Q:What will happen if I submit my proxy but do not vote on a proposal?

A:                If you submit a valid proxy but fail to provide instructions on how you want your shares to be voted, properly submitted proxies will be voted:

·

·

·

·FOR the advisory vote to approve named executive officer compensation.

·3 YEARS for the advisory vote on the frequency of future advisory votes on executive compensation.

Q:What will happen if I neither submit my proxy nor vote my shares in person at the 2019 Annual General Meeting?

A:If, however, you are a registeredbeneficial shareholder (i.e., your shares will not be voted.

If your shares are held instreet name), your bank, broker or other nominee may vote your shares on certain matters, depending on whether your bank, broker or other nominee is located in the United State of America or in Canada.

Without specific instructions, Canadian brokers and their agents or nominees are prohibited from voting common shares for the broker’s client. Without specific instructions, U.S. brokers and their agents or nominees are prohibited from voting common shares for the broker’s client with respect to “non-routine” matters, including the election of directors, but may vote such common shares with respect to “routine” matters. matters, including the appointment of an auditor. When a broker is unable to vote on a proposal because it is non-routine and the owner of the common shares does not provide voting instructions, a “broker non-vote” occurs. If you are a beneficial owner, contact your broker or nominee for any voting questions.

The ratificationappointment of independent auditors is currently considered to be a routine matter. On this matter, your bank, broker or other nominee can:

·                  Vote your street-name shares even though you have not provided voting instructions; or

·                  Choose not to vote your shares.

The other matters you are being asked to vote on are not routine and cannot be voted by your bank, broker or other nominee without your instructions. When a bank, broker or other nominee is unable to vote shares for this reason, it is calledUnder the ABCA, a “broker non-vote.”

Q:What does it mean if I receive more than one set of materials?

A:                You probably have multiple accounts with us and/non-vote” is not counted as a vote for or banks, brokers or other nominees. You should vote allagainst a proposal, and therefore has no impact on the outcome of the proposal. (However, as further explained below, if you do submit a properly executed proxy card but do not provide instructions regarding a particular proposal, your shares represented bywill be voted according to the proxy cards and/or voting instruction forms. Certain banks, brokers or other nominees have procedures in place to discontinue duplicate mailings upon a stockholder’s request. You should contact your bank, broker or other nominee for more information.

Q:How many shares must be present to conduct business at the 2019 Annual General Meeting?

A:                To carry on the businessrecommendation of the 2019 Annual General Meeting, holders of at least 33 1/3 % of the outstanding common shares issued and outstanding as of the record date must be present in person or represented by proxy, which will constitute a quorum.

Q:What vote is required to approve each proposal?

A:                All ordinary resolutions require, for the passing of the same, a simple majority of the votes cast at the Meeting by the holders of Common Shares.

For the advisory votes, the votes that shareholders cast “for” must exceed the votes that shareholders cast “against”. Because your votes are advisory on Proposals 3, 4 and 5, they will not be binding on the Board of

Directors or the Corporation. However, theour Board of Directors and the Compensation, Nominating and Corporate Governance Committee will review the voting results and take them into consideration when making future decisions regarding the named executive officers’ compensation and regarding the frequency of the advisory vote on the named executive officers’ compensation.as to such proposal.)

Q:How are votes counted?

A:                For Proposal 1, to set the number of directors at seven, you may vote “FOR” or “AGAINST.”  Abstentions and non-votes will not be counted as votes FOR or AGAINST Proposal 1.

In the election of directors, Proposal 2, you may vote “FOR” all or some of the nominees or your vote may be “WITHHOLD” with respect to one or more of the nominees.

For Proposal 3, and Proposal 4, you may vote “FOR,” “AGAINST,”“FOR” the ratification of the independent auditor or “ABSTAIN.” If you elect to “ABSTAIN,” the abstention has the same effect as a vote “AGAINST.”

For Proposal 5, you may vote for “1 YEAR,” “2 YEARS” or “3 YEARS” or “ABSTAIN.” Abstentions will have no effect on the outcome of Proposal 5.“WITHHOLD” your vote.

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. IfAs noted in the proxy, if no instructions are indicated on a properly executed proxy card or over the telephone or Internet, the shares will be voted as recommended by our boardBoard of directors.Directors. (See “What will happen if I submit my proxy but do not vote on a proposal?” above for additional information.)

Q:Will any other business be transacted at the meeting? If so, how will my proxy be voted?

A:                Management does not know of any business to be transacted at the 2019 Annual General Meeting other than those matters described in this Proxy Statement. 

Q:What will constitute a quorum?

A:                At least 33 1/3% of the outstanding common shares must be present in person or by proxy to constitute a quorum for the meeting.

Q:Who will pay the cost of soliciting votes for the 2019 Annual General Meeting?

A:                Epsilon will bear the entire cost of solicitation of proxies, including the preparation, assembly, printing, and mailing of this Proxy Statement and the accompanying materials. The largest expense in the proxy process is printing and mailing the proxy materials. Proxies also may be solicited on behalf of Epsilon by directors, officers or employees of Epsilon in person or by mail or telephone. No additional compensation will be paid to such directors, officers, or employees for soliciting proxies.  We have engaged Computershare Investor Services Inc. (“Computershare”) to assist us in the distribution of proxies. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries for their expenses incurred in sending our proxy materials to beneficial owners of our common stock as of the record date. Under Canadian National Instrument 54-101, arrangements have been made with brokerage houses and other intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the Common Shares held of record by such persons and the Corporation may reimburse such persons for reasonable fees and disbursements incurred by them in doing so. The costs thereof will be borne by the Corporation.

FINANCIAL STATEMENTS

The audited consolidated financial statements of Epsilon for the year ended December 31, 2018,2021, and the report of the auditor thereon, will be placed before the Meeting. Copies of such financial statements may be obtained from Epsilon upon request and will be available at the Meeting. No vote by the shareholders with respect to the financial statements is required. The audited consolidated financial statements were audited by BDO USA, LLP of Houston, TXTexas and approved by the Audit Committee of the Board.

PROPOSAL 1 SETTING THE NUMBER OF DIRECTORS

Shareholders of the Corporation will be asked to consider and, if thought appropriate, to approve and adopt an ordinary resolution fixing the number of directors to be elected at the Meeting. In order to be effective, an ordinary resolution requires the approval of a majority of the votes cast by shareholders who vote in respect of the resolution.

At the Meeting, it will be proposed that seven (7)eight (8) directors be elected to hold office until the next annual general meeting or until their successors are elected or appointed. Unless otherwise directed, it is the intention of the Management Designees, if named as proxy, to vote in favourfavor of the ordinary resolution fixing the number of directors to be elected at the Meeting at seven (7)eight (8).

Our Board of Directors recommends voting “FOR” the proposal to fix the number of directors to be elected at the meeting at eight (8).

PROPOSAL 2 ELECTION OF DIRECTORS

At the 20192022 Annual General Meeting, our shareholders will be asked to elect seven (7)eight (8) directors for a one-year term expiring at the next annual meeting of shareholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier death, resignation or removal.

Recommendation of our Board of Directors

Our Board of Directors recommends voting “FOR” the election of each of the Director nominees as directors, each of whom shall hold office for a term of one year, expiring at the annual meeting in 2020,2023, and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.

Each proxy or vote instruction form will be voted for the election of each of the Director nominees as directors, unless the proxy contains contrary instructions. Common shares represented by proxies received by the Board of Directors and not so marked as to withhold authority to vote for any individual nominee or for all nominees will be voted (unless one or more nominees are unable to serve) for the election of the nominees named below. The Board of Directors knows of no reason why any such nominee should be unable or unwilling to serve.

Majority Voting Policy

In March 2016, the Board adopted a policy to the effect that, in an uncontested election of directors, any nominee who receives a greater number of “withheld” votes than “for” votes will be considered to have not received the support of the shareholders of the Corporation and will be expected to immediately withdraw himself or herself from consideration and, if he or she is then currently a member of the Board, submit his or her resignation to the Board. Upon receipt of such resignation, the Chairman of the Board will meet with the Compensation, Nominating and Corporate Governance Committee, with a view to making a recommendation to the Board. The Board will make its decision within 90 days from the date of resignation. The Board shall accept the resignation unless it determines that exceptional circumstances would warrant the applicable director continuing to serve on the Board. The resignation will be effective when accepted by the Board. A director who submits his or her resignation pursuant to this policy will not participate in any deliberations of the Board or Compensation, Nominating and Corporate Governance Committee with respect to the resignation. Following the Board’Board’s decision on the resignation, the Board will promptly disclose, by way of a news release, its decision whether or not to accept the director’s resignation and, if the Board does not accept the resignation, the full reasons for rejecting the tendered resignation.

Executive Officers

The names of the executive officers and certain information about such executive officers, including their ages, are set forth below. For information concerning the number of common shares beneficially owned by each officer, see “Security Ownership of Certain Beneficial Owners and Management.”

Jason Stabell.   Mr. Stabell has worked in the energy industry since 1998 with a focus on upstream E&P. Most recently he served as President and CEO of Merlon International, LLC, a privately held company with assets in the Western Desert of Egypt and US Gulf Coast which was sold in 2019 to a publicly listed UK company where he served as an advisor until 2021. Previously, he served as CFO and ultimately President of privately held Merlon Petroleum Company, which had assets in the US Gulf Coast and Egypt and was sold in 2006. He began his career at Salomon Smith Barney as an analyst in the Planning and Analysis Group. Mr. Stabell has also been active as a private investor for the last several years. He has a BA in Economics from Williams College. He has served on numerous corporate Boards including ESI Energy Services Inc. and Layline Petroleum, LLC.

J. Andrew Williamson.   Mr. Williamson has spent his entire career in the energy business. From 2012 to early 2019, he served as Corporate Development Manager then Vice President Finance (CFO) of Merlon International, LLC. More recently, he served as the Corporate Strategy Manager for Petrosantander Inc. Mr. Williamson started his career in management consulting, advising energy clients on transaction due diligence, growth strategy, and cost reduction. He has a BBA in Finance and a BA in Political Science from Southern Methodist University.

Henry N. Clanton. Mr. Clanton joined the Company as its Chief Operations Officer in January 2018. He has over 30 years of experience in the upstream E&P sector. His experience includes financial and technical management over all phases of drilling, completions, production, and field operations. Before joining us, he spent 14 years with a private E&P start-up, ARES Energy, Ltd, which he co-founded and served as a Managing Partner. Previous to that time Mr. Clanton worked with Schlumberger, ARCO Permian, and Coastal Management Company. He holds an MBA and a BS in Petroleum Engineering from Texas A&M University.

Nominees for Election to the Board of Directors

The names of the nominees for election to the Board of Directors and certain information about such nominees, including their ages, are set forth below. For information concerning the number of shares of common stock beneficially owned by each nominee, see “Security Ownership of Certain Beneficial Owners and Management.”

Notes:

(1)                                      Proposed member of the Audit Committee.

(2)                                      Proposed member of the Compensation, Nominating and Corporate Governance Committee.

(3)                                      Proposed member of Conflicts Committee

As of May 17, 2019July 22, 2022, the directors and officers of the Corporation owned, directly or indirectly, or exercised control or direction over 9,203,0925,611,363 Common Shares, or 33.64%24.35% of the issued and outstanding Common Shares.

John Lovoi.   Mr. Lovoi has been chairman of our board of directors since July 2013. Mr. Lovoi has been the managing partner of JVL Advisors, LLC, a private oilnatural gas and gasoil investment advisor, since November 2002. He is a Director of Helix Energy Solutions Group, an operator of offshore oilnatural gas and gasoil properties and production facilities, the Chairman of Dril-Quip, Inc., a provider of subsea, surface and offshore rig equipment, and a Director of Roan Resources, Inc., an Anadarko Basin-focused exploration and production company.equipment. We believe that Mr. Lovoi is qualified to serve as a member of our board of directors as a result of his background in investment banking, equity research, and asset management, with an emphasis on the global oilnatural gas and gasoil practice.

Michael RaleighJason Stabell.   Mr. RaleighStabell has worked in the energy industry since 1998 with a focus on upstream E&P. Most recently he served as chief executive officerPresident and CEO of Merlon International, LLC, a director for Epsilon Energy Ltd. since July 2013. Before becoming chief executive officer at Epsilon Energy Ltd., he acted in various positionsprivately held company with assets in the global oilWestern Desert of Egypt and gas business for 35 years, primarily holding positionsUS Gulf Coast which was sold in 2019 to a publicly listed UK company where he served as an advisor until 2021. Previously, he served as CFO and ultimately President of privately held Merlon Petroleum Company, which had assets in the areas of reservoir development strategy, property valuations, completionsUS Gulf Coast and production.Egypt and was sold in 2006. He began his career at Salomon Smith Barney as an analyst in the Planning and Analysis Group. Mr. Stabell has also been managing investments with Domain Energy Advisors since January 2005. Mr. Raleigh has beenactive as a member ofprivate investor for the board of directors of Roan Resources, Inc,. an Anadarko Basin-focused exploration and production company, since September 2018.last several years. He has also been managing investments with Domaina BA in Economics from Williams College. He has served on numerous corporate Boards including ESI Energy Advisors since January 2005. We believe that Mr. Raleigh is qualified to serve as a member of our board of directors as a result of his background in engineering, including reserve, acquisitionsServices Inc. and valuation engineering, and his experience in the development and appraisal of oil and gas fields. Mr. Raleigh received a Bachelor of Science degree in Chemical Engineering from Queens University in Canada and received his Master of Business Administration degree from the University of Colorado.Layline Petroleum, LLC.

Matthew Dougherty.   Mr. Dougherty has been a director since July 2013 and serves as the chairChair of the Compensation, Nominating and Governing Committee. He has been theis a Managing Director ofand Partner at Advisory Research, Inc., an investment management firm, since June 2003, where he oversees the firm’s investments in oil and natural gas producers.the energy sector. He has served as the Portfolio Manager of the Advisory Research Energy Fund, LP since 2005. We believe that Mr. Dougherty is qualified to serve as a member of our board of directors because of his background in oilthe finance and the energy industry, including natural gas and finance industries.oil producers.

Ryan Roebuck. Mr. Roebuck has been a director since July 2011. He has also been serving as the chair of our Audit Committee, a member of our Compensation, Nominating and Governance Committee since July 2011, and a member of our Conflicts Committee since February 2017.Mr. Roebuck is currently the Principal of RR ONE LTD. an investment holding company located in Toronto, Canada. Prior to this position, Mr. Roebuck was an investment manager for a leading Canadian Venture Capital Firm where he was a founding investor and director of the Cronos Group. Mr. Roebuck began his career as a top-rated equity research analyst focused on North American special situations. We believe that Mr. Roebuck is qualified to serve as a member of our board of directors as a result of his background in the investment banking industry and as an investment manager.

Jacob Roorda.   Mr. Roorda has been a director of the Company since March 2016. He has also been a member of our Audit Committee since March 2016, and the chair of our Conflicts Committee since February 2017.2018. Mr. Roorda ishas been a director of PetroShale Inc., a Bakken focused oil and natural gas producer, since 2012 and currently serves on the managing director and chief executive officerReserves Committee of Windward Capital Limited, a private investment company, serving from October 2011 to January 2015, and again since July 2017. HePetroShale Inc. Mr. Roorda was the Executive Vice President and CEO of Todd Energy International Ltd. from November 2016 to July 2017, andPetroShale Inc. until February 2022. He was the Chief Executive Officer of Todd Energy Canada Ltd. from January 2015 to November 2016. Mr. Roorda currently serves on the Audit, Compensation, and Reserves Committee of Petroshale Inc. During the last five years, he also served on the boards of Wolf Minerals Limited and Northcliff Resources Ltd. None of these positions are, or have ever been, with companies affiliated with the Company. Mr. Roorda has also served on the board of Todd Energy Canada Ltd. He has been certified as a Professional Engineer by the Association of Professional Engineers and Geoscientists of Alberta since 1981. We believe that Mr. Roorda is qualified to serve as a member of our board of directors as a result of his experience in the oilnatural gas and gasoil industry, including his oilnatural gas and gasoil business development and engineering experience, and his financial industry experience.

Tracy Stephens. Mr. Stephens has been a director since May 2017.2018. He has also been a member of our Compensation, Nominating and Corporate Governance Committee, and Conflicts Committee since February 2018.2019. He is the founder of Westminster Advisors, a CEO advisory services company, and served as its Chief Executive Officer from January 2017.2018. He was previously employed by Resources Global Professionals, a large business consulting company, from July 2001 to December 2016, and was the Chief Operating Officer the last three years.

We believe that Mr. Stephens is qualified to serve as a member of our board of directors as a result of his extensive experience with public companies.

Stephen Finlayson.   Mr. Finlayson has been a director since May 2019. He resigned from the audit committee and became a member of the Compensation, Nominating and Corporate Governance Committee in January 2021. In 2002, Mr. Finlayson founded and is the founder and, since 2003, Executivecurrently Chairman of Applied Manufacturing Technologies (AMT), an independent international consulting and project services company supporting operating companiescompany. Prior to founding AMT, Mr. Finlayson headed Aspen Tech’s professional services organization serving global customers in the downstream refininghydrocarbon industries. Aspen Tech, a public company, trades under the symbol AZPN on the NASDAQ. Under Mr. Finlayson, Aspen’s professional services organization delivered over 50% of company revenues. With his extensive experience in the hydrocarbon industries both in public and chemicals industries.

Weprivate companies we believe that Mr. Finlayson is qualified to serve as a member of our board of directorsdirectors.

Jason Stankowski. Mr. Stankowski has been a director and member of the Audit Committee since January 2021. Mr. Stankowski is the founder and a partner and portfolio manager for Clayton Partners, LLC. He began his career at Prudential Securities in San Francisco and spent eight years in structured finance at CMA Capital Management, where he acted in a number of roles, including specializing in corporate retirement planning, structuring complex investment and financing structures for Fortune 1000 companies. He became designated as a result of his extensive experienceChartered Financial Analyst in the oil and gas industry, including advanced control solutions in oil and gas production.2003.

David Winn. Mr. Winn has been a director and member of the Audit Committee since January 2021. Mr. Winn recently retired from a 36 year career in public accounting that involved extensive board interaction. From 2003 until July 2020, Mr. Winn was an Audit Partner for Grant Thornton LLP, which is an independent audit, tax, and advisory firm and the U.S. member firm of Grant Thornton International Ltd. During his tenure, Mr. Winn served as audit department head, industry program leader, an engagement partner, quality control reviewer, and was a relationship partner to large clients. Mr. Winn has extensive Securities and Exchange Commission reporting experience with registration statements and annual and quarterly filings. Previously Mr. Winn served as a Director for PricewaterhouseCoopers LLP and previously as a Partner with Arthur Andersen LLP.

There is no family relationship, as defined by Item 401 of Regulation S-K (§ 229.401), between any director, executive officer, or person nominated or chosen by us to become a director or executive officer.

Criminal Proceedings

During the past ten years, none of Epsilon or itsEpsilon’s executive officers, current directors, hasor nominees have (i) been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

Bankruptcy

During the past ten years (i) no petition has been filed under federal bankruptcy laws or any state insolvency laws by or against any of our current directors or executive officers, (ii) no receiver, fiscal agent or similar officer was appointed by a court for the business or property of any of our current directors or executive officers and (iii) none of our current directors wasor executive officers were an executive officer of any business entity or a general partner of any partnership at or within two years before the filing of a petition under the federal bankruptcy laws or any state insolvency laws by or against such entity.

As disclosed at www.sec.gov, Mr. Jacob Roorda was a director of TXCO Resources Ltd. (“TXCO”), a NASDAQ listed public company until February 11, 2010. On May 3, 2009, TXCO filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. The board of directors of TXCO obtained approval of a plan of reorganization which paid all creditors in full and which projected a recovery for common shareholders. Mr. Roorda was also a director of Argosy Energy Inc. (“Argosy”), a TSX listed company which entered receivership pursuant to an order of the Court of Queen’s Bench of Alberta on May 30, 2013 at the request of its lenders. Concurrently with the receivership, Mr. Roorda resigned as a director of Argosy which was later also subject to a cease trade order for failing to file its required periodic financial statements.

With the exception of Mr. Roebuck and Mr. Roorda, who holdholds Canadian citizenship, all of the directors listed above are U.S. citizens.

Cease Trade Orders

Other than as set forth herein, no proposed director, within 10 years before the date of this Proxy Statement, has been a director, chief executive officer or chief financial officer of any company that:

(a)   was subject to: (i) a cease trade order; (ii) an order similar to a cease trade order; or (iii) an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days (collectively, an “Order”) that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or

(b)   was subject to an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Penalties or Sanctions

To the knowledge of the Corporation, no director or executive officer of the Corporation, or a shareholder holding a sufficient number of securities of the Corporation to materially affect control of the Corporation (or any personal holding corporation of such persons), has been subject to:

(i)                                     any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(ii)                                  any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Corporate Governance Policies and Practices

Our corporate governance practices and policies are administered by the board of directors and by committees of the board appointed to oversee specific aspects of our management and operations, pursuant to written charters and policies adopted by the board and such committees.

The Board of Directors

The Board is committed to a high standard of corporate governance practices. The Board believes that this commitment is not only in the best interests of the shareholders but that it also promotes effective decision-making at the Board level. The Board is of the view that its approach to corporate governance is appropriate and complies with the objectives and guidelines relating to corporate governance set out in National Instrument 58-201 adopted by the Canadian securities administrators, or NI 58-201, as well as the governance requirements of the NASDAQ CapitalNasdaq Global Market. In addition, the Board monitors and considers for implementation the corporate governance standards that are proposed by various Canadian regulatory authorities or that are published by various non-regulatory organizations in Canada. The Board has also established a Compensation, Committee and Nominating and Corporate Governance Committee and has adopted a Compensation, Committee Charter, and Nominating and Corporate Governance CharterCharters to ensure the objectives of NI 58-201 and the NASDAQ CapitalNasdaq Global Market are met.

The Board is currently composed of seveneight directors who provide us with a wide diversity of business experience. Our Board has determined that Messrs. Jacob Roorda, Tracy Stephens, Matthew Dougherty, Stephen Finlayson, Jason Stankowski, and Ryan RoebuckDavid Winn are independent in accordance with the listing requirements of the NASDAQ CapitalNasdaq Global Market, representing over 50% of the Board. More than 50% of the Board is independent in accordance with the listing requirements of the NASDAQ Capital Market. Each of the independent directors has no direct or indirect material relationship with us, including any business or other relationship, that could reasonably be expected to interfere with the director’s ability to act with a view to our best interests or that could reasonably be expected to interfere with the exercise of the director’s independent judgment.

Mr. Lovoi is the Managing Partner of JVL Advisors, LLC, beneficial owner of 20.15% of our common shares.and Mr. Dougherty is the Managing Director of Advisory Research, Inc., beneficial owner of 12.05% of our common shares. Mr. RaleighStabell is our Chief Executive Officer.Officer, and therefore are not independent directors.

The Board held eight7 meetings during 2018,2021, including four3 meetings of the full Board, and four4 meetings of the Audit Committee, and 3 meetings of the CNG Committee. All Board meetings were conducted with open and candid discussions. As such, the independent directors did not hold any separate meetings, other than Audit and Compensation, Nominating and Corporate Governance Committee meetings that excluded directors who were not independent. The chairman of the Board is not an independent director. The independent members of the Board have the ability to meet on their own and are authorized to retain independent financial, legal and other experts as required whenever, in their opinion, matters come before the Board that require an independent analysis by the independent members of the Board. The Board intends to hold at least four regular meetings each year, as well as additional meetings as required. The Board has not established any required attendance levels for the Board and committee meetings. In setting the regular meeting schedule, care is taken to ensure that meeting dates are set to accommodate directors’ schedules so as to encourage full attendance. Mr. Montgomery attended four board meetings, including three meetingsAll eight of the Audit Committee. Mr. Montgomery resigned as a director effective May 20, 2019. Six of our sevencurrent directors attended the 20182021 Annual General Meeting.

The table below provides details regarding the attendance of our directors during 2021:

The Board has stewardship responsibilities, including responsibilities with respect to oversight of our investments, management of the Board, monitoring of our financial performance, financial reporting, financial risk management and oversight of policies and procedures, communications and reporting and compliance. In carrying out its mandate, the Board meets regularly and a broad range of matters are discussed and reviewed for approval. These matters include overall plans and strategies, budgets, internal controls and management information systems, risk management as well as interim and annual financial and operating results. The Board is also responsible for the approval of all major transactions, including property acquisitions, property divestitures, equity issuances and debt transactions, if any. The Board strives to ensure that our corporate actions correspond closely with the objectives of its shareholders. The Board will meet at least once annually to review in depth our strategic plan and review our

available resources required to carry out our growth strategy and to achieve its objectives. The mandate of the Board is to be reviewed by the Board annually.

Mandate of the Board.

The Board does not have a written mandate. The Board has stewardship responsibilities, including responsibilities with respect to oversight of the Corporation’s investments, management of the Board, monitoring of the Corporation’s financial performance, financial reporting, financial risk management and oversight of policies and procedures, communications and reporting and compliance. In carrying out its mandate, the Board meets regularly and a broad range of matters are discussed and reviewed for approval. These matters include overall plans and strategies, budgets, internal controls and management information systems, risk management as well as interim and annual financial and operating results. The Board is also responsible for the approval of all major transactions, including property acquisitions, property divestitures, equity issuances and debt transactions, if any. The Board strives to ensure that actions taken by the Corporation correspond closely with the objectives of its shareholders. The Board will meet at least once annually to review in depth the Corporation’s strategic plan and review the Corporation’s available resources required to carry out the Corporation’s growth strategy and to achieve its objectives. The mandate of the Board is to be reviewed by the Board annually

Position Descriptions.Descriptions.

The Board has outlined the responsibilities in respect to our Chief Executive Officer, or CEO. The Board and CEO do not have a written position description for the CEO; however, the CEO’s principal duties and responsibilities are planning our strategic direction, providing leadership, acting as our spokesperson, reporting to shareholders, and overseeing our executive management in particular with respect to operations and finance.

The charter for each of the Board committees outlines the duties and responsibilities of the members of each of the committees, including the chair of such committees. See “Board Committees” below.

Orientation and Continuing Education.Education.

We have not adopted a formalized process of orientation for new Board members. However, all directors have been provided with a base line of knowledge about us that serves as a basis for informed decision making. This includes a combination of written material, in person meetings with our senior management, site visits and other briefings and training, as appropriate.

Directors are kept informed as to matters affecting, or that may affect, our operations through reports and presentations at the quarterly Board meetings. Special presentations on specific business operations are also provided to the Board.

Code of Ethics and Whistleblower Policy

Our Code of Ethics and Whistleblower Policy are available on our website at http://www.epsilonenergyltd.com. Each director is expected to disclose all actual or potential conflicts of interest and refrain from voting on matters in which such director has a conflict of interest. In addition, a director must recuse himself from any discussion or decision on any matter of which the director is precluded from voting as a result of a conflict of interest. The Board has reviewed and approved a disclosure and insider trading policy for us, in order to promote consistent disclosure practices aimed at informative, timely and broadly disseminated disclosure of material information to the market in accordance with applicable securities legislation. The disclosure policy promotes, among other things, the disclosure and reporting of any serious weaknesses which may affect the financial stability and assets of us and our operating entities.

The listing standards of the NASDAQ CapitalNasdaq Global Market require the Audit Committee to establish formal procedures for (a) the receipt, retention, and treatment of complaints received by us and our subsidiaries regarding accounting, internal accounting controls, or auditing matters and (b) the confidential, anonymous submission by our consultants or employees of concerns regarding questionable accounting or auditing matters. We are committed to achieving compliance with all applicable securities laws and regulations, accounting standards, accounting controls

and audit practices. In addition, we post on our website all disclosures that are required by law or the listing standards of the NASDAQ CapitalNasdaq Global Market concerning any amendments to, or waivers from, any provision of the code.code, and is updated as necessary.

Assessments

The Board does not conduct regular assessments of the Board, its committees or individual directors, however, the Board does periodically review and satisfy itself at meetings that the Board, its committees and its individual directors are performing effectively.

Nomination of Directors

The mandate of the Compensation, Nominating and Corporate Governance Committee includes consideration of issues related to the selection, nomination, and education of the directors. The Compensation, Nominating and Corporate Governance Committee is comprisedconsists of Matthew Dougherty (chairman), Tracy Stephens, and Stephen Finlayson, all of whom are independent directors.directors as defined in the listing standards of NASDAQ.

Director Terms Limits

The Board has not adopted term limits for directors because of the relatively small size of the Board. The Board is mindful of the ratio of the independent and management Board members and this will be a factor in future Board appointments. The Board has been focused on working closely as a team to develop the skills necessary for the business of the Corporation. The need for a retirement policy is not an immediate concern for the Board. The full Board reviews the need for director term limits intermittently and will institute one should the need arise.

The Board is open to possible new Board members who can add value to the Board, bring new or a greater depth of particular skill sets necessary to successfully oversee the business of the Corporation and who can successfully operate within a team environment.

Policies Regarding the Representation of Women on the Board

The Corporation does not have a formal policy regarding identification and nomination of women to the Board. The Compensation, Nominating and Corporate Governance Committee generally identifies, evaluates and recommends candidates for nomination as directors with the goal of creating a Board that, as a whole, consists of individuals with various and relevant career experience, industry knowledge and experience, and financial and other specialized expertise.

When searching for nominees for directors, the Compensation, Nominating and Corporate Governance Committee has consideredand does consider gender diversity. The Board as part of its mandate, takes gender into consideration as part of its overall recruitment and selection considerations. Accordingly, when searching for new directors, the Compensation, Nominating and Corporate Governance Committee will consider the level of female representation.

Consideration of the Representation of Women in the Director Identification and Selection Process

The Compensation, Nominating and Corporate Governance Committee takes gender into consideration as part of its overall recruitment and selection process in respect of potential candidates for the Board. Accordingly, when searching for new directors, the Compensation, Nominating and Corporate Governance Committee will consider the level of female representation on the Board. This will be achieved by monitoring the level of female representation on the Board and, where appropriate, recruiting qualified female candidates as part of the Corporation’s overall recruitment and selection process to fill Board positions, as the need arises, through vacancies, growth or otherwise.

Consideration of the Representation of Women in the Executive Officer Appointments

The Corporation is also sensitive to the representation of women when considering executive officer appointments. As of the date of this Information Circular,Proxy Statement, there are no women occupying executive officer positions

with the Corporation. However, the Corporation is committed to ongoing review with respect to the gender diversity of its executive officers.

Targets Regarding the Representation of Women on the Board and in Executive Officer Positions

The Corporation has not adopted a formal target regarding women in executive officer positions. However, as noted above, the Corporation is committed to promoting diversity and will, in the future, seek to identify talented women to fulfill Board and executive positions.

Number of Women on the Board and in Executive Officer Positions

The Corporation does not currently have any women on itits Board or in executive officer positions.

Board Committees

The Board has three committees. The committees are the Audit Committee, the Compensation, Nominating and Corporate Governance Committee, and the Conflicts Committee. Each committee has been constituted with independent directors.

Audit Committee.   The Audit Committee currently consists of Ryan RoebuckDavid Winn (Chairman), Jacob Roorda, and Stephen Finlayson. Adrian Montgomery served on the Audit Committee throughout the fiscal year ended December 31, 2018. Mr. Montgomery resigned as a director and as a member of the Audit Committee effective May 20, 2019, and Mr. Finlayson was appointed in his stead.Jason Stankowski. All members of the Audit Committee are independent and financially literate under the applicable rules and regulations of the SEC and the NASDAQ CapitalGlobal Market.

A summary of each of the Audit Committee member’s background is as follows:

·             Mr. Roebuck is currently the Principal of RR ONE LTD. an investment holding company located in Toronto, Canada. Prior to this position, Mr. Roebuck was an investment manager for a leading Canadian Venture Capital Firm where he was a founding investor and director of the Cronos Group. Mr. Roebuck began his career as a top-rated equity research analyst focused on North American special situations.

·             Mr. Roorda is the managing director and chief executive officer of Windward Capital Limited, a private investment company, serving from October 2011 to January 2015, and again since July 2017. He was the Executive Vice President of Todd Energy International Ltd. from November 2016 to July 2017, and the Chief Executive Officer of Todd Energy Canada Ltd. from January 2015 to November 2016. Mr. Roorda currently serves on the Audit, Compensation, and Reserves Committee of Petroshale Inc. During the last five years, he also served on the boards of Wolf Minerals Limited and Northcliff Resources Ltd. None of these positions are, or have ever been, with companies affiliated with the Company. Mr. Roorda has also served on the board of Todd Energy Canada Ltd. He has been certified as a Professional Engineer by the Association of Professional Engineers and Geoscientists of Alberta since 1981.

·             Mr. Finlayson is the founder and, since 2003, Executive Chairman of Applied Manufacturing Technologies, an international consulting and project services company which supports operating companies in the downstream refining and chemical industries. Mr. Finlayson was the leader of the Information Management Division, and later the business unit leader for the Enterprise Solution Division of Aspen Technology Inc.

·             Mr. Montgomery has served as the president of Aquilini Entertainment since September 2017. Mr. Montgomery was the CEO of QM Environmental, one of Canada’s largest environmental services companies, from February 2015 to September 2017. He was the President and Chief Information Officer of Tuckamore Capital Management Inc., a Toronto Stock Exchange—listed company that invests in private businesses from February 2012 to March 2016. He is also a member of the Young Presidents’ Organization and a member of the New York bar.

The Audit Committee met four (4) times during the fiscal year ended December 31, 2018.2021. The Audit Committee meets at least on a quarterly basis to review and approve our consolidated financial statements before the financial statements are publicly filed.

The Audit Committee reviews our interim unaudited condensed consolidated financial statements and annual audited consolidated financial statements and certain corporate disclosure documents including the Annual Information Form, Management’s Discussion and Analysis, and annual and interim earnings press releases before they are approved by the Board. The Audit Committee reviews and makes a recommendation to the Board in respect of the appointment and compensation of the external auditors and it monitors accounting, financial reporting, control and audit functions. The Audit Committee meets to discuss and review the audit plans of external auditors and is directly responsible for overseeing the work of the external auditors with respect to preparing or issuing the auditors’ report or the performance of other audit, review or attest services, including the resolution of disagreements between management and the external auditors regarding financial reporting. The Audit Committee questions the external auditors independently of management and reviews a written statement of its independence. The Audit Committee must be satisfied that adequate procedures are in place for the review of our public disclosure of financial information extracted or derived from its consolidated financial statements and it periodically assesses the adequacy of those procedures. The Audit Committee must approve or pre-approve, as applicable, any non-audit services to be provided to us by the external auditors. In addition, it reviews and reports to the Board on our risk management policies and procedures and reviews the internal control procedures to determine their effectiveness and to ensure compliance with our policies and avoidance of conflicts of interest. The Audit Committee has established procedures for dealing with complaints or confidential submissions which come to its attention with respect to accounting, internal accounting controls or auditing matters. To date, neither the Board nor the Audit Committee has formally assessed any individual director with respect to their effectiveness and contribution to us in their capacity as a director. Instead, members of the Board have relied on informal conversations among themselves to adequately cover such matters.

The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and The NASDAQ CapitalNasdaq Global Market. The Audit Committee reviews and reassesses the adequacy of its charter on an annual basis. Committee members are not employees of the Corporation or accountants or auditors by profession. A copy of the Audit Committee Charter can be found on our website at www.epsilonenergyltd.com.

Compensation, Nominating and Corporate Governance Committee.   The Compensation, Nominating and Corporate Governance Committee currently comprises Matthew Dougherty (chairman), Tracy Stephens and Ryan Roebuck, twoStephen Finlayson. All three members of whom, Messrs. Stephens and Roebuck,this committee are independent directors. Before July 2013, we had separate compensation committee and nominating and corporate governance committee.committees. Both committees’ mandates were approved by the Board on December 10, 2009. In July 2013, the Board consolidated the functions of the two committees for efficiency purposes. We continue to find this consolidation beneficial.

The Compensation, Nominating and Corporate Governance Committee’s mandate is to:

1.              Assist and advise the Board regarding its responsibility for oversight of our compensation policy; provided that all determinations on officer compensation will be subject to review and approval by the Board;

2.              Study and evaluate appropriate compensation mechanisms and criteria;

3.              Develop and establish appropriate compensation policies and practices for the Board and our senior management, including our security-based compensation arrangements;

4.              Evaluate senior management;

5.              Serve in an advisory capacity on organizational and personnel matters to the Board;

6.              Assist the Board by identifying individuals qualified to serve on the Board and its committees;

7.              Recommend to the Board the director nominees for the next annual meeting;

8.              Recommend to the Board members and chairpersons for each committee;

9.              Develop and recommend to the Board and review from time to time, a set of corporate governance principles and monitor compliance with such principles; and

10.       Serve in an advisory capacity on matters of governance structure and the conduct of the Board.

These responsibilities include reporting and making recommendations to the Board for their consideration and approval. The Compensation, Nominating and Corporate Governance Committee does not have a policy regarding consideration of director candidates recommended by security holders. The Compensation, Nominating and Corporate Governance Committee considers a wide range of factors, including those listed in the paragraph below, in its searches when making nomination recommendations to the Board. Corporate governance also relates to the activities of the Board, the members of which are elected by and are accountable to the shareholders and takes into account the role of the individual members of management who are appointed by the Board and who are charged with the day-to-day management of us. The Board is committed to sound corporate governance practices, which are both in the interest of its shareholders and contribute to effective and efficient decision making.

Board DiversityDiversity..

Our Compensation, Nominating and Corporate Governance Committee is responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, and the board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:

·                  personal and professional integrity, ethics and values;

·                  experience in corporate management, such as serving as an officer or former officer of a publicly held company;

·                  experience as a board member or executive officer of another publicly held company;

·                  strong finance experience;

·                  diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;

·                  diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience;

·                  experience relevant to our business industry and with relevant social policy concerns; and

·                  relevant academic expertise or other proficiency in an area of our business operations.

When searching for nominees for directors, the Compensation, Nominating and Corporate Governance Committee has consideredconsiders gender diversity. The Board as part of its mandate, takes gender into consideration as part of its overall recruitment and selection considerations. Accordingly, when searching for new directors, the Compensation, Nominating and Corporate Governance Committee will consider the level of female representation.

The Compensation, Nominating and Corporate Governance Committee takes gender into consideration as part of its overall recruitment and selection process in respect of potential candidates for the Board. Accordingly, when searching for new directors, the Compensation, Nominating and Corporate Governance Committee will consider the level of female representation on the Board. This will be achieved by monitoring the level of female representation on the Board and, where appropriate, recruiting qualified female candidates as part of the Corporation’s overall recruitment and selection process to fill Board positions, as the need arises, through vacancies, growth or otherwise.

Currently, our Board evaluates each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholdershareholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

The Compensation, Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of the SEC and The NASDAQ CapitalNasdaq Global Market. The Compensation, Nominating and Corporate Governance Committee reviews and reassesses the adequacy of its charter annually. A copy of such charter can be found on our website at www.epsilonenergyltd.com. The Compensation, Nominating and Corporate Governance Committee does not conduct separate meetings, but instead meets and confers in conjunction with other meetings of the Board.

Conflicts Committee.   The Conflicts Committee comprises Jacob Roorda (Committee Chairman), Tracy Stephens and Ryan Roebuck,Stephen Finlayson, all of whom are independent directors.directors under NASDAQ listing rules.

The Conflicts Committee has the power to advise the Board with respect to any matters or issues of concern to the Conflicts Committee in connection with any corporate opportunity and the interests of a related or conflicted party that the Conflicts Committee considers necessary or advisable.

Communications to the Board

Shareholders may communicate directly with our Board of Directors or any director by writing to the board or a director in care of the corporate secretary at Epsilon Energy Ltd., 16701 Greenspoint Park16945 Northchase Drive, Suite 195,1610, Houston, Texas 77060, or by faxing their written communication to AeRayna Flores at (281) 668-0985. Shareholders may also communicate to the Board of Directors or any director by calling Ms. Flores at (281) 670-0002. Ms. Flores will review any communication before forwarding it to the board or director, as the case may be.

Employment AgreementsIncentive Awards

The named executive officers, excluding Michael Raleigh, have executed employment contracts with us.

In January 2017, we entered into an employment agreement with Mr. Henry Clanton, pursuantEpsilon’s board of directors (the “Board”) adopted the 2020 Equity Incentive Plan (the “2020 Plan”) on July 22, 2020 subject to approval by Epsilon’s shareholders at Epsilon’s 2020 Annual General Meeting of shareholders, which Mr. Clanton serves as a Vice President and as our Chief Operating Officer.  Mr. Clanton’s employment agreement has an unspecified term and provides him with an annual base salary of US$250,000 per year plus annual bonuses and participation in our employee benefit plan. In addition, we granted Mr. Clanton four weeks of paid vacation each year. We also granted to Mr. Clanton 60,000 Epsilon Energy Ltd. Stock options under the Stock Option Plan, which options have a term of seven (7) years and which vest in portions of 33 1/3% per annum, beginning one year after the grant date (being fully vested after three years). Additional options may be granted to Mr. Clanton. Mr. Clanton’s employment agreement included severance payments in the event that he was terminated. Mr. Clanton has the right to resign by providing 15 days prior written notice. Mr. Clanton’s employment agreement also includes customary confidentiality and assignment of “Technology, Know-How, Inventions, Patents” provisions.

In September 2013, we entered into an employment agreement with Mr. B. Lane Bond, pursuant to which Mr. Bond serves as our Chief Financial Officer.  Mr. Bond’s employment contract calls for a base pay of US$200,000 per year and contains provisions for severance payments equal to six months of current annual salary in the event that a change of control occurred or Mr. Bond’s employment was terminated for reasons other than for just cause (defined as unethical, criminal behavior, his death or resignation). In the event of such change in control or such termination, Mr. Bond may also exercise any vested options that he holds. The employment agreement requires that Mr. Bond, will devote an average of 15 days per month to Epsilon affairs. We also agreed to cover directors’ and officers’ liability insurance for Mr. Bond. Mr. Bond’s initial employment agreement was for a term of three (3) years beginning on September 1, 2013, and is renewable as mutually agreed upon by2020 (the “Meeting”). Shareholders approved the parties. Prior to his employment agreement, Mr. Bond had been granted options in Epsilon shares. We agreed that Epsilon could agree in future to grant him additional options. Mr. Bond has2020 Plan at the right to resign by providing 15 days prior written notice. Mr. Bond’s employment agreement also includes customary confidentiality and assignment of “Technology, Know-How, Inventions, Patents” provisions.Meeting.

Mr. Michael Raleigh does not take a salary for his efforts with us and does not have an employment contract.

Prohibitions on Hedging, Insider Trading and Pledging CompanyCorporation Securities

Our Insider Trading Policy provides that our officers, directors, employees, and consultants who are aware of material nonpublic information may not, directly or indirectly, buy or sell securities of the Corporation other than pursuant to a trading plan that complies with Rule 10b5-1 promulgated by the Securities and Exchange Commission ( “SEC”(“SEC”). The Corporation has designated Lane Bond,Andrew Williamson, its Chief Financial Officer, as its Insider Trading Compliance Officer (the “Compliance Officer”), whose responsibilities include monitoring and enforcing this policy, along with designating and announcing special trading blackout periods during which some or all “Section 16 Insiders” and other employees are prohibited from trading in the Corporation’s securities. Additionally, the officers, directors,

employees and consultants subject to the Insider Trading Policy may not, among other things, transact in puts, calls or other derivative securities involving the Corporation’s common shares, on an exchange or in any other organized market, engage in hedging or monetization transactions, engage in short sales of the Corporation’s securities, and directors, officers, and other employees are prohibited from holding the Corporation’s securities in a margin account or pledging the Corporation’s securities as collateral for a loan.

Security Ownership of Certain Beneficial Owners and Management

The table set forth below is information with respect to beneficial ownership of common shares as of May 20, 2019,July 22, 2022, by our named executive officers, by each of our directors, by all our current executive officers and directors as a group, and by each person known to us who beneficially own 5% or more of the outstanding common shares. To our knowledge, each person named in the table has sole voting and investment power with respect to the common shares identified as beneficially owned.

Unless otherwise indicated, the address of each of the individuals named below is c/o Epsilon Energy Ltd., 16701 Greenspoint Park16945 Northchase Drive, Suite 195,1610, Houston, Texas 77060.

*                 Indicates beneficial ownership of less than 1% of outstanding shares.

(1)         The address of Advisory Research, Inc., or ARI, is 180 North Stetson Avenue, Chicago, Illinois 60601. Matthew Dougherty, a member of our board of directors, is a managing director of ARI, exercises the voting and dispositive power with respect to the common shares held by ARI.

(2)         The address of JVL Advisors, LLC, or JVL, is 10000 Memorial Drive, Houston, Texas 77024. John Lovoi, the chairman of our board of directors, and the managing partner of JVL, exercises the voting and dispositive power with respect to the common shares held by JVL.

(3)         The address of Oakview Capital Management, L.P. is 3879 Maple Avenue, Suite 300, Dallas, Texas 75219. Consists of Common Shares of the Company, no par value (“Shares”), held directly by and for the benefit of third-partiesChanges in various separately managed customer accounts and affiliated private funds (collectively, the “Clients”) managed by Oakview Capital Management, L.P. (“Oakview”) in the ordinary course of business. Solely for purposes of Section 13(d) of the Securities Exchange Act of 1934, Oakview may be deemed to indirectly beneficially own the Shares held directly by such Clients. Oakview Investments, LLC is the general partner of, and may be deemed to indirectly beneficially own any securities owned by, Oakview.  None of the Clients have beneficial ownership of more than 5% of the Shares of the Company outstanding as of March 13, 2019.

(4)         The address of azValor Asset Management SGIIC SA, or azValor, is Paseo de la Castellana 10, 3rd, Madrid, 28046, Spain. Alvaro Guzmàn de Làzaro, Chief Investment Officer at azValor, exercises the voting and dispositive power with respect to the common shares held by azValor.

(5)         Includes the shares held by ARI and 97,650 shares held by Mr. Dougherty individually. Mr. Dougherty is a member of our board of directors.

(6)         Mr. Roorda is a member of our board of directors. Includes 25,000 shares held by Mr. Roorda’s spouse, and 8,333 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018.

(7)         Includes 40,833 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018. Mr. Bond is our chief financial officer.

(8)         Includes the shares held by JVL. Includes 10,000 shares issuable upon the exercise of options held by Mr. Lovoi and exercisable within 60 days of December 31, 2018. Mr. Lovoi is the chairman of our board of directors.

(9)         Includes 10,000 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018. Mr. Roebuck is a member of our board of directors.

(10)  Mr. Stephens is a member of our board of directors.

(11)  Includes 10,000 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018. Mr. Montgomery resigned effective May 20, 2019.

(12)  Includes 20,000 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018. Mr. Clanton is our chief operating officer.

(13)  Includes 50,000 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018. Mr. Raleigh is our chief executive officer and a member of our board of directors.

(14)  Mr. Finlayson was appointed as a member of our board of directors on May 20, 2019.

(15)  Includes 149,166 shares issuable upon the exercise of options exercisable within 60 days of December 31, 2018.

Section 16(a) Beneficial Ownership Reporting ComplianceControl.   

The Form 10 for Epsilon Energy was declared effective byCorporation does not know of any arrangement, the Securities and Exchange Commission on February 14, 2019. Asoperation of which may at a subsequent date result no Section 16 filings were required forin a change of control of the fiscal year ended December 31, 2018.Corporation.

PERFORMANCE GRAPH

As noted above, theThe Common Shares are currently trading on the NASDAQ CapitalNasdaq Global Market and were voluntarily delisted from the TSXToronto Stock Exchange (“TSX”) on March 15, 2019.

The following graph compares cumulative shareholder return commencing on December 31, 2013 and ending on December 31, 20182021 (assuming a $100 investment was made on December 31, 2013) with the cumulative total return of S&P/TSX Composite Index and TSX Capped Energy Index.

EXECUTIVE COMPENSATION

The Compensation, Nominating and Corporate Governance Committee of the Board considers compensation matters as and when required. The Compensation Committee reviews and submits recommendations to the Board with respect to the Corporation’s executive compensation policies and the compensation paid to the Corporation’s executive officers. The Compensation Committee also reviews the design and competitiveness of the Corporation’s compensation and benefit programs generally and has the authority to recommend to the Board for its approval amendments to, and grants pursuant to, such programs.

Compensation Philosophy

The Corporation offers market-based pay for performance to ensure that the Corporation has the ability to attract and retain high quality personnel. Consistent with the emphasis on attracting top quality personnel, the Corporation offers above average basecompetitive salaries in order to compete in the labor force forattract the best employees available. The Corporation’s executive compensation policy is designed to provide for the enhancement of shareholder value, the successful implementation of the Corporation’s business plans and a link between executive compensation and the financial performance of the Corporation.

The objectives of the Corporation’s executive compensation policy are to:

(a) attract, retain and motivate executives critical to the success of the Corporation;

(b) provide fair, competitive and cost effective compensation programs to its executives;

(c) link the interests of management with those of the Shareholders; and

(d) provide rewards for outstanding corporate and individual performance.

The Compensation Committee will review on an annual basis the cash compensation, performance and overall compensation package for each executive officer. It will then submit to the Board its recommendations with respect to the basic salary, bonus and participation in long-term incentive plans for each executive officer.

Basic Salary

In determining the basic salary of an executive officer, the Compensation Committee places equal weight on the following factors:

(a) the particular responsibilities related to the position;

(b) salaries paid by comparable businesses;

(c) the experience level of the executive officer; and

(d) his or her overall performance.

Bonus Payments

Executive officers are eligible for annual cash bonuses or performance stock unit awards, after taking into account and giving equal weight to, financial performance, attainment of certain corporate objectives and individual performance. In taking into account the financial performance aspect, it is recognized that executive officers cannot control certain factors, such as interest rates and commodity prices. When applying the financial performance criteria, the Compensation Committee considers factors over which the executive officers can exercise control, such as meeting budget targets established by the Board at the beginning of each year, controlling costs, taking successful advantage of business opportunities and enhancing the competitive and business prospects of the Corporation. There are no pre-established payout ranges.