Empire Petroleum Reports 31.8% Revenue Decline and Increased Net Loss in Q2 2025

Empire Petroleum Corporation reported its financial results for the second quarter of 2025, revealing a total revenue of $8.754 million, a decrease of 31.8% from $12.798 million in the same quarter of 2024. The decline in revenue was primarily attributed to lower oil sales, which fell to $8.005 million from $12.287 million year-over-year, reflecting a 35% decrease. For the first half of 2025, total revenue was $17.756 million, down from $22.185 million in the prior year. The company recorded a net loss of $5.056 million for the quarter, compared to a loss of $4.390 million in the same period last year, marking a 15% increase in losses.

Empire's operational metrics showed a decline in production volumes, with oil production decreasing to 135,854 barrels in the second quarter of 2025 from 160,283 barrels in the same quarter of 2024. The average realized price for oil also fell to $58.92 per barrel from $76.66 per barrel, contributing to the revenue drop. The company’s lease operating expenses decreased by 15% to $6.387 million, reflecting lower workover costs, while general and administrative expenses rose by 23% to $2.906 million, driven by increased salaries and benefits associated with a growing employee headcount.

In terms of financial position, Empire reported total assets of $124.659 million as of June 30, 2025, a slight increase from $123.868 million at the end of 2024. However, total liabilities rose significantly to $70.154 million from $61.103 million, primarily due to increased current liabilities and long-term debt. The company’s working capital deficit widened to approximately $11.6 million, up from $8.9 million at the end of 2024, largely due to operational challenges and capital expenditures related to its Starbuck Drilling Program in North Dakota.

Strategically, Empire has been active in its acquisition efforts, having acquired a 60% interest in certain New Mexico properties from Energy Evolution in April 2024. The company is also preparing for a subscription rights offering expected to raise approximately $5 million in August 2025, which will be partially used to settle outstanding debts. Despite these efforts, management expressed concerns about the company's ability to continue as a going concern due to negative working capital and insufficient expected operating cash flows over the next 12 months.

Looking ahead, Empire plans to continue its focus on optimizing production and managing costs while seeking additional funding sources to support its operations. The company remains committed to its drilling activities and potential acquisitions to enhance its operational footprint in the oil and gas sector. However, management acknowledges the challenges posed by market conditions and operational setbacks, which may impact future performance.