Empire Petroleum Corporation (NYSE American: EP) (锟紼mpire锟�), an oil and gas company with current producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana, announced an operational update and financial results for fourth quarter and full year 2025, including year-end 2025 proved reserves.
FOURTH QUARTER AND FULL YEAR 2025 HIGHLIGHTS
- Produced full year 2025 net production volumes of 2,242 barrels of oil equivalent per day (锟紹oe/d锟�) including 1,437 barrels of oil per day (锟紹bl/d锟�);
- Boe/d is comprised of 64% oil, 18% natural gas liquids (锟絅GLs锟�), and 18% natural gas;
- During Q4-2025, Empire initiated a program to re-activate and work over what was originally planned as 10-12 wells in 2026, and as the Company advanced its multi-phase Texas gas development program, the 2026 outlook now includes 12-30 wells designed to unlock incremental production, enhance system reliability, and position the field for scalable long-term growth;
- The Company锟絪 three phase development program consists of the following steps:
- Reactivating multiple wells to restore baseline production and re-establish stable field deliverability, with operations currently active on 10 wells;
- Executing targeted recompletions and well-deepening operations to bring additional pay zones online across the Glen Rose, Rodessa, James Lime, Travis Peak, and the Haynesville-Bossier formations;
- Evaluating deeper gas potential, including a planned 17,000-21,000 foot cleanout and technical evaluation to determine the viability of deeper targets and to refine opportunities within both established and emerging zones in the consolidated Cotton Valley-Bossier and Western Haynesville intervals supported by existing seismic coverage;
- Initial wells from this program have now begun flowing during cleanup, marking the start of early production response across the area;
- Empire currently has one active workover rig in the field, with ongoing progress across workovers, recompletions, and facility optimization efforts as the staged reactivation program advances;
- The Company is executing a broad field program, including ongoing flowline construction and repair work, new location and pad development, and tie-in preparation activities to support sustained deliverability and system readiness for upcoming development phases;
- Compression capacity at Empire锟絪 Texas Midstream plant doubled from its 2025 capacity of 1.5 million cubic feet per day (锟組Mcfd锟�) to 3.0 MMcfd in Q1-2026 and is expected to increase over 600% to 9.5 MMcfd in Q2-2026, with preparation underway for an additional two bays of compression activity;
- In Q2-2026, Empire plans to progress its Texas development program with a dedicated drilling rig to deepen wells from 3,500 to 7,000 feet in depth, increasing the Company锟絪 2026 development plan to 12-30 new wells;
- During Q4-2025, Empire continued to advance the conceptual and technical redesign of its hydrocarbon vaporization technology, with a focus on improving thermal efficiency, enhancing heat utilization, and strengthening long-term operating stability to support enhanced oil recovery (锟紼OR锟�) operations in the Starbuck Drilling Program (锟絊tarbuck锟�);
- The Company experienced steam unit closures during Q4-2025 and Q1-2026 due to extreme cold weather, with the shut-ins cutting production by over 25%;
- Empire is currently working on upgrades to the thermal insulation on its steam units, focusing on improved protection and performance within the combustion chamber and coil assemblies to enhance heat-transfer efficiency and injection-system reliability;
- Through Q4-2025 and into early 2026, Empire continued well completion and artificial lift optimization, including targeted upgrades to existing sucker-rod pumping systems across the Starbuck field and other Rockies region assets to improve operational performance and production consistency;
- The Company also advanced technical evaluations to improve injected-water quality, including refining chemical treatment formulations to mitigate scale formation and related operational impacts;
- Prior to year end, the Company entered into a third amendment to its Revolver Loan Agreement with Equity Bank, extending the maturity date of its existing revolving credit facility;
- The amendment maintains the current maximum revolver commitment amount of $20.0 million and extends the facility锟絪 maturity from December 29, 2026, to December 29, 2028;
- In Q1-2026, Empire launched a subscription rights offering (锟絉ights Offering锟�) that was initially sized at $6.0 million, which has since been expanded to raise gross proceeds of up to approximately $10.0 million, due to increased shareholder interest;
- As stated in previous filings, Energy Evolution Master Fund, Ltd., the Company锟絪 largest shareholder, has indicated its intent to participate in the Rights Offering and fully subscribe to the shares of Common Stock corresponding to its subscription rights, as well as its intent to fully exercise its over-subscription rights to purchase its pro rata share of the underlying securities related to the Rights Offering that remain unsubscribed at the expiration date;
- Phil E. Mulacek, Chairman of the Board of Empire, also has indicated his intent to participate;
- The Rights Offering is expected to expire at 5:00p.m., Eastern Time, on March 18, 2026, subject to extension or earlier termination;
- During Q1-2026, the Company entered into and settled the $3.0 million convertible note held by Phil Mulacek, ahead of its May 2026 maturity, through the issuance of 1,003,344 shares of Empire common stock, further strengthening its capital structure;
- Approximately $5.0 million of Empire锟絪 debt was removed and replaced by $3.0 million of equity;
- In early 2026, Empire strengthened forward cash-flow visibility by locking in crude oil swap contracts by hedging roughly 90% of estimated oil production for the remaining three quarters of 2026 at a blended price in excess of $72 per barrel verses roughly $54 realized price per barrel in Q4-2025;
- Reported full year 2025 total product revenue of $34.2 million, a net loss of $72.1 million, or ($2.12) per diluted share;
- Adjusted EBITDA of ($5.4) million for full year 2025 compared to $0.7 million in 2024;
- Loss is primarily related to lower average oil and NGLs realized pricing, lower than expected oil production, primarily due to redrilling efforts in North Dakota, and impairment loss of $51.3 million.
2026 OUTLOOK
锟絋he natural gas market is entering a period of renewed strength, and Empire is positioning itself to benefit from that shift with a disciplined, multi-step plan in Texas,锟� said Phil Mulacek, Chairman of the Board of Empire. 锟絋he work we锟絭e initiated has positioned the Company for meaningful improvement as oil prices have strengthened through early March 2026. Following the global conflicts that pushed prices higher, we began implementing a disciplined hedging strategy, securing volumes from the high $60s per barrel up to over $90 per barrel, a significant improvement compared to the $54 realized price per barrel we realized in the fourth quarter of 2025. Our strategy remains focused on building resilient, long-term value, rather than chasing short-term cycles.
We are expanding our infrastructure, strengthening our commercial foundation, and advancing deeper-gas evaluation in a way that supports scalable growth as demand continues to rise. The groundwork being laid today provides meaningful leverage to an improving gas environment, and we believe the Company is well aligned to capture that opportunity for our shareholders. While our 2025 results reflected vastly lower realized pricing and reduced oil volumes due to natural decline, shut-ins for EOR instability, and redrilling activity, the year also delivered critical operational learnings that strengthened our strategic direction. The performance trends, subsurface data, and field work completed last year validated the importance of accelerating our gas development initiatives in Texas. These insights helped refine our technical approach and reinforced the deeper-gas potential we are now developing. The key is to stay ahead on gas compression to accelerate cash flow, and we are targeting more than 600% gas takeaway capacity during the second quarter of 2026. As a result, the recent investments, the current Rights Offering, and groundwork completed in 2025 have positioned Empire to transition into a more resilient growth platform, supported by expanding natural gas opportunities, while higher oil prices can be locked in to improve net cash flow with improving market conditions.锟�
Mike Morrisett, President & CEO, continued, 锟絆ur operational progress in early 2026 reflects deliberate execution across our Texas natural gas program. We are restoring productive capacity, expanding our inventory of recompletions, and enhancing the systems that will support higher volumes as market conditions continue to improve. Importantly, we are seeing strengthening fundamentals in the natural gas market, and Empire is pursuing a Texas development path that allows us to participate in that momentum with flexibility and discipline. At the same time, we continue to advance reliability and EOR-focused initiatives in North Dakota. Empire is also evaluating participation in oil and gas prospects in Louisiana, anticipating material expansion of our assets. Our hedging strategy further strengthens this foundation, securing a Q2-2026 blended price of approximately $75 per barrel of oil to protect short-term cash flows in a volatile commodities market. Together, these efforts provide a clear runway for sustained operational strength and expanded optionality across our broader portfolio.锟�