Epsilon Energy Ltd. Announces Canadian Joint Venture

CONCORD, ONTARIO--(Marketwire - Sept. 17, 2012) - Epsilon Energy Ltd. ("Epsilon") (TSX:EPS) is pleased to announce it has signed a definitive agreement with a private Canadian company whereby Epsilon will have the opportunity to earn a 50% interest in leasehold properties in Alberta, Canada by spending approximately $3 million of drilling and completion costs attributable to the prospect, with subsequent expenditures split between Epsilon and its partner in accordance with their participating interests, which are expected to be 50/50 thereafter. Epsilon will begin drilling a multi-well oil focused program this year and will act as operator for the joint venture.

Epsilon Energy Ltd. is a North American onshore exploration and production company with a current focus in the Marcellus Shale in Pennsylvania, Bakken Shale in Saskatchewan and Lower Smackover in Mississippi.

Forward-Looking Statements

Certain statements contained in this news release constitute forward looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", 'may", "will", "project", "should", 'believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements are based on reasonable assumption but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.

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.