Mason H. Matschke
About Mason H. Matschke
Independent director (since April 2021), age 62. Partner and Chief Compliance Officer of Energy Evolution Master Fund, Ltd. (EEF) since 2021; prior senior investment roles at Raymond James (SVP of Investments, 2007–2020), Jefferies (SVP, 2006–2008) and UBS (SVP, 1997–2006). Brings 35 years of portfolio management and research experience across sectors, derivatives strategy, and commodity/equity trading; deemed financially sophisticated for Audit Committee service under NYSE American rules .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Raymond James | Senior Vice President of Investments | 2007–2020 | Investment leadership and research across sectors |
| Jefferies | Senior Vice President | 2006–2008 | Derivatives and trading background |
| UBS | Senior Vice President | 1997–2006 | Portfolio management, compliance/regulatory experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Energy Evolution Master Fund, Ltd. (EEF) | Partner & Chief Compliance Officer | 2021–present | EEF is a >5% holder of EP and engaged in multiple related-party transactions approved by EP’s Board . |
Board Governance
- Committee memberships: Audit Committee (member), Compensation Committee (member); not a chair. Audit chaired by J. Kevin Vann; Compensation and Operations chaired by Phil E. Mulacek .
- Independence: Board determined all directors except CEO Michael R. Morrisett are independent; no material relationship for independent directors; Mulacek’s transactions reviewed in independence determination .
- Attendance: Board held 4 meetings in 2024; each director attended at least 75% of Board and committee meetings; all directors attended the 2024 annual meeting .
- Committee activity: Audit Committee held 4 meetings (2024); Compensation Committee held 4; Operations Committee held numerous meetings (2024) .
- Risk oversight: Audit Committee oversees risk management, internal controls, auditor independence, related-person transactions, and Code of Conduct application .
Fixed Compensation
EP’s director pay structure (2024–2025 framework):
- Annual cash retainer: $80,000 (non‑employee directors) .
- Quarterly cash retainer per committee: $3,000; in‑person Board meeting fee per quarter: $2,500; Chairman additional quarterly retainer: $9,000 (waived by Chairman in 2023 and 2024) .
- In 2024, non‑employee directors received no equity awards .
| Component | 2023 | 2024 |
|---|---|---|
| Fees Earned or Paid in Cash ($) | $83,000 | $111,500 |
Notes: Cash includes annual and quarterly retainers and meeting fees .
Performance Compensation
- Equity: RSUs and stock options have historically been granted; RSUs generally have forfeiture provisions that lapse 13 months after grant; options vest in four equal quarterly installments beginning with the first quarter after grant .
- 2024: No director equity awards granted .
- Option exercise price on outstanding director grants: $11.83 per share .
| Metric | 2023 | 2024 |
|---|---|---|
| RSU Grant (shares) | 10,000 shares; grant date fair value $118,300 | None granted |
| Stock Options (shares) | 40,000 shares; grant date fair value $473,200; $11.83 strike; 4-quarter vesting | No new grants; 40,000 options outstanding at $11.83 |
| Performance metrics tied to director pay | None disclosed for directors (structure primarily time-based equity) |
Other Directorships & Interlocks
| Entity | Relationship | Nature | Terms/Amounts | Date(s) |
|---|---|---|---|---|
| Energy Evolution Master Fund, Ltd. (EEF) | Matschke is Partner & CCO; EEF is principal shareholder | Bridge Loan to EP subsidiary; interest paid in EP shares; subsequent Securities Purchase Agreement (SPA) | $5,000,000 bridge loan at 7%; SPA for 1,256,832 shares at $8.00 ($10,054,657.53 total, mix of cash and loan cancellation) | Loan: 9/19/2023; amendments 10/31/2023, 11/9/2023; SPA 11/29/2023 (amended 12/1/2023) |
| EEF | Warrant exercise | Exercised EP warrant for shares | 500,000 shares for $2,500,000 | 7/20/2023 |
| EEF subsidiary | Acquisition of working interests (NM properties) | EEF acquired 90%; EP acquired 10%; EP granted option to buy EEF interest | EP paid $2,100,000; option price $5,000,000; EP issued 67,000 shares for option; extensions require additional 42,000 shares per year | 8/9/2023 |
| Phil E. Mulacek (Chairman) | Related party | Bridge Loan to EP subsidiary; SPA for shares | $5,000,000 bridge loan at 7%; SPA: 609,013 shares for $5,000,000 cash at $8.21; 631,832 shares at $8.00 via loan cancellation | 9/19/2023; amendments 10/31/2023, 11/9/2023; SPA 11/29/2023 (amended 12/1/2023) |
| Petroleum & Independent Exploration, LLC (PIE) | Controlled by Chairman Mulacek | JDA and term loan to EP Texas; later repaid in shares; Shared Services Agreement | Loan up to $2,000,000 at 6%; ~$1.06M repaid via 205,427 EP shares at $5.16; Shared services reimbursements: $266,749 (2024), $53,500 (2023) | JDA/loan: 8/1/2020; termination/repayment effective 7/1/2024; Shared Services effective 8/1/2023 |
Governance controls: The Audit Committee reviews and approves related-person transactions; Board approved the above transactions .
Expertise & Qualifications
- Financial sophistication: Able to read and understand fundamental financial statements; Audit Committee member .
- Background: Portfolio management, derivatives strategy, commodity/equity trading; compliance/regulatory expertise .
Equity Ownership
| Metric | FY 2023 (as of 4/2024) | FY 2024 (as of 4/2025) |
|---|---|---|
| Beneficial Ownership (shares) | 740,196 | 826,250 |
| Percent of Class | 2.49% | 2.44% |
| Options included | 40,000 | 40,000 |
| RSUs included | 10,000 outstanding at 12/31/2023 | 51,096 |
| EP shares outstanding basis | — | 33,712,727 (basis for % calc) |
| Principal holder linkage | EEF holds 10,733,028 shares (31.84%) | 31.84% |
Governance Assessment
- Board effectiveness and engagement: Active service on Audit and Compensation Committees with documented meeting cadence (four meetings each in 2024); Board and committee attendance ≥75% and participation at annual meeting indicate solid engagement .
- Independence and conflicts: Formally independent under NYSE American; however, affiliation with EEF (31.84% holder) that engaged in multi-million dollar financings, warrants, and asset transactions with EP introduces a perceived conflict risk. Mitigants include Audit Committee oversight of related-person transactions and Board approvals; best practice would be documented recusals by any director affiliated with a counterparty (not specifically disclosed) .
- Pay-for-performance and alignment: 2024 director pay was entirely cash ($111,500 for Matschke), with no equity grants—reducing dilution but modestly weakening long-term alignment. 2023 included RSUs (10,000) and options (40,000 at $11.83), with time-based vesting, supporting alignment without explicit performance metrics. Personal ownership of 826,250 shares (2.44%) plus outstanding equity reflects meaningful skin-in-the-game, though dwarfed by EEF’s stake .
- Compensation governance: Compensation Committee did not retain an external consultant in 2024; committee has authority to do so. EP has a compliant clawback policy aligned with SEC/NYSE rules, enhancing governance .
- Shareholder signals: Strong say-on-pay support—~93.8% approval in 2024 (2025 proxy reference) and >97.8% in 2023—indicates investor confidence in compensation practices .
RED FLAGS
- Affiliation with EEF, a large shareholder and frequent related-party counterparty (bridge loans, warrant exercise, asset interests, share issuances) increases conflict-of-interest scrutiny; clear disclosure of recusals would reduce risk (not disclosed) .
- Ongoing shared services and historical financing arrangements with entities controlled by the Chairman (PIE) can raise governance concerns; Audit Committee oversight and Board approvals are noted, but continued monitoring is warranted .
- Absence of disclosed director stock ownership guidelines or performance-linked metrics for director equity may limit formal alignment mechanisms versus best-practice boards .
Director Compensation Details
Structure Overview (Directors)
- Annual cash retainer: $80,000 (non‑employee directors) .
- Committee service: $3,000 per committee per quarter; in‑person Board meetings: $2,500 per quarter; Chairman add’l $9,000 per quarter (waived in 2023/2024) .
- Equity: Historically RSUs up to 10,000 shares annually (June-to-June service period); options historically 40,000 shares; none granted in 2024 .
Matschke – Compensation Mix
| Metric | 2023 | 2024 |
|---|---|---|
| Cash (retainers/meeting fees) | $83,000 | $111,500 |
| RSU Fair Value | $118,300 | — (no grant) |
| Options Fair Value | $473,200 | — (no grant) |
| Option Exercise Price | $11.83 | $11.83 (outstanding options) |
| Vesting Terms | RSUs: 13-month lapse; Options: 4 quarterly tranches | Existing options continue per grant terms |
Committee Assignments
| Committee | Role | Notes |
|---|---|---|
| Audit | Member | Vann is Chair; Matschke deemed financially sophisticated; Audit Committee held 4 meetings in 2024 . |
| Compensation | Member | Committee held 4 meetings in 2024; no consultant retained . |
| Operations | Not listed as member | Numerous meetings in 2024 . |
Equity Ownership Alignment
- Individual beneficial ownership: 826,250 shares (2.44%), including 40,000 options and 51,096 RSUs, as of April 21, 2025 .
- Ownership concentration: EEF at 31.84%—material influence; Matschke’s affiliation increases potential perceived conflicts despite formal independence .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: ~93.8% of votes cast (strong support) .
- 2023 say-on-pay approval: >97.8% (>99.8% excluding abstentions) .
Related Party Transactions Oversight
- Audit Committee charter requires review/approval of related-person transactions; Board approved EEF and PIE transactions listed above .
- Specific transactions include bridge financings converted to equity, warrant exercises, working interest acquisitions with options, and shared services reimbursements .
Clawback Policy
- Company policy mandates recovery of erroneously awarded incentive-based compensation upon required restatements, covering metrics such as revenue, net income, EBITDA, stock price, and TSR, for the prior three years .