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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. |
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 | |
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