Empire Petroleum (US:EP)2026-03-16 20:02Financial Performance - Empire reported full year 2025 total product revenue of $34.2 million, a decrease from $44.0 million in 2024, primarily due to lower average oil and NGLs realized pricing and reduced oil production[15]. - Empire's net loss for Q4-2025 was $58.95 million, compared to a net loss of $3.84 million in Q3-2025[12]. - Empire recorded a net loss of $72.1 million in 2025, or ($2.12) per diluted share, compared to a net loss of $16.2 million, or ($0.54) per diluted share in 2024[21]. - Net loss for the three months ended December 31, 2025, was $58,953,000 compared to a loss of $4,193,000 in the same period last year[39]. - Adjusted net loss for the year ended December 31, 2025, was $21,564,000, while the adjusted net loss for 2024 was $14,793,000[43]. - The company reported a significant impairment of $51,289,000 for the three months ended December 31, 2025[45]. Production and Sales - In Q4-2025, net production volumes were 2,161 Boe/d, including 1,359 Bbl/d of oil, reflecting a 10% decrease from Q3-2025 and a 14% decrease from Q4-2024[12]. - For the three months ended December 31, 2025, net sales volumes for oil were 125,059 Bbl, a decrease of 13.3% from 144,098 Bbl in the previous quarter[35]. - Average daily equivalent sales for the year ended December 31, 2025, were 2,242 Boe/d, a decrease of 7.2% from 2,416 Boe/d in 2024[35]. Pricing and Costs - The realized price per Boe in Q4-2025 was $35.46, down 17% from Q3-2025 and down 24% from Q4-2024[12]. - Average price per barrel of oil decreased to $54.41 from $61.00 in the previous quarter, representing a decline of 11.8%[35]. - Lease operating expenses decreased to $25.2 million in 2025 from $27.5 million in 2024, primarily due to lower workover activities[16]. - Lease operating expense per Boe increased to $36.90 from $25.99 in the previous quarter, an increase of 42.5%[35]. Assets and Liabilities - Year-end 2025 proved reserves were 7.6 MMBoe, down from 9.2 MMBoe at year-end 2024, with 77% being crude oil[22]. - The standardized measure of SEC proved reserves at year-end 2025 was $58.6 million, down from $98.4 million in 2024, reflecting lower future cash inflows and higher production costs[24]. - Total current assets decreased to $8,180,000 from $12,351,000 year-over-year, a decline of 33.5%[37]. - Total liabilities increased to $70,479,000 from $61,103,000 year-over-year, an increase of 15.5%[37]. - Total stockholders' equity turned to a deficit of $4,606,000 from a positive equity of $62,765,000 year-over-year[37]. Capital Expenditures and Cash Flow - Capital expenditures for 2025 were approximately $4.6 million, primarily for projects in Texas and North Dakota[25]. - Cash flows from operating activities for the year ended December 31, 2025, showed a net cash used of $3,946,000 compared to a net cash provided of $6,157,000 in 2024[39]. - Capital expenditures for oil and natural gas properties were $1,130,000 for the three months ended December 31, 2025, compared to $4,460,000 in the previous year[39]. - Cash at the end of the period was $1,189,000, down from $2,251,000 at the end of the previous year[43]. - The company reported a net change in cash of $(3,412,000) for the three months ended December 31, 2025[43]. Strategic Initiatives - The company plans to increase its Texas gas development program from an initial target of 10-12 wells in 2026 to a target of 12-30 wells by year-end 2026[10]. - Empire is in final due diligence for a three-well participation opportunity in Louisiana, which would expand its economic footprint in developing oil and gas properties[10]. - Empire is focused on organic growth and targeted acquisitions of proved developed assets to enhance its portfolio[29]. - Compression capacity at Empire's Texas Midstream plant is expected to increase over 600% from 1.5 MMcfd in 2025 to 9.5 MMcfd in Q2-2026[2]. - The company is advancing hydrocarbon vaporization technology to improve thermal efficiency and support enhanced oil recovery operations[5]. Expenses - General and administrative expenses for 2025 were $12.0 million, or $14.66 per Boe, slightly down from $12.6 million, or $14.23 per Boe in 2024[20]. - Depreciation, Depletion, and Amortization (DD&A) for 2025 was $12.7 million, an increase from $11.3 million in 2024, attributed to new drilling activities and acquisitions[18]. - Interest expense for the year ended December 31, 2025, was $1,547,000, slightly up from $1,515,000 in 2024[45]. - Depreciation, depletion, and amortization for the year ended December 31, 2025, totaled $10,595,000, compared to $9,256,000 in 2024[45]. - The company experienced a loss on financial derivatives of $(581,000) for the year ended December 31, 2025[45].