EP Empire Petroleum Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

_________________

 

FORM 8-K

_________________

Current Report

Pursuant To Section 13 or 15 (d) of the Securities Exchange Act of 1934

 

 

Date of Report (date of earliest event reported):

 

 

AUGUST 14, 2024

_______________________________

EMPIRE PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

_______________________________

 

Delaware	001-16653	73-1238709
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

 

2200 S. Utica Place, Suite 150, Tulsa, Oklahoma   74114

(Address of Principal Executive Offices)       (Zip Code)

 

Registrant’s telephone number, including area code:   (539) 444-8002

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $.001 par value	EP	NYSE American

  

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Item 2.02.

Results of Operations and Financial Condition.

On August 14, 2024, Empire Petroleum Corporation (the “Company”) issued a press release announcing its financial and operating results for the second quarter 2024. A copy of the press release is furnished herewith as Exhibit 99.

 

This information is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

 

 

 

Item 9.01.

Financial Statements and Exhibits.

(d)		Exhibits.
The following exhibits are filed or furnished herewith.

Exhibit Number	Description
99	Press Release of Empire Petroleum Corporation dated August 14, 2024.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

  

 

  

 

  

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

 

 

	EMPIRE PETROLEUM CORPORATION
Date:     August 15, 2024	By:	/s/ Michael R. Morrisett
		Michael R. Morrisett President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

3

EXHIBIT 99

 

 

  

Empire Petroleum Reports Q2 2024 Results and Provides an Update for North Dakota Drilling Program

 

TULSA, OK – (August 14, 2024) – Empire Petroleum (NYSE American: EP) (“Empire” or the “Company”), an oil and gas company with producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana, today reported 2024 second quarter results and progress on its North Dakota development drilling program.

 

SECOND QUARTER 2024 HIGHLIGHTS

o

Q2-2024 net production volumes rose 20% sequentially and 24% year-over-year to 2,638 barrels of oil equivalent per day (“Boe/d”);

o

Average daily oil sales volumes grew by 23% sequentially and 25% year-over-year with largest increase from North Dakota operations

o

67% oil, 16% natural gas liquids (“NGLs”), and 17% natural gas;

 

o

Completion of the first stage of the North Dakota horizontal wells for Enhanced Oil Recovery (EOR) development in Q2-2024 and the EOR infrastructure to be completed by end of Q3-2024;

 

o

Largest production increase was from the Starbuck field, an increase of ~500% from initial purchase;

o

Increased year-over-year volumes by ~130% and quarter-over-year volumes by ~45%

o

Increase does not include the completion of drilling program or effects on production from EOR activities starting at the end of Q3-2024;

 

o

Commenced conformance improvements in Empire’s New Mexico assets, including an upcoming pilot drilling program; and

 

o

Reported Q2-2024 total product revenue of $12.8 million, a net loss of $4.4 million, or $0.15 per share and an Adjusted Net Loss of $2.9 million, or $0.10 per share.

o

Generated Q2-2024 Adjusted EBITDA of $1.7 million versus $0.2 million in Q2-2023

 

2024 OUTLOOK

Phil Mulacek, Chairman, commented, “Recent drilling and development data from our North Dakota assets reinforce our confidence in achieving significant long-term production gains. We have successfully enhanced well economics, reducing costs by approximately 50% to $2.4 million through standard directional drilling, compared to $4.8 million with Coiled Tubing Drilling (CTD). Directional drilling has also enabled us to nearly double the hole diameter, increasing the flow area by 66% and extending lateral well lengths by around 150% compared to early CTD wells. We anticipate further production improvements in North Dakota throughout 2024 and 2025 by integrating insights from our seismic surveys and completing our EOR infrastructure. Our objective is to continue boosting production in our Starbuck field through Q1 2025, with the potential for additional increases following the completion of our EOR development, guided by our 3D seismic data.”

 

Mike Morrisett, President and CEO, added, “We have made significant strides in North Dakota, resulting in notable production enhancements and shaping our development strategy. Our focus will be on completing the majority of North Dakota's development efforts in the latter half of 2024. Following this, we plan to shift our attention to our Permian assets in New Mexico’s Lea County, where we see even greater potential for production growth. We are advancing our technical review and planning for these fields and aim to initiate a pilot drilling program in 2025. Meanwhile, we remain dedicated to achieving continued improvements in Lease Operating Expenses (LOE) through the end of 2024 and into 2025.”

 

 

North Dakota – Williston Basin:
Empire expects North Dakota development efforts to drive production improvements; targeted to return operations to positive cash flow and support New Mexico exploration and development in 2025 and beyond. The Company’s goal to see a significant base production increase compared to when the assets were purchased is still the objective through Q1-2025;

o

100% of the first stage of EOR horizontal wells were completed in Q2-2024 and the first stage of the EOR infrastructure to be completed in Q3-2024;

o

Second stage of the EOR program and infrastructure to be completed in 2025-2026;

o

New horizontal laterals will be completed for Starbuck and other fields the Company operates within North Dakota;

o

Production anticipated to ramp in second half of 2024 with an additional four wells coming online and EOR injection commencing;

o

Drill core data, currently being evaluated, has confirmed new zones of potential development; and

o

3D & 2D processing to enhance infield development on the Company’s Starbuck assets and apply knowledge to other Company assets in order to expand the development footprint;

o

Completion of the 3D & 2D seismic survey in May 2024

o

Expect data processing and analysis to be completed by end of Q3-2024;

 

New Mexico – Permian Basin:

o

Continued data and analytics on historical water injection profiles across all injectors in Empire’s waterflood units;

o

Started conformance improvements on wells to evaluate the response before implementation on the unit, then a phased in approach;

o

Commenced seeing well performance on production;

o

Reduced water injection on wells;

o

Continued upgrading high potential recompletion opportunities; and

o

Continue the legal and regulatory actions against third parties trespassing on the NM water floods.

 

 

SECOND QUARTER 2024 FINANCIAL AND OPERATIONAL RESULTS

 

		Q2-24				Q1-24				% Change2 Q2-24 vs. Q1-24				Q2-23				% Change2 Q2-24 vs. Q2-23
Net equivalent sales (Boe/d)			2,638				2,207				20%				2,135				24%
Net oil sales (Bbls/d)			1,761				1,437				23%				1,411				25%
Realized price ($/Boe)			53.26				50.96				5%				50.22				6%
Product Revenue ($M)			12,788				10,235				25%				9,758				31%
Net Income (Loss) ($M)			(4,390	)			(3,975	)			-10%				(2,465	)			-78%
Adjusted Net Income (Loss) ($M)1			(2,905	)			(3,866	)			25%				(2,398	)			-21%
Adjusted EBITDA ($M)1			1,727				(729	)			NM				171				NM

________________________________

 

¹ Adjusted Net Income (Loss), EBITDA and Adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Information” section later in this release for more information, including reconciliations to the most comparable GAAP measure.

² NM: A percentage calculation is not meaningful due to change in signs, a zero-value denominator, or a percentage change greater than 200.

 

 

 

 

 

 

 

 

Net sales volumes for Q2-2024 were 2,638 Boe/d, including 1,761 barrels of oil per day; 435 barrels of NGLs per day, and 2,651 thousand cubic feet per day (“Mcf/d”) or 442 Boe/d of natural gas. Quarter-over-quarter net oil sales volumes increase of 23% primarily due to new wells completed in North Dakota.

 

Empire reported Q2-2024 total product revenue of $12.8 million versus $9.8 million in Q2-2023. Contributing to the increase was higher oil sales volumes in North Dakota and higher realized oil and NGL prices.

 

Q2-2024 lease operating expenses increased to $7.5 million versus $7.1 million for Q2-2023, primarily due to increased production partially offset by lower workover expense of $1.6 million for Q2-2024 compared to $2.9 million for Q2-2023. Higher workover expense in 2023 was primarily related to work performed on wells in New Mexico to enhance production.

 

Production and ad valorem taxes for Q2-2024 were $1.1 million versus $0.7 million in Q2-2023, as a result of higher product revenues.

 

Depreciation, Depletion, Amortization and Accretion (“DD&A”) for Q2-2024 was $3.2 million versus $1.1 million for Q2-2023. The increase in DD&A reflects higher production, the acquisition of additional working interest and the impact of the capitalized costs associated with new drilling activity in North Dakota.

 

General and administrative expenses, excluding share-based compensation expense, were $2.4 million, or $9.80 per Boe in Q2-2024 versus $1.9 million, or $9.75 per Boe in Q2-2023. The year-over-year increase was primarily due to an increase in salaries and benefits associated with an increase in employee headcount to support expanded operations.

 

Interest expense for Q2-2024 was $0.7 million compared to $0.2 million for Q2-2023.

 

Empire recorded a Q2-2024 net loss of $4.4 million, or $0.15 per diluted share, versus a Q2-2023 net loss of $2.5 million, or $0.11 per diluted share.

 

Adjusted EBITDA improved to $1.7 million for Q2-2024 compared to Adjusted EBITDA of $0.2 million in Q2-2023.

 

 

CAPITAL SPENDING, BALANCE SHEET & LIQUIDITY

For the six months ended June 30, 2024, Empire invested approximately $26 million in capital expenditures, primarily reflecting the continued drilling and completions activity in North Dakota.

 

As of June 30, 2024, Empire had approximately $9.3 million in cash on hand and approximately $0.7 million available on its credit facility.

 

Empire received gross proceeds of approximately $20.66 million at $5.00 per share following the close of the Rights Offering in April 2024. The Company converted the Promissory Note with Energy Evolution Fund, $5 million at 7%, to 800,000 shares of common stock.

 

 

 

 

 

 

 

UPDATED PRESENTATION

An updated Company presentation will be posted by Friday, August 23, to the Company’s 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 its existing portfolio of wells. More information about Empire can be found at www.empirepetroleumcorp.com.

 

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’s estimates, strategy, and prospects. Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2023, and its other filings with the SEC. Readers and investors are cautioned that the Company’s 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’s 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, 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.

 

CONTACTS

 

Empire Petroleum Corporation

Mike Morrisett

President & CEO

539-444-8002

Info@empirepetrocorp.com

 

Kali Carter

Communications & Investor Relations Manager

918-995-5046

IR@empirepetrocorp.com

 

 

 

 

 

 

 

 

 

 

EMPIRE PETROLEUM CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

           

 

		Three Months Ended												YTD
		June 30,				March 31,				June 30,				June 30,
		2024				2024				2023				2024				2023
Revenue:
Oil Sales		$	12,287,272			$	9,441,964			$	9,147,611			$	21,729,236			$	18,086,326
Gas Sales			(115,833	)			377,130				248,686				261,297				904,721
NGL Sales			617,029				416,211				362,181				1,033,240				867,135
Total Product Revenues			12,788,468				10,235,305				9,758,478				23,023,773				19,858,182
Other			11,227				10,086				18,361				21,313				37,725
Loss on Commodity Derivatives			(1,453	)			(858,150	)			(66,657	)			(859,603	)			(133,480	)
Total Revenue			12,798,242				9,387,241				9,710,182				22,185,483				19,762,427
Costs and Expenses:
Lease Operating Expense			7,542,685				7,387,423				7,099,000				14,930,108				13,619,163
Production and Ad Valorem Taxes			1,065,718				833,447				721,275				1,899,165				1,479,389
Depletion, Depreciation & Amortization			2,676,981				1,490,130				711,042				4,167,111				1,333,531
Accretion of Asset Retirement Obligation			492,449				485,349				405,361				977,798				806,636
General and Administrative Expense:
General and Administrative			2,354,080				2,879,037				1,894,204				5,233,117				4,917,483
Stock-Based Compensation			591,635				710,002				1,180,806				1,301,637				2,130,445
Total General and Administrative Expense			2,945,715				3,589,039				3,075,010				6,534,754				7,047,928
Total Cost and Expenses			14,723,548				13,785,388				12,011,688				28,508,936				24,286,647
Operating Income (Loss)			(1,925,306	)			(4,398,147	)			(2,301,506	)			(6,323,453	)			(4,524,220	)
Other Income and (Expense):
Interest Expense			(735,220	)			(315,049	)			(184,887	)			(1,050,269	)			(422,186	)
Other Income (Expense)			(1,729,245	)			738,000				21,484				(991,245	)			21,906
Income (Loss) before Taxes			(4,389,771	)			(3,975,196	)			(2,464,909	)			(8,364,967	)			(4,924,500	)
Income Tax (Provision) Benefit			—				—				—				—				—
Net Income (Loss)		$	(4,389,771	)		$	(3,975,196	)		$	(2,464,909	)		$	(8,364,967	)		$	(4,924,500	)
Net Income (Loss) per Common Share:
Basic		$	(0.15	)		$	(0.15	)		$	(0.11	)		$	(0.30	)		$	(0.22	)
Diluted		$	(0.15	)		$	(0.15	)		$	(0.11	)		$	(0.30	)		$	(0.22	)
Weighted Average Number of Common Shares Outstanding:
Basic			29,839,853				25,688,427				22,105,704				27,752,816				22,101,264
Diluted			29,839,853				25,688,427				22,105,704				27,752,816				22,101,264

 

 

 

EMPIRE PETROLEUM CORPORATION

Condensed Operating Data

(Unaudited)

             

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
		2024				2024				2023				2024				2023
Net Sales Volumes:
Oil (Bbl)			160,283				130,760				128,413				291,043				248,670
Natural gas (Mcf)			241,242				211,820				211,293				453,063				442,511
Natural gas liquids (Bbl)			39,612				34,785				30,678				74,397				70,434
Total (Boe)			240,102				200,848				194,306				440,951				392,856
Average daily equivalent sales (Boe/d)			2,638				2,207				2,135				2,423				2,170
Average Price per Unit:
Oil ($/Bbl)		$	76.66			$	72.21			$	71.24			$	74.66			$	72.73
Natural gas ($/Mcf)		$	(0.48	)		$	1.78			$	1.18			$	0.58			$	2.04
Natural gas liquids ($/Bbl)		$	15.58			$	11.97			$	11.81			$	13.89			$	12.31
Total ($/Boe)		$	53.26			$	50.96			$	50.22			$	52.21			$	50.55
Operating Costs and Expenses per Boe:
Lease operating expense		$	31.41			$	36.78			$	36.54			$	33.86			$	34.67
Production and ad valorem taxes		$	4.44			$	4.15			$	3.71			$	4.31			$	3.77
Depreciation, depletion, amortization and accretion		$	13.20			$	9.84			$	5.75			$	11.67			$	5.45
General & administrative expense:
General & administrative expense		$	9.80			$	14.33			$	9.75			$	11.87			$	12.52
Stock-based compensation		$	2.46			$	3.54			$	6.08			$	2.95			$	5.42
Total general & administrative expense		$	12.27			$	17.87			$	15.83			$	14.82			$	17.94

 

 

 

 

 

EMPIRE PETROLEUM CORPORATION

Condensed Consolidated Balance Sheets

 

		June 30,				December 31,
		2024				2023
ASSETS
Current Assets:
Cash		$	9,257,773			$	7,792,508
Accounts Receivable			8,783,051				8,354,636
Derivative Instruments			—				406,806
Inventory			1,451,195				1,433,454
Prepaids			788,073				757,500
Total Current Assets			20,280,092				18,744,904
Property and Equipment:
Oil and Natural Gas Properties, Successful Efforts			123,509,574				93,509,803
Less: Accumulated Depreciation, Depletion and Impairment			(27,040,862	)			(22,996,805	)
Total Oil and Gas Properties, Net			96,468,712				70,512,998
Other Property and Equipment, Net			1,625,870				1,883,211
Total Property and Equipment, Net			98,094,582				72,396,209
Other Noncurrent Assets			1,570,531				1,474,503
TOTAL ASSETS		$	119,945,205			$	92,615,616
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable		$	13,641,835			$	16,437,219
Accrued Expenses			8,105,002				7,075,302
Derivative Instruments			189,468				—
Current Portion of Lease Liability			425,528				432,822
Current Portion of Note Payable - Related Party			1,060,004				1,060,004
Current Portion of Long-Term Debt			339,825				44,225
Total Current Liabilities			23,761,662				25,049,572
Long-Term Debt			8,523,756				4,596,775
Long-Term Lease Liability			338,953				544,382
Asset Retirement Obligations			28,649,500				27,468,427
Total Liabilities			61,273,871				57,659,156
Stockholders' Equity:
Series A Preferred Stock - $.001 Par Value, 10,000,000 Shares Authorized, 6 and 6 Shares Issued and Outstanding, Respectively			—				—
Common Stock - $.001 Par Value, 190,000,000 Shares Authorized, 31,375,375 and 25,503,530 Shares Issued and Outstanding, Respectively			90,897				85,025
Additional Paid-in-Capital			131,564,222				99,490,253
Accumulated Deficit			(72,983,785	)			(64,618,818	)
Total Stockholders' Equity			58,671,334				34,956,460
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	119,945,205			$	92,615,616

 

 

 

 

EMPIRE PETROLEUM CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

       

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Cash Flows From Operating Activities:
Net Income (Loss)		$	(4,389,771	)		$	(3,975,196	)		$	(2,464,909	)		$	(8,364,967	)		$	(4,924,500	)
Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided By Operating Activities:
Stock Compensation and Issuances			591,635				710,002				1,180,806				1,301,637				2,130,445
Amortization of Right of Use Assets			135,734				135,733				87,560				271,467				163,785
Depreciation, Depletion and Amortization			2,676,981				1,490,130				711,042				4,167,111				1,333,531
Accretion of Asset Retirement Obligation			492,449				485,349				405,361				977,798				806,636
(Gain) Loss on Commodity Derivatives			1,453				858,150				66,657				859,603				133,480
Settlement on or Purchases of Derivative Instruments			(252,630	)			(10,700	)			—				(263,330	)			(41,187	)
(Gain) Loss on Financial Derivatives			1,736,000				(738,000	)			—				998,000				—
Amortization of Debt Discount on Convertible Notes			500,382				—				—				500,382				—
Gain on Extinguishment of Debt			(16,611	)			—				—				(16,611	)			—
Change in Operating Assets and Liabilities:
Accounts Receivable			(1,694,690	)			1,064,629				(1,189,280	)			(630,061	)			(2,039,189	)
Inventory, Oil in Tanks			346,147				(363,888	)			155,057				(17,741	)			(265,802	)
Prepaids, Current			462,599				(2,398	)			618,737				460,201				708,549
Accounts Payable			(2,484,238	)			4,339,024				(1,587,886	)			1,854,786				(1,697,939	)
Accrued Expenses			668,416				361,284				(464,538	)			1,029,700				(3,642,305	)
Other Long Term Assets and Liabilities			(574,966	)			(446,430	)			(436,523	)			(1,021,396	)			(650,134	)
Net Cash Provided By (Used In) Operating Activities			(1,801,110	)			3,907,689				(2,917,916	)			2,106,579				(7,984,630	)
Cash Flows from Investing Activities:
Deposit for Acquisition of Oil ad Natural Gas Properties			—				—				(670,000	)			—				(670,000	)
Additions to Oil and Natural Gas Properties			(13,202,315	)			(16,940,873	)			(917,843	)			(30,143,188	)			(3,127,847	)
Purchase of Other Fixed Assets			(88,868	)			(31,023	)			(125,866	)			(119,891	)			(153,036	)
Cash Paid for Right of Use Assets			(125,237	)			(125,238	)			(117,560	)			(250,475	)			(204,105	)
Sinking Fund Deposit			—				—				—				—				2,779,000
Net Cash Provided By (Used In) Investing Activities			(13,416,420	)			(17,097,134	)			(1,831,269	)			(30,513,554	)			(1,375,988	)
Cash Flows from Financing Activities:
Borrowings on Credit Facility			—				3,950,000				—				3,950,000				—
Proceeds from Promissory Note			—				5,000,000				—				5,000,000				—
Proceeds from Rights offering (net of transaction costs)			20,511,529				—				—				20,511,529				—
Principal Payments of Debt			(156,594	)			(61,598	)			(719,838	)			(218,192	)			(1,288,974	)
Net Proceeds from Warrants Exercises			628,903				—				—				628,903				—
Net Cash Provided By (Used In) Financing Activities			20,983,838				8,888,402				(719,838	)			29,872,240				(1,288,974	)
Net Change in Cash			5,766,308				(4,301,043	)			(5,469,023	)			1,465,265				(10,649,592	)
Cash - Beginning of Period			3,491,465				7,792,508				6,763,873				7,792,508				11,944,442
Cash - End of Period		$	9,257,773			$	3,491,465			$	1,294,850			$	9,257,773			$	1,294,850

 

 

 

Empire Petroleum Corporation

Non-GAAP Information

 

Certain financial information included in Empire’s 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 “Adjusted Net Income (Loss)”, “EBITDA” and “Adjusted EBITDA”. 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 Income (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.

 

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Net Income (Loss)		$	(4,389,771	)		$	(3,975,196	)		$	(2,464,909	)		$	(8,364,967	)		$	(4,924,500	)
Adjusted for:
(Gain) loss on commodity derivatives			1,453				858,150				66,657				859,603				133,480
Settlement on or purchases of derivative instruments			(252,630	)			(10,700	)			—				(263,330	)			(41,187	)
Loss on financial derivatives			1,736,000				(738,000	)			—				998,000				—
CEO severance (including employer taxes)			—				—				—				—				374,820
Adjusted Net Income (Loss)		$	(2,904,948	)		$	(3,865,746	)		$	(2,398,252	)		$	(6,770,694	)		$	(4,457,387	)
Diluted Weighted Average Shares Outstanding			29,839,853				25,688,427				22,105,704				27,752,816				22,101,264
Adjusted Net Income (Loss) Per Share		$	(0.10	)		$	(0.15	)		$	(0.11	)		$	(0.24	)		$	(0.20	)

 

 

 

 

  

The Company defines Adjusted EBITDA as net income (loss) plus net interest expense, depreciation, depletion and amortization (“DD&A”), accretion, amortization of right of use assets and other items. Company management believes this presentation is relevant and useful because it helps investors understand Empire’s 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, 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.

 

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Net Income (Loss)		$	(4,389,771	)		$	(3,975,196	)		$	(2,464,909	)		$	(8,364,967	)		$	(4,924,500	)
Add Back:
Interest expense			735,220				315,049				184,887				1,050,269				422,186
DD&A			2,676,981				1,490,130				711,042				4,167,111				1,333,531
Accretion			492,449				485,349				405,361				977,798				806,636
Amortization of right of use assets			135,734				135,733				87,560				271,467				163,785
Income taxes			—				—				—				—				—
EBITDA		$	(349,387	)		$	(1,548,935	)		$	(1,076,059	)		$	(1,898,322	)		$	(2,198,362	)
Adjustments:
Stock based Compensation			591,635				710,002				1,180,806				1,301,637				2,130,445
(Gain) loss on commodity derivatives			1,453				858,150				66,657				859,603				133,480
Settlement on or purchases of derivative instruments			(252,630	)			(10,700	)			—				(263,330	)			(41,187	)
(Gain) Loss on financial derivatives			1,736,000				(738,000	)			—				998,000				—
CEO severance (including employer taxes)			—				—				—				—				374,820
Adjusted EBITDA		$	1,727,071			$	(729,483	)		$	171,404			$	997,588			$	399,196

 

 

 

 

 

 

 

 

10

 

 

v3.24.2.u1

Cover	Aug. 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 14, 2024
Entity File Number	001-16653
Entity Registrant Name	EMPIRE PETROLEUM CORPORATION
Entity Central Index Key	0000887396
Entity Tax Identification Number	73-1238709
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2200 S. Utica Place
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	Tulsa,
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	74114
City Area Code	539
Local Phone Number	444-8002
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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