Empire Petroleum Corporation Reports Q1 2025 Financial Results with Revenue Decline

Empire Petroleum Corporation reported its financial results for the first quarter of 2025, revealing a total revenue of $9.0 million, a decrease of 4% from $9.4 million in the same period of 2024. The decline in revenue was primarily attributed to lower oil and natural gas liquids (NGL) sales volumes, which fell by approximately 9% due to operational challenges, including five wells being down for redrilling in North Dakota. The average realized price for oil decreased to $67.28 per barrel from $72.21 per barrel, while natural gas prices increased to $2.74 per Mcf from $1.78 per Mcf, reflecting market trends.

The company's operating loss for the quarter was $3.96 million, a slight improvement from a loss of $4.40 million in the prior year. Net loss increased to $4.22 million from $3.97 million, with a basic loss per share of $0.12, compared to $0.15 in the previous year. Total expenses decreased to $12.96 million from $13.78 million, driven by a reduction in lease operating expenses, which fell by 22% to $5.77 million, largely due to lower workover costs.

Empire's balance sheet as of March 31, 2025, showed total assets of $123.68 million, a slight decrease from $123.87 million at the end of 2024. Current liabilities increased to $24.01 million from $21.27 million, resulting in a negative working capital of approximately $12.45 million, up from $8.92 million at the end of the previous year. The company’s cash position also declined, with cash on hand at $1.08 million compared to $2.25 million at the end of 2024.

Strategically, Empire continues to focus on its Starbuck Drilling Program in North Dakota, which has incurred significant costs but is expected to enhance production capabilities in the long term. The company has also secured financial support from its major shareholders, Phil Mulacek and Energy Evolution, who collectively own approximately 52.9% of the company’s common stock and have indicated their willingness to provide additional funding if necessary. Despite the current financial challenges, management remains optimistic about future operations and is actively seeking additional capital to support ongoing and future projects.

Looking ahead, Empire anticipates continued operational costs related to drilling activities and potential acquisitions in core areas. The company plans to utilize a combination of cash on hand, cash flows from operations, and debt or equity issuances to fund its capital programs. However, the substantial negative working capital raises concerns about the company's ability to meet its obligations over the next 12 months, underscoring the importance of securing additional financing to sustain operations.