EP Empire Petroleum Corporation

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

• Q2-2024 net production volumes rose 20% sequentially and 24% year-over-year to 2,638 barrels of oil equivalent per day (“Boe/d”);
  • Average daily oil sales volumes grew by 23% sequentially and 25% year-over-year with largest increase from North Dakota operations
  • 67% oil, 16% natural gas liquids (“NGLs”), and 17% natural gas;
• 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;
• Largest production increase was from the Starbuck field, an increase of ~500% from initial purchase;
  • Increased year-over-year volumes by ~130% and quarter-over-year volumes by ~45%
  • Increase does not include the completion of drilling program or effects on production from EOR activities starting at the end of Q3-2024;
• Commenced conformance improvements in Empire’s New Mexico assets, including an upcoming pilot drilling program; and
• 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.
  • 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;

• 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;
• Second stage of the EOR program and infrastructure to be completed in 2025-2026;
  • New horizontal laterals will be completed for Starbuck and other fields the Company operates within North Dakota;
• Production anticipated to ramp in second half of 2024 with an additional four wells coming online and EOR injection commencing;
• Drill core data, currently being evaluated, has confirmed new zones of potential development; and
• 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;
  • Completion of the 3D & 2D seismic survey in May 2024
  • Expect data processing and analysis to be completed by end of Q3-2024;

New Mexico – Permian Basin:

• Continued data and analytics on historical water injection profiles across all injectors in Empire’s waterflood units;
• Started conformance improvements on wells to evaluate the response before implementation on the unit, then a phased in approach;
• Commenced seeing well performance on production;
• Reduced water injection on wells;
• Continued upgrading high potential recompletion opportunities; and
• 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 % Change2Q2-24 vs. Q1-24 Q2-23 % Change2Q2-24 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.

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

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240814852806/en/

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