HOUSTON, TEXAS--(Marketwired - Sept. 21, 2016) - Epsilon Energy Ltd. ("Epsilon" or the "Company") (TSX:EPS) today reports that the previously announced PSA has expired.

Mr. Michael Raleigh, Chief Executive Officer, commented, "On February 23rd, Epsilon signed an agreement to acquire roughly an additional 4% working interest in the producing, developed non-producing and undeveloped properties within the Auburn Gas Gathering system for $11.3 million. Also, as part of the agreement, Epsilon would have assumed operatorship of all the upstream properties. This agreement was subject to consents and was expected to close during the second quarter 2016. The agreement was mutually extended into the third quarter; however, the current operator, subject to agreements with others, has been unable to obtain the necessary consents. Therefore, this agreement has expired.

"Epsilon has developed a good relationship with the operator, and we anticipate revisiting this transaction in the future. Epsilon has the right, under the Joint Operating Agreement, to propose drilling and completion activity and does not require consents from others should we deem this to be economically attractive."

About Epsilon

Epsilon Energy Ltd. is a North American onshore natural gas production and midstream company with a current focus on the Marcellus Shale of Pennsylvania.

Special note for news distribution in the United States

The securities described in the news release have not been registered under the United Stated Securities Act of 1933, as amended, (the "1933 Act") or state securities laws. Any holder of these securities, by purchasing such securities, agrees for the benefit of Epsilon Energy Ltd. (the "Corporation") that such securities may not be offered, sold, or otherwise transferred only (A) to the Corporation or its affiliates; (B) outside the United States in accordance with applicable state laws and either (1) Rule 144(as) under the 1933 Act or (2) Rule 144 under the 1933 Act, if applicable.