Epsilon Energy Ltd. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Leadership Update, Regulation FD Disclosure, Financial Statements and Exhibits
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Item 1.01 Entry into a Material Definitive Agreement.
The response to Item 2.01 below is included and incorporated by reference in its entirety.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On February 27, 2024, the Company closed on an acquisition of assets in the Permian Basin, Ector County, Texas. The assets, acquired from Pradera Fuego, LP, include a 25% working interest in 3 producing wells and 3,246 gross undeveloped acres. The effective date for the transaction was (i) February 1, 2024 with respect to the leases and (ii) March 1, 2024 with respect to the wells. The total consideration paid was $15 million, funded from cash on-hand.
A copy of the letter agreement is filed herewith as Exhibit 10.1 and the terms are incorporated by reference into this Item 2.01 as if fully set forth herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 12, 2024, the Company entered into an executive employment agreement with Mr. Henry Clanton, effective January 1, 2024. Pursuant to the employment agreement, the Company and Mr. Clanton have agreed that Mr. Clanton will continue to serve as Chief Operating Officer on an “at-will” basis for an annual base salary of $282,000. In addition to his base salary, Mr. Clanton will be eligible to receive an annual incentive bonus targeted at $150,000 for achieving performance goals established by the Compensation Committee of the Board in its sole discretion for the then current calendar year. Mr. Clanton will be entitled to participate in all applicable Company benefit plans, programs, or arrangements that the Company may offer to its executives generally, from time to time, and as may be amended from time to time. Participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as may be in effect from time to time, and any other restrictions or limitations imposed by law. If Mr. Clanton is terminated by the Company without cause or resigns for Good Reason (as defined in the employment agreement), he will be entitled to a severance payment equal to twenty-four (24) months’ salary and the pro-rated target bonus for the year in which the termination takes place.
A copy of the employment agreement is filed herewith as Exhibit 10.2 and the terms thereof are incorporated by reference into this Item 5.02 of Form 8-K as if fully set forth herein.
Item 7.01 | Regulation FD Disclosure |
On February 27, 2024, the Company issued a press release announcing the consummation of the transactions described in Item 2.01. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Current Report on Form 8-K pursuant to this “Item 7.01 Regulation FD Disclosure” shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. The information in this section of this Current Report on Form 8-K shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit NumberDescription
10.1Letter Agreement with Pradera Fuego, LP dated February 26, 2024
10.2Employment Agreement with Henry Clanton dated February 12, 2024
99.1Press Release dated February 27, 2024
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
EPSILON ENERGY LTD. | ||
Date: March 12, 2024 | By: | /s/ J. Andrew Williamson |
J. Andrew Williamson | ||
Chief Financial Officer | ||
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