SecProbe.io

CORRESP
1
filename1.htm

January 20, 2026

​

Via EDGAR

​

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Attention:Michael Purcell

​

​

Re:Epsilon Energy Ltd.

Registration Statement on Form S-3

Filed January 13, 2026

File No. 333-292704

​

Acceleration Request

​

Requested Date:January 22, 2026

Requested Time:4:00 PM Eastern Time

​

​

Ladies and Gentlemen:

​

Pursuant to Rule 461 under the Securities Act of 1933, as amended, Epsilon Energy Ltd. (the “Company”) hereby requests that the above-referenced Registration Statement on Form S-3 (File No. 333-292704) (the “Registration Statement”) be declared effective at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable, or at such later time as the Company may request by telephone to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”).  The Company hereby authorizes David R. Earhart of Gray Reed & McGraw LLP, counsel for the Company, to make such request on the Company’s behalf.

​

 The Company requests that it be notified of the effectiveness of the Registration Statement by telephone to David R. Earhart of Gray Reed & McGraw LLP, at (469) 320-6041.  Please direct any questions or comments regarding this acceleration request to David R. Earhart.

​

Sincerely,

​

EPSILON ENERGY LTD.

​

​

By:  /s/ Andrew Williamson​ ​​ ​

Andrew Williamson

Chief Financial Officer

​

cc: David R. Earhart

 Gray Reed & McGraw LLP

CORRESP
1
filename1.htm

January 20, 2026

​

Via EDGAR

​

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Attention:Michael Purcell

​

​

Re:Epsilon Energy Ltd.

Registration Statement on Form S-3

Filed January 13, 2026

File No. 333-292703

​

Acceleration Request

​

Requested Date:January 22, 2026

Requested Time:4:00 PM Eastern Time

​

​

Ladies and Gentlemen:

​

Pursuant to Rule 461 under the Securities Act of 1933, as amended, Epsilon Energy Ltd. (the “Company”) hereby requests that the above-referenced Registration Statement on Form S-3 (File No. 333-292703) (the “Registration Statement”) be declared effective at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable, or at such later time as the Company may request by telephone to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”).  The Company hereby authorizes David R. Earhart of Gray Reed & McGraw LLP, counsel for the Company, to make such request on the Company’s behalf.

​

 The Company requests that it be notified of the effectiveness of the Registration Statement by telephone to David R. Earhart of Gray Reed & McGraw LLP, at (469) 320-6041.  Please direct any questions or comments regarding this acceleration request to David R. Earhart.

​

Sincerely,

​

EPSILON ENERGY LTD.

​

​

By:  /s/ Andrew Williamson​ ​​ ​

Andrew Williamson

Chief Financial Officer

​

cc: David R. Earhart

 Gray Reed & McGraw LLP

January 16, 2026
Jason Stabell
Chief Executive Officer
Epsilon Energy Ltd.
500 Dallas St., Suite 1250
Houston, TX 77002
Re:Epsilon Energy Ltd.
Registration Statement on Form S-3
Filed January 13, 2026
File No. 333-292703
Dear Jason Stabell:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Michael Purcell at 202-551-5351 with any questions.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation
cc:David R. Earhart

January 16, 2026
Jason Stabell
Chief Executive Officer
Epsilon Energy Ltd.
500 Dallas St., Suite 1250
Houston, TX 77002
Re:Epsilon Energy Ltd.
Registration Statement on Form S-3
Filed January 13, 2026
File No. 333-292704
Dear Jason Stabell:
            This is to advise you that we have not reviewed and will not review your registration 
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you 
that the company and its management are responsible for the accuracy and adequacy of their 
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Michael Purcell at 202-551-5351 with any questions.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation
cc:David R. Earhart

CORRESP
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February 6, 2023

Via EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-3720

Attention:

 Mitchell Austin

​

 Claudia Rios

​

​

 Re:

 Epsilon Energy Ltd.

​

 ​

 Registration Statement on Form S-3

​

 ​

 Filed January 17, 2023

​

 ​

 File No. 333-269267

​

Acceleration Request

​

​

 Requested Date:

 February 9, 2023

​

 Requested Time:

 4:00 PM Eastern Time

​

Ladies and Gentlemen:

Pursuant to Rule 461 under the Securities Act of 1933, as amended, Epsilon Energy Ltd. (the “Company”) hereby requests that the above-referenced Registration Statement on Form S-3 (File No. 333-269267) (the “Registration Statement”) be declared effective at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable, or at such later time as the Company may request by telephone to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”). The Company hereby authorizes David R. Earhart of Gray Reed & McGraw LLP, counsel for the Company, to make such request on the Company’s behalf.

The Company requests that it be notified of the effectiveness of the Registration Statement by telephone to David R. Earhart of Gray Reed & McGraw LLP, at (469) 320-6041. Please direct any questions or comments regarding this acceleration request to David R. Earhart.

​

​

 Sincerely,

​

 ​

​

 EPSILON ENERGY LTD.

​

 ​

​

 By:

 /s/ Andrew Williamson

​

 ​

 Andrew Williamson

​

 ​

 Chief Financial Officer

​

cc:

 David R. Earhart

 ​

​

 Gray Reed & McGraw LLP

 ​

​

United States securities and exchange commission logo
January 25, 2023
Jason Stabell
Chief Executive Officer
Epsilon Energy Ltd.
16945 Northchase Drive, Suite 1610
Houston, Texas 77060
Re:Epsilon Energy Ltd.
Registration Statement on Form S-3
Filed January 17, 2023
File No. 333-269267
Dear Jason Stabell:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Claudia Rios, Staff Attorney, at (202) 551-8770 or, in her absence,
Mitchell Austin, Acting Legal Branch Chief, at (202) 551-3574 with any questions.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation
cc:       David R. Earhart, Esq.

United States securities and exchange commission logo
January 13, 2023
Andrew Williamson
Chief Financial Officer
Epsilon Energy Ltd.
16945 Northchase Drive
Suite 1610
Houston, TX 77060
Re:Epsilon Energy Ltd.
Form 10-K for the Fiscal Year ended December 31, 2021
Filed March 24, 2022
File No. 001-38770
Dear Andrew Williamson:
            We have completed our review of your filing.  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation

CORRESP
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CORRESP

 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Mark One)
☒
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021. OR
☐
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 001-38770 EPSILON ENERGY LTD.  (Exact name of registrant as specified in its charter)

Alberta,
Canada

98
-
1476367

(State or Other
Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

 16945 Northchase Drive, Suite 1610 Houston, Texas 77060 (281) 670-0002 (Address of principal executive offices including zip code and telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Shares, no par value

“
EPSN
”

NASDAQ

Global Market

 Securities registered pursuant to Section 12(g) of the Act: NONE (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

☐

☒

☐

☒

☒

☐

☒

☐

☐

☐

☒

☒

☒

                                         ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes

☐

☒

   1   PART I FORWARD LOOKING STATEMENTS. Certain statements contained in this report constitute forward-looking statements. The use of any of the words ‘‘anticipate,’’ ‘‘continue,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘may,’’ ‘‘will,’’ ‘‘project,’’ ‘‘should,’’ ‘‘believe,’’ and similar expressions and statements relating to matters that are not historical facts constitute ‘‘forward looking information’’ within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated. Such forward-looking statements are based on reasonable assumptions, but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this report should not be unduly relied upon. These statements are made only as of the date of this report. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to oil and natural gas production rates, commodity prices for crude oil or natural gas, supply and demand for oil and natural gas; the estimated quantity of oil and natural gas reserves, including reserve life; future development and production costs, and statements expressing general views about future operating results — are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our present expectations or projections. These risks
and uncertainties include, but are not limited to, those described in this Annual Report on Form 10-K, and those described from time to time in our future reports filed with the Securities and Exchange Commission. DEFINED TERMS We have included below the definitions for certain terms used in this document: ‘‘3-D seismic’’ Geophysical data that depict the subsurface strata in three dimensions. 3-D seismic typically provides a more detailed and accurate interpretation of the subsurface strata than 2-D, or two-dimensional, seismic. ‘‘ABCA’’ Business Corporations Act (Alberta). ‘‘Anchor shippers’’ Parties listed in the Anchor Shipper Gas Gathering Agreement for Northern Pennsylvania, including Epsilon Energy USA, Inc., Equinor USA Onshore Properties, Inc., and Chesapeake Energy Corporation. for the Auburn Gas Gathering System. ‘‘ASC’’ Accounting Standards Codification. ‘‘Bbl’’ One stock tank barrel, or 42 U.S. gallons liquid volume, used in this report in reference to oil, NGLs and other liquid hydrocarbons. ‘‘Bcf’’ One billion cubic feet, used in reference to natural gas. ‘‘BOE’’ One stock tank barrel of oil equivalent, computed on an approximate energy equivalent basis that one Bbl of crude oil equals six Mcf of natural gas and one Bbl of crude oil equals one Bbl of natural gas liquids. ‘‘Completion’’ The process of preparing a natural gas and oil wellbore for production through the installation of permanent production equipment, as well as perforation and fracture stimulation to optimize production. ‘‘Delay rental’’ Consideration paid to the lessor by a lessee to extend the terms of an oil and natural gas lease in the absence of drilling operations and/or production that is contractually required to hold the lease. This consideration is
generally required to be paid on or before the anniversary date of the natural gas and oil lease during its primary term, and typically extends the lease for an additional year. ‘‘Development well’’ A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

   2  ‘‘Differential’’ The difference between a benchmark price of oil and natural gas, such as the NYMEX crude oil spot price, and the wellhead price received. ‘‘Dry hole’’ A well found to be incapable of producing either natural gas or oil in sufficient quantities to justify completion as a natural gas or oil well. ‘‘Exit rate’’ Upstream term referring to the rate of production of oil and/or gas as of a specified date. ‘‘Exploratory well’’ A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir. ‘‘FASB’’ Financial Accounting Standards Board. ‘‘Field’’ An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field that are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or both. Reservoirs that
are associated by being in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms ‘‘structural feature’’ and ‘‘stratigraphic condition’’ are intended to identify localized geological features as opposed to the broader terms of basins, trends, provinces, plays, areas of interest, etc.  ‘‘Free cash flow’’ A measure of a company’s financial performance, calculated as operating cash flow minus capital expenditures. Free cash flow represents the cash that a company is able to generate after spending the money
required to maintain or expand its asset base. ‘‘GAAP’’ Generally accepted accounting principles in the United States of America. ‘‘Gross acres’’ or ‘‘gross wells’’ The total acres or wells, as the case may be, in which a working interest is owned. “Henry Hub” A natural gas pipeline located in Erath, Louisiana, that serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX). The hub is owned by Sabine Pipe Line LLC and has
access to many of the major gas markets in the United States. ‘‘ISDA’’ International Swaps and Derivatives Association, Inc. ‘‘Lease operating expense’’ or ‘‘LOE’’ The expenses of lifting oil or gas from a producing formation to the surface, constituting part of the current operating expenses of a working interest, and also including labor, superintendence, supplies, repairs, short-lived assets, maintenance, allocated overhead costs and other expenses incidental to production, but not including lease acquisition or drilling or completion expenses. ‘‘LIBOR’’ London interbank offered rate. ‘‘MBbl’’ One thousand barrels of oil, NGLs or other liquid hydrocarbons. ‘‘MBbl/d’’ One MBbl per day. ‘‘MBOE’’ One thousand BOE. ‘‘MBOE/d’’ One MBOE per day. ‘‘Mcf’’ One thousand cubic feet, used in reference to natural gas. ‘‘MMBbl’’ One million Bbl. ‘‘MMBOE’’ One million BOE. ‘‘MMBtu’’ One million British Thermal Units, used in reference to natural gas. ‘‘MMcf’’ One million cubic feet, used in reference to natural gas. ‘‘MMcf/d’’ One MMcf per day. ‘‘Net acres’’ or ‘‘net wells’’ The sum of the fractional working interests owned in gross acres or wells, as the case may be. ‘‘Net production’’ The total production attributable to our fractional working interest owned. ‘‘NGL’’ Natural gas liquid. ‘‘NYMEX’’ The New York Mercantile Exchange. ‘‘PDNP’’ Proved developed nonproducing reserves. ‘‘PDP’’ Proved developed producing reserves.

   3  ‘‘Plugging and abandonment’’ Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another or to the surface. Regulations of most states legally require plugging of abandoned wells. ‘‘Prospect’’ A property on which indications of oil or gas have been identified based on available seismic and geological information. ‘‘Proved developed reserves’’ Proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to
the cost of a new well.  ‘‘Proved reserves’’ Those reserves that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs and under existing
economic conditions, operating methods and government regulations— prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time. The area of the reservoir considered as proved includes all of the following: a. The area identified by drilling and limited by fluid contacts, if any, and b. Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data. Reserves that can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when both of the following occur: a. Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the
reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based, and b. The project has been approved for development by all necessary parties and entities, including governmental
entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period before the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. ‘‘Proved undeveloped reserves’’ or ‘‘PUDs’’ Proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic
producibility at greater distances. Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless specific
circumstances justify a longer time. Under no circumstances shall estimates of proved undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty. ‘‘PV-10’’ The present value, discounted at 10% per annum, of future net revenues (estimated future gross revenues less estimated future costs of production, development, and asset retirement costs) associated with reserves and is not necessarily the same as market value. PV-10 does not include estimated future income taxes. Unless otherwise noted, PV-10 is calculated using the pricing scheme as required by the Securities and Exchange Commission (‘‘SEC’’). PV-10 of proved reserves is calculated the same as the standardized measure of discounted future net cash flows, except that the
standardized measure of discounted future net cash flows includes future estimated income taxes discounted at 10% per annum. See the definition of standardized measure of discounted future net cash flows.

   4  ‘‘Reasonable certainty’’ If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimate. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as changes due to increased availability of geoscience (geological, geophysical and geochemical) engineering, and economic data are made to estimated ultimate recovery with
time, reasonably certain estimated ultimate recovery is much more likely to increase or remain constant than to decrease. ‘‘Reserves’’ Estimated remaining quantities of natural gas and oil and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering natural gas and oil or related substances to market, and all permits and financing required to implement the project. ‘‘Reservoir’’ A porous and permeable underground formation containing a natural accumulation of producible crude oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs. ‘‘Royalty’’ The amount or fee paid to the owner of mineral rights, expressed as a percentage or fraction of gross income from crude oil or natural gas produced and sold, unencumbered by expenses relating to the drilling, completing or
operating of the affected well. ‘‘

CORRESP
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CORRESP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10
-
K/A

(Mark One)

☒

ANNUAL REPORT PURSUANT TO SECTION

13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal

year ended
December

31, 2021
.

OR

☐

TRANSITION REPORT PURSUANT TO SECTION

13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number
001
-
38770

EPSILON ENERGY

LTD.

(Exact name of registrant as specified in its charter)

Alberta,
Canada

98
-
1476367

(State or Other
Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

16945 Northchase Drive
,
Suite 1610

Houston
,
Texas

77060

(
281
)
670
-
0002

(Address of principal executive offices including zip code and

telephone number, including area
code)

Securities registered pursuant to Section

12(b)

of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Shares, no par value

“
EPSN
”

NASDAQ

Global Market

Securities registered pursuant to
Section

12(g)

of the Act:

NONE

(Title of class)

Indicate by check mark if the registrant is a well
-
known seasoned issuer, as defined in Rule

405 of the Securities Act.

Yes

☐

No

☒

Indicate by check mark if the registrant is not required to file
reports pursuant to Section

13 or Section

15(d)

of the Act.

Yes

☐

No

☒

Indicate by check mark whether the registrant (1)

has filed all reports required to be filed by Section

13 or 15(d)

of the Securities Exchange Act of 1934 during the
preceding
12

months (or for such shorter period that registrant was required to file such reports), and (2)

has been subject to such filing requirements for the past 90

days.

Yes

☒

No

☐

Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule

405 of Regulation S
-
T
(§232.405 of this chapter) during the preceding 12

months (or for such shorter period that the registrant was required to submit such files
).

Yes

☒

No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non
-
accelerated filer, a smaller reporting company or an emerging growth
company. See the definitions of “large accelerated
filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule

12b
-
2 of the Exchange
Act.

Large accelerated filer

☐

Accelerated filer

☐

Non
-
accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period

for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐

Ind
icate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effect
iveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes
-
Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report.
☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule

12b
-
2 of the Exchange Act).

Yes

☐

No

☒

Aggregate market value of the voting and non
-
voting common equity held by non
-
affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the last business day of t
he registrant’s most recently completed second fiscal quarter:
$43.0

million.
There were
23,684,453

shares of Common Shares ($0 par value) outstanding as of March 22, 202
2
.

1

PART

I

FORWARD
LOOKING STATEMENTS.

Certain statements contained in this report constitute forward
-
looking statements. The use of any of the words
‘‘anticipate,’’ ‘‘continue,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘may,’’ ‘‘will,’’ ‘‘project,’’ ‘‘should,’’ ‘‘believe,’’ and similar
expressions and statements relating to matters that are not historical facts constitute ‘‘forward looking information’’
within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties and
other factors that

may cause actual results or events to differ materially from those anticipated. Such forward
-
looking
statements are based on reasonable assumptions, but no assurance can be given that these expectations will prove to be
correct and the forward
-
looking sta
tements included in this report should not be unduly relied upon. These statements are
made only as of the date of this report. All statements that address operating performance, events or developments that
we expect or anticipate will occur in the future
—

including statements relating to oil and natural gas production rates,
commodity prices for crude oil or natural gas, supply and demand for oil and natural gas; the estimated quantity of oil
and natural gas reserves, including reserve life; future develo
pment and production costs, and statements expressing
general views about future operating results
—

are forward
-
looking statements. Management believes that these forward
-
looking statements are reasonable as and when made. However, caution should be taken

not to place undue reliance on
any such forward
-
looking statements because such statements speak only as of the date when made. We undertake no
obligation to publicly update or revise any forward
-
looking statements, whether as a result of new information,

future
events or otherwise, except as required by law. In addition, forward
-
looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from our present expectations or projections. These risks
an
d uncertainties include, but are not limited to, those described in
this

Annual Report on Form 10
-
K, and those described
from time to time in our future reports filed with the Securities and Exchange Commission.

DEFINED TERMS

We have included below the def
initions for certain terms used in this document:

‘‘3
-
D seismic’’

Geophysical data that depict the subsurface strata in three dimensions. 3
-
D seismic typically
provides a more detailed and accurate interpretation of the subsurface strata than 2
-
D, or two
-
d
imensional, seismic.

‘‘ABCA’’

Business
Corporation
s Act (Alberta).

‘‘Anchor shippers’’

Parties listed in the Anchor Shipper Gas Gathering Agreement for Northern Pennsylvania,
including
Epsilon

Energy

USA
,

Inc.,
Equinor USA Onshore Properties, Inc., and
Chesapeake Energy

Corporation
.

for the
Auburn Gas Gathering System.

‘‘ASC’’

Accounting Standards Codification.

‘‘Bbl’’

One stock tank barrel, or 42 U.S. gallons liquid volume, used in this report in reference to oil, NGLs and
other liquid hydrocarbons.

‘‘B
cf’’
One billion cubic feet, used in reference to natural gas.

‘‘BOE’’

One stock tank barrel of oil equivalent, computed on an approximate energy equivalent basis that one
Bbl of crude oil equals six Mcf of natural gas and one Bbl of crude oil equals one Bbl of natural gas liquids.

‘‘Completion’’

The process of preparing a

n
atural gas and oil

wellbore for production through the installation of
permanent production equipment, as well as perforation and fracture stimulation to optimize production.

‘‘Delay rental’’

Consideration paid to the lessor by a lessee to extend the terms

of an oil and natural gas lease in
the absence of drilling operations and/or production that is contractually required to hold the lease. This consideration is
generally required to be paid on or before the anniversary date of the
natural gas and oil

leas
e during its primary term, and
typically extends the lease for an additional year.

‘‘Development well’’

A well drilled within the proved area of an oil or natural gas reservoir to the depth of a
stratigraphic horizon known to be productive.

2

‘‘Differential’
’

The difference between a benchmark price of oil and natural gas, such as the NYMEX crude oil
spot price, and the wellhead price received.

‘‘Dry hole’’

A well found to be incapable of producing either
natural gas or oil

in sufficient quanti
ties to justify

completion as a

natural gas or oil

well.

‘‘Exit rate’’
Upstream term referring to the rate of production of oil and/or gas as of a specified date.

‘‘Exploratory well’’

A well drilled to find a new field or to find a new reservoir in a field previously fou
nd to be
productive of oil or natural gas in another reservoir.

‘‘FASB’’

Financial Accounting Standards Board.

‘‘Field’’

An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same
individual geological structural
feature and/or stratigraphic condition. There may be two or more reservoirs in a field that
are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or both. Reservoirs that
are associated by being in overlapping
or adjacent fields may be treated as a single or common operational field. The
geological terms ‘‘structural feature’’ and ‘‘stratigraphic condition’’ are intended to identify localized geological feature
s
as opposed to the broader terms of basins, trends,

provinces, plays, areas of interest, etc.

‘‘Free cash flow’’

A measure of a company’s financial performance, calculated as operating cash flow minus
capital expenditures. Free cash flow represents the cash that a company is able to generate after spendin
g the money
required to maintain or expand its asset base.

‘‘GAAP’’

Generally accepted accounting principles in the United States of America.

‘
‘Gross acres’’

or
‘‘gross wells’’

The total acres or wells, as the case may be, in which a working interest is
ow
ned.

“
Henry Hub”

A natural gas pipeline located in Erath, Louisiana, that serves as the official delivery location for
futures contracts on the New York Mercantile Exchange (NYMEX). The hub is owned by Sabine Pipe Line LLC and has
access to many of the
major gas markets in the United States
.

‘‘ISDA’’
International Swaps and Derivatives Association, Inc.

‘‘Lease operating expense’’

or ‘‘LOE’’ The expenses of lifting oil or gas from a producing formation to
t
he
surface, constituting part of the current ope
rating expenses of a working interest, and also including labor, superintendence,
supplies, repairs, short
-
lived assets, maintenance, allocated overhead costs and other expenses incidental to production,
but not including lease acquisition or drilling or c
ompletion expenses.

‘‘LIBOR’’

London interbank offered rate.

‘‘MBbl’’

One thousand barrels of oil, NGLs or other liquid hydrocarbons.

‘‘MBbl/d’’

One MBbl per day. ‘‘MBOE’’ One thousand BOE. ‘‘MBOE/d’’ One MBOE per day.

‘‘Mcf’’

One thousand cubic feet, used

in reference to natural gas. ‘‘MMBbl’’ One million Bbl.

‘‘MMBOE’’

One million BOE.

‘‘MMBtu’’

One million British Thermal Units, used in reference to natural gas.

‘‘MMcf’’
One million cubic feet, used in reference to natural gas.

‘‘MMcf/d’’

One MMcf per da
y.

‘‘Net acres’’

or
‘‘net wells’’
The sum of the fractional working interests owned in gross acres or wells, as the
case may be.

‘‘Net production’’

The total production attributable to our fractional working interest owned.

‘‘NGL’’
Natural gas liquid.

‘‘NY
MEX’’

The New York Mercantile Exchange. ‘‘PDNP’’ Proved developed nonproducing reserves. ‘‘PDP’’
Proved developed producing reserves.

3

‘‘Plugging and abandonment’’

Refers to the sealing off of fluids in the strata penetrated by a well so that the
fluids from one stratum will not escape into another or to the surface. Regulations of most states legally require plugging
of abandoned wells.

‘‘Prospect’’
A property on w
hich indications of oil or gas have been identified based on available seismic and
geological information.

‘‘Proved developed reserves’’
Proved reserves that can be expected to be recovered through existing wells with
existing equipment and operating metho
ds or in which the cost of the required equipment is relatively minor compared to
the cost of a new well.

‘‘Proved reserves’’
Those reserves that, by analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economicall
y producible
—
from a given date forward, from known reservoirs and under existing
economic conditions, operating methods and government regulations
—

prior to the time at which contracts providing the
right to operate expire, unless evidence indicates that r
enewal is reasonably certain, regardless of whether deterministic or
probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the
operator must be reasonably certain that it will commence the projec
t, within a reasonable time.

The area of the reservoir considered as proved includes all of the following:

a.

The area identified by drilling and limited by fluid contacts, if any, and

b.

Adjacent undrilled portions of the reservoir that can, with reasonable cer
tainty, be judged to be continuous
with it and to contain economically producible oil or gas on the basis of available geoscience and engineering
data.

Reserves that can be produced economically through application of improved recovery techniques (includin
g, but
not limited to, fluid injection) are included in the proved classification when both of the following occur:

a.

Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the
reservoir as a whole, the
operation of an installed program in the reservoir or an analogous reservoir, or other
evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which
the project or program was based, and

b.

The project has been a
pproved for development by all necessary parties and entities, including governmental
entities.

Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be
determined. The price shall be the average price

during the 12
-
month period before the ending date of the period covered
by the report, determined as an unweighted arithmetic average of the

first
-
day
-
of
-
the
-
month price for each month within
such period, unless prices are defined by contractual arrangeme
nts, excluding escalations based upon future conditions.

‘‘Proved undeveloped reserves’’

or
‘‘PUDs’
’ Proved reserves that are expected to be recovered from new wells
on undrilled acreage, or from existing wells where a relatively major expenditure is requi
red for recompletion. Reserves
on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of
production when drilled, unless evidence using reliable technology exists that establishes reasonable

certainty of economic
producibility at greater distances. Undrilled locations can be classified as having undeveloped reserves only if a
development plan has been adopted indicating that they are scheduled to be drilled within five years, unless specific
circumstances justify a longer time. Under no circumstances shall estimates of proved undeveloped reserves be attributable
to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless
such techniqu
es have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other
evidence using reliable technology establishing reasonable certainty.

‘‘PV
-
10’’

The present value, discounted at 10% per annum, of future net reve
nues (estimated future gross
revenues less estimated future costs of production, development, and asset retirement costs) associated with reserves and
is not necessarily the same as market value. PV
-
10 does not include estimated future income taxes. Unless

otherwise noted,
PV
-
10 is calcula

CORRESP
1
filename1.htm

October 26, 2022

​

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Energy & Transportation

Washington, DC 20549

ATTN: Karl Hiller

Branch Chief

​

Re:Epsilon Energy Ltd.

Form 10-K for the Fiscal Year ended December 31, 2021

Filed March 24, 2022

File No. 001-38770

​

Dear Mr. Hiller,

​

Below you will find our responses to your letter dated August 23, 2022.  Please let us know if you have any additional questions/comments.

​

Business Properties, page 6

 1. We note your disclosure of gross and net productive wells is not provided separately by oil and gas wells. Please revise your filing as necessary to comply with the requirements in Item 1208(a) of Regulation S-K.

​

​

Oil and Natural Gas Production and Revenues and Gathering System Revenues, page 7

2. We note your disclosure of annual production volumes and average sales prices appears to aggregate oil with natural gas liquids into a single combined figure. Please revise your presentation to provide separate disclosure by final product sold to comply with Item 1204(a) of Regulation S-K.

​

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

​

3. Tell us how you considered the requirements with regard to disclosure of production, by final product sold, for each field that contains 15% or more of your total proved reserves. Refer to Item 1204(a) of Regulation S-K and Rule 4-10(a)(15) of Regulation S-X.

​

​

Internal Controls Over Reserves Estimation Process..., page 8

4. Please expand your disclosure to provide a general discussion of the technologies used to establish the appropriate level of certainty for your reserves estimates. Refer to the disclosure requirements in Item 1202(a)(6) of Regulation S-K.

​

​

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

​

Proved Reserves, page 8

5. We note that your discussion of the changes in proved undeveloped reserves appears to be limited to the net quantities converted to proved developed reserves.

​

Please expand your disclosure to separately identify and quantify all material factors underlying the overall change in net quantities, as may include conversions, extensions and discoveries, divestitures and acquisitions, improved recovery, and revisions to the previous estimates, so that the overall change in net reserve quantities between periods is fully reconciled and explained to comply with Item 1203(b) of Regulation S-K.

​

If two or more unrelated factors, including offsetting factors, contribute to the overall change, please separately identify and quantify the change attributable to each factor. For example, disclosures of revisions in previous estimates should address changes in commodity prices, costs, property interest adjustments, well performance, type well forecasts, unsuccessful or uneconomic proved undeveloped locations, and the removal of proved undeveloped locations due to changes in a previously adopted development plan.

​

Response: with respect to the discussion of the changes in proved undeveloped reserves appearing to be limited to the net quantities converted to proved developed reserves, the disclosure will be expanded to include the below;

​

​

​

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

​

​

Notes related of changes from prior year:

 (1) Revisions of previous estimates primarily attributable to changes in commodity prices

 (2) Increases to extensions & discoveries due mainly to changes to the previously adopted development plan

​

Please similarly revise your disclosures on page 71, regarding changes in the net quantities of total proved reserves due to revisions of previous estimates, to comply with FASB ASC 932-235-50-5.

​

Response:  With respect to the discussion of the changes in proved undeveloped reserves appearing to be limited to the net quantities converted to proved developed reserves, the disclosure will be expanded to include the below;

​

​

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

​

​

Notes related of changes from prior year:

 (1) Revisions of previous estimates primarily attributable to changes in commodity prices

 (2) Increases to extensions & discoveries due mainly to changes to the previously adopted development plan

​

6. Your disclosure of capital expenditures associated with converting year-end 2020 proved undeveloped reserves during 2021 appears to be limited to costs spent in Pennsylvania. Please expand your disclosure to similarly quantify the capital expenditures spent in Oklahoma. Alternatively, you may disclose total capital expenditures incurred during the year to convert proved undeveloped reserves to developed reserves.

​

Refer to the disclosure requirements in Item 1203(c) of Regulation S-K.

​

(See response to Item #7)

​

7. Please expand the disclosure of your drilling activity to include the numbers of productive and dry development wells drilled during fiscal 2020 and to specify the number of dry development wells drilled during fiscal 2021, or to clarify if there were none.

​

Refer to the disclosure requirements in Item 1205(a) of Regulation S-K.

​

​

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

​

Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations, page 31

​

8. We note that you provide risk factor disclosures on page 25 concerning the importance of obtaining new supplies of natural gas in order to maintain throughput in the gathering system and compression facility, as production from existing wells naturally declines.

​

You indicate that if utilization rates decline, the cost-of-service model that applies until 2026 could result in a non-competitive gathering rate, having the effect of further reducing throughput and causing utilization of the gathering system to become uneconomic. We understand that the gathering rates are reset annually, based on historical and forecast throughput, revenue, operating expenses and capital expenditures.

​

We also note that you provide property related disclosure on page 8, explaining that the compression facility has a design capacity of 330 MMcf per day, and that natural gas quantities delivered over the gathering system during 2021 and 2020 were 173 MMcf per day and 190 MMcf per day, respectively, indicating utilization of the system had declined to about 52% during 2021 from about 58% during 2020.

​

As you previously reported that quantities delivered during 2019 and 2018 were 241 MMcf per day and 274 MMcf per day, respectively, utilization during 2020 appears to have also represented a decline from about 73% during 2019, and a decline from about 83% in 2018, exhibiting a four-year downward trend in utilization.

​

Please expand your disclosures in MD&A to address utilization and the reasonably likely effects of changes in utilization of the gathering system on your liquidity and results of operations to comply with Item 303(b)(1)(i) and Item 303(b)(2)(ii) of Regulation S-K.

​

​

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

In conjunction with the foregoing, please address the following points.

​

• Explain how present utilization compares to the levels at which the system may become uneconomic based on the current economic environment and your expectations, and disclose the timeframe when this may occur based on your expectations or the trend established over the last four years.

​

Response:  The Auburn compression facility capacity is 220 MMcf/d, down from 330 MMcf/d due to a planned reduction in suction pressure which occurred in 2020. Despite the 37% decline in facility throughput from 2018 to 2021, the utilization rate of the Auburn compression facility declined only 4% from approximately 83% to 79%.

​

This decline in facility throughput was offset by higher compression fees and a higher average gathering rate due to a lower percentage mix of third-party volumes.

​

​

The Company estimates the current Anchor Shipper utilization rates would have to decline to below 20% to render the system uneconomic using the 2021 SEC price deck for natural gas pricing.

​

• Explain how your expectation for throughput in future periods compares to the trend exhibited by volumes delivered through the system during the last four years, and if your outlook differs disclose your rationale, assumptions, and related plans.

​

Response:  The table above illustrates that the majority of the decline in volumes from 2018 to 2021 was third-party gas which generates 75% less revenue for the Auburn gas gathering system than Anchor Shipper gas.

​

Anchor Shipper volumes delivered through Auburn GGS from 2018 through 6/30/22 were 242 Bcf. The current development plan forecasts 258 Bcf of Anchor Shipper gas to be delivered from 7/1/2022 through 2026.

​

While the Company does not expect future third-party volumes to return to 2018 levels, the Company does expect to continue to receive material volumes.

​

• Indicate the extent to which the system throughput and utilization levels disclosed are based on production from your properties, as opposed to production attributed to other parties or production that you have acquired, and describe your expectations for any material change in your proportionate volumes.

​

Response: The allocation of throughput between Anchor Shippers and third-parties is included in the table above. The Company’s expectations for Anchor Shipper gas from 7/1/22 through 2026 is 258 Bcf. The Company does expect the Auburn GGS to continue to receive material third-party volumes in future years.

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

• Disclose the gathering rates for each period and indicate the extent to which changes in the rates are attributed to differences between actual throughput and actual results, compared to the corresponding inputs previously forecasted, as opposed to changes in forecasted figures for the remaining future periods.

​

​

• Identify any alternative means of sustaining production from your properties in the event that the gathering system becomes uneconomic.

​

Response: The Auburn GGS is critical to sustaining production from Epsilon’s properties. The Company cannot foresee an alternative to the system in the unlikely event the gathering system becomes uneconomic.

​

In this scenario, the Auburn GGS owners and shippers would likely transition away from the cost-of-service calculation to a negotiated competitive fixed rate which would allow for the economic development of the natural gas reserves. This could result in an impairment charge to the Company’s ownership in the Auburn GGS.

​

Supplemental Information to Consolidated Financial Statements (Unaudited)

Net Proved Reserve Summary, page 71

9. We note that the production figures shown in the reserves reconciliation for the year ended December 31, 2020 appear to be inconsistent with the comparable production information provided elsewhere in your filing.

​

For example, disclosure on page 7 indicates natural gas and oil/natural gas liquids production during 2020 of 11,204 MMcf and 14.9 MBbl, while disclosure on page 71 indicates production during 2020 of 11,252 MMcf for natural gas, 0 MBbls for natural gas liquids, and 7 MBbls for oil. We also note that the production volumes used in the reserves reconciliation for the year ended December 31, 2021 on page 71 appear as a positive value with the illogical effect of increasing reserves for the year.

​

Please submit the revisions that you propose to address these concerns, including a summary of all corrections required for each period, and an explanation of effects on other line items requiring adjustment to properly reconcile the overall change in reserves.

​

(See response to Item #5)

​

/s/

 ​

​

 Sincerely,

​

 /s/ Andrew Williamson

​

 Andrew Williamson

​

 Chief Financial Officer

​

​

Epsilon Energy USA, Inc.

16945 Northchase Drive,

Suite 1610

Houston, Texas  77060

Phone: 281.670.0002

Fax: 281.668.0985

 PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON OFFICE.

 Epsilon Energy Ltd.

14505 Bannister Road SE
Suite 300
Calgary, AB T2X 3J3

​

United States securities and exchange commission logo
August 23, 2022
Andrew Williamson
Chief Financial Officer
Epsilon Energy Ltd.
16945 Northchase Drive
Suite 1610
Houston, TX 77060
Re:Epsilon Energy Ltd.
Form 10-K for the Fiscal Year ended December 31, 2021
Filed March 24, 2022
File No. 001-38770
Dear Mr. Williamson:
            We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2021
Business
Properties, page 6
1.We note your disclosure of gross and net productive wells is not provided separately by
oil and gas wells. Please revise your filing as necessary to comply with the requirements
in Item 1208(a) of Regulation S-K.
Oil and Natural Gas Production and Revenues and Gathering System Revenues, page 7
2.We note your disclosure of annual production volumes and average sales prices appears to
aggregate oil with natural gas liquids into a single combined figure.

Please revise your presentation to provide separate disclosure by final product sold to
comply with Item 1204(a) of Regulation S-K.

 FirstName LastNameAndrew Williamson
 Comapany NameEpsilon Energy Ltd.
 August 23, 2022 Page 2
 FirstName LastNameAndrew Williamson
Epsilon Energy Ltd.
August 23, 2022
Page 2
3.Tell us how you considered the requirements with regard to disclosure of production, by
final product sold, for each field that contains 15% or more of your total proved reserves.
Refer to Item 1204(a) of Regulation S-K and Rule 4-10(a)(15) of Regulation S-X.
Internal Controls Over Reserves Estimation Process..., page 8
4.Please expand your disclosure to provide a general discussion of the technologies used to
establish the appropriate level of certainty for your reserves estimates.

Refer to the disclosure requirements in Item 1202(a)(6) of Regulation S-K.
Proved Reserves, page 8
5.We note that your discussion of the changes in proved undeveloped reserves appears to be
limited to the net quantities converted to proved developed reserves.

Please expand your disclosure to separately identify and quantify all material factors
underlying the overall change in net quantities, as may include conversions, extensions
and discoveries, divestitures and acquisitions, improved recovery, and revisions to the
previous estimates, so that the overall change in net reserve quantities between periods is
fully reconciled and explained to comply with Item 1203(b) of Regulation S-K.

If two or more unrelated factors, including offsetting factors, contribute to the overall
change, please separately identify and quantify the change attributable to each factor.  For
example, disclosures of revisions in previous estimates should address changes in
commodity prices, costs, property interest adjustments, well performance, type well
forecasts, unsuccessful or uneconomic proved undeveloped locations, and the removal of
proved undeveloped locations due to changes in a previously adopted development plan.

Please similarly revise your disclosures on page 71, regarding changes in the net
quantities of total proved reserves due to revisions of previous estimates, to comply
with FASB ASC 932-235-50-5.
6.Your disclosure of capital expenditures associated with converting year-end 2020 proved
undeveloped reserves during 2021 appears to be limited to costs spent in Pennsylvania.
Please expand your disclosure to similarly quantify the capital expenditures spent in
Oklahoma. Alternatively, you may disclose total capital expenditures incurred during the
year to convert proved undeveloped reserves to developed reserves.

Refer to the disclosure requirements in Item 1203(c) of Regulation S-K.
7.Please expand the disclosure of your drilling activity to include the numbers of productive
and dry development wells drilled during fiscal 2020 and to specify the number of dry
development wells drilled during fiscal 2021, or to clarify if there were none.

Refer to the disclosure requirements in Item 1205(a) of Regulation S-K.

 FirstName LastNameAndrew Williamson
 Comapany NameEpsilon Energy Ltd.
 August 23, 2022 Page 3
 FirstName LastNameAndrew Williamson
Epsilon Energy Ltd.
August 23, 2022
Page 3
Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations, page 31
8.We note that you provide risk factor disclosures on page 25 concerning the importance of
obtaining new supplies of natural gas in order to maintain throughput in the gathering
system and compression facility, as production from existing wells naturally declines.

You indicate that if utilization rates decline, the cost-of-service model that applies until
2026 could result in a non-competitive gathering rate, having the effect of further
reducing throughput and causing utilization of the gathering system to become
uneconomic. We understand that the gathering rates are reset annually, based on historical
and forecast throughput, revenue, operating expenses and capital expenditures.

We also note that you provide property related disclosure on page 8, explaining that the
compression facility has a design capacity of 330 MMcf per day, and that natural gas
quantities delivered over the gathering system during 2021 and 2020 were 173 MMcf per
day and 190 MMcf per day, respectively, indicating utilization of the system had declined
to about 52% during 2021 from about 58% during 2020.

As you previously reported that quantities delivered during 2019 and 2018 were 241
MMcf per day and 274 MMcf per day, respectively, utilization during 2020 appears to
have also represented a decline from about 73% during 2019, and a decline from about
83% in 2018, exhibiting a four-year downward trend in utilization.

Please expand your disclosures in MD&A to address utilization and the reasonably likely
effects of changes in utilization of the gathering system on your liquidity and results of
operations to comply with Item 303(b)(1)(i) and Item 303(b)(2)(ii) of Regulation S-K.

In conjunction with the foregoing, please address the following points.

•Explain how present utilization compares to the levels at which the system may
become uneconomic based on the current economic environment and your
expectations, and disclose the timeframe when this may occur based on your
expectations or the trend established over the last four years.

•Explain how your expectation for throughput in future periods compares to the trend
exhibited by volumes delivered through the system during the last four years, and if
your outlook differs disclose your rationale, assumptions, and related plans.

•Indicate the extent to which the system throughput and utilization levels disclosed are
based on production from your properties, as opposed to production attributed to
other parties or production that you have acquired, and describe your expectations for
any material change in your proportionate volumes.

 FirstName LastNameAndrew Williamson
 Comapany NameEpsilon Energy Ltd.
 August 23, 2022 Page 4
 FirstName LastName
Andrew Williamson
Epsilon Energy Ltd.
August 23, 2022
Page 4
•Disclose the gathering rates for each period and indicate the extent to which changes
in the rates are attributed to differences between actual throughput and actual results,
compared to the corresponding inputs previously forecasted, as opposed to changes in
forecasted figures for the remaining future periods.

•Identify any alternative means of sustaining production from your properties in the
event that the gathering system becomes uneconomic.
Supplemental Information to Consolidated Financial Statements (Unaudited)
Net Proved Reserve Summary, page 71
9.We note that the production figures shown in the reserves reconciliation for the year
ended December 31, 2020 appear to be inconsistent with the comparable production
information provided elsewhere in your filing.

For example, disclosure on page 7 indicates natural gas and oil/natural gas liquids
production during 2020 of 11,204 MMcf and 14.9 MBbl, while disclosure on page 71
indicates production during 2020 of 11,252 MMcf for natural gas, 0 MBbls for natural gas
liquids, and 7 MBbls for oil. We also note that the production volumes used in the
reserves reconciliation for the year ended December 31, 2021 on page 71 appear as a
positive value with the illogical effect of increasing reserves for the year.

Please submit the revisions that you propose to address these concerns, including a
summary of all corrections required for each period, and an explanation of effects on other
line items requiring adjustment to properly reconcile the overall change in reserves.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759, if you have
questions regarding comments on the financial statements and related matters.  You may contact
Sandra Wall, Petroleum Engineer, at (202) 551-4727, or John Hodgin, Petroleum Engineer, at
(202) 551-3699, with questions regarding comments on engineering matters.  Please contact Karl
Hiller, Branch Chief, at (202) 551-3686, with any other questions.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation

CORRESP
1
filename1.htm

        DLA Piper LLP (US)

        1000 Louisiana Street

        Suite 2800

        Houston, Texas 77002-5005

www.dlapiper.com

    June 4, 2020

    Via EDGAR

Division of Corporation Finance,

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Attn: Perry Hindin

Re: Epsilon Energy Ltd.

Schedule TO-I

Filed May 19, 2020

File No 005-91403

Dear Mr. Hindin:

On behalf of Epsilon Energy Ltd. (“Epsilon”
or the “Company”), we hereby submit for your review responses to the comments contained in the letter from the Staff
dated May 26, 2020. Simultaneously with and in response to this letter, the Company has filed an amendment to its Schedule TO-I
as originally filed on May 19, 2020 (“Amendment No. 1”). For your convenience of reference, the text of the comments
in the Staff’s letter has been reproduced in bold herein.

1. Refer to clause (a) and (b) in this section. A tender offer may be conditioned on a variety of events and circumstances,
provided that they are not within the direct or indirect control of the bidder. The conditions also must be drafted with sufficient
specificity to allow for objective verification that the conditions have been satisfied. The disclosure in clause (a) and (b) in
this section includes the language “there shall have been threatened…any action…” and “there shall
have been any action or proceeding threatened…” With a view towards revised disclosure, please advise what is meant
by the term “threatened” and how it may be objectively determinable.

RESPONSE:

In response to the Staff’s comments, the Company has amended
its disclosure as follows to add an objective standard:

US Securities and Exchange Commission

Perry Hindin

June 4, 2020

Page Two

Clause (a) of Section 8 “Conditions of the Offer”
on page 22 in the Offer to Purchase will be amended by inserting “in writing” immediately after “there shall
have been threatened.”

Clause (b) of Section 8 “Conditions of the Offer”
on page 22 in the Offer to Purchase will be amended by inserting  “in writing” immediately after “there shall
have been any action or proceeding threatened.”

2. Refer to condition (vi) disclosed on page 23. Please advise us, with a view toward revised disclosure, whether or not such
condition has become operative given the continuing adverse economic developments linked to the recent COVID-19 viral outbreak.
To the extent such condition has been determined not to be operative, please advise us, with a view towards revised disclosure,
of the measurement date against which such condition should be evaluated. Please also refer to condition (xi) and advise us what
would constitute a material acceleration or worsening of condition (vi).

RESPONSE:

In response to the Staff’s comments, the Company has clarified
that the condition is not currently operative (please see page 1 of Amendment No.1) and would only be triggered by an additional
significant downturn occurring after the commencement of the Offer.

The Company has added the word “additional”
before “slowdown in economic growth, economic downturn, recession or other adverse economic development linked to the
outbreak of a pandemic or contagious disease, including, but not limited to, the recent COV ID-19 viral outbreak” and
has also added “including, after the commencement of the Offer” immediately following “the United
States” in condition (iii) (please see pages 1 and 2 of Amendment No. 1, and please also see the Company's response 3
below).

In response to the Staff's comments, the Company has
eliminated condition (xi) on page 23 of its Offer to Purchase (please see page 3 of Amendment No. 1).

Should the Company, in its reasonable judgment, determine, that
as a result of an additional significant impact of the COVID-19 viral outbreak a material change has occurred which may warrant
the termination of the Offer, the Company will make the applicable disclosures as required under Exchange Act Rules 13e-4(e)(3),
13e-4(d)(2), and 13e-4(c)(3).

US Securities and Exchange Commission

Perry Hindin

June 4, 2020

Page Three

3. Refer to the preceding comment and condition (iii) disclosed on page 23. Given the inclusion of condition (vi), please
                                        advise us, with a view towards disclosure, whether condition (iii) is also intended to include the COVID-19 pandemic, and if
                                        so, how such condition, as it relates to COVID-19, is different than condition
(vi). In addition, since the condition refers to the “material worsening” of a war, armed hostilities, act of terrorism
or other international or national calamity, please advise us, with a view towards revised disclosure, how the “material
worsening” language in condition (xi) should be read in conjunction with the “material worsening” language in
condition (iii).

RESPONSE:

In response to the Staff’s comment, the Company has
revised condition (iii) on page 23 of its Offer to Purchase to include a specific mention of the COVID-19 viral outbreak by
adding the language previously contained in condition (vi) (please see pages 1 and 2 of Amendment no 1, and please also see
the company’s response 2 above). The Company added the language "including, after the commencement of the Offer," after "the United States" and deleted the
language "or any other country or region in which the Company or its subsidiaries maintain significant business activities"
from condition (iii). The Company added the language in the former condition (vi) immediately following the newly inserted
"commencement of the Offer," as described above. The condition (vi) seen on page 23 of the Offer to Purchase is accordingly deleted because it is now
included in condition (iii) (please see pages 1 and 2 of Amendment No. 1).

In addition, in response to the Staff’s comments, the
Company has deleted condition (xi) on page 23 of its Offer to Purchase to eliminate duplicative references to “material worsening”
(please see page 3  of Amendment No. 1).

4. To the extent the Company concludes that condition (vi) has occurred, please advise us, with a view toward revised disclosure,
whether or not the condition has been waived or a decision has been made to terminate the offer. Please also advise us whether
or not a material change has occurred under Exchange Act Rules 13e-4(e)(3), 13e-4(c)(3) and 13e-4(d)(2), and if so, how the Company
intends to effectuate compliance with those rules.

RESPONSE:

The Company respectfully advises the Staff that as of the
filing of Amendment No.1 and as of the date of this letter, condition (vi) (now included in condition (iii)) has not occurred
and there has been no material change under Exchange Act Rules 13e-4(e)(3), 13e-4(c)(3) and 13e-4(d)(2) (please see pages 1
and 2 of Amendment No. 1).

Should the Company determine that during the remaining
pendency of the Offer that such a condition has occurred or a material change under Exchange Act Rules 13e-4(e)(3),
13e-4(c)(3) and 13e-4(d)(2) has occurred, the Company will undertake to make the required public announcement and disclosure
of a waiver or of its decision to terminate the Offer, as applicable in accordance with Exchange Act Rules 13e-4(c)(3),
13e-4(d)(2), and 13e-4(e)(3).

US Securities and Exchange Commission

Perry Hindin

June 4, 2020

Page Four

5. Refer to conditions (vii) and (viii). Given that condition (vii) enables the Company to measure the 15% market drop immediately
prior to the Expiration Time, please advise us of the purpose of condition (viii). Please respond to this comment with respect
to conditions (ix) and (x) as well.

RESPONSE:

In response to the Staff’s comment, Amendment No. 1
deletes conditions (viii) and (x) as redundant with conditions (vii) and (ix) of Section 8 “Conditions of the
Offer” on page 23 in the Offer, and has clarified that the measurement period is from the last trading day prior to the
Company’s announcement of its intent to commence the Offer until the Expiration Time on the Expiration Date by deleting
the word “since” and replacing it with “as measured from.” The Company has also corrected the
beginning of the measurement period to read “May 14, 2020.” Immediately following “2020” the phrase
“the last trading day immediately prior to the announcement of the Company’s intent to commence the Offer,
to” is inserted. The phrase “Time on the Expiration” is also inserted immediately between
“Expiration” and “Date” such that, as amended, the amended conditions conclude “commence the
Offer, to any time prior to the Expiration Time on the Expiration Date” (please see pages 1
and 2 of Amendment No. 1).

6. We note the following statement on page 24: “The failure by the Company at any time to exercise its rights under any
of the foregoing conditions shall not be deemed a waiver of any such right, and the waiver of any such right with respect to particular
facts and other circumstances shall not constitute a waiver with respect to any other facts and circumstances, and each such right
shall be deemed an ongoing right which may be asserted at any time or from time to time.” This language suggests that if
a condition is triggered and the Company fails to assert the condition, the Company will not lose the right to assert the condition
at a later time. Please note that when a condition is triggered and the Company decides to proceed with the Offer anyway, we believe
that this decision is tantamount to a waiver of the triggered condition(s). Depending on the materiality of the waived condition
and the number of days remaining in the Offer, the Company may be required to extend the Offer and recirculate new disclosure to
security holders. Please confirm the Company’s understanding that if an Offer condition is triggered, the Company will notify
shareholders whether or not it has waived such condition. In addition, when an Offer condition is triggered by events that occur
during the Offer period and before the expiration of the Offer, the Company should inform holders how
it intends to proceed immediately, rather than waiting until the end of the Offer period, unless the condition is one where satisfaction
of the condition may be determined only upon expiration. Please confirm the Company’s understanding in your response letter.

US Securities and Exchange Commission

Perry Hindin

June 4, 2020

Page Five

RESPONSE:

Epsilon acknowledges that the materiality of a waived
condition may require an extension of the tender offer and circulation of new disclosures. Following the sentence cited in
the Staff’s comment 6 and in response to the Staff’s comments, the Company included the following disclosure in
Section 8 of the “Offer to Purchase”: “In certain circumstances, if the Company waives any of the
conditions described above, the Company may be required to extend the Expiration Date.” (see page 3 of Amendment No. 1).
Accordingly, the Company confirms its understanding that if a condition is triggered but the Company elects to proceed with
the tender offer nevertheless, such election may amount to a waiver of the condition. The Company further understands that
depending on the materiality of the waived condition and the number of days remaining in the tender offer, the Company may be
required to extend the tender offer and circulate new disclosure to shareholders. The Company understands that if an Offer condition is triggered, it will notify shareholders whether or not it has waived
such condition. The Company also
understands that it should promptly inform shareholders of how it intends to proceed in the event a condition to the tender
offer is triggered by events that occur prior to the expiration of the tender offer.

* * * *

We and the Company appreciate the Staff’s attention to
the review of this matter. Please do not hesitate to contact me at (713) 425-8400 or via email at gislar.donnenberg@dlapiper.com
if you have any questions regarding this letter.

Respectfully,

DLA Piper LLP (US)

    /s/ Gislar Donnenberg

cc: Michael Raleigh, CEO, Epsilon Energy Ltd.

May 26, 2020

Via E-mail
Gislar Donnenberg , Esq.
DLA Piper LLP (US)
1000 Louisiana, Suite 2800
Houston, Texas 77002

Re: Epsilon Energy Ltd.
Schedul e TO-I
Filed May 19, 2020
File No.  5-91403

Dear Mr. Donnenberg :

We have reviewed the filing above and have the following comment s.  In some of our
comment s, we may ask you to provide us with information so we may better understand the
disclosure.

Please respond to this letter by amending the filing or by providing the requested
information.  If you do not believe our comment s apply to the Company’s facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to the filing and the information you provide in response
to these comment s, we may have  additional comments.   All defined terms used in this letter have
the same meaning as in the Offer to Purchase , unless otherwise indicated.

Offer to Purchase

Conditions  of the Offer, page 22

1. Refer to clause (a) and (b) in this section .  A tender offer may be conditioned on a variety
of events and circumstances, provided that they are not within the direct or indirect
control of the bidder.  The conditions also must be drafted with sufficient specificity to
allow for objective verification  that the conditions have been satisfied.  The disclosure in
clause (a) and (b) in this section includes the language “ there shall have been
threatened …any action …” and “there shall h ave been any action or proceeding
threatened …”  With a view towards revised disclosure, please advise what is meant by
the term “threatened” and how it may be objectively determinable.

Gislar Donnenberg , Esq.
DLA Piper LLP (US)
May 26, 2020
Page 2
 2. Refer to condition (vi) disclosed on page 23.  Please advise us, with a view toward
revised disclosure, whether or not such condition has become operative given the
continuing adverse eco nomic developments linked to the recent COVID -19 viral
outbreak.  To the extent such condition has been determined not to be operative, please
advise us, with a view towards revised disclosure, of the measurement date against which
such condition should be  evaluated.  Please also refer to condition (xi) and  advise us what
would constitute a material acceleration o r worsening of condition (vi).

3. Refer to the preceding comment  and condition (iii) disclosed on page 23.  Given the
inclusion of condition (vi), please advise us, with a view towards disclos ure, whether
condition (iii) is also intended to include the COVID -19 pandemic, and if so, how such
condition , as it relates to COVID -19, is different than condition (vi).  In addition, since
the condition refers to the “material worsening ” of a war, armed hostilities, act of
terrorism or other international or nat ional calamity , please advis e us, with a view
towards revised disclosure, how the “material worsening ” language in condition (xi)
should be read in conjunction with the “material worsening ” language  in condition (iii).

4. To the extent the Company  conclude s that condition (vi) has occurred, please advise us,
with a view toward revised disclosure, whether or not the condition has been waived or a
decision has been made to terminate the offer.  Please also advise us whether or not a
material change has occurred under Exchange Act Rules 13e-4(e)(3), 13e -4(c)(3)  and
13e-4(d)(2) , and if so, how the Company  intend s to effectuate compliance with those
rules.

5. Refer to conditions (vii) and (viii).  Given that condition (vii) enables the Company to
measure the 15% market drop immediately prior to the Expiration Time, please advise us
of the purpose of condition (viii).  P lease respond to this comment with respect to
conditions (ix) and (x) as well.

6. We note the following statement  on page 24 : “The failure by the Company at any time to
exercise its rights under any of the foregoing conditions shall not be deemed a waiver of
any such right, and the waiver of any such right with respect to particular facts and other
circumstances shall not constitute a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right which may be
asserted at any time or from time to time. ”  This language suggests that if a condition is
triggered and the Company fails to assert the condition, the Company will not lose the
right to assert the condition at a later time.  Please note that when a  condition is triggered
and the Company decides to proceed with the Offer anyway, we believe that this decision
is tantamount to a waiver of the triggered condition(s).  Depending on the materiality of
the waived condition and the number of days remaining in the Offer, the Company may
be required to extend the Offer and recirculate new disclosure to security holders.  Please
confirm the Company ’s understanding that if an Offer condition is triggered, the
Company will notify  shareholders whether or not i t has waived such condition.  In

Gislar Donnenberg , Esq.
DLA Piper LLP (US)
May 26, 2020
Page 3
 addition, when an Offer  condition is triggered by events that occur during the Offer
period and before the  expiration of the Offer, the Company should inform holders how it
intends to proceed  immediately, rather than waitin g until the end of the Offer period,
unless the condition is  one where satisfaction of the condition may be determined only
upon expiration. Please  confirm the Company ’s understanding in your response letter .

*     *     *

We remind you that the registrant and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

 Please contact me at (202) 551 -3444 with any questions.

Sincerel y,

/s/ Perry Hindin

Perry Hindin
Special Counsel
Office of Mergers and Acquisitions

CORRESP
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filename1.htm

DLA Piper LLP (US)

1000 Louisiana Street,   Suite 2800
   Houston, Texas  77002-5005

www.dlapiper.com

Gislar Donnenberg

gislar.donnenberg@dlapiper.com

T     713.425.8451

F     713.300.6003

May 11, 2018

Via Edgar

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Attention:                                         John Reynolds, Assistant Director

Diane Fritz, Staff Accountant

Ethan Horowitz, Accounting Branch Chief

John Hodgin, Petroleum Engineer

Karina Dorin, Staff Attorney

Timothy S. Levenberg, Special Counsel

Re:                                                                             Epsilon Energy Ltd.

Amendment No. 1 to Registration Statement on Form S-4

Filed May 7, 2018

CIK No. 0001726126

Ladies and Gentlemen:

We are writing on behalf of Epsilon Energy Ltd. (the “Company” or “Epsilon”) in response to the May 10, 2018 comment letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) regarding the Company’s Registration Statement on Form S-4 which was filed with the Commission on May 7, 2018 (the “Registration Statement”).

The Company is concurrently filing, via EDGAR, this letter and a complete copy of Amendment No. 2 to the Registration Statement (the “Amendment No. 2”).

A marked copy of Amendment No. 2 indicating changes from the Registration Statement is enclosed. This letter restates the numbered comments of the Staff, and the discussion set out below each comment is the Company’s response. Page references in this letter are to page numbers in Amendment No. 2.

Division of Corporation Finance

May 11, 2018

Page 2

1.                                      We note your response to prior comment 1. Please revise the registration statement to indicate that you will not count any proxy card (in the form) which you distributed on April 12, 2018 for purposes of determining whether the domestication proposal has been approved.

Response: In response to the Staff’s comment, the Company has revised its disclosure on the second page of the “Notice of Special Meeting of Shareholders” and pages 2, 3, and 79 of Amendment No. 2 to indicate that the Company will not count any proxy card in the form distributed on April 12, 2018 for purposes of determining whether the domestication proposal has been approved.

2.                                      In addition, please revise your disclosure to clarify that shareholders should complete and return the new/replacement proxy card which you are including as part of the definitive proxy statement. Use highlighting, notation, or some other means to make clear that this is a new form of proxy card which shareholders should use to vote and to distinguish it visually from the version which you distributed to shareholders on April 12, 2018.

Response: In response to the Staff’s comment, the Company has revised its disclosure on pages 1 and 2 of Exhibit F of Amendment No. 2 to clarify that shareholders should complete and return the replacement proxy card which the Company is including as part of the definitive proxy statement and to make clear with visual distinctions (see the prominent legend on page 1 of Exhibit F) that the current proxy card is a new form which shareholders should use to vote.

United States and Canadian Income Tax Considerations, page 96

3.                                      We note the revised disclosure at page 102 suggesting a change as to your expectations regarding your becoming a USRPHC. However, the disclosure in that paragraph is now internally inconsistent. Please revise the disclosure to clarify.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 102 of Amendment No. 2 to clarify that there can be no assurance that the Company will or will not be a USRPHC in the future.

* * * *

Division of Corporation Finance

May 11, 2018

Page 3

We and the Company appreciate the Staff’s attention to the review of Amendment No. 1. Please do not hesitate to contact me at tel: (713) 425-8451 if you have any questions regarding this letter or the Registration Statement.

Very truly yours,

DLA Piper LLP (US)

/s/   Gislar Donnenberg

Partner

cc:                                Michael Raleigh (Epsilon Energy Ltd.)

B. Lane Bond (Epsilon Energy Ltd.)

Anna Denton (DLA Piper LLP (US))

Rocky Horvath (BDO USA, LLP)

CORRESP
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filename1.htm

Epsilon Energy Ltd.

16701 Greenspoint Park Drive, Suite 195

Houston, Texas 77060

May 11, 2018

VIA EDGAR SUBMISSION

Securities and Exchange Commission

Division of Corporation Finance

100 F Street N.E.

Washington, D.C. 20549

Re:                             Epsilon Energy Ltd.

Registration Statement on Form S-4

File No. 333-224262

Request for Effectiveness

Ladies and Gentleman:

Pursuant to Rule 461 of the Securities Act of 1933, as amended, Epsilon Energy Ltd. (the “Company”) hereby requests acceleration of the effective date of the above-referenced Registration Statement on Form S-4, as amended, File No. 333-224262 (the “Registration Statement”) so that it may be effective at 1:00 p.m., Eastern Time on May 14, 2018 or as soon thereafter as practicable.

The Company hereby acknowledges that:

(a) should the United States Securities and Exchange Commission (the “Commission”) or its staff, acting pursuant to delegated authority, declare the Registration Statement effective, it does not foreclose the Commission from taking any action with respect to the Registration Statement;

(b) the action of the Commission or its staff, acting pursuant to delegated authority, in declaring the Registration Statement effective, does not relieve the Company from its full responsibility for the accuracy and adequacy of the disclosure in the Registration Statement; and

(c) it may not assert staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

*              *              *

We respectfully request that you notify Gislar Donnenberg of DLA Piper LLP (US) at 713-425-8400 when the Registration Statement is declared effective.

Sincerely,

EPSILON ENERGY LTD.

/s/ Lane Bond

B. Lane Bond

Chief Financial Officer

Cc:          Gislar Donnenberg, DLA Piper LLP (US)

Mail Stop 4628
May 10 , 2018

Michael Raleigh
Chief Executive Officer
Epsilon Energy Ltd.
16701 Greenspoint Park Drive, Suite 195
Houston, TX 77060

Re: Epsilon Energy Ltd.
Amendment No. 1 to Registration Statement on Form S -4
Filed May 7, 2018
  File No. 333 -224262

Dear Mr. Raleigh :

We have reviewed your registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requested information .  If you do not believe our comments apply to your facts and
circumstances or do not bel ieve an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, we may have  additional comments.   Unless we note
otherwise, our references to prior comments are to comments in our April 30, 2018 letter.

1. We note your response to prior comment 1.  Please revise the registration statement to
indicate that you will not count any proxy card (in the form) which you distri buted on
April 12, 2018 for purposes of determining whether the domestication proposal has been
approved.

2. In addition, please revise your disclosure to clarify that shareholders should complete and
return the new/replacement proxy card which you are inc luding as part of the definitive
proxy statement.  Use highlighting , notation, or some other means  to make clear that this
is a new form of proxy card which shareholders should use to vote and to distinguish it
visually from the version which you distrib uted to shareholders on April 12, 2018 .

Michael Raleigh
Epsilon Energy Ltd.
May 10 , 2018
Page 2

 United States and Canadian Income Tax Considerations, page 96

3. We note the revised disclosure at page 102 suggesting a change as to your expectations
regarding your becoming a USRPHC.  However, the disclosure in that paragraph is now
internally inconsistent.  Please revise the disclosure to clarify.

Closing Comments

We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comment s, action or absence of
action by the staff.

Refer to Rules 460 and 461 regarding requests for  acceleration.  Please allow adequate
time for us to review any amendment prior to the requested effective date of the registration
statement.

You may contact Diane Fritz, Staff Accountant,  at (202) 551 -3331 or Ethan Horowitz,
Accounting Branch Chief,  at (202) 551 -3311 if you have questions regarding comments on the
financial statements and re lated matters.  For questions regarding comments on en gineering
matters, you may contact John Hodgin, Petroleum Engineer, at (202) 551 -3699.   Please contact
Karina Dorin, Staff Attorney,  at (202) 551 -3763 or, in her absence,  Timothy S. Levenberg,
Special Counsel,  at (202) 551 -3707 with any other questions.

Sincerely,

 /s/ John Reynolds

John Reynolds
Assistant Director
Office of Natural Resources

CORRESP
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DLA   Piper   LLP (US)

1000   Louisiana Street, Suite 2800

Houston,   Texas 77002-5005

www.dlapiper.com

Gislar   Donnenberg

gislar.donnenberg@dlapiper.com

T   713.425.8451

F   713.300.6003

May 7, 2018

Via Edgar

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Attention:

John   Reynolds, Assistant Director

Diane   Fritz, Staff Accountant

Ethan   Horowitz, Accounting Branch Chief

John   Hodgin, Petroleum Engineer

Karina   Dorin, Staff Attorney

Timothy   S. Levenberg, Special Counsel

Re:

Epsilon   Energy Ltd.

Registration Statement on   Form S-4

Filed   April 13, 2018

CIK   No. 0001726126

Ladies and Gentlemen:

We are writing on behalf of Epsilon Energy Ltd. (the “Company” or “Epsilon”) in response to the April 30, 2018 comment letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) regarding the Company’s Registration Statement on Form S-4 which was filed with the Commission on April 13, 2018 (the “Registration Statement”).

The Company is concurrently filing, via EDGAR, this letter and a complete copy of Amendment No. 1 to the Registration Statement (the “Amendment No. 1”).

A marked copy of Amendment No. 1 indicating changes from the Registration Statement is enclosed. This letter restates the numbered comments of the Staff, and the discussion set out below each comment is the Company’s response. Page references in this letter are to page numbers in Amendment No. 1.

Division of Corporation Finance

May 7, 2018

Page 2

General

1.             We understand the company has mailed its proxy materials.  Please advise us how you propose to address our remaining concerns and new comments, including whether you intend to postpone your recently scheduled meeting.  Please refer to C&DI 125.07.

Response: The Company has cancelled its scheduled meeting to address the Staff’s remaining concerns and new comments and to allow the Staff appropriate time to review the Company’s responses. In accordance with C&DI 125.07 the Company intends to mail its proxy materials once the Staff has declared the Registration Statement effective.

2.             Please confirm that the Delaware corporation to be formed in the domestication will file a post-effective amendment adopting the Form S-4 registration statement as its own and updating the disclosure as appropriate.

Response: The Company confirms that once the domestication is complete, the Delaware corporation will file a post-effective amendment adopting the Registration Statement as its own and updating the disclosure as appropriate.

3.             We note that Article XI of the Form of Certificate of Incorporation for Epsilon Energy, Inc. includes an exclusive forum provision requiring that the Court of Chancery of the State of Delaware must be the exclusive forum for the actions described in the article.  Under an appropriately titled risk factor and in the Description of Capital Stock and Comparison of Shareholder Rights sections, please describe the exclusive forum provision and the types of actions to which it relates, and disclose that such a provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the company and its directors, officers, or other employees and may discourage lawsuits with respect to such claims.

Response: In response to the Staff’s comment, the Company has revised its disclosure on pages 22, 92 and 107 of Amendment No. 1 to describe the exclusive forum provision and the types of actions to which it relates, including disclosure that such a provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company and its directors, officers, or other employees and may discourage lawsuits with respect to such claims.

Properties, page 37

Acreage, page 37

4.             We note your response to prior comment 7 and the additional footnote disclosure clarifying that all of your acreage is currently held by production.  Undrilled acreage that is held by production should be reported as undeveloped acreage for purposes of disclosure under Item 1208(b) of Regulation S-K.  Revise your disclosure as necessary to resolve any inconsistencies in the classification of your acreage.

Division of Corporation Finance

May 7, 2018

Page 3

Response: In response to the Staff’s comment, the Company has revised its disclosure on pages 38 and 39 of Amendment No. 1 to include a revised table to separately list the Gross and Net of developed, undeveloped and total acreage of our leasehold inventory in Pennsylvania, Oklahoma and Mississippi, and the corresponding footnote (3) states that all of the Company’s undeveloped acreage is classified as deep rights acreage and is thus held by production of developed acreage.

Consolidated Financial Statements, page F-3

Notes to Consolidated Financial Statements, page F-7

Supplemental Information to Consolidated Financial Statements, page F-30

Oil and Gas Reserves, page F-30

5.             The explanations in the revised footnote disclosure provided in response to comment 20 do not appear to encompass all of the significant changes that occurred in your proved reserves, e.g. the changes in proved developed producing and proved developed non-producing reserves in 2016 and 2017 due to economic factors and the changes in proved developed producing reserves due the technical revisions of such reserves.  Similarly, it is unclear if footnote (2) is intended to apply to the 2017 line item captioned “Additions-Acquisitions” which appears to be the combination of changes from two separate and unrelated factors, e.g. changes from the purchases of proved developed producing, non-producing and undeveloped minerals in place and the changes related to the addition of new proved undeveloped reserves not previously disclosed at the beginning of the fiscal year.  Refer to the description of the change categories under FASB ASC 932-235-50-5 and revise your disclosure to clearly and separately address each required change category.

To the extent that you provide a reconciliation of the changes by individual reserves status, e.g. proved developed producing, proved developed non-producing and proved undeveloped in addition to the reconciliation of the changes in total proved reserves as required by FASB ASC 932-235-50-5, include an explanation of the significant line item changes relating to each of those reconciliations.  Alternatively, modify your disclosure to present the reconciliation of the changes in total proved reserves and provide a separate reconciliation and explanation of the material changes that occurred in proved undeveloped reserves, including the net quantities of such reserves converted to developed during the year, here or in conjunction with the discussion of proved reserves elsewhere on page 39.  Refer to the illustration in Example 1 of FASB ASC 932-235-55¬2 and the disclosure requirements in FASB ASC 932-235-50-4 and 50-5 regarding the presentation of changes in total proved reserves and the separate disclosure of proved developed and undeveloped reserves at the beginning and end of each fiscal year.  Refer to Item 1203(b) of Regulation S-K regarding the disclosure requirements for the changes in proved undeveloped reserves.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page F-31 of Amendment No. 1 to better explain the change in reserve categories in accordance with Example 1 of FASB ASC 932-235-55-2. The Company has reviewed the description of the

Division of Corporation Finance

May 7, 2018

Page 4

change categories in FASB ASC 932-235-50-5 and accordingly clarified and re-formatted its disclosure to separately address and define the change categories in accordance therewith.

Further, the Company has reviewed the illustration in Example 1 of FASB ASC 932-235-55¬2 and the disclosure requirements in FASB ASC 932-235-50-4 and 50-5 regarding the presentation of changes in total proved reserves and the separate disclosure of proved developed and undeveloped reserves at the beginning and end of each fiscal year. Accordingly, the Company has more fully and separately presented and explained the material changes in the proved developed and proved undeveloped reserves.

6.             The disclosure on page 39 indicates that you incurred only $0.03 million in costs during 2017 to convert proved undeveloped reserves to proved developed reserves.  In comparison, the reserves report filed as Exhibit 99.1 indicates that total future capital expenditures of approximately $87.6 million would be incurred over the next five years relating to the development of your proved undeveloped reserves.

The definition of reserves under Rule 4-10(a)(26) of Regulation S-X indicates that “[t]here must exist, or there must be a reasonable expectation that there will exist, ...all financing required to implement the project.”  Explain to us the means by which you have established compliance with this requirement as it relates to the proved undeveloped reserves disclosed as of December 31, 2017.

Response: The low price environment for natural gas that existed for the last few years resulted in a curtailment in development spending. With prices firming up recently, the Company has initiated plans to increase development spending going forward. The Company’s current cash balance is $13mm and it currently expects to generate $14mm in cash available for investment during the remainder of 2018. Generally speaking, most of the development spending in the Company’s area of Pennsylvania occurs from late summer through the remainder of the year which is expected to allow the Company to generate an additional $18mm in cash during 2019. The Company believes that this additional cash flow coupled with the $10mm available with its line of credit will provide both adequate working capital and the ability to fund the $43mm capital program through the highest spending period shown on the Company’s reserves report. Starting in 2020 the capital spending requirements decrease substantially and the benefits of the development spending in 2018 and 2019 will substantially increase the Company’s available cash for the remainder of the development spending program.

7.             Tell us the expected sources of funding for the portion of your 2018 capital budget that is allocated to drilling and completing proved undeveloped reserves.  Separately, tell us the extent of such expenditures and development activity to-date during 2018.

Response: The Company respectfully advises that Staff that it expects to fund the 2018 capital budget with remaining cash on hand and operating cash flows. The Company’s drilling and completion spending from January 1, 2018 to April 30, 2018 was $0.2 million. The majority of

Division of Corporation Finance

May 7, 2018

Page 5

the Company’s budgeted spending is expected to occur from late summer through the remainder of the year.

Changes in Standardized Measure of Discounted Future Net Cash Flows, page F-34

8.             Tell us about the components of the “Timing differences and other technical revisions” line item in your presentation of Changes in Standardized Discounted Cash Flows and tell us how you determined that these components should not be included as part of the other sources of change required by FASB ASC 932-235-50-35.

Response: In response to the Staff’s comment, after reviewing the calculations for the Changes in Standardized Discounted Cash Flows on page F-34 of Amendment No. 1, the Company discovered that an incorrect discount factor had been used in the calculation for the line item “Revisions of previous quantity estimates”. When the correct factor was used, the majority of the previous amount in the line for “Timing differences and other technical revisions” was properly determined to belong to the “Revisions of previous quantity estimates” as required by FASB ASC 932-235-50-35. The Company has revised the disclosure on page F-34 to reflect this revision.

Exhibits

9.             Please re-file your Credit Agreement filed as Exhibit 10.1 and the Anchor Shipper Gas Gathering Agreement for Northern Pennsylvania filed as Exhibit 10.9 in complete form, including omitted exhibits and schedules.

Response:  In response to the Staff’s comment, the Company has re-filed copies of Exhibits 10.1 and 10.9 to include the omitted exhibits and schedules.

10.          In response to prior comment 25, you state that you are not required to file your cost of service agreement for the Auburn gas gathering system since it is an ordinary course of business contract.  However, we note you will receive a fixed percentage rate of return on the total capital invested in the construction of the system through 2026 and that your gathering system revenue represented approximately 25% of your 2017 revenue.  Given the portion of your revenue that appears to be attributable to this agreement, please file the cost of service agreement for the Auburn gas gathering system or explain why you are not substantially dependent on such agreement.

Response: The Company has filed as Exhibit 10.12 to Amendment No. 1 the Agreement for the Construction, Ownership, and Operation of Midstream Assets in AMI Area D of Northern Pennsylvania effective the 1st day of January, 2012, which evidences the right of the Company to 35% of the gathering revenue from the Auburn GGS as calculated pursuant to the related Anchor Shipper Gas Gathering Agreement effective January 1, 2012 (filed with Amendment No. 1 as Exhibit 10.9) which sets forth the fixed percentage rate of return on the total capital invested in the construction of the system through 2026. In addition, the Company has clarified its disclosure on pages 1, 37, 39 and 47 of Amendment No. 1.

Exhibit F — Form of Proxy Card

11.          Please file with the amended registration statement a legible version of your Form of Proxy Card.

Response: In response to the Staff’s comment, the Company has filed a legible version of its Form of Proxy Card with Amendment No. 1.

Division of Corporation Finance

May 7, 2018

Page 6

Exhibit 5.1

12.          Please obtain and file a revised opinion letter from counsel in which it makes clear, if accurate, that those shares of Epsilon Energy Ltd. common stock outstanding prior to the domestication (and for which shareholders have not sought appraisal along with their dissent) will constitute shares of Epsilon Energy, Inc. immediately thereafter.  We note related language and representations in the “letter to shareholders” and throughout the proxy statement / prospectus.

Response: In response to the Staff’s comment, the Company has filed a revised opinion letter which clarifies that all outstanding shares of Epsilon Energy Ltd., other than those held by dissenting holders, will convert into shares of common stock of  Epsilon Energy, Inc.

13.          As a related matter, in the revised opinion letter, counsel should clarify why multiple items are referenced in numbered opinion 2, insofar as the current presentation does not distinguish among the various items and the impact of the domestication (or ABCA Section 191 appraisal) on each.

Response: In response to the Staff’s comment, the Company has filed a revised opinion letter which removes the reference to multiple items and only includes a discussion of the common shares.

14.          The revised opinion letter must make clear that any referenced rights constitute a binding obligation of the company under the law of the jurisdiction governing the rights agreement.  Refer to Section II.B.I.f of Staff Legal Bulletin No. 19 for guidance.

Response: In response to the Staff’s comment, the Company has filed a revised opinion letter which removes the reference to any outstanding rights

Mail Stop 4628
April 30, 2018

Michael Raleigh
Chief Executive Officer
Epsilon Energy Ltd.
16701 Greenspoint Park Drive, Suite 195
Houston, TX 77060

Re: Epsilon Energy Ltd.
Registration Statement on Form S -4
Filed April 13, 2018
  File No. 333 -224262

Dear Mr. Raleigh :

We have reviewed your registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requested information .  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is a ppropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, we may have  additional comments.   Unless we note
otherwise, our references to prior comments are to comments in our March 12, 2018 letter .

General

1. We understand  the company has mailed its proxy materials .  Please  advise us how you
propose to address our remaining concerns and new comments, including whether you
intend to postpone your recently scheduled meeting.   Please refer to C&DI 125.07.

2. Please confirm that the Delaware corporation to be formed in the domestication will file a
post-effect ive amendment adopting the Form S -4 registration statement as its own and
updating the disclosure as appropriate.

3. We note that Article XI of the Form of Certificate of Incorporation for Epsilon Energy,
Inc. includes an exclusive forum provision requiring  that the Court of Chancery of the
State of Delaware must be the exclusive forum for the actions described in the article.
Under an appropriately titled risk factor and in the Description of Capital Stock and

Michael Raleigh
Epsilon Energy Ltd.
April 30, 2018
Page 2

 Comparison of Shareholder Rights sections, ple ase describe the exclusive forum
provision and the types of actions to which it relates, and disclose that such a provision
may limit a shareholder’ s ability to bring a claim in a judicial forum that it finds
favorable for disputes with the company and its  directors, officers , or other employees
and may discourage lawsuits with respect to such claims .

Properties, page 37

Acreage, page 37

4. We note your response to prior comment 7 and the additional footnote disclosure
clarifying that all of your acreage is  currently held by production.  U ndrilled acreage that
is held by production should be reported as undeveloped acreage for purposes of
disclosure under Item 1208(b) of Regulation S -K.  Revise your disclosure as necessary to
resolve any inconsistencies in t he classification of your acreage.

Consolidated Financial Statements , page F -3

Notes to Consolidated Financial Statements , page F -7

Supplemental Information to Consolidated Financial Statements, page F -30

Oil and Gas Reserves, page F -30

5. The explanations in the revised footnote disclosure provided in response to comment 20
do not appear to encompass all of the significant changes that occurred in your proved
reserves, e.g. the changes in proved developed producing and proved developed non -
producing reserves in 2016 and 2017 due to economic factors and the changes in proved
developed producing reserves due the technical revisions of such reserves.  Similarly, it is
unclear if footnote (2) is intended to apply to the 2017 line item captioned “Add itions -
Acquisitions” which appears to be the combination of changes from two separate and
unrelated factors, e.g. changes from the purchases of proved developed producing, non -
producing and undeveloped minerals in place and the changes related to the addit ion of
new proved undeveloped reserves not previously disclosed at the beginning of the fiscal
year.  Refer to the description of the change categories under FASB ASC 932 -235-50-5
and revise your disclosure to clearly and separately address each required c hange
category.

To the extent that you provide a reconciliation of the changes by individual reserves
status, e.g. proved developed producing, proved developed non -producing and proved
undeveloped in addition to the reconciliation  of the changes in total proved reserves as
required by FASB ASC 932 -235-50-5, include an explanation of the significant line item
changes relating to each of those reconciliations.  Alternatively, modify your disclosure
to present the reconciliation of the changes in total proved  reserves and provide a separate

Michael Raleigh
Epsilon Energy Ltd.
April 30, 2018
Page 3

 reconciliation and explanation of the material changes that occurred in proved
undeveloped reserves, including the net quantities of such reserves converted to
developed during the year, here or in conjunction with the disc ussion of proved reserves
elsewhere on page 39.  Refer to the illustration in Example 1 of FASB ASC 932 -235-55-
2 and the disclosure requirements in FASB ASC 932 -235-50-4 and 50 -5 regarding the
presentation of changes in total proved reserves  and the separa te disclosure of proved
developed and undeveloped reserves at the beginning and end of each fiscal year .  Refer
to Item 1203(b) of Regulation S -K regarding the disclosure requirements for the changes
in proved undeveloped reserves.

6. The disclosure on page 39 indicates that you incurred only $0.03 million in costs during
2017 to convert proved undeveloped reserves to proved developed reserves.  In
comparison, the reserves report filed as Exhibit 99.1 indicates that total future capital
expenditures of approx imately $87.6 million would be incurred over the next five years
relating to the development of your proved undeveloped reserves.

The definition of reserves under Rule 4 -10(a)(26) of Regulation S -X indicates  that
“[t]here must exist, or there must be a reasonable expectation that there will exist, …all
financing required to implement the project.”   Explain to us the means by which you have
established compliance with this requirement as it relates to the proved undeveloped
reserves disclosed as of Decemb er 31, 201 7.

7. Tell us the expected sources of funding for the portion of your 201 8 capital budget that is
allocated to drilling and completing proved undeveloped reserves .  Separately, tell us the
extent of such expenditures and development activity to-date during 2018.

Changes in Standardized Measure of Discounted Future Net Cash Flows, page F -34

8. Tell us about the components of the “Timing differences and other technical revisions”
line item in your presentation of Changes in Standardized Discounted Cash Flows and
tell us how you determined that these components should not be included as part of the
other sources of change required by FASB ASC 932 -235-50-35.

Exhibits

9. Please re -file your Credit Agreement filed as Exhibit 10.1 and the Anchor Shipper  Gas
Gathering Agreement for Northern Pennsylvania  filed as Exhibit 10.9 in complete form,
including omitted exhibits and schedules .

10. In response to prior comment 25, you state that you are not required to file your cost of
service agreement for the Auburn  gas gathering system since it is an ordinary course of
business contract.  However, we note you will receive a fixed percentage rate of return on
the total capital invested in the construction of the system through 2026 and that your
gathering system reve nue represented approximately 25% of your 2017 revenue.  Given

Michael Raleigh
Epsilon Energy Ltd.
April 30, 2018
Page 4

 the portion of your revenue that appears to be attributable to this agreement, please file
the cost of service agreement for the Auburn gas gather ing system or explain why you are
not substantially dependent on such agreement .

Exhibit F  – Form of Proxy Card

11. Please file with the amended registration statement a legible version of your Form of
Proxy Card .

Exhibit 5.1

12. Please obtain and file a revised opinion letter from counsel in which it makes clear, if
accurate, that those shares of Epsilon Energy Ltd. common stock outstanding prior to the
domestication (and for which shareholders have not sought appraisal along with their
dissent) will constitute s hares of Epsilon Energy, Inc. immediately thereafter.  We note
related language and representations in the “letter to shareholders” and throughout the
proxy statement / prospectus.

13. As a related matter, in the revised opinion letter, counsel should clar ify why multiple
items are referenced in numbered opinion 2, insofar as the current presentation does not
distinguish among the various items and the impact of the domestication (or ABCA
Section 191 appraisal) on each.

14. The revised opinion letter must mak e clear that any referenced rights constitute a binding
obligation of the company under the law of the jurisdiction governing the rights
agreement.  Refer to Section II.B.I.f of Staff Legal Bulletin No. 19 for guidance.

Exhibit 8.1

15. Please file as an exhibit a revised version of counsel’s opinion in which it makes clear
that it is rendering a “will” opinion” rather than a “should” opinion, or explain why it is
unable to do so in these circumstances.  In that regard, we note that DLA P iper LLP (US)
opines that the “change in [y]our place of incorporation will constitute a reorganization
within the meaning of Code Section 368(a)(1)(F)” at page 96 of the prospectus.  Please
see Staff Legal Bulletin 19, Section III.C.1 and Section III.C.4 .

Exhibit  99.1

16. The reserves report does not appear to include all of the information that is required by
Item 1202(a)(8) of Regulation S -K.  Please obtain and file a revised reserves report  to
address the following points.

Michael Raleigh
Epsilon Energy Ltd.
April 30, 2018
Page 5

  The purpose for which the report was prepared (e.g. for inclusion as an exhibit in
a filing made with the U.S. Securities and Exchange Commission (SEC) (Item
1202(a)(8)(i)).

 The reserves report should include the date on which the report was completed
(Item 1202(a)(8)(ii)).

 The p roportion of the Company’s total proved reserves covered by the report
(Item 1202(a)(8)(iii).

17. We note the reserves report  include s information relating to probable reserves that is not
disclosed in the Registration Statement.  The information in the reser ve report should
correlate with the disclosure in your filing.   Therefore, either obtain and file a revised
reserve report which do es not include the information relating to probable  reserves, or
revise the Registration Statement to disclose this informati on in a manner that is
consistent with the guidance in Item 1202(a)(2) of Regulation S -K.

18. To the extent that you revise the reserve report to remove i nformation relating to the
tabular presentation of probable reserves , also remove all other information r elating to
such non -proved reserves throughout the reserve report.

19. The reserves report refers to additional supplemental information such as “Appendix A”
and “Appendix B” that is not included in the report.  Please obtain and file a revised
report to incl ude the referenced supplemental information.   Alternatively, remove these
references if you do not intend to include this supplemental information.

Closing Comments

We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

Refer to Rules 460 and 461 regarding requests for  accel eration .  Please allow adequate
time for us to review any amendment prior to the requested effective date of the registration
statement.

Michael Raleigh
Epsilon Energy Ltd.
April 30, 2018
Page 6

 You may contact Diane Fritz, Staff Accountant,  at (202) 551 -3331 or Ethan Horowitz,
Accounting Branch Chief,  at (202) 551 -3311 if you have questions regarding comments on the
financial statements and re lated matters.  For questions regarding comments on engineering
matters, you may contact John Hodgin, Petroleum Engineer, at (202) 551 -3699.   Please contact
Karina Dorin, Staff Attorney,  at (202) 551 -3763 or, in her absence,  Timothy S. Levenberg,
Special Counsel,  at (202) 551 -3707 with any other questions.

Sincerely,

 /s/ John Reynolds

John Reynolds
Assistant Director
Office of Natural Resources

CORRESP
1
filename1.htm

DLA Piper LLP (US)

1000 Louisiana Street,   Suite 2800

Houston, Texas 77002-5005

www.dlapiper.com

Gislar Donnenberg

gislar.donnenberg@dlapiper.com

T   713.425.8451

F   713.300.6003

April 12, 2018

Via Edgar

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Attention:                                         H. Roger Schwall, Assistant Director

Diane Fritz, Staff Accountant

Ethan Horowitz, Accounting Branch Chief

John Hodgin, Petroleum Engineer

Karina Dorin, Staff Attorney

Timothy S. Levenberg, Special Counsel

Re:                                                                             Epsilon Energy Ltd.

Confidential Draft Registration Statement on Form S-4

Submitted February 12, 2018

CIK No. 0001726126

Ladies and Gentlemen:

We are writing on behalf of Epsilon Energy Ltd. (the “Company” or “Epsilon”) in response to the March 12, 2018 comment letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) regarding the Company’s draft Registration Statement on Form S-4 which was submitted to the Commission confidentially on February 12, 2018 (the “Confidential Submission”).

The Company is concurrently filing, via EDGAR, this letter and a complete copy of the Registration Statement on Form S-4 (the “Registration Statement”).

A marked copy of the Registration Statement indicating changes from the Confidential Submission is enclosed. This letter restates the numbered comments of the Staff, and the discussion set out below each comment is the Company’s response. Page references in this letter are to page numbers in the Registration Statement.

General

1.             Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications.

Response: The Company respectfully advises the Staff that no such communications have taken place to date and that the Company will supplementally provide any such communications should any occur.

2.             In your discussion of shareholder rights, you qualify disclosure by reference to the exhibits you provide and to other items.  As another example, see the generic reference to “Delaware law” at page 107.  However, you provide ABCA Section 191 as Exhibit E.  It is not appropriate to incorporate by reference to information that is not included in the prospectus or filed as an exhibit to the registration statement.  Please indicate where the pertinent, specified provisions of the DGCL and the ABCA are included in the materials.

Response: In response to the Staff’s comment, the Company has revised its disclosure on pages 80 and 103 of the Registration Statement to remove the incorporation by reference of information not included or filed as an exhibit to the Registration Statement.

The Incentive Plan Proposal, page 12

3.             If there are any current plans or proposals to grant awards of benefits under the plan to be adopted, briefly disclose the particulars.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 12 of the Registration Statement to clarify that it has no current plans or proposals to grant any equity awards under the plan.

Risk Factors, page 22

Extensive government legislation and regulatory initiatives, page 28

4.             The last sentence reflects speculative disclosure and mitigates the risk you present.  Unless you provide us with independent supplemental support for the assertions regarding the likelihood of regulatory action, please revise your risk factor to eliminate such assertions.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 27 of the Registration Statement to remove the last sentence of the risk factor.

Description of the Business — Summary, page 37

5.             Please discuss the material terms of your joint venture with Chesapeake Energy Corp. and the Anchor Shippers dedication.

Response: In response to the Staff’s comment, the Company has revised its disclosure to remove all references to the joint venture with Chesapeake Energy Corporation and the Anchor Shippers dedication, and has revised its disclosure on pages 1 and 36 of the Registration Statement to clarify that all of the production from its Pennsylvania acreage is dedicated to the Auburn gas gathering system. The Company respectfully advises the Staff that Chesapeake Energy

2

Corporation is, pursuant to a standard joint operating agreement, the operator of wells in Pennsylvania in which the company has an interest.

Properties, page 38

6.             Please expand or revise the disclosure relating to the 258 gross (55.0 net) wells to separately provide the total gross and net productive oil wells and gas wells as of a reasonably current date or as of the end of the current fiscal year.  Refer to disclosure requirements of Item 1208(a) and the definition of a productive well under Item 1208(c)(3) of Regulation S-K.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 37 of the Registration Statement to provide the total gross and net productive oil wells and gas wells as of the date of the Circular.

Acreage, page 38

7.             Expand the disclosure of your leasehold acreage to separately disclose the total gross and net developed and undeveloped acreage amounts and the expiration dates of material amounts of your undeveloped acreage.  Refer to the disclosure requirements of Items 1208(a) and 1208(b) of Regulation S-K.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 38 of the Registration Statement to clarify that all acreage is held by production such that none of it is subject to expiration.

Proved Reserves, page 40

8.             We note disclosure indicating that the estimated proved reserves as of December 31, 2016 presented on page 40 and elsewhere in your filing were derived from a reserve report prepared by the independent petroleum consultants, DeGolyer and MacNaughton.  Please obtain and file the referenced report as required by Item 1202(a)(8) of Regulation S-K.  Additionally, obtain and file the consent of the third party engineer regarding the disclosure of the reserves report in a filing under the Securities Act of 1933.

Response: In response to the Staff’s comment, the Company has filed the third-party reserve report of DeGolyer and MacNaughton and the related consent as exhibits 99.1 and 23.2, respectively.

9.             Expand your disclosure to describe the internal controls used in your reserves estimation effort, including the qualifications of the technical persons of Epsilon Energy Ltd. and DeGolyer and MacNaughton primarily responsible for overseeing the preparation of the reserves estimates presented in the Registration Statement.  Refer to the disclosure requirements of Item 1202(a)(7) of Regulation S-K.

3

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 40 of the Registration Statement to expand its disclosure regarding the internal controls used in its reserve estimation efforts.

Management’s Discussion and Analysis of Financial Condition and Results of Operation, page 47

10.          Please revise to clarify what steps you took to “high-grade” your organization.

Response: In response to the Staff’s comment, the Company has removed such term from its disclosure. Please see page 46 of the Registration Statement.

Operating Costs, page 51

11.          Please expand or revise the disclosure of the lease operating costs to provide the average operating cost per unit of production excluding ad valorem, severance and production taxes.  Refer to the disclosure requirements of Item 1204(b)(2) of Regulation S-K.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 49 of the Registration Statement to provide a total cost per unit of production and to clarify that the average cost per unit excludes ad valorem, severance and production costs.

Directors, Executive Officers and Corporate Governance, page 64

Biographies of Corporate Directors and Executive Officers, page 64

12.          Please disclose the name of the private E&P start-up co-founded by Mr. Clanton and for which he served as a Managing Partner prior to joining the company.  See Item 401(e) of Regulation S-K.  Also, please revise or explain the disclosure at page 83, which does not include him as one of your officers.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 62 of the Registration Statement to include the name of the E&P startup co-founded by Mr. Clanton, and revised the disclosure on page 81 of the Registration Statement to include Mr. Clanton as one of its officers.

Executive Compensation, page 71

13.          Please describe the material terms of Mr. Raleigh’s stock award in 2017.  In addition, please tell us how you measured the fair value of the shares issued to Mr. Raleigh as compensation in 2017 and the nature of the material assumptions involved.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 68 of the Registration Statement to describe the material terms of Mr. Raleigh’s share award in 2017, including the measurement of the fair value.

4

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, page 74

14.          Please identify the natural person or persons who directly or indirectly exercise sole or shared voting and/or dispositive power with respect to the common stock held by Advisory Research, Inc., Oakview Capital Management, L.P. and Azvalor Asset Management SGIIC SA.

Response: In response to the Staff’s comment, the Company has revised its disclosure on pages 73 and 74 of the Registration Statement to identify the natural persons who exercise voting and dispositive power with respect to the common stock held by Advisory Research, Inc., Oakview Capital Management, L.P. and azValor Asset Management SGIIC SA.

Certain Relationships and Related Transactions, page 77

15.          Please provide the disclosures required by Item 404 of Regulation S-K for the period set forth in Instruction 1 to Item 404.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 75 of the Registration Statement to provide disclosure since January 1, 2015.

Forward Looking Statements, page 77

16.          Please remove references to Securities Act Section 27A and Exchange Act Section 21E, because Securities Act Section 27A(b)(2)(D) and Exchange Act Section 21E(b)(2)(D) expressly state that the safe harbor for forward looking statements does not apply to statements made in connection with an initial public offering.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 75 of the Registration Statement to remove references to Securities Act Section 27A and Exchange Act Section 21E.

The Domestication, page 82

Proposal No. 1 on The Notice of Special Meeting and The Accompanying Proxy, page 82

Effects of the Domestication, page 83

17.          As it relates to your accounting for income taxes, expand your disclosure regarding the effects of your proposed domestication to the United States to more clearly address the reasonably likely impact to your net operating loss carryforwards and uncertain tax positions.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 81 of the Registration Statement to provide that it will not incur any tax liability upon its exit from Canada.

5

Description of Capital Stock, page 107

18.          You state that you will have unlimited shares of common stock, no par value per share, authorized following the domestication.  However, you disclose at page 85 that you will have authority to issue 150,000,000 shares of common stock, $0.001 par value per share, following the domestication.  Please advise or revise.  See also your discussion of Delaware law limitations in the last paragraph at page 11.

Response: In response to the Staff’s comment, the Company has revised its disclosure on page 105 of the Registration Statement to clarify that it will have the authority to issue 150,000,000 shares of common stock, $0.001 par value per share, following the domestication.

Consolidated Financial Statements

Notes to Consolidated Financial Statements

Note 3 — Significant Accounting Policies, page F-27

Gas Gathering System Properties, page F-29

19.          Explain how you determined that it is appropriate to account for your interest in the Auburn Gas Gathering System using the proportionate consolidation method of accounting by providing us with a discussion of its operations and your analysis of FASB ASC 810-10-45-14 and 932-810-45-1.  Your response should explain how you concluded that the nature of the operations of this gathering system meets the definition of “oil- and gas-producing activities” per FASB ASC 932-10-15-2A.

Response: FASB ASC 810-10-45-14 and 932-810-45-1 address when it is appropriate to use the proportionate consolidation method to account for an investment in a legal entity that would otherwise be accounted for using the equity method. The Auburn Gas Gathering System is not a legal entity. The Company owns a 35% undivided interest in this asset and is liable for a proportionate share of the liabilities.

The Company’s use of the proportionate consolidation method for its interest in this asset is consistent with the principle reflected in FASB ASC 810-10-45-14 and 932-810-45-1, which state that proportionate gross financial statement presentation is appropriate if an investor-venturer owns an undivided interest in an asset and is proportionately liable for its share of each liability and the investee is in an “extractive industry”. It states further that an “extractive industry” includes oil and gas exploration and production but excludes downstream activities such as refining, marketing and transporting. Epsilon is involved only in upstream activities. It is not involved in any downstream activities such as refining, marketing or transporting activities.

FASB ASC 932-10-15-2A c. states that the “acquisition, construction, installation and maintenance of field gathering and storage systems such as . . . gathering, treating and field processing” are “production activities necessary to retrieve oil and gas from their natural

6

reservoirs” and are considered “oil- and gas-producing activities”. As set forth below, the activities of the Auburn Gas Gathering System meet the above definition.

The Auburn Gas Gathering System is the network of flow lines from the individual well pads that collect the produced gas from the wells and move the accumulated gas to the central processing facility that treats the gas and readies it for injection into the off-site, third-party transportation pipelines to take it to market. This gathering system was built by the original major partners in the development of the Auburn field so that the produced gas could be collected and treated to make it marketable before onward transport. It is an essential part of the process of gas production to be able to collect and eventually sell the gas. The primary reason that the Company chose to participate in the ownership of the in-field gas gathering system was to ensure that the gas that the Company produced would have priority within the system and be guaranteed to be treated and injected into the off-site, third party transportation pipeline system. Consequently, and secondarily the gathering system operator has been able to mark

Mail Stop 4628
March 12, 2018

Michael Raleigh
Chief Executive  Officer
Epsilon Energy Ltd.
16701 Greenspoint Park Drive, Suite 195
Houston, TX 77060

Re: Epsilon Energy Ltd.
Draft Registration Statement on Form S -4
Submitted February 12, 2018
  CIK No. 0001726126

Dear Mr. Raleigh :

We have reviewed your draft registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or  publicly  filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumst ances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments  and your
amended draft registration statement or filed registration statement,  we may have additional
comments.

General

1. Please supplementally provide us with copies of all written communications, as defined
in Rule 405 under the Securities Act, that you,  or anyone authorized to do so on your
behalf, present to potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they retain copies of the communications.

2. In your discussion of shareholder rights, you qualify disclosure by r eference to the
exhibits you provide and to other items.  As another example, see the generic reference to
“Delaware law” at page 107.  However, you provide ABCA Section 191 as Exhibit E.  It
is not appropriate to incorporate by reference to information that is not included in the
prospectus  or filed as an exhibit to the registration statement.  P lease indicate  where the
pertine nt, specified provisions of the DGCL and the ABCA are included in the materials .

Michael Raleigh
Epsilon Energy Ltd.
March 12, 2018
Page 2

The Incentive Plan Proposal, page 12

3. If there are any current plans or p roposals to grant awards of benefits under the plan to be
adopted, briefly disclose the particulars.

Risk Factors, page 22

Extensive government legislation a nd regulatory initiatives, p age 28

4. The last sentence reflects speculative disclosure and mitigates the risk you present.
Unless you provide us with independent supplemental support for the assertions
regarding the likelihood of regulatory action, please revise your risk factor to e liminate
such assertions.

Description of the Business -- Summary, page 37

5. Please  discuss the material terms of your joint venture with Chesapeake Energy Corp.
and the Anchor Shippers dedication.

Properties, page 38

6. Please expand or revise  the disclosure relating to the 258 gross (55.0 net) wells to
separately provide the total gross and net productive oil wells and gas wells as of a
reasonably current date or as of the end of the current fiscal year.  Refer to disclosure
requirements of Item 1208(a) and the definition of a productive well under Item
1208(c)(3) of Regulation S -K.

Acreage, page 38

7. Expand the disclosure of your leasehold acreage to separately disclose the total gross and
net developed and undeveloped acreage amounts and the expiration dates of material
amounts of your undeveloped acreage.  Refer to the disclosure requirements  of Items
1208(a) and 1208(b) of Regulation S -K.

Proved Reserves, page 40

8. We note disclosure indicating that the estimated proved reserves as of Decemb er 31,
2016 presented on page 40 and elsewhere in your filing were derived from a reserve
report prepared by the independent petroleum consultants, DeGolyer and MacNaughton.
Please obtain and file the referenced report as required by Item 1202(a)(8) of Re gulation
S-K.  Additionally, obtain and file the consent of the third party engineer regarding the
disclosure of the reserves report in a filing under the Securities Act of 1933.

Michael Raleigh
Epsilon Energy Ltd.
March 12, 2018
Page 3

 9. Expand your disclosure to describe the internal controls used in your reserv es estimation
effort, including the qualifications of the technical persons of Epsilon Energy Ltd. and
DeGolyer and MacNaughton primarily responsible for overseeing the preparation of the
reserves estimates presented in the Registration Statement.  Refer t o the disclosure
requirements of Item 1202(a)(7) of Regulation S -K.

Management’s Discussion and Analysis of Financial Condition and Results of Operation, page
47

10. Please revise to clarify wha t steps you took to “high -grade ” your organization.

Operating C osts, page 51

11. Please expand or revise the disclosure of the lease operating costs to provide the average
operating cost per unit of production excluding ad valorem, severance and production
taxes.  Refer to the disclosure requirements of Item 1204(b)(2) o f Regulation S -K.

Directors, Executive Officers and Corporate Governance, page 64

Biographies of Corporate Directors and Executive Officers, page 64

12. Please disclose the name of the private E&P start -up co -founded  by Mr. Clanton and for
which  he served as a Managing Partner prior to joining the company.  See Item 401(e) of
Regulation S -K.  Also, please revise or explain the disclosure at page 83 , which does not
include him as one of  your officers.

Executive Compensation, page 71

13. Please descr ibe the material terms of Mr. Raleigh’s stock award in 2017.  In addition,
please tell us how you measured the fair value of the shares issued to Mr. Raleigh as
compensation in 2017 and the nature of the material assumptions involved.

Security Ownership o f Certain Beneficial Owners and Management and Related Stockholder
Matters, page 74

14. Please identify the natural person or persons who directly or indirectly exercise sole or
shared voting and/or dispositive power with respect to the common stock held by
Advisory Research, Inc., Oakview Capital Management, L.P. and Azvalor Asset
Management SGIIC SA.

Certain Relationships and Related Transactions, page 77

15. Please provide the disclosures required by Item 404 of Regulation S -K for the period set
forth in Inst ruction 1 to Item 404.

Michael Raleigh
Epsilon Energy Ltd.
March 12, 2018
Page 4

Forward Looking Statements, page 77

16. Please remove references to Securities Act Section 27A and Exchange Act Section 21E,
because Securities Act Section 27A(b)(2)(D) and Exchange Act Section 21E(b)(2)(D)
expressly state that the saf e harbor for forward looking statements does not apply to
statements made in connection with an initial public offering.

The Domestication, page 82

Proposal No. 1 on The Notice of Special Meeting and The Accompanying Proxy, page 82

Effects of the Domestication, page 83

17. As it relates to your accounting for income taxes, expand your disclosure regarding the
effects of your proposed domestication to the United States to more clearly address the
reasonably likely impact to your net operating loss carr yforwards and uncertain tax
positions .

Description of Capital Stock, page 107

18. You state that you will have unlimited shares of common stock, no par value per share,
authorized following the domestication.  However, you disclose at page 85 that you will
have authority to issue 150,000,000 shares of common stock, $0.001 par value per share,
following the domestication.  Please advise or revise.  See also your discussion of
Delaware law limitations in the last paragraph at page 11.

Michael Raleigh
Epsilon Energy Ltd.
March 12, 2018
Page 5

 Consolidated Financial Statements

Notes to Consolidated Financial Statements

Note 3 – Significant Accounting Policies, page F -27

Gas Gathering System Properties, page F -29

19. Explain how you determined that it is appropriate to account for your interest in the
Auburn Gas Gather ing System using the proportionate consolidation method of
accounting  by provid ing us with a discussion of  its operations and your analysis of FASB
ASC 810 -10-45-14 and 932 -810-45-1.  Your response should explain how you concluded
that the nature of the op erations of this gathering system meets  the definition of “oil - and
gas-producing activities” per FASB ASC 932-10-15-2A.

Supplemental Information to Consolidated Financial Statements , page F -50

Net Proved Reserve Summary, page F -51

20. For each period presented, revise your explanation to separately identify and quantify
each factor that contributed to a significant change  in your proved reserves .  For example,
your disclosure of revisions in the previous estimates of reserves in particu lar should the
impact of individual  factors such as changes caused by commodity prices, well
performance , and the removal of proved undeveloped locations .  Refer to FASB ASC
932-235-50-5.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas
Reserves, page F -52

21. Please tell us if the costs associated with the abandonment of your proved properties,
including the costs related to the proved undeveloped locations included in the reserves
report, have been included as part of  the development costs used in the calculation of the
standardized measure for the periods ended December 31, 2016 and 2015, respectively.
If such costs have been omitted, explain to us your basis for excluding these costs from
your calculation of the sta ndardized measure .

22. Expand your disclosure to explain why your standardized measure of discounted future
net cash flows calculation as of December 31, 2016 does not include any future income
taxes.  In addition, disclose what impact, if any, your domesti cation will have on your
standardized measure’s future income taxes.  Refer to FASB ASC 932 -235-50-31c and
50-36.

Michael Raleigh
Epsilon Energy Ltd.
March 12, 2018
Page 6

 Signatures

23. Ensure that the registration statement is signed by your authorized representative in the
United States.  Refer to Instruction 1 to Signatures in Form S -4.

Exhibits

24. Please file as exhibits your charter documents as currently in effect.  Refer to Item
601(b)(3) of Regulation S -K.

25. Similarly, list and file all material agreements, including the employment agreements
entered into with your named executive officers.  In addition, please file the Anchor
Shipper Gas Gather Agreement for Northern Pennsylvania, the cost of service agreement
for Auburn GCS, and your long -term contracts with producers.  In that regard, we note
you state at page 36 that you “rely on a limited number of producers for a significant
portion of your revenues and supply of natural gas” and that most of your producers are
subject to long -term contracts.  See Item 601(b)(10) of R egulation S -K.  In the
alternative , tell us why you believe these agreements need not be filed.

Closing Comments

You may contact Diane Fritz, Staff Accountant,  at (202) 551 -3331  or Ethan Horowitz ,
Accounting Branch Chief,  at (202) 551 -3311  if you have questions regarding comments on the
financial statements and re lated matters.  For questions regarding comments on engineering
matters, you may contact John Hodgin, Petroleum Engineer, at (202) 551 -3699.   Please contact
Karina Dorin, Staff Attorney,  at (202) 551-3763  or, in her absence,  Timothy S. Levenberg ,
Special Counsel,  at (202) 551-3707  with any other questions.

Sincerely,

 /s/H. Roger Schwall

H. Roger Schwall
Assistant Director
Office of Natural Resources