Empire Petroleum Corp (NYSE: EP)

Empire Petroleum Corp is an independent energy company focused on unlocking value in developed oil and natural gas assets. The company operates primarily through its wholly-owned subsidiaries, Empire New Mexico LLC, Empire North Dakota LLC, Empire Texas LLC, and Empire Louisiana LLC, each targeting strategic plays in the United States. Empire Petroleum Corp's core business activities revolve around optimizing well production, reducing unit operating costs, and improving margins through the acquisition and development of proved developed producing properties. The company's mission is to increase shareholder value by building oil and natural gas reserves in strategic plays, with a focus on high-quality assets that add scale and provide synergies to its existing portfolio.

Empire Petroleum Corp generates revenue through the production and sale of oil, natural gas, and natural gas liquids (NGLs). The company's primary products include crude oil, natural gas, and NGLs, which are sold to marketers and transported by truck or pipeline to storage facilities. Empire Petroleum Corp's revenue is derived from the sale of these hydrocarbons, with pricing adjusted for differentials based on oil quality. The company's customer base consists of marketers and third-party purchasers, with a significant portion of revenues coming from a few key customers. For 2025, 66% of revenues from oil, natural gas, and NGLs sales were to three customers, while for 2024, 78% of revenues were to four customers.

• Empire New Mexico: This segment includes approximately 709 gross (525 net) wells on 48,000 gross (41,000 net) acres in Lea County, New Mexico. Empire New Mexico's assets primarily produce oil with accompanying natural gas and NGLs production. The properties are located in various formations, including Grayburg/San Andres, Queen-Seven Rivers-Yates, Devonian, Abo, Blineberry, Tubb, and Drinkard. The segment also includes 18 royalty interest wells with an average overriding royalty interest of 0.6%.

• Empire North Dakota: This segment includes approximately 243 gross (118 net) wells on 24,200 gross (18,200 net) acres in North Dakota and western Montana. Empire North Dakota's assets primarily produce oil with some related gas production. The properties are located in formations such as Madison, Bakken, Duperow, Red River, and Ratcliffe/Mission Canyon. The segment also includes smaller nonoperating interests in 105 gross (less than 1 net) vertical wells. Empire North Dakota has experienced near-flat production rates over the last five years and has capitalized on operational improvements to allow a more immediate recovery of reserves. The company completed a Starbuck Drilling Program in 2024, strategically designed for enhanced oil recovery (EOR) production to further develop the Starbuck Field in North Dakota. The program involved 13 wells in the Upper Charles formation and has resulted in increased production throughout 2025, which is anticipated to continue into 2026.

• Empire Texas: This segment includes approximately 118 gross (105 net) wells on approximately 43,000 gross (30,000 net) acres, as well as 49 miles of gathering lines and pipelines with related facilities and equipment. Empire Texas owns concentrated acreage and stacked pay in the historically prolific East Texas Basin. Assets are concentrated in the Fort Trinidad Field in Houston and Madison Counties, with high working interest and historical production from eight separate formations. The company has begun technical work for uplift opportunities in Texas and initiated a return-to-production program on four wells in the fourth quarter of 2024, primarily focused on facility work on the existing saltwater disposal system, which was completed in 2025.

• Empire Louisiana: This segment includes 7 gross (5 net) wells and three saltwater disposal wells in the Miocene, Frio, Cockfield, and Wilcox formations. Empire Louisiana's assets primarily produce oil.

Empire Petroleum Corp operates in a highly competitive oil and natural gas industry, facing competition from numerous parties ranging from small independent producers to major integrated companies. The company encounters significant competition in acquiring properties and, at higher commodity prices, in contracting for oil field services, rigs, pressure pumping and workover equipment, and securing trained personnel. Many competitors have financial, technical, and personnel resources substantially larger than those of Empire Petroleum Corp, which may enable them to pay more for desirable properties or to evaluate, bid for, and purchase a greater number of properties or prospects. The oil and natural gas industry is also subject to extensive federal, state, and local laws and regulations governing the production, transportation, and sale of hydrocarbons, as well as the taxation of income resulting therefrom. These regulations can increase the cost of doing business and affect profitability.

Empire Petroleum Corp sells its oil, natural gas, and NGLs production to marketers, which is transported by truck or pipeline to storage facilities arranged by the marketers. The company's marketing of oil and natural gas can be affected by factors beyond its control, the effects of which cannot be accurately predicted. For 2025, 66% of revenues from oil, natural gas, and NGLs sales were to three customers, while for 2024, 78% of revenues were to four customers. No other purchaser accounted for more than 10% of the company's total revenues during the respective periods. While the loss of these purchasers may result in a temporary interruption in sales of, or a lower price for, the company's production, Empire Petroleum Corp believes that the loss of these purchasers would not have a material adverse effect on its operations, as there are alternative purchasers in its producing regions.