Epsilon Announces Settlement Agreement With Concerned Shareholders and New Board Composition

CONCORD, ONTARIO--(Marketwired - July 12, 2013) - Epsilon Energy Ltd. ("Epsilon" or the "Company") (TSX:EPS) today announced that following discussions with JVL Advisors, LLC and Advisory Research, Inc., the Company has agreed to support a change in the board of directors of the Company. Joseph Feldman, Stephen Altbaum, Kurt Portmann, and Raymond Savoie will resign effective Monday, July 15, 2013 from the Company's Board of Directors. John V. Lovoi, Matthew W. Dougherty, Ryan Roebuck and Adrian Montgomery will be appointed as new directors of the Company as of the same date. As a result, the Special Meeting of the Company currently scheduled to be held on August 20, 2013 will be canceled.

The newly reconstituted Board of Directors effective Monday, July 15, 2013 will be composed of John V. Lovoi, Matthew W. Dougherty, Ryan Roebuck, Adrian Montgomery and Ramik Arandjelovic (the "New Board of Directors").

The Company would like to thank Joseph Feldman, Stephen Altbaum, Kurt Portmann, and Raymond Savoie for their contribution and commitment to the Company and its shareholders during their respective tenures as directors of the Company.

The Company will provide further information after the New Board of Directors is appointed.

Epsilon Energy Ltd. is a North American onshore exploration and production 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.