“Company”) (TSX: EPS) today announced the closing of its Farm Out Agreement

with Chesapeake Energy Corporation (NYSE:CHK) (“Chesapeake”) previously

announced on January 18 2010. The assets in the joint venture include

approximately 11,500 net acres of leasehold in the Highway 706 area in

Susquehanna County, Pennsylvania; approximately 10 MMcf/day of current

natural gas production, and related compression, pipeline and tap site facilities. In

addition, Epsilon believes that its leasehold position will support the drilling of

approximately 120-150 additional locations (60-75 net to Epsilon).

At closing Chesapeake paid to the joint venture approximately $5 million in cash

and will earn a 50% interest in Epsilon’s upstream Marcellus Shale assets by

paying a further $95 million over time by carrying the first $95-million of Epsilon's

50-per-cent share of leasehold, drilling, completing, equipping and gathering

costs attributable to the prospect. The carry obligation is expected to be

completed by August 1, 2012.

In the framework of the Farm Out Agreement, Chesapeake plans to spend a total

of $195 million developing the Highway 706 prospect.

Zoran Arandjelovic, Epsilon’s Executive Chairman, President and CEO,

commented, "We believe this transaction creates tremendous value for our

shareholders and we are very excited and looking forward to our partnership with

Chesapeake. Chesapeake’s expertise will help us maximize return on our

Pennsylvania assets while freeing up our resources to concentrate on our New

York Marcellus Shale prospect."

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, added, “We are

very pleased to have now closed this transaction with Epsilon. Their acreage is

located in an area of Susquehanna County where we expect average estimated

ultimate reserve recoveries to be substantially greater than those found on

average in the Marcellus. We expect to begin development work in the prospect

area in short order.”