Empire Petroleum Corp (NYSE: EP)

Empire Petroleum Corporation is an independent energy company engaged in the acquisition development and production of oil and natural gas properties in the United States. The company focuses on unlocking value from mature assets by optimizing well performance reducing operating costs and pursuing proved developed producing acquisitions in stable basins. Empire Petroleum Corporation operates through wholly owned subsidiaries in New Mexico North Dakota Texas and Louisiana managing a portfolio of producing wells and associated infrastructure.

The company generates revenue primarily from the sale of oil natural gas and natural gas liquids produced from its operated wells. Petroleum is sold at the lease to third party purchasers via truck or pipeline under market based contracts that reflect quality differentials. Natural gas and NGLs are also sold at the lease under similar market based arrangements. Revenue streams are supplemented by occasional fees for water disposal and other ancillary services. The customer base consists of energy marketers traders and refining companies that take delivery of the hydrocarbons for further processing or resale.

The company operates through a single operating segment.

• Operating Segment: The segment encompasses the exploration development production and sale of oil natural gas and NGLs across the company's properties in the four geographic areas.

Empire Petroleum Corporation competes in a highly fragmented upstream sector where it faces competition from both small independent producers and large integrated oil companies. Many competitors possess greater financial technical and personnel resources which enables them to bid more aggressively for acquisitions and secure oil field services. The company differentiates itself by concentrating on low decline long life assets employing cost effective operational improvements and pursuing enhanced oil recovery projects to extend reserve life and improve margins. Its disciplined acquisition approach and focus on synergies among nearby properties provide a competitive edge in the basins where it operates.

The company sells its oil natural gas and NGLs to a limited number of major marketers that arrange transportation and storage for the products. In 2024 approximately 78% of revenues came from four customers while in 2023 70% of revenues were derived from the same concentration of buyers. No single purchaser accounted for more than 10% of total revenue in either year. Although the loss of any of these customers could cause a temporary sales interruption the presence of alternative purchasers in the operating regions mitigates the risk of a material adverse impact.