Royale Energy, Inc. reported a net loss of $1.25 million for the fiscal year ending December 31, 2025, a decrease from a net loss of $2.16 million in 2024. Total revenues for 2025 were $1.95 million, down 13.9% from $2.26 million in the previous year, primarily due to lower oil prices. The company’s oil and gas production revenue decreased by 14.2% to $1.93 million, attributed to a decline in average oil prices and some wells being offline due to weather-related issues. Despite the revenue drop, total expenses decreased by 27.7% to $4.18 million, largely due to reduced lease operating expenses and impairments.
In a significant operational development, Royale Energy completed the acquisition of non-operated working interests in seven producing horizontal wells and approximately 382.9 net acres in the Pradera Fuego project for $1.5 million. This acquisition, effective July 1, 2025, was financed through a combination of cash and increased borrowings. The company’s total proved reserves increased substantially, with oil reserves rising by 171.1% and natural gas reserves by 362.3%, reflecting successful drilling and revisions of previous estimates.
Operationally, Royale Energy participated in the drilling of one gross well in Texas during 2025, which was commercially productive. The company reported total proved reserves of approximately 949,727 barrels of oil equivalent (BOE) at year-end 2025, compared to 304,200 BOE in 2024. The net reserve value of its proved reserves was estimated at $20.5 million, based on average market prices of $66.01 per barrel for oil and $3.39 per thousand cubic feet for natural gas. The company’s employee headcount remained stable at 11 full-time employees.
Looking ahead, Royale Energy faces challenges related to its significant working capital deficit of $11.55 million and ongoing liquidity concerns. The company plans to seek additional capital through equity or debt financing and aims to increase participation in drilling and completion activities in the Permian Basin. Management has expressed uncertainty about its ability to continue as a going concern, emphasizing the need for strategic decisions to enhance operational cash flow and profitability.
About Royale Energy, Inc.
Royale Energy, Inc. is an independent oil and natural gas producer focused on exploration, development, and production in California and Texas. The company acquires lease interests, drills both exploratory and development wells, and sells fractional interests to diversify risk. It operates and manages reserves, emphasizing cost-effective production and strategic asset management within regulated markets. Royale's core value lies in its diversified portfolio and partnership-based business model.
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