,760,000 Bad debt expense — 819,000 — — 819,000 Segment assets $ 70,549,241 $ 16,698,193 $ 92,019 $ — $ 87,339,453 Capital expenditures (2) 3,128,378 467,017 — — 3,595,395 Proved properties 36,273,429 — — — 36,273,429 Unproved properties 21,448,546 — — — 21,448,546 Gathering system — 10,214,493 — — 10,214,493 Other property and equipment 981,141 — — — 981,141 As of and for the nine months ended September 30, 2019 Operating revenue Natural gas $ 12,698,643 $ — $ — $ — $ 12,698,643 Natural gas liquids 88,256 — — — 88,256 Oil and condensate 218,823 — — — 218,823 Gathering and compression fees — 7,779,107 — (856,049) 6,923,058 Total operating revenue $ 13,005,722 (1) $ 7,779,107 $ — $ (856,049) $ 19,928,780 Net earnings for the period $ 5,259,959 $ 4,465,906 $ (3,061,033) (3) $ — $ 6,664,832 Operating costs 4,851,090 1,868,758 — (856,049) 5,863,799 Development geological and geophysical expenses 83,748 — — — 83,748 Depletion, deprec., amortization and accretion 4,185,925 1,444,443 — — 5,630,368 Gain on sale of property (1,375,000) — — — (1,375,000) Segment assets $ 78,581,513 $ 16,340,875 $ 87,991 $ — $ 95,010,379 Capital expenditures (2) 8,098,511 237,681 — — 8,336,192 Proved properties 37,535,119 — — — 37,535,119 Unproved properties 21,015,039 — — — 21,015,039 Gathering system — 11,696,643 — — 11,696,643 (1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the nine months ended September 30, 2020 and 2019 have been eliminated upon consolidation. For the nine months ended September 30, 2020, Epsilon sold natural gas to 23 unique customers. The four customers over 10% comprised 27%, 22%, 16% and 13% of total revenue. For the nine months ended September 30, 2019, Epsilon sold natural gas to 26 unique customers. The three customers over 10% comprised 36%, 35% and 11% 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. Segment activity for the three months ended September 30, 2020 and 2019 is as follows: Upstream Gas Gathering Corporate Elimination Consolidated For the three months ended September 30, 2020 Operating revenue Natural gas $ 3,573,908 $ — $ — $ — $ 3,573,908 Natural gas liquids 14,843 — — — 14,843 Oil and condensate 1,955 — — — 1,955 Gathering and compression fees — 2,740,186 — (520,281) 2,219,905 Total operating revenue $ 3,590,706 (1) $ 2,740,186 $ — $ (520,281) 5,810,611 Net earnings for the period $ (694,490) $ 1,541,709 $ (1,140,002) (3) — $ (292,783) Operating costs 2,147,795 563,992 — (520,281) 2,191,506 Development geological and geophysical expenses 2,693 — — — 2,693 Depletion, deprec., amortization and accretion 2,134,708 634,485 — — 2,769,193 Bad debt expense — — — — — Capital expenditures (2) 673,716 325,071 — — 998,787 For the three months ended September 30, 2019 Operating revenue Natural gas $ 2,933,695 $ — $ — $ — $ 2,933,695 Natural gas liquids 23,905 — — — 23,905 Oil and condensate 41,981 — — — 41,981 Gathering and compression fees — 2,498,232 — (278,619) 2,219,613 Total operating revenue $ 2,999,581 (1) $ 2,498,232 $ — $ (278,619) 5,219,194 Net earnings for the period $ 516,408 $ 1,286,555 $ (349,665) (3) $ — $ 1,453,298 Operating costs 1,548,902 739,655 — (278,619) 2,009,938 Development geological and geophysical expenses — — — — — Depletion, deprec., amortization and accretion 1,379,444 472,022 — — 1,851,466 Gain on sale of property (445,173) — — — (445,173) Capital expenditures (2) 4,821,766 (7,944) — — 4,813,822 (1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended September 30, 2020 and 2019 have been eliminated upon consolidation. For the three months ended September 30, 2020, Epsilon sold natural gas to 20 unique customers. The three customers over 10% comprised 25%, 22% and 21% of total revenue. For the three months ended September 30, 2019, Epsilon sold natural gas to 21 unique customers. The two customers over 10% comprised 60% and 11% 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	9 Months Ended
	Sep. 30, 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. In January 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and the significant risks to the international community and economies as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and throughout the second quarter of 2020 and thereafter, COVID-19 continued to spread throughout the U.S. In addition, after the Organization of the Petroleum Exporting Countries (“OPEC”) and a group of oil producing nations led by Russia failed in March 2020 to agree on oil production cuts, Saudi Arabia announced that it would cut oil prices and increase production, leading to a sharp further decline in oil and natural gas prices. While OPEC, Russia and other oil producing countries reached an agreement in April 2020 to reduce production levels, U.S. production has declined, and a significant crude oil price recovery is not expected until global supply matches current lower levels of demand caused by a number of factors, including the uncertainty around the extent and timing of an economic recovery due to the COVID-19 pandemic. The effects of COVID-19 and concerns regarding its domestic and global spread, as well as the recent actions by Russia and Saudi Arabia, could continue to negatively impact the domestic and international supply and demand for oil and natural gas, to sustain continued price volatility and impact the price paid for oil and natural gas and to materially and adversely affect the demand for and marketability of oil and natural gas production. 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 and nine months ended September 30, 2020, Epsilon recognized gains on commodity derivative contracts of $419,879 and $2,055,548, respectively. This amount included cash received on settlements of these contracts of $1,657,323 during the three months ended September 30, 2020 and $4,035,092 during the nine months ended September 30, 2020. For the three and nine months ended September 30, 2019, Epsilon recognized gains on commodity derivative contracts of $1,270,494 and $3,494,727 respectively. This amount included cash received on settlements of these contracts of $1,157,271 during the three months ended September 30, 2019 and $1,344,690 during the nine months ended September 30, 2019. Commodity Derivative Contracts Presented below is a summary of Epsilon’s natural gas price and basis swap contracts as of September 30, 2020. Weighted Average Price ($/MMbtu) Fair Value Volume Basis September 30, Derivative Type (MMbtu) Swaps Differential 2020 2020 Fixed price swap 762,500 $ 2.73 $ — (73,029) Basis swap 762,500 $ — $ (0.44) 93,287 $ 20,258 As of September 30, 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 September 30, December 31, 2020 2019 Current Basis swap $ 97,899 $ 162,844 Fixed price swap 76,522 2,001,496 $ 174,421 $ 2,164,340 Fair Value of Derivative September 30, December 31, 2020 2019 Current Basis swap $ (4,611) $ (164,538) Fixed price swap (149,552) — $ (154,163) $ (164,538) Net Fair Value of Derivatives $ 20,258 $ 1,999,802 The following table presents the changes in the fair value of Epsilon’s commodity derivatives for the periods indicated: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Fair value of asset (liability), beginning of the period $ 1,257,702 $ 1,739,791 $ 1,999,802 $ (297,023) Gains (losses) on derivative contracts included in earnings 419,879 1,270,494 2,055,548 3,494,727 Settlement of commodity derivative contracts (1,657,323) (1,157,271) (4,035,092) (1,344,690) Fair value of asset, end of the period $ 20,258 $ 1,853,014 $ 20,258 $ 1,853,014

Asset Retirement Obligations

Asset Retirement Obligations	9 Months Ended
	Sep. 30, 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: Nine Months Ended Year ended September 30, December 31, 2020 2019 Balance beginning of period $ 2,909,855 $ 1,625,154 Liabilities from drilling of new wells 5,306 16,163 Change in estimates 2,181 1,153,740 Accretion 153,605 114,798 Balance end of period $ 3,070,947 $ 2,909,855

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 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 September 30, 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)	9 Months Ended
	Sep. 30, 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, Dewey Energy Holdings, LLC, Epsilon Operating, LLC, and Altolisa 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. The Company is currently assessing the impact of adopting this new guidance. 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 and anticipates the addition of an insignificant asset and related liability associated with our office lease beginning in January 2022.

Cash, Cash Equivalents, and R_2

Cash, Cash Equivalents, and Restricted Cash (Tables)	9 Months Ended
	Sep. 30, 2020
Summary of Significant Accounting Policies
Schedule of cash, cash equivalents and restricted cash	September 30, September 30, 2020 2019 Cash and cash equivalents $ 11,580,278 $ 18,746,426 Restricted cash included in other assets 565,049 559,053 Cash, cash equivalents and restricted cash in the statement of cash flows $ 12,145,327 $ 19,305,479

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2020
Property and Equipment
Schedule of property and equipment	September 30, December 31, 2020 2019 Property and equipment: Oil and gas properties, successful efforts method Proved properties $ 133,138,412 $ 130,819,256 Unproved properties 21,448,546 21,047,512 Accumulated depletion, depreciation, amortization and impairment (96,864,983) (89,255,035) Total oil and gas properties, net 57,721,975 62,611,733 Gathering system 41,912,242 41,445,225 Accumulated depletion, depreciation, amortization and impairment (31,697,749) (29,961,690) Total gathering system, net 10,214,493 11,483,535 Land 637,464 375,314 Buildings and other property and equipment, net 343,677 211,879 Total property and equipment, net $ 68,917,609 $ 74,682,461

Revolving Line of Credit (Table

Revolving Line of Credit (Tables)	9 Months Ended
	Sep. 30, 2020
Revolving Line of Credit
Schedule of revolving line of credit	Balance at Balance at September 30, December 31, Current Interest Rate 2020 2019 Borrowing Base 3 mo. Revolving line of credit $ — $ — $ 23,000,000 LIBOR + 2.75% (1) (1) At September 30, 2020, the weighted average interest rate was 2.98%.

Shareholders Equity (Tables)

Shareholders Equity (Tables)	9 Months Ended
	Sep. 30, 2020
Shareholders' Equity
Schedule of purchases of equity Shares	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 (4) programs (5) Beginning of normal-course issuer bid, May 20, 2019 1,367,762 Shares purchased through December 31, 2019 (1) (2) 696,096 $ 3.72 January 2020 (2) 102,051 $ 2.95 February 2020 (2) 261,519 $ 3.11 March 2020 (2) 124,459 $ 2.98 April 2020 (2) 156,585 $ 2.48 May 2020 (2) 12,700 $ 2.91 July 2020 (3) 2,337,034 $ 3.06 2,337,034 Total as of September 30, 2020 3,690,444 $ 3.16 2,337,034 — (1) Shares purchased through December 31, 2019 were cancelled prior to the year ended December 31, 2019. (2) Epsilon repurchased these shares under its share repurchase program that commenced on May 20, 2019, as described above. (3) Epsilon repurchased these shares under its substantial issuer bid/issuer tender offer dated May 19, 2020, as described above. (4) The Company announced its intention to commence a substantial issuer bid/issuer tender offer on May 14, 2020, and the substantial issuer bid/issuer tender offer commenced May 19, 2020, as described above. (5) The normal-course issuer bid expired on May 19, 2020, and the substantial issuer bid/issuer tender offer expired on June 30, 2020.
Schedule of restricted stock activity	Nine months ended Year ended September 30, 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 20,833 — 184,500 3.00 Vested (20,833) — (106,834) — Forfeited — — (14,000) 2.64 Balance non-vested Restricted Stock at end of period 346,499 0.92 346,499 1.67
Summary of stock option activity	Nine months ended Year ended September 30, 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.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	9 Months Ended
	Sep. 30, 2020
Revenue Recognition
Summary of revenue	Three months ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating revenue Natural gas $ 3,573,908 $ 2,933,695 $ 11,470,012 $ 12,698,643 Natural gas liquids 14,843 23,905 56,705 88,256 Oil and condensate 1,955 41,981 190,180 218,823 Gathering and compression fees 2,219,905 2,219,613 6,800,347 6,923,058 Total operating revenue $ 5,810,611 $ 5,219,194 $ 18,517,244 $ 19,928,780
Schedule of accounts receivable net of allowance for doubtful accounts	September 30, December 31, 2020 2019 Accounts receivable Natural gas and oil sales $ 1,792,828 $ 2,293,044 Joint interest billing 61,556 59,127 Gathering and compression fees 2,612,753 1,940,308 Other 3,899 4,438 Total accounts receivable 4,471,036 4,296,917 Less: allowance for doubtful accounts (819,000) — Total accounts receivable, net of allowance for doubtful accounts $ 3,652,036 $ 4,296,917

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Tables)	9 Months Ended
	Sep. 30, 2020
Accumulated Other Comprehensive Income.
Schedule of Accumulated Other Comprehensive Income	Three months ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Balance at beginning of period $ 9,816,496 $ 9,809,774 $ 9,810,478 $ 9,797,930 Translation gain other 2,273 (900) 8,291 10,944 Balance at end of period $ 9,818,769 $ 9,808,874 $ 9,818,769 $ 9,808,874

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2020
Income Taxes
Schedule of current and deferred tax expense (benefit)	Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Current: Federal $ 159,626 $ 1,622,486 $ 272,016 $ 1,622,486 State 4,829 460,765 42,469 507,953 Total current income tax expense 164,455 2,083,251 314,485 2,130,439 Deferred: Federal (185,265) (1,256,553) (251,979) 509,308 State (12,952) (283,559) 51,561 343,808 Total deferred tax expense (benefit) (198,217) (1,540,112) (200,418) 853,116 Income tax expense (benefit) $ (33,762) $ 543,139 $ 114,067 $ 2,983,555

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies
Schedule of future minimum lease commitments	Year ended December 31, Payments 2020 25,147 2021 103,073 2022 106,797 2023 36,013 $ 271,030

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	9 Months Ended
	Sep. 30, 2020
Net Income (Loss) Per Share
Schedule of net income used in the calculation of basic and diluted net income per share	Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net income (loss) available to shareholders $ (292,783) $ 1,453,298 $ (548,518) $ 6,664,832
Schedule of weighted-average shares used in calculation of net income per share	Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Basic weighted-average number of shares outstanding 23,955,619 27,060,387 25,550,194 27,218,162 Dilutive stock options — — — — Unvested restricted shares granted — 34,004 — 21,955 Diluted weighted average shares outstanding 23,955,619 27,094,391 25,550,194 27,240,117
Schedule of anti-dilutive shares	Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Anti-dilutive options 245,000 255,000 245,000 255,000 Anti-dilutive unvested restricted shares 346,499 248,829 346,499 260,878 Total Anti-dilutive shares 591,499 503,829 591,499 515,878

Operating Segments (Tables)

Operating Segments (Tables)	9 Months Ended
	Sep. 30, 2020
Operating Segments.
Schedule of segment financial information	Segment activity as of, and for the nine months ended September 30, 2020 and 2019 is as follows: Upstream Gas Gathering Corporate Elimination Consolidated As of and for the nine months ended September 30, 2020 Operating revenue Natural gas $ 11,470,012 $ — $ — $ — $ 11,470,012 Natural gas liquids 56,705 — — — 56,705 Oil and condensate 190,180 — — — 190,180 Gathering and compression fees — 8,210,255 — (1,409,908) 6,800,347 Total operating revenue $ 11,716,897 (1) $ 8,210,255 $ — $ (1,409,908) $ 18,517,244 Net earnings (loss) for the period $ (2,301,433) $ 4,019,870 $ (2,266,955) (3) $ — $ (548,518) Operating costs 6,229,682 1,631,099 — (1,409,908) 6,450,873 Development geological and geophysical expenses 7,595 — — — 7,595 Depletion, deprec., amortization and accretion 6,021,053 1,740,286 — — 7,761,339 Impairment 1,760,000 — — — 1,760,000 Bad debt expense — 819,000 — — 819,000 Segment assets $ 70,549,241 $ 16,698,193 $ 92,019 $ — $ 87,339,453 Capital expenditures (2) 3,128,378 467,017 — — 3,595,395 Proved properties 36,273,429 — — — 36,273,429 Unproved properties 21,448,546 — — — 21,448,546 Gathering system — 10,214,493 — — 10,214,493 Other property and equipment 981,141 — — — 981,141 As of and for the nine months ended September 30, 2019 Operating revenue Natural gas $ 12,698,643 $ — $ — $ — $ 12,698,643 Natural gas liquids 88,256 — — — 88,256 Oil and condensate 218,823 — — — 218,823 Gathering and compression fees — 7,779,107 — (856,049) 6,923,058 Total operating revenue $ 13,005,722 (1) $ 7,779,107 $ — $ (856,049) $ 19,928,780 Net earnings for the period $ 5,259,959 $ 4,465,906 $ (3,061,033) (3) $ — $ 6,664,832 Operating costs 4,851,090 1,868,758 — (856,049) 5,863,799 Development geological and geophysical expenses 83,748 — — — 83,748 Depletion, deprec., amortization and accretion 4,185,925 1,444,443 — — 5,630,368 Gain on sale of property (1,375,000) — — — (1,375,000) Segment assets $ 78,581,513 $ 16,340,875 $ 87,991 $ — $ 95,010,379 Capital expenditures (2) 8,098,511 237,681 — — 8,336,192 Proved properties 37,535,119 — — — 37,535,119 Unproved properties 21,015,039 — — — 21,015,039 Gathering system — 11,696,643 — — 11,696,643 (1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the nine months ended September 30, 2020 and 2019 have been eliminated upon consolidation. For the nine months ended September 30, 2020, Epsilon sold natural gas to 23 unique customers. The four customers over 10% comprised 27%, 22%, 16% and 13% of total revenue. For the nine months ended September 30, 2019, Epsilon sold natural gas to 26 unique customers. The three customers over 10% comprised 36%, 35% and 11% 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. Segment activity for the three months ended September 30, 2020 and 2019 is as follows: Upstream Gas Gathering Corporate Elimination Consolidated For the three months ended September 30, 2020 Operating revenue Natural gas $ 3,573,908 $ — $ — $ — $ 3,573,908 Natural gas liquids 14,843 — — — 14,843 Oil and condensate 1,955 — — — 1,955 Gathering and compression fees — 2,740,186 — (520,281) 2,219,905 Total operating revenue $ 3,590,706 (1) $ 2,740,186 $ — $ (520,281) 5,810,611 Net earnings for the period $ (694,490) $ 1,541,709 $ (1,140,002) (3) — $ (292,783) Operating costs 2,147,795 563,992 — (520,281) 2,191,506 Development geological and geophysical expenses 2,693 — — — 2,693 Depletion, deprec., amortization and accretion 2,134,708 634,485 — — 2,769,193 Bad debt expense — — — — — Capital expenditures (2) 673,716 325,071 — — 998,787 For the three months ended September 30, 2019 Operating revenue Natural gas $ 2,933,695 $ — $ — $ — $ 2,933,695 Natural gas liquids 23,905 — — — 23,905 Oil and condensate 41,981 — — — 41,981 Gathering and compression fees — 2,498,232 — (278,619) 2,219,613 Total operating revenue $ 2,999,581 (1) $ 2,498,232 $ — $ (278,619) 5,219,194 Net earnings for the period $ 516,408 $ 1,286,555 $ (349,665) (3) $ — $ 1,453,298 Operating costs 1,548,902 739,655 — (278,619) 2,009,938 Development geological and geophysical expenses — — — — — Depletion, deprec., amortization and accretion 1,379,444 472,022 — — 1,851,466 Gain on sale of property (445,173) — — — (445,173) Capital expenditures (2) 4,821,766 (7,944) — — 4,813,822 (1) Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended September 30, 2020 and 2019 have been eliminated upon consolidation. For the three months ended September 30, 2020, Epsilon sold natural gas to 20 unique customers. The three customers over 10% comprised 25%, 22% and 21% of total revenue. For the three months ended September 30, 2019, Epsilon sold natural gas to 21 unique customers. The two customers over 10% comprised 60% and 11% 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)	9 Months Ended
	Sep. 30, 2020
Commodity Risk Management Activities
Schedule of natural gas price and basis swap contracts	Weighted Average Price ($/MMbtu) Fair Value Volume Basis September 30, Derivative Type (MMbtu) Swaps Differential 2020 2020 Fixed price swap 762,500 $ 2.73 $ — (73,029) Basis swap 762,500 $ — $ (0.44) 93,287 $ 20,258
Schedule of fair value of derivatives	Fair Value of Derivative September 30, December 31, 2020 2019 Current Basis swap $ 97,899 $ 162,844 Fixed price swap 76,522 2,001,496 $ 174,421 $ 2,164,340 Fair Value of Derivative September 30, December 31, 2020 2019 Current Basis swap $ (4,611) $ (164,538) Fixed price swap (149,552) — $ (154,163) $ (164,538) Net Fair Value of Derivatives $ 20,258 $ 1,999,802
Schedule of fair value of derivatives rollforward	Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Fair value of asset (liability), beginning of the period $ 1,257,702 $ 1,739,791 $ 1,999,802 $ (297,023) Gains (losses) on derivative contracts included in earnings 419,879 1,270,494 2,055,548 3,494,727 Settlement of commodity derivative contracts (1,657,323) (1,157,271) (4,035,092) (1,344,690) Fair value of asset, end of the period $ 20,258 $ 1,853,014 $ 20,258 $ 1,853,014

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	9 Months Ended
	Sep. 30, 2020
Asset Retirement Obligations
Schedule of activity in asset retirement obligations	Nine Months Ended Year ended September 30, December 31, 2020 2019 Balance beginning of period $ 2,909,855 $ 1,625,154 Liabilities from drilling of new wells 5,306 16,163 Change in estimates 2,181 1,153,740 Accretion 153,605 114,798 Balance end of period $ 3,070,947 $ 2,909,855

Description of Business (Detail

Description of Business (Details) - USD ($)	Jun. 28, 2020	Jun. 30, 2020	May 31, 2020	Sep. 30, 2020
Description of business
Bad debt expense				$ 819,000
CHK
Description of business
Ownership percentage in the ASGGA	43.875%
Bankruptcy claim - unpaid gathering fees		$ 1,300,000	$ 1,100,000
CHK
Description of business
Percentage of bad debt expense recorded	35.00%			35.00%
Bad debt expense				$ 800,000
Ownership percentage in the ASGGA	35.00%

Cash, Cash Equivalents and Rest

Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 11,580,278	$ 14,052,417	$ 18,746,426
Restricted cash included in other assets	565,049		559,053
Cash, cash equivalents and restricted cash in the statement of cash flows	$ 12,145,327	$ 14,613,711	$ 19,305,479	$ 14,959,518

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	1 Months Ended		3 Months Ended	6 Months Ended	9 Months Ended		12 Months Ended
	Jul. 31, 2019	Jun. 30, 2019	Mar. 31, 2020	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property and equipment:
Proved properties				$ 133,138,412	$ 133,138,412		$ 130,819,256
Unproved properties				21,448,546	21,448,546	$ 21,015,039	21,047,512
Accumulated depletion, depreciation, amortization and impairment				(96,864,983)	(96,864,983)		(89,255,035)
Total oil and gas properties, net				57,721,975	57,721,975		62,611,733
Gathering system				41,912,242	41,912,242		41,445,225
Accumulated depletion, depreciation, amortization and impairment				(31,697,749)	(31,697,749)		(29,961,690)
Total gathering system, net				10,214,493	10,214,493	11,696,643	11,483,535
Land				637,464	637,464		375,314
Buildings and other property and equipment, net				343,677	343,677		211,879
Total property and equipment, net				68,917,609	68,917,609		74,682,461
Payment for land acquired					0		596,500
Proceeds from sale of leases	$ 400,000	$ 1,000,000				$ 1,375,000	1,400,000
Impairment of oil and gas properties			$ 1,760,000	$ 0	$ 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	Sep. 30, 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	$ 13,500,000
Minimum utilization percentage	25.00%
Hedging percentage on production for succeeding nine months	50.00%
Percentage of commodity hedge of natural gas		50.00%
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 proved oil and gas properties			90.00%
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	9 Months Ended
	Sep. 30, 2020USD ($)	Feb. 11, 2020USD ($)	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	$ 13,500,000
Weighted average interest rate (as a percent)	2.98%
LIBOR
Revolving Credit Facility
Margin added to variable interest rate	2.75%

Shareholders Equity - Share Cap

Shareholders Equity - Share Capital (Details)	1 Months Ended						2 Months Ended	7 Months Ended	12 Months Ended	16 Months Ended
	Jul. 31, 2020shares	May 31, 2020shares	Apr. 30, 2020shares	Mar. 31, 2020shares	Feb. 29, 2020shares	Jan. 31, 2020shares	Mar. 15, 2019$ / shares$ / $	Dec. 31, 2019$ / sharesshares	Dec. 31, 2019$ / sharesshares	Sep. 30, 2020$ / sharesshares
Components of share capital:
Common Stock, No Par Value								$ 0	$ 0	$ 0
Preferred Stock, No Par Value										$ 0
Buyback and retirement of common shares | shares	2,337,034	12,700	156,585	124,459	261,519	102,051		696,096		3,690,444
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 of Cdn | $ / $							1.33
Average share price on the TSX							$ 4.22

Shareholders Equity - Purchases

Shareholders Equity - Purchases of Equity Shares (Details) - USD ($)	Jul. 06, 2020	May 19, 2020	May 20, 2019	Jul. 31, 2020	May 31, 2020	Apr. 30, 2020	Mar. 31, 2020	Feb. 29, 2020	Jan. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Nov. 10, 2020	May 14, 2020
Shares purchased
Authorized shares to be repurchased			1,367,762
Shares repurchased as a percentage of outstanding common shares			5.00%
Authorized amount repurchase			$ 5,000,000
Purchased shares				2,337,034	12,700	156,585	124,459	261,519	102,051						696,096			3,690,444
Average price paid per share				$ 3.06	$ 2.91	$ 2.48	$ 2.98	$ 3.11	$ 2.95						$ 3.72			$ 3.16
Total costs																$ 9,078,522	$ 1,714,291
Consideration for shares repurchased										$ 427,612	$ 1,499,586	$ 480,646	$ 985,264
Common shares issued														23,817,470	26,790,985	23,817,470		23,817,470
Common shares outstanding														23,817,470	26,790,985	23,817,470		23,817,470
Substantial Issuer Bid
Shares purchased
Authorized shares to be repurchased		2,000,000
Authorized amount repurchase																				$ 6,200,000
Purchased shares				2,337,034										2,337,034
Average price paid per share	$ 3.06	$ 3.06
Total costs		$ 6,100,000
Percentage of additional stock repurchase on issued and outstanding stock		2.00%
Shares purchased	2,337,034
Consideration for shares repurchased	$ 7,151,324
Common shares issued																			23,859,136
Common shares outstanding																			23,859,136
Substantial Issuer Bid | Maximum
Shares purchased
Authorized shares to be repurchased		2,522,673

Shareholders Equity - Equity In

Shareholders Equity - Equity Incentive Plan (Details) - Equity Incentive 2020 Plan - shares	Sep. 01, 2020	Sep. 30, 2020	Jul. 22, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized to be issued			2,000,000
Number of shares available for issuance		1,875,000
Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued	125,000

Shareholders Equity - Restricte

Shareholders Equity - Restricted and Performance Stock Units (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Restricted stock awards
Share Compensation Plan
Vesting period					3 years
Vesting percentage					33.00%
Stock based compensation expense	$ 239,134	$ 127,419	$ 583,238	$ 382,258
Compensation cost not yet recognized	$ 793,439		$ 793,439		$ 1,309,594
Weighted average period for recognition			1 year 7 days		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)			20,833		184,500
Vested (in shares)			(20,833)		(106,834)
Forfeited (in shares)					(14,000)
Balance non-vested Restricted Stock at end of period (in shares)	346,499		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)			11 months 1 day		1 year 8 months 1 day	2 years 6 months 22 days
Chief Executive Officer | Performance Shares
Number outstanding
Granted (in shares)			20,833
Chief Executive Officer | Performance Stock Units
Share Compensation Plan
Vesting period			3 years
Potential bonus awards			125,000
Number outstanding
Granted (in shares)			104,167

Shareholders Equity - Stock Opt

Shareholders Equity - Stock Option Activity (Details) - Stock options	9 Months Ended	12 Months Ended
	Sep. 30, 2020$ / sharesshares	Dec. 31, 2019$ / sharesshares	Mar. 15, 2019$ / $
Share Compensation Plan
Average share price, converted to US$ using rate of Cdn | $ / $			1.33
Number of Options Outstanding
Balance at beginning of period (in shares) | shares	245,000	290,750
Exercised (in shares) | shares	0	(25,000)
Expired/Forfeited (in shares) | shares	0	(20,750)
Options outstanding, end of period (in shares) | shares	245,000	245,000
Exercisable at period-end (in shares) | 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
Additional disclosures
Weighted average expected remaining term	2 years 6 months

Shareholders Equity - Stock O_2

Shareholders Equity - Stock Option Activity, Narrative (Details) - Stock options - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Share Compensation Plan
Unrecognized stock based compensation to be recognized over a period	$ 0		$ 0		$ 1,867
Weighted average period for recognition					29 days
Aggregate intrinsic value of options outstanding	0		0		$ 0
Stock based compensation expense	$ 0	$ 6,301	$ 1,867	$ 18,903
Granted (in shares)			0		0

Revenue Recognition - Summary o

Revenue Recognition - Summary of revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue recognition
Total operating revenue	$ 5,810,611	$ 5,219,194	$ 18,517,244	$ 19,928,780
Natural gas
Revenue recognition
Total operating revenue	3,573,908	2,933,695	11,470,012	12,698,643
Natural gas liquids
Revenue recognition
Total operating revenue	14,843	23,905	56,705	88,256
Oil and condensate
Revenue recognition
Total operating revenue	1,955	41,981	190,180	218,823
Gas gathering and compression revenue
Revenue recognition
Total operating revenue	$ 2,219,905	$ 2,219,613	$ 6,800,347	$ 6,923,058

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($)	Jun. 28, 2020	Jun. 30, 2020	May 31, 2020	Sep. 30, 2020
Revenue recognition
Bad debt expense				$ 819,000
Gas, oil, NGLs and condensate revenue
Revenue recognition
Period settlement statement received				30 days
Gas gathering and compression revenue | Auburn Gas Gathering System
Revenue recognition
Period settlement statement received				2 months
CHK
Revenue recognition
Percentage of bad debt expense recorded	35.00%			35.00%
Bad debt expense				$ 800,000
CHK
Revenue recognition
Bankruptcy claim - unpaid gathering fees		$ 1,300,000	$ 1,100,000

Revenue Recognition - Accounts

Revenue Recognition - Accounts receivable, net of allowance for doubtful accounts (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Total accounts receivable	$ 4,471,036	$ 4,296,917
Less: allowance for doubtful accounts	(819,000)	0
Total accounts receivable, net of allowance for doubtful accounts	3,652,036	4,296,917
Natural gas and oil sales
Disaggregation of Revenue [Line Items]
Total accounts receivable	1,792,828	2,293,044
Joint interest billing
Disaggregation of Revenue [Line Items]
Total accounts receivable	61,556	59,127
Gas gathering and compression revenue
Disaggregation of Revenue [Line Items]
Total accounts receivable	2,612,753	1,940,308
Other
Disaggregation of Revenue [Line Items]
Total accounts receivable	$ 3,899	$ 4,438

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss)
Balance	$ 74,532,050	$ 75,347,512	$ 76,362,994	$ 74,201,261	$ 71,213,894	$ 69,944,087	$ 76,362,994	$ 69,944,087
Translation gain other	2,273	6,132	(114)	(900)	1,052	10,792
Balance	67,329,350	74,532,050	75,347,512	75,360,983	74,201,261	71,213,894	67,329,350	75,360,983
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss)
Balance	9,816,496		$ 9,810,478	9,809,774		$ 9,797,930	9,810,478	9,797,930
Translation gain other	2,273			(900)			8,291	10,944
Balance	$ 9,818,769	$ 9,816,496		$ 9,808,874	$ 9,809,774		$ 9,818,769	$ 9,808,874

Income Taxes - Current and Defe

Income Taxes - Current and Deferred Tax Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Current:
Federal	$ 159,626	$ 1,622,486	$ 272,016	$ 1,622,486
State	4,829	460,765	42,469	507,953
Total current income tax expense	164,455	2,083,251	314,485	2,130,439
Deferred:
Federal	(185,265)	(1,256,553)	(251,979)	509,308
State	(12,952)	(283,559)	51,561	343,808
Total deferred tax expense (benefit)	(198,217)	(1,540,112)	(200,418)	853,116
Income tax expense (benefit)	$ (33,762)	$ 543,139	$ 114,067	$ 2,983,555

Commitments and Contingencies_2

Commitments and Contingencies (Details)	Sep. 30, 2020USD ($)
Future minimum lease commitments
2020	$ 25,147
2021	103,073
2022	106,797
2023	36,013
Total future minimum lease commitments	271,030
Commitments for capital expenditures	$ 2,630,000

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net income (loss) available to shareholders	$ (292,783)	$ 1,453,298	$ (548,518)	$ 6,664,832
Weighted average number of shares - basic and diluted
Basic weighted-average number of shares outstanding	23,955,619	27,060,387	25,550,194	27,218,162
Diluted weighted average shares outstanding	23,955,619	27,094,391	25,550,194	27,240,117
Total Anti-dilutive shares	591,499	503,829	591,499	515,878
Stock options
Weighted average number of shares - basic and diluted
Total Anti-dilutive shares	245,000	255,000	245,000	255,000
Restricted stock awards
Weighted average number of shares - basic and diluted
Incremental common shares		34,004		21,955
Total Anti-dilutive shares	346,499	248,829	346,499	260,878

Operating Segments - Segments (

Operating Segments - Segments (Details)	3 Months Ended			6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2020USD ($)	Mar. 31, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)	Sep. 30, 2020USD ($)segment	Sep. 30, 2019USD ($)	Dec. 31, 2019USD ($)
Segment information
Total operating revenue	$ 5,810,611		$ 5,219,194		$ 18,517,244	$ 19,928,780
Net earnings for the period	(292,783)		1,453,298		(548,518)	6,664,832
Operating costs	2,191,506		2,009,938		6,450,873	5,863,799
Development geological and geophysical expenses	2,693				7,595	83,748
Depletion, deprec., amortization and accretion	2,769,193		1,851,466		7,761,339	5,630,368
Gain on sale of property			(445,173)			(1,375,000)
Impairment of oil and gas properties		$ 1,760,000		$ 0	1,760,000		$ 0
Bad debt expense					819,000
Segment assets	87,339,453		95,010,379	87,339,453	87,339,453	95,010,379
Capital expenditures	998,787		4,813,822		3,595,395	8,336,192
Proved properties					36,273,429	37,535,119
Unproved properties	21,448,546		21,015,039	21,448,546	21,448,546	21,015,039	21,047,512
Gathering system	10,214,493		11,696,643	10,214,493	10,214,493	11,696,643	$ 11,483,535
Other property and equipment	981,141			981,141	981,141
Corporate
Segment information
Net earnings for the period	(1,140,002)		(349,665)		(2,266,955)	(3,061,033)
Segment assets	92,019		87,991	92,019	92,019	87,991
Elimination
Segment information
Total operating revenue	(520,281)		(278,619)		(1,409,908)	(856,049)
Operating costs	(520,281)		(278,619)		(1,409,908)	(856,049)
Natural gas
Segment information
Total operating revenue	3,573,908		2,933,695		11,470,012	12,698,643
Natural gas liquids
Segment information
Total operating revenue	14,843		23,905		56,705	88,256
Oil and condensate
Segment information
Total operating revenue	1,955		41,981		190,180	218,823
Gas gathering and compression revenue
Segment information
Total operating revenue	2,219,905		2,219,613		6,800,347	6,923,058
Gas gathering and compression revenue | Elimination
Segment information
Total operating revenue	(520,281)		(278,619)		(1,409,908)	(856,049)
Upstream | Operating Segments
Segment information
Total operating revenue	3,590,706		2,999,581		11,716,897	13,005,722
Net earnings for the period	(694,490)		516,408		(2,301,433)	5,259,959
Operating costs	2,147,795		1,548,902		6,229,682	4,851,090
Development geological and geophysical expenses	2,693				7,595	83,748
Depletion, deprec., amortization and accretion	2,134,708		1,379,444		6,021,053	4,185,925
Gain on sale of property			(445,173)			(1,375,000)
Impairment of oil and gas properties					1,760,000
Segment assets	70,549,241		78,581,513	70,549,241	70,549,241	78,581,513
Capital expenditures	673,716		4,821,766		3,128,378	8,098,511
Proved properties					36,273,429	37,535,119
Unproved properties	21,448,546		21,015,039	21,448,546	21,448,546	21,015,039
Other property and equipment	981,141			981,141	981,141
Upstream | Natural gas | Operating Segments
Segment information
Total operating revenue	3,573,908		2,933,695		11,470,012	12,698,643
Upstream | Natural gas liquids | Operating Segments
Segment information
Total operating revenue	14,843		23,905		56,705	88,256
Upstream | Oil and condensate | Operating Segments
Segment information
Total operating revenue	1,955		41,981		$ 190,180	218,823
Gas Gathering | Operating Segments
Operating Segments
Number of companies partnered to operate natural gas gathering system | segment					2
Segment information
Total operating revenue	2,740,186		2,498,232		$ 8,210,255	7,779,107
Net earnings for the period	1,541,709		1,286,555		4,019,870	4,465,906
Operating costs	563,992		739,655		1,631,099	1,868,758
Depletion, deprec., amortization and accretion	634,485		472,022		1,740,286	1,444,443
Bad debt expense					819,000
Segment assets	16,698,193		16,340,875	16,698,193	16,698,193	16,340,875
Capital expenditures	325,071		(7,944)		467,017	237,681
Gathering system	10,214,493		11,696,643	$ 10,214,493	10,214,493	11,696,643
Gas Gathering | Gas gathering and compression revenue | Operating Segments
Segment information
Total operating revenue	$ 2,740,186		$ 2,498,232		$ 8,210,255	$ 7,779,107

Operating Segments - Customers

Operating Segments - Customers (Details) - customer	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Concentration risk
Number of customers	20	21	23	26
Customer Concentration risk
Concentration risk
Number of customers	3	2	4	3
Threshold concentration risk for reporting (as a percent)	10.00%	10.00%	10.00%	10.00%
Customer Concentration risk | Customer One
Concentration risk
Concentration risk (as a percent)	25.00%	60.00%	27.00%	36.00%
Customer Concentration risk | Customer Two
Concentration risk
Concentration risk (as a percent)	22.00%	11.00%	22.00%	35.00%
Customer Concentration risk | Customer Three
Concentration risk
Concentration risk (as a percent)	21.00%		16.00%	11.00%
Customer Concentration risk | Customer Four
Concentration risk
Concentration risk (as a percent)			13.00%

Commodity Risk Management Act_3

Commodity Risk Management Activities - Commodity Price Risks (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commodity Risk Management Activities
Unrealized gains (losses) on derivatives included in earnings	$ 419,879	$ 1,270,494	$ 2,055,548	$ 3,494,727
Cash received from (paid for) settlements of derivative contracts	$ 1,657,323	$ 1,157,271	$ 4,035,092	$ 1,344,690

Commodity Risk Management Act_4

Commodity Risk Management Activities - Commodity Derivative Contracts (Details)	9 Months Ended
	Sep. 30, 2020USD ($)MMBTU$ / MMBTU	Dec. 31, 2019USD ($)
Risk Management Activities
Fair Value	$ 20,258	$ 1,999,802
Fixed price swap
Risk Management Activities
Volume (Mmbtu) | MMBTU	762,500
Swaps | $ / MMBTU	2.73
Fair Value	$ (73,029)
Basis swap
Risk Management Activities
Volume (Mmbtu) | MMBTU	762,500
Basis Differential | $ / MMBTU	(0.44)
Fair Value	$ 93,287

Commodity Risk Management Act_5

Commodity Risk Management Activities - Fair Value of Derivative Instruments (Details)	Sep. 30, 2020USD ($)DerivativeInstrument	Dec. 31, 2019USD ($)
Risk Management Activities
Number of credit risk derivatives held | DerivativeInstrument	0
Fair value of derivative assets, current	$ 20,258	$ 1,999,802
Fair Value of Derivative Assets	174,421	2,164,340
Fair Value of Derivative Liabilities	(154,163)	(164,538)
Net Fair Value of Derivatives	20,258	1,999,802
Basis swap
Risk Management Activities
Fair value of derivative assets, current	97,899	162,844
Fair value of derivative liabilities, current	(4,611)	(164,538)
Net Fair Value of Derivatives	93,287
Fixed price swap
Risk Management Activities
Fair value of derivative assets, current	76,522	$ 2,001,496
Fair value of derivative liabilities, current	(149,552)
Net Fair Value of Derivatives	$ (73,029)

Commodity Risk Management Act_6

Commodity Risk Management Activities - Fair value of asset (liability) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commodity Risk Management Activities
Fair value of asset (liability), beginning of the period	$ 1,257,702	$ 1,739,791	$ 1,999,802	$ (297,023)
Gains (losses) on derivative contracts included in earnings	419,879	1,270,494	2,055,548	3,494,727
Settlement of commodity derivative contracts	(1,657,323)	(1,157,271)	(4,035,092)	(1,344,690)
Fair value of asset, end of the period	$ 20,258	$ 1,853,014	$ 20,258	$ 1,853,014

Asset Retirement Obligations (D

Asset Retirement Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 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	5,306	16,163
Change in estimates	2,181	1,153,740
Accretion	153,605	114,798
Balance end of period	$ 3,070,947	$ 2,909,855