Gray Reed represented Epsilon Energy Ltd. (“Epsilon”) in its acquisition of Peak Exploration and Production LLC and Peak BLM Lease LLC (together, “Peak”), majority owned by funds of Yorktown Energy Partners LLC. The transaction expands Epsilon’s presence in the Powder River Basin and strengthens its platform for growth across North American assets.

Gray Reed guided Epsilon through the negotiation and structuring of the deal, which includes the issuance of 6 million common shares, assumption of roughly $49 million in debt and potential contingent consideration of up to 2.5 million shares. The deal also gives Epsilon control over operations on underdeveloped assets. The transaction is expected to close in the fourth quarter of 2025, pending shareholder approval.

The acquisition adds 40,500 net acres in the Powder River Basin, with second quarter 2025 production of 2.2 MBoepd (56% oil 44% gas). Proved reserves from the assets are 21.5 MMBoe, roughly a 150% increase over Epsilon’s year-end 2024 proved reserves.

Epsilon Chief Executive Officer Jason Stabell said, “This is a key step forward for the company. We are acquiring a large under-exploited asset at an attractive price. The acquisition brings additional balance to our portfolio and importantly, provides both control of the investment cadence and increased optionality to deploy capital for our shareholders as conditions warrant”.

The Gray Reed team, led by Partners Philip Jordan and David Earhart, and Associates Constanza Recchini and Tanner McClellan, advised Epsilon in the transaction.

“Working with Epsilon on this acquisition was exciting,” said Philip Jordan, leader of Gray Reed’s Energy Practice Group. “They had a clear strategy for growth, and we focused on helping them navigate the complexities of the Powder River Basin and structure a deal that supports their long-term objectives.” 

About Epsilon

Epsilon Energy Ltd. is a North American onshore natural gas and oil production and gathering company with assets in Pennsylvania, Texas, Alberta, New Mexico and Oklahoma.

About Gray Reed’s Energy and M&A Practice

Gray Reed's Energy focused Mergers and Acquisitions team has significant experience representing privately held and public companies, management teams, founders, private equity funds and other equity sponsors in transactions across the energy space, including in M&A transactions in every major producing basin, equity investments and recapitalizations.

About Gray Reed

As a full-service Texas law firm, with a comprehensive range of litigation and transactional practice groups, Gray Reed’s 150 attorneys focus on understanding our clients’ businesses and industries. We are equipped to support companies and high-net-worth individuals with sophisticated legal needs. Through our subsidiary, Gray Reed Advisory Services, we extend our support with expert consultants who provide strategic business solutions tailored to each client’s objectives. Discover what sets us apart at www.grayreed.com and www.grayreedadvisory.com.