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Empire Petroleum Reports Results for Fourth Quarter and Full Year 2024 and Provides Operational Updates

TULSA, Okla.--(BUSINESS WIRE)-- Empire Petroleum (NYSE American: EP) (鈥淓mpire鈥� or the 鈥淐ompany鈥�), an oil and gas company with producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana, today reported operational and financial results for the fourth quarter and full year 2024, including year-end 2024 proved reserves.

FOURTH QUARTER AND FULL YEAR 2024 HIGHLIGHTS

• Produced Q4-2024 net production volumes of 2,356 barrels of oil equivalent per day (鈥淏oe/d鈥�) including 1,581 barrels of oil per day (鈥淏bl/d鈥�);
  • 22% increase of BBl/d comparing Q4-2024 vs. Q4-2023;
  • Boe/d is comprised of 67% oil, 17% natural gas liquids (鈥淣GLs鈥�), and 16% natural gas;

• Since initiating phase one of Enhanced Oil Recovery (鈥淓OR鈥�) efforts in the Starbuck Drilling Program (鈥淪tarbuck鈥�) in North Dakota, Empire remains committed to leveraging advanced recovery technologies to optimize production and convert additional wells into injectors;
  • In Q4-2024, Empire secured approval from the North Dakota Industrial Commission (鈥淣DIC鈥�) to convert two more oil wells into injectors, further advancing its EOR strategy;
  • Converting three wells lowered the Company鈥檚 short-term production, while better positioning Empire for long-term production growth;

• In Q4-2024, Empire officially filed a provisional patent application with the United States Patent and Trademark Office in connection with a technology it developed in relation to hydrocarbon vaporization;
  • The Company continues to advance the final design of the patent in preparation for field deployment;
  • Initial results from the 30-day peak period showed more than a 700% increase in Starbuck production, achieved using only temporary solutions at that time;
  • Final fabrication was 30% complete to the target design and Empire expects the intellectual property (鈥淚P鈥�) to be developed over the next 90-120 days;

• As Empire continues to expand its technical focus into its Texas region, the Company successfully completed initial infrastructure to begin a new drilling program in Texas, which is expected to begin in 2025;

• Year-end 2024 proved reserves were approximately 9.2 million barrels of oil equivalent (鈥淢MBoe鈥�), and the standardized measure of SEC proved reserves discounted at 10% was $98.4 million;
  • At year-end 2024, future net cash flows without the 10% discount applied was approximately $156.4 million;

• Empire successfully completed two rights offerings in 2024, both anchored by its largest shareholders and bolstered by additional shareholder participation, reflecting optimism in Empire鈥檚 long-term growth strategy;
  • In Q1-2024, Empire launched a $20.7 million rights offering (鈥淎pril Rights Offering鈥�) at $5.00 per share, and due to strong demand, the offering was ultimately oversubscribed upon its conclusion in Q2-2024;
  • Following this success, the Company completed a second rights offering (鈥淣ovember Rights Offering鈥�) in Q4-2024, raising an additional $10.0 million at $5.05 per share, which was also oversubscribed, underscoring shareholder confidence in the Company鈥檚 operational and financial outlook;

• In Q4-2024, Empire increased its revolving credit facility with Equity Bank from $10.0 million to $20.0 million, with the expansion immediately providing over $11.0 million in additional capacity, which highlights the strong relationship with Equity Bank and the financial institution鈥檚 continued confidence in the Company鈥檚 performance and growth trajectory; and

• Reported full year 2024 total product revenue of $44.0 million, a net loss of $16.2 million, or ($0.54) per diluted share;
  • Adjusted EBITDA of $0.7 million for full year 2024 compared to ($2.4) million in 2023;
  • Loss is primarily related to operational challenges on the initial production optimization associated with the EOR in North Dakota. Empire anticipates resolving these non-recurring production issues in Q2-2025.

2025 OUTLOOK

鈥淎s an emerging, agile company, Empire Petroleum has a unique ability to pivot quickly as we receive new data and insights. This flexibility is a tremendous advantage in the dynamic energy sector, allowing us to efficiently allocate capital and resources to the most promising opportunities where they will have the greatest impact,鈥� said Phil Mulacek, Chairman of the Board of Empire. 鈥淓ach new set of data and developments strengthens our confidence in our forward plan, ensuring the best results for our shareholders.鈥�

Mike Morrisett, President and CEO, added 鈥渨ith assets spanning multiple regions, Empire has the ability to shift our focus based on the latest geological, operational, and technical information. We continue to build on our progress in Starbuck and drive responsible energy development. At the same time, we are actively integrating new information to refine our approach ensuring that we adapt to evolving conditions while optimizing our performance. We are confident this level of adaptability positions us well for long-term success.鈥�

North Dakota 鈥� Williston Basin:

• Empire anticipates completing the final equipment portion of the first EOR phase, which should allow the Company to increase production to its original levels, and as the technology is implemented, Empire anticipates production growth; and
• In February 2025, Empire secured NDIC approval for five new drilling permits for horizontal wells, as the Company continues to advance its growth strategy.

New Mexico 鈥� Permian Basin:

• From Q4-2024 to Q1-2025, Empire completed 19 workovers in the region, underscoring the Company鈥檚 commitment to maximizing well productivity, extending asset life, and optimizing operational output;
  • The work completed during this period ensures continued production and mitigates a potential decline; and
• Empire continues the legal and regulatory actions against a third-party trespassing on the New Mexico water floods.

Texas 鈥� East Texas Basin:

• Empire will continue to use new technology, including the technical IP developed in other areas, which will allow the Company to expand its capacity for potential new joint ventures benefiting Empire and the companies it partners with.

Net sales volumes for Q4-2024 were 2,356 Boe/d, including 1,581 barrels of oil per day; 397 barrels of NGLs per day, and 2,268 thousand cubic feet per day (鈥淢cf/d鈥�) or 378 Boe/d of natural gas. Oil sales volumes for 2024 increased compared to prior year by approximately 93,000 barrels or 19% primarily due to new wells completed in North Dakota during Q3-2024 as well as the acquisition of additional working interest in New Mexico.

Empire reported 2024 total product revenue of $44.0 million versus $40.1 million in 2023. Contributing to the increase were higher oil sales volumes in North Dakota due to the Company鈥檚 Starbuck Drilling Program offset by a slight decline in commodity prices.

Lease operating expenses in 2024 decreased to $27.5 million versus $28.6 million for 2023, primarily due to lower workover activities of $5.9 million in 2024 compared to $12.0 million for 2023, partially offset by higher expenses related to an increase in production. Higher workover expense in 2023 was primarily related to work performed on wells in New Mexico to workover wells in the region to enhance and maintain production. These costs are part of the damages Empire seeks to recover under litigation.

Production and ad valorem taxes for 2024 were $3.8 million versus $3.0 million in 2023, as a result of higher product revenues.

Depreciation, Depletion, and Amortization (鈥淒D&A鈥�) and Accretion for 2024 was $11.3 million versus $4.9 million for 2023. The increase in DD&A reflects higher production, the acquisition of additional working interest in New Mexico and the impact of the capitalized costs associated with new drilling activity in North Dakota. Accretion increased slightly due to new drilling activity related to the Starbuck Drilling Program.

General and administrative expenses, excluding share-based compensation expense, was $12.6 million, or $14.23 per Boe in 2024 versus $12.0 million, or $15.71 per Boe in 2023. The slight increase in expenses was primarily due to an increase in salaries and benefits associated with an increase in employee headcount.

Interest expense for 2024 was $1.5 million compared to $1.0 million for 2023, a slight increase due to a higher outstanding balance under the Company鈥檚 credit facility offset by lower interest rates.

Empire recorded a net loss of $16.2 million in 2024, or ($0.54) per diluted share, versus a 2023 net loss of $12.5 million, or ($0.55) per diluted share.

Adjusted EBITDA was $0.7 million for 2024 compared to Adjusted EBITDA of ($2.4) million in 2023.

YEAR-END 2024 PROVED RESERVES

The Company鈥檚 year-end 2024 SEC proved reserves were 9.2 MMBoe compared to 9.1 MMBoe at year-end 2023. The Company recorded 0.4 MMBoe for acquisitions/revisions and (0.3) MMBoe for extensions/production.

Year-end 2024 SEC proved reserves were comprised of approximately 76% crude oil, 13% NGLs, and 11% natural gas.

The acquisition of reserves for 2024 and 2023 primarily relate to additional working interests in certain of the Company鈥檚 New Mexico properties. The revisions for 2024 and 2023 primarily relate to changes in pricing and the extensions relate to increased volumes from our Starbuck Drilling Program.

The standardized measure of the Company鈥檚 reported SEC proved reserves, discounted at 10%, at year-end 2024 was $98.4 million. As of December 31 for each year:

The 12-month average prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive at realized sales prices used to estimate the properties' reserves. The prices for the properties鈥� reserves were as follows:

Changes in the Standardized Measure of Discounted Future Net Cash Flows at 10% per annum are as follows as of December 31 for each year:

CAPITAL SPENDING, BALANCE SHEET & LIQUIDITY

For 2024, Empire invested approximately $42.2 million in capital expenditures, primarily related to the continued drilling and completions activity in North Dakota.

As of December 31, 2024, Empire had approximately $2.3 million in cash on hand and approximately $8.7 million available on its credit facility.

Successful completion of the November Rights Offering in November 2024 with Empire receiving gross proceeds of $10.0 million at $5.05 per share.

UPDATED PRESENTATION

An updated Company presentation will be posted to the Company鈥檚 website under the Investor Relations section.

ABOUT EMPIRE PETROLEUM

Empire Petroleum Corporation is a publicly traded, Tulsa-based oil and gas company with current producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana. Management is focused on organic growth and targeted acquisitions of proved developed assets with synergies with their existing portfolio of wells. More information about Empire can be found at .

SAFE HARBOR STATEMENT

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve a wide variety of risks and uncertainties, and include, without limitations, statements with respect to the Company鈥檚 estimates, strategy, and prospects. Such statements are subject to certain risks and uncertainties which are disclosed in the Company鈥檚 reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2024, and its other filings with the SEC. Readers and investors are cautioned that the Company鈥檚 actual results may differ materially from those described in the forward-looking statements due to a number of factors, including, but not limited to, the Company鈥檚 ability to acquire productive oil and/or gas properties or to successfully drill and complete oil and/or gas wells on such properties, general economic conditions both domestically and abroad, uncertainties associated with legal and regulatory matters, and other risks and uncertainties related to the conduct of business by the Company. Other than as required by applicable securities laws, the Company does not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations, or otherwise.

Empire Petroleum Corporation

Non-GAAP Information

Certain financial information included in Empire鈥檚 financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures include 鈥淎djusted Net Loss鈥�, 鈥淓BITDA鈥� and 鈥淎djusted EBITDA鈥�. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be reported by other companies. Adjusted net loss is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods.

The Company defines adjusted EBITDA as net loss plus net interest expense, depreciation, depletion, and amortization (鈥淒D&A鈥�) and accretion, amortization of right of use assets, income tax (provision) benefit, and other adjustments. Company management believes this presentation is relevant and useful because it helps investors understand Empire鈥檚 operating performance and makes it easier to compare its results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income (loss), as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. In addition, adjusted EBITDA does not represent funds available for discretionary use.

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Mike Morrisett

President & CEO

539-444-8002

[email protected]

Kali Carter

Communications & Investor Relations Manager

918-995-5046

[email protected]

Source: Empire Petroleum