Welcome To The Epsilon Energy Ltd HUB On AGORACOM

Engaged in the acquisition, exploration, development and production of oil and natural gas reserves in North America, the Middle East and Africa.

Message: NR operational update....some good prospects....Ethiopa

CONCORD, Ontario – July 2, 2008 –

Epsilon Energy ("Epsilon" or the "Company") (TSX: EPS) is pleased to provide the following operations update:

North America


Epsilon has completed drilling the Larue #1H, the first horizontal well in its Highway 706 project and is in the process of drilling its 2


horizontal well in the project, the Larue #2H. The Company plans to frac both wells and to conduct a microseismic evaluation on the completion and frac of the Larue #1H. Epsilon will use the data obtained during this microseismic evaluation to design and implement the frac procedure for the Larue #2H and other future Marcellus shale wells. The Company has secured services to continue drilling in the Highway 706 project into 2009. Additionally, Epsilon has entered into an agreement with Tennessee Gas Pipeline for the construction of a pipeline tap into its pipeline and has entered into an agreement with a third party to transport gas to the Tennessee Gas Pipeline system. The Company has also ordered compression and has completed design of the gathering system. Bids are being accepted for construction of the gathering system, which is expected to start in the fall of this year.

New York

Epsilon has participated in its first Marcellus shale well in New York and is encouraged by its results. The Company is staking wells on its existing acreage and expanding its Marcellus shale acreage position with the view of drilling additional wells in the Marcellus shale.

West Virginia

The Company has drilled 23 gross (12.38) net wells year-to-date and production continues to increase in this area.


In the Yamaska project, Epsilon is working with its industry partners to further evaluate and develop this play and will report additional details as they become available.


Federal Democratic Republic of Ethiopia

Since signing the Northwest Study Agreement, Epsilon has acquired detailed stream drainage maps of Ethiopia. These have been interpreted and this work has shown 13 large surface high areas in the study area. It is hoped that some of these surface high areas also reflect subsurface structural high areas which could be oil prospects. The Company has also ordered Landsat imagery for the area. It is being mosaiced together and interpretation will start in mid-July.

The Republic of Yemen

The Company will issue an update on its Yemen operations shortly.

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