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Epsilon Energy Ltd. Announces Issuer Tender Offer (Substantial Issuer Bid) for up to 2,000,000 of its Common Shares
HOUSTON, May 19, 2020 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd., a company organized under the laws of Alberta, Canada (NASDAQ:EPSN) (“Epsilon” or the
About this update from Epsilon Energy Ltd.
[{"type":"text","content":"HOUSTON, May 19, 2020 (GLOBE NEWSWIRE) -- Epsilon Energy Ltd., a company organized under the laws of Alberta, Canada (NASDAQ:EPSN) (“Epsilon” or the “Company”), announced today that it has commenced an Issuer Tender Offer or Substantial Issuer Bid (the “Offer”) to purchase from the holders (the “Shareholders”) of the common shares of the Company, no par value (the “Common Shares”), up to 2,000,000 Common Shares at a price of US$3.06 per share less any applicable withholding taxes and without interest. The Common Shares proposed to be purchased in the Offer represent approximately 7.7% of the Company’s currently issued and outstanding Common Shares.\n Background and Rationale for the OfferSince May 20, 2019, the Company has utilized a normal course issuer bid (“NCIB”) to repurchase its Common Shares, when doing so has been accretive to management’s estimates of intrinsic value per share. During that period, the Company has also strengthened its financial position through strong operating performance. With available cash in addition to free cash flow, the Company has used discretionary cash to fund repurchases of its securities. During the twelve months preceding the date of the Offer, the Company has purchased for cancellation an aggregate of 1,353,410 Common Shares under the NCIB.The previous NCIBs utilized by the Company have been inefficient with respect to the repurchase of its Common Shares in the open market due to the restrictive rules imposed on such process. The Company believes that the proposed Offer is more efficient, provides a substantially better liquidity option and provides a more effective means to return capital to its Shareholders. The Company believes that the recent trading level of its Common Shares reflects a price that is below management’s estimates of intrinsic value per Common Share. Therefore, management has determined that an acceleration and expansion of Common Share repurchases beyond that permitted under the NCIB is in the best interests of the Company. The Company’s board of directors, based on the recommendation of its independent special committee (the “Special Committee”), has authorized this Offer. Subject to the terms and conditions of the Offer, the Company may purchase up to 2,000,000 Common Shares for US$3.06 per Common Share. The Offer provides liquidity to those Shareholders that sell u...