# EDGAR Filing Document

**Accession Number:** 0001726126
**File Stem:** 0001104659-26-003368
**Filing Date:** 2026-1
**Character Count:** 134145
**Document Hash:** 139180e1554cf696a6613dab2655cb01
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-003368.hdr.sgml**: 20260113

**ACCESSION NUMBER**: 0001104659-26-003368

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 20

**CONFORMED PERIOD OF REPORT**: 20251112

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260113

**DATE AS OF CHANGE**: 20260113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Epsilon Energy Ltd.
- **CENTRAL INDEX KEY:** 0001726126
- **STANDARD INDUSTRIAL CLASSIFICATION:** CRUDE PETROLEUM & NATURAL GAS [1311]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A0
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38770
- **FILM NUMBER:** 26530472

**BUSINESS ADDRESS:**
- **STREET 1:** 500 DALLAS STREET
- **STREET 2:** SUITE 1250
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77002
- **BUSINESS PHONE:** 281-670-0002

**MAIL ADDRESS:**
- **STREET 1:** 500 DALLAS STREET
- **STREET 2:** SUITE 1250
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77002

?xml version='1.0' encoding='ASCII'? EPSILON ENERGY LTD._November 12, 2025

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 8-K/A**

**(Amendment No. 1)**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **November 12, 2025**

**EPSILON ENERGY LTD.**

(Exact name of registrant as specified in charter)

---

| | | |
|:---|:---|:---|
| **Alberta, Canada** | **001-38770** | **98-1476367** |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |

---

**500 Dallas St., Suite 1250**

**Houston, Texas 77002**

(Address of principal executive offices, including zip code)

**(281) 670-0002**

(Registrant's telephone number, including area code)

**Not Applicable**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class:** | **Trading Symbol(s)** | **Name of each exchange on which registered:** |
| Common Shares, no par value | EPSN | NASDAQ Capital Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐ 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. ☐

------

**INTRODUCTORY NOTE**

On November 14, 2025, Epsilon Energy Ltd. (the "***Company***") filed a Current Report on Form 8-K (the "***Initial Form 8-K***") to report, among other things, the consummation of the transactions contemplated by the:

● Membership Interest Purchase Agreement among the Company, its wholly owned subsidiary, Epsilon Energy USA, Inc. ("  ***Epsilon USA*** "), Peak Exploration & Production, LLC ("  ***Peak E&P*** "), the Sellers party thereto, and Yorktown Energy Partners XI, L.P. (as Sellers' Representative); and

● Membership Interest Purchase Agreement among the Company, Epsilon USA, Yorktown Energy Partners XI, L.P. and Peak BLM Lease LLC ("  ***Peak BLM*** ").

This Amendment No. 1 ("***Amendment No. 1***") to the Current Report on Form 8-K/A amends and supplements the Initial Form 8-K filed by the Company, and is being filed to provide the historical financial statements and the pro forma financial information required pursuant to Items 9.01(a) and 9.01(b) of Form 8-K, respectively. In accordance with the requirements of Items 9.01(a)(3) and 9.01(b)(2) of Form 8-K, this Amendment No. 1 is being filed within 71 calendar days of the date that the Initial Form 8-K was required to be filed with respect to the above referenced transactions.

#### Item 9.01 Financial Statements and Exhibits.
**(a) Financial Statements of Businesses Acquired.**

The audited historical financial statements and related notes thereto set forth under the caption "Index to Consolidated Financial Statements" on page F-1 of the Company's Definitive Proxy Statement on Schedule 14A filed with the SEC on October 10, 2025 are hereby incorporated by reference herein.

The unaudited consolidated financial statements of Peak E&P as of September 30, 2025 and for the nine months ended September 30, 2025 and 2024 are attached as Exhibit 99.1 to this Amendment No. 1.

The unaudited consolidated financial statements of Peak BLM as of September 30, 2025 and for the nine months ended September 30, 2025 and 2024 are attached as Exhibit 99.2 to this Amendment No. 1.

**(b) Pro Forma Financial Information.**

The unaudited pro forma condensed combined financial information and related notes thereto as of September 30, 2025, with respect to the Company's acquisitions of Peak E&P and Peak BLM are attached as Exhibit 99.3 to this Amendment No. 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(d) Exhibits**

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | <br>**Description** |
| **23.1\*** | [Consent of Baker Tilly US, LLP](epsn-20251112xex23d1.htm) |
| **23.2\*** | [Consent of Baker Tilly US, LLP](epsn-20251112xex23d2.htm) |
| **23.3\*** | [Consent of Cawley, Gillespie & Associates, Inc.](epsn-20251112xex23d3.htm) |
| **99.1\*** | [Unaudited Consolidated Financial Statements of Peak Exploration and Production, LLC as of September 30, 2025 and for the nine months ended September 30, 2025 and 2024](epsn-20251112xex99d1.htm) |
| **99.2\*** | [Unaudited Consolidated Financial Statements of Peak BLM Lease LLC as of September 30, 2025 and for the nine months ended September 30, 2025 and 2024](epsn-20251112xex99d2.htm) |
| **99.3\*** | [Unaudited Pro Forma Condensed Combined Financial Information as of September 30, 2025 and for the nine months ended September 30, 2025 with respect to the Company's acquisitions of Peak E&P and Peak BLM](epsn-20251112xex99d3.htm) |
| **99.4** | [Summary Reserve Report of Cawley, Gillespie & Associates, Inc. (incorporated by reference to Annex D to definitive proxy statement, File No. 001-38770, filed on October 10, 2025)](https://www.sec.gov/Archives/edgar/data/1726126/000110465925098621/epsn-20251010xdefm14a.htm#AnnexD_728697) |
| **99.5** | [Summary Reserve Report of Cawley, Gillespie & Associates, Inc. (incorporated by reference to Annex E to definitive proxy statement, File No. 001-38770, filed on October 10, 2025)](https://www.sec.gov/Archives/edgar/data/1726126/000110465925098621/epsn-20251010xdefm14a.htm#AnnexE_317322) |
| **104** | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\*Filed or furnished herewith

**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. | EPSILON ENERGY LTD. |
| Date: January 13, 2026 | By:  | /s/ *J. Andrew Williamson* |
|  |  | J. Andrew Williamson |
|  |  | Chief Financial Officer |

---

## Exhibit 23.1

**Exhibit 23.1**

**Consent of Independent Auditors**

We consent to the incorporation by reference in this Registration Statement on Form S-3 of Epsilon Energy Ltd. of our report dated May 9, 2025, relating to the consolidated financial statements of Peak Exploration & Production, LLC and Subsidiaries as of December 31, 2024 and 2023, and for the years then ended, incorporated by reference in Amendment No. 1 to the Current Report on Form 8-K of Epsilon Energy Ltd. dated November 14, 2025, and included in Epsilon Energy Ltd.'s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 10, 2025. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ Baker Tilly US, LLP

Denver, Colorado January 13, 2026

------

## Exhibit 23.2

Exhibit 23.2

**Consent of Independent Auditors**

We consent to the incorporation by reference in this Registration Statement on Form S-3 of Epsilon Energy Ltd. of our report dated April 10, 2025, relating to the consolidated financial statements of Peak BLM Lease LLC and Subsidiary, as of December 31, 2024 and 2023, and for the years then ended, incorporated by reference in Amendment No. 1 to the Current Report on Form 8-K of Epsilon Energy Ltd. dated November 14, 2025, and included in Epsilon Energy Ltd.'s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 10, 2025. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ Baker Tilly US, LLP

Denver, Colorado January 13, 2026

------

## Exhibit 23.3

**Exhibit 23.3**

**CONSENT OF INDEPENDENT PETROLEUM ENGINEERS**

We hereby consent to the inclusion of information included or incorporated by reference in this Registration Statement on Form S-3 of Epsilon Energy Ltd. with respect to the information from (i) our reserve report dated February 11, 2025, with respect to the estimates of reserves and future net revenues of Peak Exploration & Production, LLC ("Peak E&P"), as of December 31, 2024, and (ii) our reserve report dated February 11, 2025, with respect to the estimates of reserves and future net reserves of Peak Powder River Acquisitions, LLC, a wholly-owned subsidiary of Peak BLM Lease LLC ("Peak BLM"), as of December 31, 2024.

---

| |
|:---|
| <br>**CAWLEY, GILLESPIE & ASSOCIATES, INC.** |
| Texas Registered Engineering Firm F-693<br>![Graphic](epsn-20251112xex23d3001.jpg)<br>|
| J. Zane Meekins, P. E. |
| Executive Vice President |

---

Fort Worth, Texas

January 13, 2026

------

## Exhibit 99.1

[**Table of Contents**](#TOC)

**Exhibit 99.1**

**Peak Exploration & Production, LLC and Subsidiaries**

*Condensed Consolidated Financial Statements*

*September 30, 2025 and 2024*

------

[**Table of Contents**](#TOC)

#### PEAK EXPLORATION & PRODUCTION, LLC AND SUBSIDIARIES

#### INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

---

| | |
|:---|:---|
|  | **PAGE** |
| [**Condensed Consolidated Balance Sheets** – September 30, 2025 and December 31, 2024](#CONDENSEDCONSOLIDATEDBALANCESHEETSUNAUDI) | 2 |
| [**Unaudited Condensed Consolidated Statements of Operations** – For the Nine Months Ended September 30, 2025 and 2024](#CONDENSEDCONSOLIDATEDSTATEMENTSOFOPERATI) | 3 |
| [**Unaudited Condensed Consolidated Statements of Members' Equity** – For the Nine Months Ended September 30, 2025 and 2024](#STATEMENTSOFOPERATIONSUNAUDITED_681208) | 4 |
| [**Unaudited Condensed Consolidated Statements of Cash Flows** – For the Nine Months Ended September 30, 2025 and 2024](#CONDENSEDCONSOLIDATEDSTATEMENTSOFCASHFLO) | 5 |
| [**Notes to Unaudited Condensed Consolidated Financial Statements**](#NOTE1ORGANIZATIONANDSIGNIFICANTACCOUNTIN) | 6 |

---

------

[**Table of Contents**](#TOC)

***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)***

***(in thousands)***

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| ASSETS |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $5172 | $10288 |
| &nbsp;&nbsp;Accounts receivable, net | 9005 | 14325 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 722 | 805 |
| &nbsp;&nbsp;Commodity derivatives assets, current | 712 | 89 |
| &nbsp;&nbsp;Inventories | 105 | 98 |
| Total current assets | 15716 | 25605 |
| Oil and natural gas property and equipment, based on successful efforts method of accounting, net | 105741 | 131116 |
| Other property, plant and equipment, net | 1334 | 1739 |
| Right-of-use assets | 276 | 333 |
| Commodity derivatives assets, non-current | 538 |  |
| Other assets, net | 940 | 1550 |
| Total assets | $124545 | $160343 |
| LIABILITIES AND MEMBERS' EQUITY |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;Accounts payable and accrued expenses | $10260 | $14312 |
| &nbsp;&nbsp;Production and ad valorem taxes payable | 2169 | 2737 |
| &nbsp;&nbsp;Oil and natural gas revenue payable | 9565 | 12663 |
| &nbsp;&nbsp;Commodity derivatives liability, current | 104 | 1156 |
| &nbsp;&nbsp;Right-of-use liabilities | 150 | 149 |
| &nbsp;&nbsp;Current portion of long-term debt | 48262 | 6200 |
| Total current liabilities | 70510 | 37217 |
| Long - term debt, net |  | 45981 |
| Other noncurrent liabilities: |  |  |
| &nbsp;&nbsp;Asset retirement obligation | 3066 | 2900 |
| &nbsp;&nbsp;Ad valorem taxes | 8284 | 8321 |
| &nbsp;&nbsp;Commodity derivatives liability, non-current | 261 | 1339 |
| &nbsp;&nbsp;Right-of-use liabilities | 142 | 204 |
| Total other noncurrent liabilities | 11753 | 12764 |
| Total liabilities | 82263 | 95962 |
| Commitments and contingencies (Note 13) |  |  |
| Members' equity: |  |  |
| &nbsp;&nbsp;Preferred equity | 95886 | 95886 |
| &nbsp;&nbsp;Common equity | 242518 | 242518 |
| &nbsp;&nbsp;Accumulated deficit | (296122) | (274023) |
| Total members' equity | 42282 | 64381 |
| Total liabilities and members' equity | $124545 | $160343 |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-2-***

------

[**Table of Contents**](#TOC)

***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)***

***(in thousands)***

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| REVENUES: |  |  |
| &nbsp;&nbsp;Oil and natural gas sales, net | $23153 | $32672 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues, net | 23153 | 32672 |
| OPERATING EXPENSES: |  |  |
| &nbsp;&nbsp;Lease operating | 7497 | 8993 |
| &nbsp;&nbsp;Production and ad valorem taxes | 2973 | 4299 |
| &nbsp;&nbsp;Depletion, depreciation and amortization | 7923 | 9729 |
| &nbsp;&nbsp;Accretion | 166 | 171 |
| &nbsp;&nbsp;Abandonment | 1716 | 1921 |
| &nbsp;&nbsp;Impairment of long lived properties | 18333 |  |
| &nbsp;&nbsp;General and administrative | 4589 | 5225 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses  | 43197 | 30338 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from operations | (20044) | 2334 |
| OTHER INCOME (EXPENSE): |  |  |
| &nbsp;&nbsp;Gain (loss) on commodity derivatives | 3173 | (2825) |
| &nbsp;&nbsp;Interest expense, net | (5549) | (6367) |
| (Loss) on sale of assets | (3) | (23) |
| &nbsp;&nbsp;Other gain (loss) | 324 | 233 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other (expense) | (2055) | (8982) |
| NET LOSS | $(22099) | $(6648) |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-3-***

------

[**Table of Contents**](#TOC)

***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)***

***(in thousands)***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Preferred**<br>**Equity** | **Common**<br>**Equity** | **Accumulated**<br>**Deficit** | <br>**Total** |
| BALANCE, JANUARY 1, 2025 | $95886 | $242518 | $(274023) | $64381 |
| &nbsp;&nbsp;Net loss |  |  | (22099) | (22099) |
| BALANCE, SEPTEMBER 30, 2025 | $95886 | $242518 | $(296122) | $42282 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Preferred**<br>**Equity** | **Common**<br>**Equity** | **Accumulated**<br>**Deficit** | <br>**Total** |
| BALANCE, JANUARY 1, 2024 | $95886 | $242518 | $(262502) | $75902 |
| &nbsp;&nbsp;Net loss |  |  | (6648) | (6648) |
| BALANCE, SEPTEMBER 30, 2024 | $95886 | $242518 | $(269150) | $69254 |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-4-***

------

[**Table of Contents**](#TOC)

***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)***

***(in thousands)***

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Net loss | $(22099) | $(6648) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided by operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depletion, depreciation and amortization | 7923 | 9729 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss on sale of assets | 3 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment of long lived properties | 18333 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 914 | 713 |
| &nbsp;&nbsp;&nbsp;&nbsp;Abandonment | 1716 | 1921 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion expense | 166 | 171 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives (gain) loss | (3290) | 2426 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 5320 | 4752 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (7) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 83 | (684) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (1429) | (4813) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production and ad valorem taxes payable | (568) | (466) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and natural gas revenue payable | (3098) | (3908) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables | (153) | (114) |
| Net cash provided by operating activities | 3814 | 3101 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Additions to oil and natural gas properties | (4139) | (3543) |
| &nbsp;&nbsp;Additions to other property, plant and equipment | (38) | (18) |
| &nbsp;&nbsp;Proceeds from sales of other assets | 79 | 3243 |
| Net cash used in investing activities | (4098) | (318) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Repayments on debt | (4650) | (3100) |
| &nbsp;&nbsp;Debt issuance costs | (182) | (86) |
| Net cash used in financing activities | (4832) | (3186) |
| Net decrease in cash and cash equivalents | (5116) | (403) |
| Cash and cash equivalents at beginning of period | 10288 | 11762 |
| Cash and cash equivalents at end of period | $5172 | $11359 |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-5-***

------

[**Table of Contents**](#TOC)

***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

#### NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
*Description of Business* — The accompanying condensed consolidated financial statements include the accounts of Peak Exploration & Production, LLC, Peak Energy Operating #2, LLC, Peak Powder River Resources, LLC, Willow Springs Development, LLC, and Peak Exploration & Production, Inc. (collectively, the "Company"). The Company is an independent oil and gas company engaged in exploration and development of oil and natural gas assets. The Company, at this time, conducts its activities in Wyoming. As a Limited Liability Company ("LLC"), the amount of loss at risk for each individual member is limited to the amount of capital contributed to the LLC, and unless otherwise noted, the individual member's liability for indebtedness of an LLC is limited to the member's actual capital contribution. The Company will have LLC status until perpetual existence unless it is terminated.

*Basis of Presentation* — The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and include the accounts of Peak Exploration & Production, LLC, Peak Energy Operating #2, LLC, Peak Powder River Resources, LLC, Willow Springs Development, LLC, and Peak Exploration & Production, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024. Results for the interim periods are not necessarily indicative of results to be expected for the full year ended December 31, 2025. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the result for the periods indicated.

*Going Concern* — The accompanying condensed consolidated financial statements are prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In accordance with the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued. In making its assessment, management considered the Company's current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due over the next twelve months.

The Company is not in compliance, and may not be able to be in compliance in the future, with a financial covenant requirement of its Credit Agreement as outlined in Note 10 during the next twelve months, which would lead to an acceleration of the maturity of the Company's debt obligations. The Company does not have sufficient cash on hand or available liquidity that can be utilized to repay such debt obligations, which raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In response to these conditions, the Company has taken various steps to preserve its liquidity including (1) deferring drilling and completion activity for the foreseeable future, (2) continuing to focus on reducing its operating and overhead costs, and (3) continuing to manage its hedge portfolio. In addition, the Company has signed a non-binding term sheet with a third-party purchaser, where the Company will be acquired by the third-party purchaser. The Membership Interest Purchase Agreement ("MIPA") related to the term sheet was executed on August 11, 2025, with a target close date of November 14, 2025. However, this contemplated transaction may not be completed or that any completion of it cannot be guaranteed.

*Use of Estimates* — The preparation of the condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ significantly from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include

***-6-***

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[**Table of Contents**](#TOC)

***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

timing and costs associated with asset retirement obligations, and oil and gas reserve quantities, which are the basis for the calculation of depreciation, depletion and impairment of oil and natural gas properties.

*Recent Accounting Pronouncements* — In November 2024, FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE). The ASU primarily requires companies to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The new guidance will be effective for the Company's year ending December 31, 2027 and interim periods during the year ending December 31, 2028. The Company does not believe the new guidance will have a material impact on its consolidated financial statements and related disclosures.

#### NOTE 2. ACCOUNTS RECEIVABLE
The following table reflects the components of accounts receivable of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**September 30,**<br>**2025** | **As of**<br>**December 31,**<br>**2024** |
| Oil and natural gas sales | $6094 | $8495 |
| Joint interest billings | 2808 | 5821 |
| Other | 103 | 9 |
| &nbsp;&nbsp;Gross accounts receivable | 9005 | 14325 |
| Allowance for credit losses |  |  |
| &nbsp;&nbsp;Net accounts receivable | $9005 | $14325 |

---

Amounts billed and due are recorded as trade accounts receivable and included in accounts receivable in the Company's consolidated balance sheets. The Company has no allowance at September 30, 2025 or December 31, 2024.

#### NOTE 3. OIL AND NATURAL GAS PROPERTIES
The following table reflects the aggregate capitalized costs associated with the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**September 30,**<br>**2025** | **As of**<br>**December 31,**<br>**2024** |
| Oil and natural gas properties: |  |  |
| &nbsp;&nbsp;Unproved properties | $24010 | $25622 |
| &nbsp;&nbsp;Proved properties | 511965 | 512531 |
| &nbsp;&nbsp;Work in process | 13272 | 11479 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total oil and natural gas properties | 549247 | 549632 |
| &nbsp;&nbsp;Less: Accumulated depreciation, depletion, amortization and impairment | (443506) | (418516) |
| &nbsp;&nbsp;&nbsp;&nbsp;Oil and natural gas properties, net | $105741 | $131116 |

---

Depletion expense was $7.3 million and $9.1 million for the nine months ended September 30, 2025 and 2024, respectively. Abandonment expense in the amount of $1.7 million for the nine months ended September 30, 2025 consists of abandoned leases associated with unproved property that were allowed to expire. Abandonment expense in the amount of $2.0 million for the nine months ended September 30, 2024 consists of abandonment of a drilled well that will not be completed and certain leases associated with unproved property were allowed to expire. The Company had no exploratory wells costs during the nine months ended September 30, 2025 or for the year ended December 31, 2024.

***-7-***

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

For the nine months ended September 30, 2025, the Company recorded an impairment related to its oil and gas properties in the amount of $17.8 million based on terms outlined in the executed term sheet dated June 13, 2025. The calculation of the impairment is a Fair Value Level 3 non-recurring measurement.

#### NOTE 4. REVENUE
The following table presents the disaggregation of oil and natural gas revenue of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Oil sales | $19634 | $29403 |
| Natural gas sales | 3519 | 3269 |
| Total oil and natural gas sales, net | $23153 | $32672 |

---

#### NOTE 5. OTHER PROPERTY, PLANT AND EQUIPMENT
The following table presents the other property, plant and equipment of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**September 30,**<br>**2025** | **As of**<br>**December 31,**<br>**2024** |
| Building and improvements | $3175 | $3175 |
| Office furniture and equipment | 1145 | 1107 |
| Land | 594 | 594 |
| Transportation equipment | 274 | 379 |
| Other | 29 | 29 |
| &nbsp;&nbsp;Total property and equipment | 5217 | 5284 |
| Less: accumulated depreciation and impairment | (3883) | (3545) |
| &nbsp;&nbsp;Total property and equipment, net | $1334 | $1739 |

---

Depreciation expense for other property, plant and equipment was $0.1 million for both the nine months ended September 30, 2025 and 2024.

For the nine months ended September 30, 2025, the Company recorded an impairment related to its other property, plant and equipment in the amount of $0.3 million based on terms outlined in the executed term sheet dated June 13, 2025. The calculation of the impairment is a Fair Value Level 3 non-recurring measurement.

#### NOTE 6. OTHER ASSETS
The following table presents the other assets of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**September 30,** <br>**2025** | **As of**<br>**December 31,**<br> **2024** |
| Water production facilities | $4308 | $4308 |
| Operating bonds | 100 | 100 |
| Yard equipment | 260 | 260 |
| &nbsp;&nbsp;Total property and equipment | 4668 | 4668 |
| Less: accumulated depreciation and amortization | (3728) | (3118) |
| &nbsp;&nbsp;Total other assets, net | $940 | $1550 |

---

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

Depreciation expense for other assets was $0.3 million for both the nine months ended September 30, 2025 and 2024.

For the nine months ended September 30, 2025, the Company recorded an impairment related to its other property, plant and equipment in the amount of $0.3 million based on terms outlined in the executed term sheet dated June 13, 2025. The calculation of the impairment is a Fair Value Level 3 non-recurring measurement.

#### NOTE 7. ASSET RETIREMENT OBLIGATIONS
The following table presents changes in asset retirement obligations of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**September 30,**<br>**2025** | **As of**<br>**December 31,**<br>**2024** |
| Asset retirement obligations at beginning of period | $2900 | $2678 |
| &nbsp;&nbsp;Liabilities incurred |  | 17 |
| &nbsp;&nbsp;Liabilities settled and divested |  | (18) |
| &nbsp;&nbsp;Accretion expense on discounted obligation | 166 | 223 |
| Asset retirement obligations at end of period | $3066 | $2900 |

---

#### NOTE 8. COMMODITY DERIVATIVES
*Derivative Financial Instruments* — The Company's primary market exposure is to adverse fluctuations in the prices of crude oil and natural gas. The primary objective of the Company's risk management policy is to preserve and enhance the value of the Company's production. The Company uses derivative instruments, primarily swap and collar contracts, to manage the price risk associated with oil production and the resulting impact on cash flow and revenues. The Company's management is responsible for approving risk management policies and for establishing the Company's overall risk mitigation. Management is responsible for proposing hedge recommendations, execution of the approved hedging plan, and oversight of the risk management process including methodologies used for valuation and risk measurement.

Derivative instruments expose the Company to counterparty credit risk. The Company enters these contracts with a major financial institution that it considers creditworthy. In addition, the Company's agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty.

As with most derivative instruments, the Company's derivative contracts contain provisions that may allow another party to require security from the counterparty to ensure performance under the contract. The security may be in the form of, but not limited to, a letter of credit, security interest or a performance bond.

The terms of the Company's agreements provide for the offsetting of amounts owed or owing between it and the counterparty, at the election of both parties, for transactions that occur on the same date and in the same currency. The Company's agreements also provide that in the event of an early termination, the counterparty has the right to offset amounts owed or owing under that and any other agreement between the parties. The Company's accounting policy is to offset these positions in its accompanying condensed consolidated balance sheets.

***-9-***

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

The Company had the following outstanding commodity derivative financial instruments outstanding at September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2026** | **2027** | **2028** |
| **Natural gas swaps:** |  |  |  |  |
| &nbsp;&nbsp;Notional volume (MMBtu) | 179547 | 557326 | 297634 | 13842 |
| &nbsp;&nbsp;Weighted average swap price ($/MMBtu) | $3.63 | $3.67 | $3.83 | $4.45 |
| **Natural gas collars:** |  |  |  |  |
| &nbsp;&nbsp;Notional volume (MMBtu) | 108731 | 365700 | 416723 | 13842 |
| &nbsp;&nbsp;Weighted average ceiling price ($/MMBtu) | $4.20 | $4.26 | $4.25 | $5.10 |
| &nbsp;&nbsp;Weighted average floor price ($/MMBtu) | $3.20 | $3.26 | $3.23 | $4.10 |
| **Oil swaps:** |  |  |  |  |
| &nbsp;&nbsp;Notional volume (Bbl) | 65894 | 217622 | 105986 | 8308 |
| &nbsp;&nbsp;Weighted average swap price ($/Bbl) | $65.26 | $63.33 | $63.94 | $63.15 |
| **Oil collars:** |  |  |  |  |
| &nbsp;&nbsp;Notional volume (Bbl) | 11894 | 55230 | 118096 | 8308 |
| &nbsp;&nbsp;Weighted average ceiling price ($/Bbl) | $71.77 | $69.23 | $67.83 | $67.96 |
| &nbsp;&nbsp;Weighted average floor price ($/Bbl) | $61.91 | $59.37 | $57.61 | $57.57 |

---

*Derivative Gains and Losses* — Cash receipts and payments reflect the gains or losses on derivative contracts which matured during the applicable period, calculated as the difference between the contract price and the market settlement price of matured contracts. The derivative contracts of the Company are settled based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on the New York Mercantile Exchange ("NYMEX") West Texas Intermediate pricing and natural gas derivative settlements based primarily on NYMEX Henry Hub pricing. Non-cash gains and losses represent the change in fair value of derivative instruments which continued to be held at period end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured during the period.

The following table summarizes the commodity derivative activity of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Cash (paid) received on derivatives | $(117) | $(399) |
| Non-cash (loss) on derivatives | 3290 | (2426) |
| Gain (loss) on commodity derivatives | $3173 | $(2825) |

---

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

*Financial Statement Presentation* — All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the condensed consolidated balance sheets. The Company determines the current and long-term classification based on the timing of expected future cash flows of individual trades. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets.

The following table presents the fair value of the commodity derivative instruments of the Company on a gross basis and on a net basis as presented in the condensed consolidated balance sheets for the periods indicated (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
|  | **Gross Fair** <br>**Value** | **Amounts**<br> **Netted** | <br>**Net Fair Value** |
| Commodity derivative assets: |  |  |  |
| &nbsp;&nbsp;Commodity derivative asset, current | $712 | $— | $712 |
| &nbsp;&nbsp;Commodity derivative asset, noncurrent | 538 |  | 538 |
| Total commodity derivative assets | $1250 | $— | $1250 |
| Commodity derivative liabilities: |  |  |  |
| &nbsp;&nbsp;Commodity derivative liability, current | $(104) | $— | $(104) |
| &nbsp;&nbsp;Commodity derivative liability, noncurrent | (261) |  | (261) |
| Total commodity derivative liabilities | $(365) | $— | $(365) |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Gross Fair** <br>**Value** | **Amounts**<br> **Netted** | <br>**Net Fair Value** |
| Commodity derivative assets: |  |  |  |
| &nbsp;&nbsp;Commodity derivative asset, current | $89 | $— | $89 |
| &nbsp;&nbsp;Commodity derivative asset, noncurrent |  |  |  |
| Total commodity derivative assets | $89 | $— | $89 |
| Commodity derivative liabilities: |  |  |  |
| &nbsp;&nbsp;Commodity derivative liability, current | $(1156) | $— | $(1156) |
| &nbsp;&nbsp;Commodity derivative liability, noncurrent | (1339) |  | (1339) |
| Total commodity derivative liabilities | $(2495) | $— | $(2495) |

---

#### NOTE 9. FAIR VALUE MEASUREMENTS
The Company's financial instruments consist of cash and cash equivalents, trade receivables, trade payables, accrued liabilities, long-term debt, and derivatives. The carrying value of cash and cash equivalents, trade receivables, and trade payables and accrued liabilities are considered to be representative of their fair market value due to the short maturity of these instruments.

The Company's debt is subject to variable interest rates and accordingly the carrying value is considered to be representative of its fair market value.

***-11-***

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

The following table provides the carrying value and fair value measurement information for certain of the financial assets and liabilities of the Company (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | | **Fair Value Measurements Using:** | **Fair Value Measurements Using:** | **Fair Value Measurements Using:** |
|  | <br>**Carrying**<br>**Amount** | <br>**Total**<br>**Fair Value** | **Level 1**<br>**Inputs** | **Level 2**<br>**Inputs** | **Level 3** <br>**Inputs** |
| September 30, 2025 assets (liabilities): |  |  |  |  |  |
| &nbsp;&nbsp;Commodity derivatives | $885 | $885 | $— | $885 | $— |
| December 31, 2024 assets (liabilities): |  |  |  |  |  |
| &nbsp;&nbsp;Commodity derivatives | $(2406) | $(2406) | $— | $(2406) | $— |

---

The following methods and assumptions were used to estimate the fair values in the table above.

#### Level 2 Fair Value Measurements
*Impairment* — The calculation of the impairment as discussed in notes 3, 5, and 6 are Fair Value Level 3 non-recurring measurements based on terms outlined in the executed term sheet dated June 13, 2025.

*Commodity derivatives* — The fair value of commodity derivatives is estimated using observable market data and assumptions with adjustments based on widely accepted valuation techniques. A discounted cash flow analysis on the expected cash flows of each derivative reflects the contractual terms of the derivative, including period to maturity, and uses observable market-based inputs, including interest rate curves, implied volatilities and credit risk.

#### Assets Measured at Fair Value on a Nonrecurring Basis
Certain assets and liabilities of the Company are reported at fair value on a nonrecurring basis in the consolidated financial statements. The following methods and assumptions were used to estimate the fair values for those assets and liabilities.

*Asset retirement obligations* — The fair value of asset retirement obligations is estimated using discounted cash flow projections using numerous estimates, assumptions and judgments regarding such factors as the existence of a legal obligation, estimated plugging and abandonment costs, timing of remediation, the credit-adjusted risk-free rate and inflation rate. Significant unobservable inputs (Level 3) utilized in the determination of asset retirement obligations include estimated plugging and abandonment costs of approximately $0.1 million per well, the timing of remediation, which is estimated based on the aggregate average useful life of the Company's wells, and the credit adjusted risk free rate.

*Proved oil and Natural Gas Reserves* — The Company's estimates of proved and proved developed reserves are the major component of its impairment calculations for oil and natural gas properties. The Company reviews and evaluates its oil and natural gas properties for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. If there is an indication the carrying amount of oil and natural gas properties may not be recovered, the asset is assessed for potential impairment by management through an established process. If, upon review, the sum of the undiscounted pre-tax reserve cash flows is less than the carrying value of the asset, the carrying value is written down to estimated fair value. Because there is usually a lack of quoted market prices for long-lived assets, the fair value of impaired assets is typically determined based on the present values of expected future cash flows using discount rates believed to be consistent with those used by principal market participants or by comparable transactions. The Company's proved reserves represent the element of these calculations that require various subjective judgments. Estimates of proved reserves are forecasts based on engineering data, projected future rates of production and the timing of future expenditures. These forecasts rely heavily on historical experience of production results, incurred capital costs, operating expenses and workover experience, among other factors. An impairment loss is measured as the amount by which asset carrying value exceeds Level 3 fair value on an individual field-by-field basis.

***-12-***

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

#### NOTE 10. DEBT AND RELATED EXPENSES
The following table presents the outstanding debt and related expenses of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of** <br>**September 30,**<br> **2025** | **As of** <br>**December 31,**<br> **2024** |
| Fortress Credit Agreement | $49600 | $54250 |
| Total debt, including current portion | 49600 | 54250 |
| Debt issuance costs | (1338) | (2069) |
| Total debt, including current portion, net | 48262 | 52181 |
| Less: current portion of debt | 48262 | 6200 |
| Long-term debt, net | $— | $45981 |

---

*Fortress Credit Agreement* — On January 31, 2023, the Company ("Borrower") entered into a new Credit and Guaranty Agreement with Fortress Credit Corp. ("Credit Agreement") with initial loan commitments of $62.0 million provided by Fortress Credit Corp. and Cargill, Incorporated (collectively, the "Lenders"). Upon execution of the Credit Agreement, the Company was issued a new term loan with the Lenders for the full commitment amount of $62.0 million which matures on January 31, 2027 ("Maturity Date"). Proceeds from the new loan were utilized to repay in full the existing Credit Facility and NPA, as well as debt issuance costs. The remaining unused proceeds served as additional cash to the Company's consolidated balance sheet.

Initially, the obligations under the Credit Agreement are guaranteed by certain of the Borrower's subsidiaries (the "Guarantors") and the Credit Agreement is secured by substantially all of the assets owned by the Company and the Guarantors (subject to customary exceptions). Borrowings outstanding under the Credit Agreement will initially be Term SOFR Loans (as defined in the Credit Agreement) which bear interest at a rate equal to the sum of (i) the Term SOFR Rate for a three-month interest period, plus 0.15% ("Adjusted Term SOFR Rate"); and (ii) 8.00% per annum. The Administrative Agent (permitted only as expressly set forth in Section 2.07 of the Credit Agreement), may convert any outstanding Term SOFR Loan to an ABR Loan (as defined in the Credit Agreement). Borrowings constituting ABR Loans shall bear interest at a rate equal to the sum of (i) the Alternate Base Rate, defined as the greater of (a) the Prime Rate and (b) the NYFRB Rate plus 0.50%; and (ii) 7.00% per annum. Interest accrued on all outstanding loans is payable at the end of each quarter, through the Maturity Date. For the quarter ended September 30, 2025 and for the year ended December 31, 2024, the interest rate on the outstanding balance Credit Agreement was 12.44% and 12.74%, respectively.

The Company is required to repay to the Lenders an amount equal to 2.50% of the full commitment amount of $62.0 million, including accrued interest, on the first business day of the immediately succeeding quarter. Furthermore, the Company is subject to mandatory repayment provisions, including in the event of default where the Lenders elect to accelerate amounts due. The Credit Agreement further outlines the ability to prepay the loans in whole, or in part, at the option of the Company. In the event of any repayment or prepayment of the loans, the Company shall immediately pay the applicable premium (as defined in the Credit Agreement) and all accrued interest.

The Credit Agreement contains restrictive covenants that limit the Company's ability to, among other things: (i) incur additional indebtedness; (ii) incur liens; (iii) enter into mergers; (iv) dispose of assets; (v) engage in new business type; (vi) make any investments; (vii) enter into certain swap agreements; (viii) make restrictive payments; and (ix) engage in certain transactions with affiliates. These restrictive covenants are subject to a number of important exceptions and qualifications.

In addition, the Credit Agreement requires the Company to maintain compliance with the following financial ratios determined as of the last day of the quarter: (A) a current ratio (as defined in the Credit Agreement) of no less than 1.00 to 1.00; (B) a proved developed producing ("PDP") asset coverage ratio (as defined in the Credit Agreement) of no less than 1.75 to 1.00; (C) a leverage ratio (as defined in the Credit Agreement) of no more than 2.75 to 1.00; and (D) liquidity (as

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

defined in the Credit Agreement) of not less than $5.0 million. Furthermore, for any year, general and administrative expenses (as defined in the Credit Agreement) attributable to the Company must not exceed $8.5 million. On April 24, 2024, the Company entered into the First Amendment to the Credit Agreement, which moved the payment date for the required quarterly principal and interest payments to the first business day of the immediately succeeding quarter. As of December 31, 2024, the company was not in compliance with the current ratio of no less than 1.00 to 1.00. However, on February 28, 2025, the Company received a waiver related to non-compliance with the current ratio. On May 9, 2025, the Company entered into the Second Amendment to the Credit Agreement which modified certain covenants with an effective date of March 31, 2025 and applicable compliance period commencing with the quarter ended March 31, 2025 through and including the quarter ended March 31, 2026. Covenants that were amended include: (A) a current ratio (as defined in the Credit Agreement) of no less than .85 to 1.00; (B) a proved developed producing ("PDP") asset coverage ratio (as defined in the Credit Agreement) of no less than 1.50 to 1.00; and (C) a leverage ratio (as defined in the Credit Agreement) of no more than 3.00 to 1.00.At the end of the applicable compliance period, the covenants will revert back to the original covenants listed above. As of June 30, 2025, the Company was not in compliance with the current ratio of no less than .85 or the leverage ratio of no more than 3.00 to 1.00. However, on August 11, 2025, the Company received a waiver related to non-compliance. On August 29, 2025, the Company entered into the Third Amendment to the Credit Agreement with the following language: "Borrower shall repay in cash to the Administrative Agent for the ratable account of each Lender as follows: (i) on January 2, 2026, an amount equal to 5.00% of the aggregate principal amount of the Term Loan outstanding on the Effective Date; and (ii) on each April 1, July 1, October 1 and January 1 ending thereafter (or if such date is not a Business Day, then the immediately subsequent Business Day) (each such date, a "Payment Date"), an aggregate principal amount equal to 2.50% of the aggregate principal amount of the Term Loan outstanding on the Effective Date. Each payment of Loans pursuant to this Section 2.06(e) shall be accompanied by accrued and unpaid interest with respect thereto and other amounts pursuant to Section 2.09 and Section 2.13, if any." As of September 30, 2025, the Company was not in compliance with the current ratio of no less than .85 or the leverage ratio of no more than 3.00 to 1.00. However, the Company is not seeking another waiver and has decided to reclass the debt to current pending the closing of the MIPA in November.

#### NOTE 11. EQUITY AND SHARE BASED COMPENSATION
*Preferred Equity* — The Company has issued 958,864 units of preferred shares for cash totaling $95.9 million as of September 30, 2025 and December 31, 2024. The Company has not issued any preferred shares since 2018. The preferred shares include the following characteristics and rights:

● When declared, the Company shall pay distributions in cash to the holders of the preferred shares in the amount of 6.0% per annum, paid in arrears.

● All or a portion of the preferred shares and accrued but unpaid interest can be converted into common units at a price of $65.00 per unit, or the conversion price then in effect at the time of conversion.

● Each holder of the preferred shares is entitled to one vote per preferred share.

● The preferred shares include a liquidation preference over common units.

The preferred shares may not demand repayment of the equity or accrued dividends, and if not converted to common units, once the amount of the preferred shares and all accrued dividends has been paid, the holders have no additional rights or claims to the assets of the Company. For the nine months ended September 30, 2025 and 2024 no dividends have been declared, therefore, are not recorded on the condensed consolidated balance sheets. The balance of accumulated undeclared distributions totaled $54.0 million as of September 30, 2025 and $49.7 million as of December 31, 2024. The accumulated liquidation preference totaled $149.9 million as of September 30, 2025 and $145.6 million as of December 31, 2024.

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

*Share Based Compensation* — The Company has a total of 69,855 and 87,389 options outstanding as of September 30, 2025 and December 31, 2024, respectively. The options are exercisable at a price of $100 per option, to purchase common stock. During the six months ended September 30, 2025, 17,534 options were forfeited, however, no options were granted or exercised during the nine months ended September 30, 2025. There were no options granted, forfeited or exercised during the year ended December 31, 2024. Therefore, the Company had no compensation expense for the nine months ended September 30, 2025 and 2024.

The approximate remaining weighted-average contractual term of options outstanding at September 30, 2025 is approximately three years. At September 30, 2025, all options were vested and the Company had no unrecognized share-based compensation expense.

#### NOTE 12. LEASES
The following table summarizes the operating leases of the Company for the periods indicated (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine Month Ended September 30,** | **Nine Month Ended September 30,** |
|  | **2025** | **2024** |
| Operating lease expenses | $115 | $113 |
| Cash paid for operating lease liabilities | $115 | $113 |
| Right-of-use assets obtained in exchange for operating lease liabilities | $— | $— |
| Amortization of right-of-use assets | $112 | $114 |
| Lease liability balance | $292 | $390 |
| Weighted-average discount rate (%) | 1.37 | 1.37 |
| Weighted-average remaining lease term (years) | 1.89 | 2.81 |

---

Total expense for all leases was $1.4 million and $1.5 million for both the nine months ended September 30, 2025 and 2024, respectively.

Future minimum annual lease payments as of September 30, 2025 are as follows (in thousands):

---

| | |
|:---|:---|
| &nbsp;&nbsp;2025 | $39 |
| &nbsp;&nbsp;2026 | 157 |
| &nbsp;&nbsp;2027 | 101 |
| Total lease payments | 297 |
| Less: interest | (5) |
| Present value of lease liabilities | $292 |

---

#### NOTE 13. COMMITMENTS AND CONTINGENCIES
*Environmental Matters* — Various federal, state and local laws and regulations covering the discharge of materials into the environment, or otherwise relating to the protection of the environment, may affect the operations and the cost of crude oil and natural gas exploration, development, and production operations of the Company. The Company does not anticipate that it will be required in the near future to expend significant amounts for compliance with such federal, state and local laws and regulations, and therefore, no amounts have been accrued for such purposes. At September 30, 2025 and December 31, 2024, there were no known environmental or regulatory matters which are reasonably expected to result in a material liability to the Company.

*Government Regulation* — Many aspects of the oil and gas industry are extensively regulated by federal, state, and local governments in all areas in which the Company has operations. Regulations govern such things as drilling permits, environmental protection and pollution control, spacing of wells, the unitization and pooling of properties, reports

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***PEAK EXPLORATION AND PRODUCTION, LLC AND SUBSIDIARIES***

***NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***SEPTEMBER 30, 2025 AND 2024***

concerning operations, royalty rates, and various other matters, including taxation. Oil and gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. As of September 30, 2025 and December 31, 2024, the Company has not been fined or cited for any violations of governmental regulations that would have a material adverse effect upon the financial condition, capital expenditures, earnings, or competitive position of the Company in the oil and gas industry.

*Litigation* — The Company is involved in various legal proceedings including, but not limited to, commercial disputes, claims from royalty and surface owners, property damage claims, personal injury claims, regulatory compliance matters, disputes with tax authorities and other matters. While the outcome of these legal matters cannot be predicted with certainty, the Company does not expect any such matters to have a material effect on its financial condition, results of operations or cash flows.

#### NOTE 14. RELATED PARTY TRANSACTIONS
The Company is subject to an Administrative Service Agreement ("ASA") with Peak BLM Lease, LLC ("Peak BLM"), an affiliate, that specifies the Company will perform administrative duties associated with Peak BLM's properties. Per the ASA, Peak BLM is to pay the Company approximately $0.1 million monthly. For the nine months ended September 30, 2025 and 2024, the Company received or accrued for reimbursements, related to the administrative duties, from Peak BLM in the amount of $0.9 million and $0.9 million, respectively. These reimbursements are reflected as a reduction to "general and administrative" on the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2025 and 2024. In addition, the Company performs as the administrator of three jointly owned wells, which resulted in Peak BLM paying $1.3 million and $0.5 million for nine months ended September 30, 2025 and 2024, respectively, for capital expenditures and/or lease operating expenses. During the nine months ended September 30, 2024, the Company purchased interests in two wells from Peak E&P in the amount of $3.2 million, which represents the historical book value.

#### NOTE 15. SUPPLEMENTAL CASH FLOW INFORMATION
The following table provides certain supplemental cash flow information for the periods indicated (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| *Supplemental Disclosure of Cash Flow Information:* |  |  |
| &nbsp;&nbsp;Cash paid for interest | $5020 | $4025 |
| *Supplemental Disclosure of Non-Cash Information:* |  |  |
| &nbsp;&nbsp;Oil and natural gas additions through accounts payable and accrued expenses | $2625 | $(405) |

---

#### NOTE 16. SUBSEQUENT EVENTS
In preparing the accompanying consolidated financial statements of the Company, management has evaluated all subsequent events and transactions for potential recognition or disclosure through November 14, 2025, the date the consolidated financial statements of the Company were available for issuance. On August 11, 2025, the Company signed the MIPA with a third-party purchaser, where the Company will be acquired by the third-party purchaser. The MIPA is scheduled to close on or around November 14, 2025.

***-16-***

------

## Exhibit 99.2

[**Table of Contents**](#TOC)

**Exhibit 99.2**

**Peak BLM Lease LLC and Subsidiary**

*Condensed Consolidated Financial Statements*

*September 30, 2025 and 2024*

------

[**Table of Contents**](#TOC)

***PEAK BLM LEASE LLC AND SUBSIDIARY***

**INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)**

---

| | |
|:---|:---|
|  | PAGE |
| [**Condensed Consolidated Balance Sheets** – September 30, 2025 and December 31, 2024](#CONDENSEDCONSOLIDATEDBALANCESHEETSUNAUDI) | 3 |
| [**Condensed Consolidated Statements of Operations** – For the Nine Months Ended September 30, 2025 and 2024](#CONDENSEDCONSOLIDATEDSTATEMENTSOFOPERATI) | 4 |
| [**Condensed Consolidated Statements of Member's Equity** – For the Nine Months Ended September 30, 2025 and 2024](#CONDENSEDCONSOLIDATEDSTATEMENTSOFMEMBERS) | 5 |
| [**Condensed Consolidated Statements of Cash Flows** – For the Nine Months Ended September 30, 2025 and 2024](#CONSOLIDATEDSTATEMENTSOFCASHFLOWSUNAUDIT) | 6 |
| [**Notes to Condensed Consolidated Financial Statements**](#Note1OrganizationandSignificantAccountin) | 7 |

---

------

[**Table of Contents**](#TOC)

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)***

***(in thousands)***

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| ASSETS |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $15 | $337 |
| &nbsp;&nbsp;Accounts receivable, net | 609 | 792 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 34 | 7 |
| Total current assets | 658 | 1136 |
| Oil and natural gas property and equipment, based on successful efforts method of accounting, net | 18997 | 51962 |
| Total assets | $19655 | $53098 |
| LIABILITIES AND MEMBER'S EQUITY |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;Accounts payable and accrued expenses | $276 | $865 |
| Total current liabilities | 276 | 865 |
| Other noncurrent liabilities: |  |  |
| &nbsp;&nbsp;Asset retirement obligation | 51 | 61 |
| Total other noncurrent liabilities | 51 | 61 |
| Total liabilities | 327 | 926 |
| Commitments and contingencies (Note 5) |  |  |
| Member's equity: |  |  |
| &nbsp;&nbsp;Member's equity | 57000 | 57000 |
| &nbsp;&nbsp;Accumulated deficit | (37672) | (4828) |
| Total member's equity | 19328 | 52172 |
| Total liabilities and member's equity | $19655 | $53098 |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-***3***-***

------

[**Table of Contents**](#TOC)

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)***

***(in thousands)***

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| REVENUES: |  |  |
| &nbsp;&nbsp;Oil and natural gas sales, net | $1813 | $2506 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues, net | 1813 | 2506 |
| OPERATING EXPENSES: |  |  |
| &nbsp;&nbsp;Lease operating | 350 | 569 |
| &nbsp;&nbsp;Production and ad valorem taxes | 233 | 339 |
| &nbsp;&nbsp;Depletion, depreciation and amortization | 545 | 1050 |
| &nbsp;&nbsp;Accretion | 3 | 3 |
| &nbsp;&nbsp;Impairment of oil & gas properties | 29655 |  |
| &nbsp;&nbsp;General and administrative | 1659 | 1284 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 32445 | 3245 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Loss) from operations | (30632) | (739) |
| OTHER INCOME (LOSS): |  |  |
| &nbsp;&nbsp;Interest income | 163 |  |
| &nbsp;&nbsp;Interest Expense | 8 |  |
| &nbsp;&nbsp;Other gain |  | 277 |
| &nbsp;&nbsp;Loss on sale of properties | (2383) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other income (loss) | (2212) | 277 |
| NET (LOSS) | $(32844) | $(462) |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-***4***-***

------

[**Table of Contents**](#TOC)

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***CONDENSED CONSOLIDATED STATEMENTS OF MEMBERS EQUITY (UNAUDITED)***

***(in thousands)***

---

| | | | |
|:---|:---|:---|:---|
|  | **Member's**<br> **Equity** | **Accumulated**<br>**Deficit** | <br>**Total** |
| BALANCE, JANUARY 1, 2025 | $57000 | $(4828) | $52172 |
| &nbsp;&nbsp;Net loss |  | (32844) | (32844) |
| BALANCE, SEPTEMBER 30, 2025 | $57000 | $(37672) | $19328 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Member's** <br>**Equity** | **Accumulated** <br>**Deficit** | <br>**Total** |
| BALANCE, JANUARY 1, 2024 | $57000 | $(2344) | $54656 |
| &nbsp;&nbsp;Net loss |  | (462) | (462) |
| BALANCE, SEPTEMBER 30, 2024 | $57000 | $(2806) | $54194 |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-***5***-***

------

[**Table of Contents**](#TOC)

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)***

***(in thousands)***

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Net (loss) | $(32844) | $(462) |
| &nbsp;&nbsp;Adjustments to reconcile (loss) to net cash provided by (used in) operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depletion, depreciation and amortization | 545 | 1050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss on sale of properties | 2383 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 113 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment of oil & gas properties | 29655 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion expense | 3 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 70 | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (27) | 156 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (150) | 283 |
| Net cash provided by (used in) operating activities | (252) | 1120 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Additions to oil and natural gas properties | (1038) | (354) |
| &nbsp;&nbsp;Acquisition of oil and natural gas properties |  | (3235) |
| &nbsp;&nbsp;Proceeds from sale of other assets | 968 |  |
| Net cash (used in) investing activities | (70) | (3589) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| Net cash provided by financing activities |  |  |
| Net decrease in cash and cash equivalents | (322) | (2469) |
| Cash and cash equivalents at beginning of period | 337 | 3677 |
| Cash and cash equivalents at end of period | $15 | 1208 |
| SUPPLEMENTAL STATEMENT OF CASH FLOW DISCLOSURES: Oil and gas additions through accounts payable and accrued expenses | $438 | (665) |

---

***The accompanying notes are an integral part of these condensed consolidated financial statements.***

***-***6***-***

------

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***September 30, 2025 and 2024***

**Note 1. Organization and Significant Accounting Policies**

*Description of the Business* — The accompanying condensed consolidated financial statements include the accounts of Peak BLM Lease LLC ("Peak BLM") and Peak Powder River Acquisitions, LLC ("PPRA", collectively, the "Company"). The Company is an independent oil and natural gas company engaged in exploration and development of crude oil and natural gas assets. The Company, at this time, conducts its activities in Wyoming. As a Limited Liability Company ("LLC"), the amount of loss at risk for each individual member is limited to the amount of capital contributed to the LLC, and unless otherwise noted, the sole Member's liability for indebtedness of an LLC is limited to the Member's actual capital contribution. The Company will have LLC status until perpetual existence unless it is terminated.

*Basis of Presentation* — The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and include the accounts of Peak BLM and PPRA. All intercompany accounts and transactions have been eliminated. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024. Results for the interim periods are not necessarily indicative of results to be expected for the full year ended December 31, 2025. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the result for the periods indicated.

*Use of Estimates* — The preparation of the condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ significantly from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include timing and costs associated with asset retirement obligations, and oil and gas reserve quantities, which are the basis for the calculation of depreciation, depletion and impairment of oil and natural gas properties.

*Accounts Receivable – Oil and Gas Sales* — The Company accrues for oil and natural gas sales based on actual production dates. These are due within 45 days of production. The Company determines its allowance for each type of receivable based on the length of time the receivable is past due, its previous loss history, and customers current ability to pay its obligation. The Company estimates the allowance on receivables using relevant available information for internal and external sources, related historical events, current conditions, and supportable forecasts of economic condition. The Company writes off specific receivables when they become uncollectible. Once an allowance is recorded, any subsequent payments received on such receivables are credited to the allowance for credit losses. The Company recorded provisions for certain credit losses for the nine months ended September 30, 2025 and for the year ended December 31, 2024. The provisions for the credit losses were related to the initial public offering ("IPO") expenses that were paid by the Company and would be paid by the new public entity once the IPO closed. To date, the Company has not experienced any pattern of credit losses related to its oil and gas revenues. The Company will continually monitor the creditworthiness of its counterparties by reviewing credit ratings, financial statements, and payment history. Accounts receivable from oil and gas sales for the quarter ended September 30, 2025 and the year ended December 31, 2024 were $0.4 million and $0.8 million, respectively. The Company's accounts receivable from oil and gas sales were $0.7 million at January 1, 2024.

The following table details the change in the allowance for credit losses for the periods indicated (in thousands):

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Balance at beginning of period | $1072 | $— |
| Credit loss expense | 113 | 1072 |
| Deductions |  |  |
| Provision for credit loss at end of period | $1185 | $1072 |

---

Credit loss expense for the nine months ended September 30, 2025 and for the year ended December 31, 2024 are related to a single party and is recorded in G&A expense on the statement of operations.

***-***7***-***

------

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***September 30, 2025 and 2024***

*Recent Accounting Pronouncements* — In November 2024, FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE). The ASU primarily requires companies to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The new guidance will be effective for the Company's year ending December 31, 2027 and interim periods during the year ending December 31, 2028. The Company does not believe the new guidance will have a material impact on its consolidated financial statements and related disclosures.

**Note 2. Oil and Natural Gas Properties**

The following table reflects the aggregate capitalized costs associated with the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of** <br>**September 30, 2025** | **As of** <br>**December 31, 2024** |
| Oil and natural gas properties: |  |  |
| &nbsp;&nbsp;Unproved properties | $39148 | $39148 |
| &nbsp;&nbsp;Proved properties | 10654 | 17163 |
| &nbsp;&nbsp;Work in process | 3535 | 2935 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total oil and natural gas properties | 53337 | 59246 |
| &nbsp;&nbsp;Less: Accumulated depreciation, depletion, amortization, and impairment | (34340) | (7284) |
| &nbsp;&nbsp;&nbsp;&nbsp;Oil and natural gas properties, net | $18997 | $51962 |

---

Depletion expense was $0.5 million and $1.1 million for the nine months ended September 30, 2025 and 2024, respectively.

On March 11, 2025, the Company completed the sale of certain non-operated oil and natural gas wells with an effective date of March 1, 2025. The Company received proceeds of $1.0 million and recognized a net loss of $2.4 million for the nine months ended September 30, 2025.

For the nine months ended September 30, 2025, the Company recorded an impairment related to its oil and gas properties in the amount of $29.7 million based on terms outlined in the executed term sheet dated June 13, 2025. The calculation of the impairment is a Fair Value Level 3 non-recurring measurement.

**Note 3. Revenue**

The following table presents the disaggregation of oil and natural gas revenue of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Oil sales | $1506 | $2270 |
| Natural gas sales | 307 | 236 |
| Total oil and natural gas sales, net | $1813 | $2506 |

---

**Note 4. Asset Retirement Obligations**

The following table presents changes in asset retirement obligations of the Company (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of** <br>**September 30, 2025** | **As of** <br>**December 31, 2024** |
| Asset retirement obligations at beginning of period | $61 | $50 |
| &nbsp;&nbsp;Liabilities incurred |  | 7 |
| &nbsp;&nbsp;Liabilities settled and divested | (13) |  |
| &nbsp;&nbsp;Accretion expense on discounted obligation | 3 | 4 |
| Asset retirement obligations at end of period | $51 | $61 |

---

***-***8***-***

------

***PEAK BLM LEASE LLC AND SUBSIDIARY***

***UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***

***September 30, 2025 and 2024***

**Note 5. Commitments And Contingencies**

*Environmental Matters* — Various federal, state and local laws and regulations covering the discharge of materials into the environment, or otherwise relating to the protection of the environment, may affect the operations and the cost of crude oil and natural gas exploration, development, and production operations of the Company. The Company does not anticipate that it will be required in the near future to expend significant amounts for compliance with such federal, state and local laws and regulations, and therefore, no amounts have been accrued for such purposes. At September 30, 2025 and December 31, 2024, there were no known environmental or regulatory matters which are reasonably expected to result in a material liability to the Company.

*Government Regulation* — Many aspects of the oil and gas industry are extensively regulated by federal, state, and local governments in all areas in which the Company has operations. Regulations govern such things as drilling permits, environmental protection and pollution control, spacing of wells, the unitization and pooling of properties, reports concerning operations, royalty rates, and various other matters, including taxation. Oil and gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. As of September 30, 2025 and December 31, 2024, the Company has not been fined or cited for any violations of governmental regulations that would have a material adverse effect upon the financial condition, capital expenditures, earnings, or competitive position of the Company in the oil and gas industry.

*Litigation* — The Company is involved in various legal proceedings including, but not limited to, commercial disputes, claims from royalty and surface owners, property damage claims, personal injury claims, regulatory compliance matters, disputes with tax authorities and other matters. While the outcome of these legal matters cannot be predicted with certainty, the Company does not expect any such matters to have a material effect on its financial condition, results of operations or cash flows.

**Note 6. Related Party Transactions**

The Company is subject to an Administrative Service Agreement ("ASA") with Peak Exploration and Production, LLC ("Peak E&P"), an affiliate, that specifies that Peak E&P will perform administrative duties associated with the Company's properties. Per the ASA, the Company is to pay Peak E&P $0.1 million monthly. For the nine months ended September 30, 2025 and 2024 the Company reimbursed or accrued $0.9 million and $0.9 million, respectively. These reimbursements are reflected within "general and administrative" on the accompany condensed consolidated statements of operations. In addition, Peak E&P performs as the administrator of three jointly owned wells, which resulted in the Company paying $1.3 million and $0.5 million for the nine months ended September 30, 2025 and 2024, respectively for capital expenditures and/or lease operating expenses. During the nine months ended September 30, 2024, the Company purchased interests in two wells from Peak E&P in the amount of $3.2 million, which represents the historical book value.

**Note 7. Subsequent Events**

In preparing the accompanying consolidated financial statements of the Company, management has evaluated all subsequent events and transactions for potential recognition or disclosure through November 14, 2025, the date the consolidated financial statements of the Company were available for issuance. On August 11, 2025, the Company signed a Membership Interest Purchase Agreement ("MIPA") with a third-party purchaser, where the Company will be acquired by the third-party purchaser. The MIPA is expected to close on or around November 14, 2025.

***-***9***-***

------

## Exhibit 99.3

**Exhibit 99.3**

**Epsilon Energy Ltd.**

**Unaudited Pro Forma Condensed Combined Financial Information**

On August 11, 2025, Epsilon Energy Ltd. (the "Company" or "Epsilon") entered into (i) that Membership Interest Purchase Agreement (the "Peak E&P Purchase Agreement") by and among the Company, Epsilon Energy USA, Inc. ("Epsilon USA"), Peak Exploration & Production, LLC ("Peak E&P"), certain seller signatory thereto, and Yorktown Energy Partners XI, L.P., as representative of such sellers (such sellers and their representatives, collectively, "Yorktown"), and (ii) that Membership Interest Purchase Agreement (the "Peak BLM Purchase Agreement" and together with the Peak E&P Purchase Agreement, the "Purchase Agreements") by and among the Company, Epsilon USA, Yorktown, and Peak BLM Lease LLC ("Peak BLM"). Subject to the terms and conditions of the Purchase Agreements, Epsilon USA, a wholly owned subsidiary of the Company, will acquire all of the issued and outstanding limited liability company interests of each of Peak E&P and Peak BLM (collectively, together with their respective subsidiaries, the "Acquired Companies"), and as a result the Acquired Companies would become indirect wholly owned subsidiaries of the Company. The Purchase Agreements closed on November 14, 2025 (the "Closing Date").

Total consideration paid as of the Closing Date, was $88.5 million. Total consideration, as of the Closing Date, consisted of 5,591,372 common shares, no par value ("Common Shares"), of the Company at closing under the Peak E&P Purchase Agreement. At the Closing Date, the Company issued 90,117 Common Shares to Yorktown under the Peak BLM Purchase Agreement and, subject to the conditions of the Peak BLM Purchase Agreement, the Company issued an additional 2,234,847 Common Shares following the Closing Date on November 19, 2025. Epsilon shareholders will retain approximately 73.5% of Epsilon outstanding equity and approximately 26.5% will be owned by Yorktown. Additionally, the Company made a payment of $50.3 million (with proceeds from the Company's revolving credit facility), to satisfy all indebtedness of Peak E&P.

The Acquired Companies are privately held oil and gas exploration and production companies that operate in the Power River Basin ("PRB"). As of December 31, 2024, the Acquired Companies own approximately 39,600 net leasehold acres (out of 61,000 gross acres) in the PRB, primarily in Campbell and Converse Counties, Wyoming. The Acquired Companies' operations are focused on the development of multiple productive horizons, including the Parkman, Shannon, Turner, Niobrara, and Mowry formations, utilizing advanced horizontal drilling and completion technologies.

The acquisition of the Acquired Companies has been assumed to be accounted for as a business combination in accordance with Accounting Standards Codification Topic 805, *Business Combinations* ("ASC 805"). The assets acquired and liabilities assumed would be recorded at their respective fair values as of the Closing Date. Any transaction costs were assumed to be expensed as incurred in accordance with ASC 805. The unaudited pro forma condensed combined financial statements presented herein have been prepared to reflect the transaction accounting adjustments to Epsilon's historical condensed consolidated financial information.

The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2025 gives effect to the acquisition of the Acquired Companies as if it had been completed on September 30, 2025. The Unaudited Pro Forma Condensed Combined Statements of Operations for the Nine Months Ended September 30, 2025 and the Year Ended December 31, 2024 give effect to the acquisition of the Acquired Companies as if it had been completed on January 1, 2024. The unaudited pro forma condensed combined financial information has been compiled in a manner consistent with the accounting policies adopted by Epsilon. These pro forma adjustments are described in more detail in the accompanying notes to the unaudited pro forma condensed combined financial statements. Additional assumptions and estimates underlying the pro forma adjustments are also described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed combined financial statements.

------

The unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of Epsilon would have been had the acquisition of the Acquired Companies occurred on the dates noted above, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. Future results may vary significantly from the results reflected because of various factors. In Epsilon's opinion, all adjustments that are necessary to present fairly the unaudited pro forma condensed combined financial information have been made.

The unaudited pro forma condensed combined financial information does not reflect the benefits of potential cost savings or the costs that may be necessary to achieve such savings, opportunities to increase revenue generation or other factors that may result from the acquisition of the Acquired Companies and, accordingly, does not attempt to predict or suggest future results.

The unaudited pro forma condensed combined financial statements have been developed from and should be read in conjunction with:

&nbsp;&nbsp;&nbsp;&nbsp;• The audited consolidated financial statements and accompanying notes of Epsilon contained in Epsilon's Annual Report on Form 10-K for the year ended December 31, 2024;

&nbsp;&nbsp;&nbsp;&nbsp;• The unaudited consolidated financial statements and accompanying condensed notes contained in Epsilon's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;• The audited consolidated financial statements and related notes of Peak E&P for the year ended December 31, 2024, which are included elsewhere in this filing;

&nbsp;&nbsp;&nbsp;&nbsp;• The audited consolidated financial statements and related notes of Peak BLM for the year ended December 31, 2024, which are included elsewhere in this filing;

&nbsp;&nbsp;&nbsp;&nbsp;• The unaudited consolidated financial statements and related notes of Peak E&P as of September 30, 2025 and for the nine months ended September 30, 2025, which are included elsewhere in this filing; and

&nbsp;&nbsp;&nbsp;&nbsp;• The unaudited consolidated financial statements and related notes of Peak BLM as of September 30, 2025 and for the nine months ended September 30, 2025, which are included elsewhere in this filing.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** |
| **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** |
| **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
|  |  |  |  | **Transaction Accounting Adjustments** | **Transaction Accounting Adjustments** |  |
|  | **Historical** | **Historical** | **Historical** | | | **Pro Forma** |
|  | **Epsilon** | **Peak BLM** | **Peak E&P** | **Conforming and**<br>**Reclassifications** | **Acquisition**<br>**Adjustments** | **Combined** |
| **ASSETS** |  |  |  |  |  |  |
| &nbsp;&nbsp;*Current assets* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $12766167 | $15000 | $5172000 | $— | $50336000<br> (b) | $17953167 |
|  |  |  |  |  | (50336000)<br> (b) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 4515199 | 609000 | 9005000 |  |  | 14129199 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of derivatives | 889187 |  |  | 712000<br> (a) |  | 1601187 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives |  |  | 712000 | (712000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid income taxes |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories |  |  | 105000 | (105000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 965970 |  |  | 722000<br> (a) |  | 1826970 |
|  |  |  |  | 105000<br> (a) |  |  |
|  |  |  |  | 34000<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 34000 | 722000 | (722000)<br> (a) |  |  |
|  |  |  |  | (34000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 19136523 | 658000 | 15716000 |  |  | 35510523 |
| &nbsp;&nbsp;*Non-current assets* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Property and equipment:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and gas properties, successful efforts method |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proved properties | 200066005 |  |  | 539426000<br> (a) | (539426000)<br> (c) | 245421691 |
|  |  |  |  |  | 44000000<br> (d) |  |
|  |  |  |  |  | 1355686<br> (e) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unproved properties | 33396744 |  |  | 63158000<br> (a) | (63158000)<br> (c) | 89074837 |
|  |  |  |  |  | 55678093<br> (d) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated depletion, depreciation, amortization and impairment | (134181378) |  |  | (477846000)<br> (a) | 477846000<br> (c) | (134181378) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and natural gas property and equipment, based on successful efforts method accounting, net |  | 18997000 | 105741000 | (124738000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total oil and gas properties, net | 99281371 | 18997000 | 105741000 |  | (23704221) | 200315150 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gathering system | 43540301 |  |  | 4308000<br> (a) |  | 47848301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated depletion, depreciation, amortization and impairment | (37271826) |  |  | (3728000)<br> (a) |  | (40999826) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total gathering system, net | 6268475 |  |  | 580000 |  | 6848475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land | 637764 |  |  | 594000<br> (a) |  | 1231764 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buildings and other property and equipment, net | 221901 |  |  | 740000<br> (a) | 3070000<br> (j) | 4031901 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other property, plant and equipment, net |  |  | 1334000 | (1334000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total property and equipment, net | 106409511 | 18997000 | 107075000 | 580000 | (20634221) | 212427290 |
| &nbsp;&nbsp;**Other assets:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets |  |  | 276000 | (276000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease right-of-use assets, long term | 272298 |  |  | 276000<br> (a) |  | 548298 |
| &nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 470000 |  |  |  |  | 470000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Commodity derivatives |  |  | 538000 | (538000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Fair value of derivatives |  |  |  | 538000<br> (a) |  | 538000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Prepaid drilling costs | 4673 |  |  |  |  | 4673 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other assets, net |  |  | 940000 | (580000)<br> (a) |  | 360000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 107156482 | 18997000 | 108829000 |  | (20634221) | 214348261 |
| **Total assets** | $126293005 | $19655000 | $124545000 | $— | $(20634221) | $249858784 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** |
| **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** | **Unaudited Pro Forma Condensed Combined Balance Sheet** |
| **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
|  |  |  |  | **Transaction Accounting Adjustments** | **Transaction Accounting Adjustments** |  |
|  | **Historical** | **Historical** | **Historical** | | | **Pro Forma** |
|  | **Epsilon** | **Peak BLM** | **Peak E&P** | **Conforming and**<br>**Reclassifications** | **Acquisition**<br>**Adjustments** | **Combined** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |
| &nbsp;&nbsp;*Current liabilities* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable trade | $2963805 | $— | $— | $8003000 | $2470000<br> (i) | $13436805 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gathering fees payable | 978890 |  |  |  |  | 978890 |
| &nbsp;&nbsp;&nbsp;&nbsp;Royalties payable | 1481520 |  |  |  |  | 1481520 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 1556724 |  |  |  |  | 1556724 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued capital expenditures | 1605705 |  |  | 19000<br> (a) |  | 1624705 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 726213 |  |  |  |  | 726213 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other accrued liabilities | 490970 |  |  | 2169000<br> (a) | 3900000<br> (f) | 9073970 |
|  |  |  |  | 2514000<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of derivatives  |  |  |  | 104000<br> (a) |  | 104000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | 120799 |  |  | 150000<br> (a) |  | 270799 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses |  | 276000 | 10260000 | (19000)<br> (a) |  |  |
|  |  |  |  | (2514000)<br> (a) |  |  |
|  |  |  |  | (8003000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Oil and natural gas revenue payable |  |  | 9565000 |  |  | 9565000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Production and ad valorem taxes payable |  |  | 2169000 | (2169000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives |  |  | 104000 | (104000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt |  |  | 48262000 |  | (50336000)<br> (b) |  |
|  |  |  |  |  | 736000<br> (b) |  |
|  |  |  |  |  | 1338000<br> (b) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use liabilities |  |  | 150000 | (150000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 9924626 | 276000 | 70510000 |  | (41892000) | 38818626 |
| &nbsp;&nbsp;*Non-current liabilities* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset retirement obligations | 3822030 | 51000 | 3066000 |  | (1761315)<br> (e) | 5177715 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving line of credit |  |  |  |  | 50336000<br> (b) | 50336000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 12062053 |  |  |  |  | 12062053 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities, long term | 266263 |  |  | 142000<br> (a) |  | 408263 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of derivatives |  |  |  | 261000<br> (a) |  | 261000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ad valorem taxes |  |  | 8284000 |  |  | 8284000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration |  |  |  |  | 10637872<br> (h) | 10637872 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commodity derivatives |  |  | 261000 | (261000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use liabilities |  |  | 142000 | (142000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Long term debt, net |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current liabilities | 16150346 | 51000 | 11753000 |  | 59212557 | 87166903 |
| **Total liabilities** | 26074972 | 327000 | 82263000 |  | 17320557 | 125985529 |
| **Commitments and contingencies** |  |  |  |  |  |  |
| &nbsp;&nbsp;*Shareholders'/Member's equity* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred shares |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common shares | 116081031 |  |  |  | 27555222<br> (g) | 143636253 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 13267196 |  |  |  |  | 13267196 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 9864979 |  |  |  |  | 9864979 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred equity |  |  | 95886000 |  | (95886000)<br> (c) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common equity |  | 57000000 | 242518000 |  | (299518000)<br> (c) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (38995173) | (37672000) | (296122000) |  | 335132000<br> (c) | (42895173) |
|  |  |  |  |  | (3900000)<br> (f) |  |
|  |  |  |  |  | (1338000)<br> (b) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 100218033 | 19328000 | 42282000 |  | (37954778) | 123873255 |
| **Total liabilities and shareholders'/member's equity** | $126293005 | $19655000 | $124545000 | $— | $(20634221) | $249858784 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** |
| **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** |
| **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** |
|  |  |  |  | **Transaction Accounting Adjustments** | **Transaction Accounting Adjustments** |  |
|  | **Historical** | **Historical** | **Historical** | | | **Pro Forma** |
|  | **Epsilon** | **Peak BLM** | **Peak E&P** | **Conforming and**<br>**Reclassifications** | **Acquisition**<br>**Adjustments** | **Combined** |
| **Revenues from contracts with customers:**  |  |  |  |  |  |  |
| &nbsp;&nbsp;Gas, oil, NGL, and condensate revenue | $31586766 | $1813000 | $23153000 | $— | $— | $56552766 |
| &nbsp;&nbsp;Gas gathering and compression revenue  | 5182566 |  |  |  |  | 5182566 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 36769332 | 1813000 | 23153000 |  |  | 61735332 |
| **Operating costs and expenses:** |  |  |  |  |  |  |
| &nbsp;&nbsp;Lease operating expenses | 7615735 | 350000 | 7497000 | 3206000<br> (a) |  | 18668735 |
| &nbsp;&nbsp;Gathering system operating expenses | 1729988 |  |  |  |  | 1729988 |
| &nbsp;&nbsp;Depletion, depreciation, amortization, and accretion | 9247973 |  |  | 8468000<br> (a) | (5864836)<br> (b) | 11871904 |
|  |  |  |  | 169000<br> (a) | (148233)<br> (b) |  |
| &nbsp;&nbsp;Depletion, depreciation, amortization |  | 545000 | 7923000 | (8468000)<br> (a) |  |  |
| &nbsp;&nbsp;Accretion expense |  | 3000 | 166000 | (169000)<br> (a) |  |  |
| &nbsp;&nbsp;Impairment expense | 2676669 |  |  | 1716000<br> (a) |  | 4392669 |
| &nbsp;&nbsp;Production and ad valorem taxes |  | 233000 | 2973000 | (3206000)<br> (a) |  |  |
| &nbsp;&nbsp;Abandonment |  |  | 1716000 | (1716000)<br> (a) |  |  |
| &nbsp;&nbsp;Impairment of oil and gas properties |  | 29655000 | 18333000 |  | (47988000)<br> (g) |  |
| &nbsp;&nbsp;General and administrative expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;Stock based compensation expense | 1148289 |  |  |  |  | 1148289 |
| &nbsp;&nbsp;Other general and administrative expenses | 5748081 |  |  | 6248000<br> (a) | (280855)<br> (h) | 11715226 |
| &nbsp;&nbsp;General and administrative |  | 1659000 | 4589000 | (6248000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating costs and expenses  | 28166735 | 32445000 | 43197000 |  | (54281924) | 49526811 |
| **Operating income (loss)** | 8602597 | (30632000) | (20044000) |  | 54281924 | 12208521 |
| **Other income (expense):** |  |  |  |  |  |  |
| &nbsp;&nbsp;Interest income  | 117440 | 163000 |  |  |  | 280440 |
| &nbsp;&nbsp;Interest expense | (43783) | 8000 | (5549000) |  | 2762720<br> (c) | (2822063) |
| &nbsp;&nbsp;Gain on derivative contracts | 2076000 |  | 3173000 |  |  | 5249000 |
| &nbsp;&nbsp;Other expense | (28086) |  |  |  |  | (28086) |
| &nbsp;&nbsp;Loss on sale of assets |  | (2383000) | (3000) |  | 2386000<br> (i) |  |
| &nbsp;&nbsp;Other gain |  |  | 324000 |  |  | 324000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 2121571 | (2212000) | (2055000) |  | 5148720 | 3003291 |
| **Net income (loss) before income tax expense (benefit)** | 10724168 | (32844000) | (22099000) |  | 59430644 | 15211812 |
| &nbsp;&nbsp;Income tax expense | 4084378 |  |  |  | 942405<br> (d) | 5026783 |
| **NET INCOME (LOSS)** | $6639790 | $(32844000) | $(22099000) | $— | $58488239 | $10185029 |
| **Net income per share, basic** | $0.30 |  |  |  | $0.07 <br> (e) | $0.37  |
| **Net income per share, diluted** | $0.30 |  |  |  | $0.04 <br> (e) | $0.34  |
| **Weighted average number of shares outstanding, basic** | 22028248 |  |  |  | 5681489<br> (e) | 27709737 |
| **Weighted average number of shares outstanding, diluted** | 22170223 |  |  |  | 7916336<br> (e) | 30086559 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** | **Epsilon Energy Ltd.** |
| **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** | **Unaudited Pro Forma condensed Combined Statements of Operations** |
| **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** |
|  |  |  |  | **Transaction Accounting Adjustments** | **Transaction Accounting Adjustments** |  |
|  | **Historical** | **Historical** | **Historical** | | | **Pro Forma** |
|  | **Epsilon** | **Peak BLM** | **Peak E&P** | **Conforming and**<br>**Reclassifications** | **Acquisition**<br>**Adjustments** | **Combined** |
| **Revenues from contracts with customers:**  |  |  |  |  |  |  |
| &nbsp;&nbsp;Gas, oil, NGL, and condensate revenue | $25998712 | $3504000 | $41740000 | $— | $— | $71242712 |
| &nbsp;&nbsp;Gas gathering and compression revenue  | 5524063 |  |  |  |  | 5524063 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 31522775 | 3504000 | 41740000 |  |  | 76766775 |
| **Operating costs and expenses:** |  |  |  |  |  |  |
| &nbsp;&nbsp;Lease operating expenses | 7264824 | 740000 | 11750000 | 5917000<br> (a) |  | 25671824 |
| &nbsp;&nbsp;Gathering system operating expenses | 2265190 |  |  |  |  | 2265190 |
| &nbsp;&nbsp;Depletion, depreciation, amortization, and accretion | 10185119 |  |  | 228000<br> (a) | (9656450)<br> (b) | 14207738 |
|  |  |  |  | 13596000<br> (a) | (144931)<br> (b) |  |
| &nbsp;&nbsp;Depletion, depreciation, amortization |  | 1413000 | 12183000 | (13596000)<br> (a) |  |  |
| &nbsp;&nbsp;Accretion expense |  | 5000 | 223000 | (228000)<br> (a) |  |  |
| &nbsp;&nbsp;Impairment expense | 1450076 |  |  | 7118000<br> (a) |  | 8568076 |
| &nbsp;&nbsp;Production and ad valorem taxes |  | 464000 | 5453000 | (5917000)<br> (a) |  |  |
| &nbsp;&nbsp;Abandonment |  | 886000 | 6232000 | (7118000)<br> (a) |  |  |
| &nbsp;&nbsp;General and administrative expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;Stock based compensation expense | 1244416 |  |  |  |  | 1244416 |
| &nbsp;&nbsp;Other general and administrative expenses | 5688714 |  |  | 9747000<br> (a) | 3900000<br> (f) | 19335714 |
|  |  |  |  |  | (1587291)<br> (h) | (1587291) |
| &nbsp;&nbsp;General and administrative |  | 2835000 | 6912000 | (9747000)<br> (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating costs and expenses  | 28098339 | 6343000 | 42753000 |  | (7488672) | 69705667 |
| **Operating income (loss)** | 3424436 | (2839000) | (1013000) |  | 7488672 | 7061108 |
| **Other income (expense):** |  |  |  |  |  |  |
| &nbsp;&nbsp;Interest income  | 493277 | 38000 |  |  |  | 531277 |
| &nbsp;&nbsp;Interest expense | (46400) |  | (8630000) |  | 4914960<br> (c) | (3761440) |
| &nbsp;&nbsp;Loss on derivative contracts | (391147) |  | (2128000) |  |  | (2519147) |
| &nbsp;&nbsp;Other income | 76727 | 317000 | 480000 |  |  | 873727 |
| &nbsp;&nbsp;Loss on sale of assets |  |  | (301000) |  | 301000<br> (i) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 132457 | 355000 | (10579000) |  | 5215960 | (4875583) |
| **Net income (loss) before income tax expense (benefit)** | 3556893 | (2484000) | (11592000) |  | 12704632 | 2185525 |
| &nbsp;&nbsp;Income tax expense (benefit) | 1629093 |  |  |  | (287987)<br> (d) | 1341106 |
| **NET INCOME (LOSS)** | $1927800 | $(2484000) | $(11592000) | $— | $12992619 | $844419 |
| **Net income (loss) per share, basic** | $0.09 |  |  |  | $($0.06)<br> (e) | $0.03  |
| **Net income (loss) per share, diluted** | $0.09 |  |  |  | $($0.06)<br> (e) | $0.03  |
| **Weighted average number of shares outstanding, basic** | 21930277 |  |  |  | 5681489<br> (e) | 27611766 |
| **Weighted average number of shares outstanding, diluted** | 21930277 |  |  |  | 7916336<br> (e) | 29846613 |

---

------

**Epsilon Energy Ltd.**

**Notes to Unaudited Pro Forma Condensed Combined Financial Information**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Basis of Presentation** 

The accompanying unaudited pro forma condensed combined financial statements were prepared based on the historical consolidated financial statements of Epsilon and the historical consolidated financial statements of Peak E&P and Peak BLM. The acquisition of the Acquired Companies has been assumed to be accounted for as a business combination in accordance with ASC 805. The assets acquired and liabilities assumed are estimated at their respective fair values as of September 30, 2025. Any transaction costs were assumed to be expensed as incurred in accordance with ASC 805.

The Unaudited Pro Forma Condensed Combined Statements of Operations for the Nine Months Ended September 30, 2025 and the Year Ended December 31, 2024 were prepared assuming the acquisition of the Acquired Companies occurred on January 1, 2024. The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2025 was prepared as if the acquisition of the Acquired Companies had occurred on September 30, 2025. These pro forma adjustments are described in more detail in the accompanying notes to the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of Epsilon would have been had the acquisition of the Acquired Companies occurred on the dates noted above, nor are they indicative of future consolidated results of operations or consolidated financial position. Future results may vary significantly from the results reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations. In Epsilon's opinion, all adjustments that are necessary to fairly present the unaudited pro forma condensed combined financial information have been made.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Consideration and Purchase Price Allocation** 

The preliminary allocation of the total purchase price is based upon management's estimates of, and assumptions related to, the fair value of assets acquired and liabilities to be assumed as of November 14, 2025, using currently available information and market data. Because the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on financial position and results of operations may differ significantly from the pro forma amounts included herein.

The preliminary purchase price allocation is subject to change due to several factors, including but not limited to changes in the estimated fair value of assets acquired and liabilities assumed as of the closing date of the transaction, which could result from changes in future oil and natural gas commodity prices, reserve estimates, interest rates, as well as other factors.

------

The consideration transferred and the fair value of assets acquired and liabilities assumed by Epsilon are as follows:

---

| | |
|:---|:---|
| **Consideration:** | 5681489 |
| &nbsp;&nbsp;Common Shares issued | $4.85 |
| &nbsp;&nbsp;Common Share price at November 14, 2025 | $27555222 |
| &nbsp;&nbsp;Common Shares consideration | 2234847 |
| &nbsp;&nbsp;Contingent consideration | $4.76 |
| &nbsp;&nbsp;Common Share price at November 19, 2025 | 10637872 |
| &nbsp;&nbsp;Contingent consideration | 50336000 |
| &nbsp;&nbsp;Repayment of indebtedness of Peak E&P | $88529093 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total consideration |  |
| **Fair value of assets acquired:** |  |
| &nbsp;&nbsp;Cash and cash equivalents | $5187000 |
| &nbsp;&nbsp;Accounts receivable, net | 9614000 |
| &nbsp;&nbsp;Fair value of derivatives, current | 712000 |
| &nbsp;&nbsp;Other assets, current | 861000 |
| &nbsp;&nbsp;Oil and gas properties | 101033779 |
| &nbsp;&nbsp;Other property and equipment | 4984000 |
| &nbsp;&nbsp;Fair value of derivatives, non-current | 538000 |
| &nbsp;&nbsp;Other assets, non-current | 636000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amounts attributable to assets acquired | $123565779 |
| **Fair value of liabilities assumed:** |  |
| &nbsp;&nbsp;Accounts payable trade | $10473000 |
| &nbsp;&nbsp;Accrued capital expenditures | 19000 |
| &nbsp;&nbsp;Oil and natural gas revenue payable | 9565000 |
| &nbsp;&nbsp;Other accrued liabilities | 4683000 |
| &nbsp;&nbsp;Fair value of derivatives, current | 104000 |
| &nbsp;&nbsp;Operating lease liabilities, current | 150000 |
| &nbsp;&nbsp;Asset retirement obligation | 1355686 |
| &nbsp;&nbsp;Fair value of derivatives, non-current | 261000 |
| &nbsp;&nbsp;Operating lease liabilities, non-current | 142000 |
| &nbsp;&nbsp;Other liabilities, non-current | 8284000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts attributable to liabilities assumed | $35036686 |
| **Total identifiable net assets** | $88529093 |

---

The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair value of oil and gas properties and asset retirement obligations were measured using the discounted cash flow technique of valuation.

Significant unobservable inputs included future commodity prices adjusted for differentials, projections of estimated quantities of recoverable reserves, forecasted production based on decline curve analysis, estimated timing and amount of future operating and development costs, and a weighted average cost of capital.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet and Unaudited Pro Forma Condensed Combined Statements of Operations** 

The unaudited pro forma condensed combined financial information has been compiled in a manner consistent with the accounting policies adopted by Epsilon. Actual results may differ materially from the assumptions and estimates contained herein.

The pro forma adjustments are based on currently available information and certain estimates and assumptions that Epsilon believes provide a reasonable basis for presenting the significant effects of the acquisition of the Acquired Companies. General descriptions of the pro forma adjustments are provided below.

------

***Unaudited Pro Forma Condensed Combined Balance Sheet***

The following adjustments were made in the preparation of the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Adjustments necessary to reclassify various assets and liabilities to conform to the presentation of Epsilon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As a closing condition to consummate the acquisition of the Acquired Companies, Epsilon repaid the outstanding debt of Peak E&P of $50.3 million. Epsilon drew down on its revolving line of credit in order to repay the outstanding debt of Peak E&P. The outstanding debt of Peak E&P includes $1.3 million of unamortized debt issuance costs, which will be written off by Peak E&P and is shown as a charge against accumulated deficit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Adjustments necessary to remove the historical book basis of proved property, unproved property, accumulated depreciation, depletion, amortization and impairment as well as the historical book basis of member's equity of the Acquired Companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Adjustments necessary to reflect the estimated fair value of proved and unproved oil and natural gas properties. The fair value of proved oil and natural gas properties was estimated using a discounted cash flow approach and strip oil and natural gas prices as of November 14, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Adjustments necessary to reflect the estimated fair value of asset retirement obligations assumed as of September 30, 2025. The fair value of asset retirement obligations was estimated using assumptions consistent with those of Epsilon, including a credit-adjusted risk-free rate of 8.25%, an inflation rate of 2.0%, a 35 year well life and a reclamation cost of $0.2 million per well.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Adjustment necessary to reflect estimated direct costs for the acquisition of the Acquired Companies expected to be incurred subsequent to September 30, 2025. These estimated direct costs will be incurred during the latter part of 2025 and early 2026 and have been retrospectively reflected in the Unaudited Pro Forma Condensed Combined Balance Sheet as though incurred and payable at September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Adjustment necessary to reflect the issuance of 5,681,489 Common Shares of Epsilon, based on the November 14, 2025 closing price of Epsilon of $4.85 per Common Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Under the Peak BLM Purchase Agreement and, subject to the conditions of the Peak BLM Purchase Agreement, Epsilon issued an additional 2,234,847 Common Shares which settled on November 19, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Adjustment to include certain incremental liabilities of the sellers that are being assumed by Epsilon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Adjustment necessary to reflect the estimated fair value of a building acquired from Peak E&P. The value of the building acquired was based upon a third-party appraisal.

***Unaudited Pro Forma Condensed Combined Statements of Operations***

The following adjustments were made in the preparation of the Unaudited Pro Forma Condensed Combined Statements of Operations for the Nine Months Ended September 30, 2025 and the Year Ended December 31, 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Adjustments necessary to reclassify various expenses to conform to the presentation of Epsilon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Adjustments necessary to depreciation, depletion, and amortization expense resulting from the change in basis of property and equipment acquired and accretion expense from new asset retirement obligations recognized as a result of the acquisition of the Acquired Companies. The depletion adjustment was calculated using the unit-of-production method under the successful efforts method of accounting using estimated proved reserves and production volumes attributable to the Acquired Companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Adjustment necessary to reflect the estimated interest expense in the period presented with respect to the incremental borrowings to finance the acquisition of the Acquired Companies. The interest rate utilized as of September 30, 2025 was 7.5% per annum. A one-eighth point change in interest rates as of September 30, 2025 would change interest expense by $0.1 million for the nine months ended September 30, 2025 and the year ended December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Adjustment necessary to reflect estimated income taxes from the operations of the Acquired Companies. Income taxes were estimated by applying the statutory rate of 21.0% to pre-tax income of the operations of the Acquired Companies and to the transaction accounting adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The following table reconciles historical and pro forma basic and diluted earnings per share for the period indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Nine Months** | **For the Nine Months** | **For the Year Ended** | **For the Year Ended** |
|  | **Ended September 30, 2025** | **Ended September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Historical** | **Pro Forma** | **Historical** | **Pro Forma** |
| Net Income | $6639790 | $10185029 | $1927800 | $844419 |
| Common shares: |  |  |  |  |
| &nbsp;&nbsp;Common Shares outstanding — basic | 22028248 | 27709737 | 21930277 | 27611766 |
| &nbsp;&nbsp;Dilutive effect of potential Common Shares | 141975 | 2376822 |  | 2234847 |
| &nbsp;&nbsp;Common Shares outstanding — diluted | $22170223 | $30086559 | $21930277 | $29846613 |
| Net income per share: |  |  |  |  |
| &nbsp;&nbsp;Basic | $0.30 | $0.37 | $0.09 | $0.03 |
| &nbsp;&nbsp;Diluted | $0.30 | $0.34 | $0.09 | $0.03 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Adjustment necessary to reflect estimated direct costs expected to be incurred subsequent to September 30, 2025 for the acquisition of the Acquired Companies. These estimated direct costs will be incurred during the latter part of 2025 and early 2026 and have been retrospectively reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations as though incurred for the year ended December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Adjustment necessary to remove impairments during the nine months ended September 30, 2025. The Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2025, assumes the acquisition of the Acquired Companies occurred on January 1, 2024 and the acquired assets are recorded at their respective fair values, including oil and gas properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Adjustment necessary to remove certain non-recurring general and administrative costs of the Acquired Companies. During the nine months ended September 30, 2025 and the year ended December 31, 2024, the Acquired Companies incurred various non-recurring costs in preparation for an initial public offering. These costs included legal, accounting, consulting, engineering and other associated costs. Such amounts represent non-recurring costs that will not impact the ongoing operations of the Acquired Companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Adjustment necessary to remove losses on the sale of certain assets during the nine months ended September 30, 2025 and the year ended December 31, 2024. The Unaudited Pro Forma Condensed Combined Statements of Operations for the Nine Months ended September 30, 2025 and the Year Ended December 31, 2024, assumes the acquisition of the Acquired Companies occurred on January 1, 2024 and the acquired assets are recorded at their respective fair values, including oil and gas properties and other property, plant and equipment.

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&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Supplemental Unaudited Pro Forma Combined Oil and Natural Gas Reserves and Standardized Measure Information** 

The following tables set forth information with respect to the historical and pro forma combined estimated oil and natural gas reserves as of December 31, 2024 for Epsilon, Peak BLM and Peak E&P. The reserve information of Epsilon has been prepared by DeGolyer and MacNaughton, independent petroleum engineers. Peak BLM and Peak E&P reserve information has been prepared by Cawley, Gillespie and Associates, Inc., independent petroleum engineers. The following unaudited pro forma combined proved reserve information is not necessarily indicative of the results that might have occurred had the acquisition of the Acquired Companies taken place on January 1, 2024, nor is it intended to be a projection of future results. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Periodic revisions or removals of estimated reserves and future cash flows may be necessary as a result of a number of factors, including reservoir performance, new drilling, crude oil and natural gas prices, changes in costs, technological advances, new geological or geophysical data, changes in business strategies, or other economic factors. Accordingly, proved reserve estimates may differ significantly from the quantities of crude oil and natural gas ultimately recovered. For Epsilon, Peak BLM and Peak E&P, the reserve estimates shown below were determined using the average first day of the month price for each of the preceding 12 months for oil and natural gas for the year ended December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** |
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |  |
|  | | | | **Pro Forma** |
|  | <br>**Epsilon** | <br>**Peak BLM** | <br>**Peak E&P** | **Combined** |
| **Natural Gas (MMcf)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2023 | 65915 | 953 | 28235 | 95103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revisions of previous estimates | 8157 | 717 | (2853) | 6021 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 1471 | 1003 | 387 | 2861 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Extensions |  | 945 | 9592 | 10537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Divestitures |  | (387) | (1004) | (1391) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production | (6142) | (211) | (2323) | (8676) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2024 | 69401 | 3020 | 32034 | 104455 |
| **Natural Gas Liquids (MBbl)** <sup>(2)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2023 | 383 |  |  | 383 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revisions of previous estimates | 88 |  |  | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 475 |  |  | 475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Extensions |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Divestitures |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production | (69) |  |  | (69) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2024 | 877 |  |  | 877 |
| **Oil and Condensate (MBbl)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2023 | 341 | 274 | 5011 | 5626 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revisions of previous estimates | 223 | 14 | (459) | (222) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 1192 | 48 | 19 | 1259 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Extensions |  | 202 | 1117 | 1319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Divestitures |  | (19) | (48) | (67) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production | (184) | (43) | (507) | (734) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2024 | 1572 | 476 | 5133 | 7181 |
| **Total Company (Mmcfe)** <sup>(1)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2023 | 70262 | 2597 | 58301 | 131160 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revisions of previous estimates | 10022 | 801 | (5606) | 5217 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 11473 | 1291 | 501 | 13265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Extensions |  | 2157 | 16294 | 18451 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Divestitures |  | (501) | (1291) | (1792) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production | (7660) | (469) | (5365) | (13494) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proved reserves at December 31, 2024 | 84097 | 5876 | 62834 | 152807 |

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<sup>(1)</sup> Assumes a ratio of 1 bbl of oil per 6 Mcfe.

<sup>(2)</sup> Peak E&P and Peak BLM reserve quantities are shown in 2-streams, with natural gas liquids included with natural gas.

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| | | | | |
|:---|:---|:---|:---|:---|
| **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** |
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |  |
|  | | | | **Pro Forma** |
|  | <br>**Epsilon** | <br>**Peak BLM** | <br>**Peak E&P** | **Combined** |
| Proved developed reserves: |  |  |  |  |
| &nbsp;&nbsp;Oil (MBbl) | 847 | 274 | 3562 | 4683 |
| &nbsp;&nbsp;Natural Gas (MMcf) | 56851 | 2075 | 18283 | 77209 |
| &nbsp;&nbsp;Natural gas liquids (MBbl) <sup>(2)</sup> | 490 |  |  | 490 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total proved developed reserves (Mmcfe) <sup>(1)</sup> | 64872 | 3720 | 39657 | 108249 |
| Proved undeveloped reserves: |  |  |  |  |
| &nbsp;&nbsp;Oil (MBbl) | 725 | 202 | 1571 | 2498 |
| &nbsp;&nbsp;Natural Gas (MMcf) | 12550 | 945 | 13751 | 27246 |
| &nbsp;&nbsp;Natural gas liquids (MBbl) <sup>(2)</sup> | 387 |  |  | 387 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total proved undeveloped reserves (Mmcfe) <sup>(1)</sup> | 19225 | 2156 | 23177 | 44558 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** | **ESTIMATED OIL AND NATURAL GAS RESERVES** |
|  | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** |  |
|  | | | | **Pro Forma** |
|  | <br>**Epsilon** | <br>**Peak BLM** | <br>**Peak E&P** | **Combined** |
| Proved developed reserves: |  |  |  |  |
| &nbsp;&nbsp;Oil (MBbl) | 272 | 274 | 4306 | 4852 |
| &nbsp;&nbsp;Natural Gas (MMcf) | 47555 | 953 | 20374 | 68882 |
| &nbsp;&nbsp;Natural gas liquids (MBbl) <sup>(2)</sup> | 249 |  |  | 249 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total proved developed reserves (Mmcfe) <sup>(1)</sup> | 50681 | 3720 | 39657 | 99488 |
| Proved undeveloped reserves: |  |  |  |  |
| &nbsp;&nbsp;Oil (MBbl) | 69 |  | 705 | 774 |
| &nbsp;&nbsp;Natural Gas (MMcf) | 18361 |  | 7861 | 26222 |
| &nbsp;&nbsp;Natural gas liquids (MBbl) <sup>(2)</sup> | 134 |  |  | 134 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total proved undeveloped reserves (Mmcfe) <sup>(1)</sup> | 19579 | 2156 | 23177 | 31670 |

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<sup>(1)</sup> Assumes a ratio of 1 bbl of oil per 6 Mcfe.

<sup>(2)</sup> Peak E&P and Peak BLM reserve quantities are shown in 2-streams, with natural gas liquids included with natural gas.

The following table presents the Standardized Measure of Discounted Future Net Cash Flows (as defined by FASB Accounting Standards Codification 932) relating to the proved crude oil and natural gas reserves of Epsilon and of the Acquired Companies on a pro forma combined basis as of December 31, 2024. The Pro Forma Combined Standardized Measure shown below represents estimates only and should not be construed as the market value of either Epsilon's crude oil and natural gas reserves or the crude oil and natural gas reserves attributable to the Acquired Companies.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** |
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |  |  |
|  | | | | **Transaction** | **Pro Forma** |
|  | <br>**Epsilon** | <br>**Peak BLM** | <br>**Peak E&P** | **Adjustments** | **Combined** |
| Future cash inflows | $248266584 | $41000900 | $441235616 | $— | $730503100 |
| Future production costs | (109070217) | (17976409) | (208937432) |  | (335984058) |
| Future development costs | (31461723) | (4633644) | (55168825) |  | (91264192) |
| Future income taxes | (18611204) |  |  | (19267334)<br> (a) | (37878538) |
| &nbsp;&nbsp;**Future net cash flows (undiscounted)** | 89123440 | 18390847 | 177129359 | (19267334) | 265376312 |
| 10% annual discount for estimated timing of cash flows | (38466846) | (8850431) | (84035064) | 8439101<br> (a) | (122913240) |
| &nbsp;&nbsp;**Standardized measure of discounted future net cash flows** | $50656594 | $9540416 | $93094295 | $(10828233) | $142463072 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Transaction adjustments represent the estimated effect of income taxes on the undiscounted and discounted future net cash flows associated with Peak BLM and Peak E&P.

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The following table sets forth the changes in the Standardized Measure of discounted future net cash flows attributable to estimated net proved crude oil and natural gas reserves of Epsilon and the Acquired Companies on a pro forma combined basis for the year ending December 31, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** | **CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE CASH FLOWS** |
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |  |  |
|  | | | | **Transaction** | **Pro Forma** |
|  | <br>**Epsilon** | <br>**Peak BLM** | <br>**Peak E&P** | **Adjustments** | **Combined** |
| **Beginning of year** | $32972908 | $7471670 | $115563752 | $(13034672)<br> (a) | $142973658 |
| &nbsp;&nbsp;Revenue less production and other costs | (17599243) | (2357423) | (24537391) |  | (44494057) |
| &nbsp;&nbsp;Changes in price, net of production costs | (3339422) | (1313485) | (8637392) |  | (13290299) |
| &nbsp;&nbsp;Development costs incurred | 14319839 | (20030) |  |  | 14299809 |
| &nbsp;&nbsp;Net changes in future development costs | (26549734) | 664820 | 5760297 |  | (20124617) |
| &nbsp;&nbsp;Revisions of previous quantity estimates | 6014458 | 1350685 | (12343143) |  | (4978000) |
| &nbsp;&nbsp;Accretion of discount | 3742998 | 747167 | 11556375 | 1303467<br> (a) | 17350007 |
| &nbsp;&nbsp;Net change in income taxes | (3647700) |  |  | 902972<br> (a) | (2744728) |
| &nbsp;&nbsp;Purchases of reserves in place | 40846884 | 1457831 | 572562 |  | 42877277 |
| &nbsp;&nbsp;Extensions |  | 2180312 | 11602891 |  | 13783203 |
| &nbsp;&nbsp;Sale of reserves in place |  | (572562) | (1457831) |  | (2030393) |
| &nbsp;&nbsp;Timing differences and other technical revisions | 3895607 | (68569) | (4985825) |  | (1158787) |
| **End of year** | $50656595 | $9540416 | $93094295 | $(10828233) | $142463073 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Transaction adjustments represent the estimated effect of income taxes on the undiscounted and discounted future net cash flows associated with Peak BLM and Peak E&P.

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