Aug 17, 2026, 4:08 PM ETEnergy

Empire Petroleum — Second Quarter 2026 Earnings Summary

EPEMPIRE PETROLEUM CORP

Financial Performance

Reported total product revenue of $11.1 million for Q2 2026, a 27% increase year-over-year from $8.7 million in Q2 2025.
Reported a net loss of $1.9 million ($0.05 per diluted share) for Q2 2026, compared to a net loss of $5.1 million ($0.15 per diluted share) in Q2 2025.
Adjusted EBITDA was $0.4 million for Q2 2026, improving from a loss of $1.2 million in Q2 2025.
Net sales volumes averaged 1,825 Boe/d in Q2 2026, down 23% from 2,357 Boe/d in Q2 2025.
Realized price per Boe was $41.33 in Q2 2026, up 1% from $40.78 in Q2 2025.
Lease operating expenses decreased to $5.0 million in Q2 2026 from $6.4 million in Q2 2025.
Depreciation, Depletion, and Amortization (DD&A) was $2.0 million in Q2 2026, down from $3.1 million in Q2 2025.
General and administrative expenses (excluding stock-based compensation) were $2.88 million in Q2 2026 versus $2.91 million in Q2 2025.
Total interest expense increased slightly in Q2 2026 compared to Q2 2025 due to higher average outstanding balances and interest rates.
Cash on hand was $3.1 million as of June 30, 2026, with $2.0 million available on the credit facility.
Total additions to oil and natural gas properties for the six months ended June 30, 2026, were approximately $4.0 million.

Texas development is expected to build momentum through the second half of 2026 with the initiation of drilling to support additional development locations.
Additional wells in Texas are planned to come online via reactivations, recompletions, and new drilling as infrastructure improvements take full effect.
The Company anticipates extending subsurface control across Intermediate Productive Zones (IPZ) and Deep Productive Zones (DPZ), including depths up to 21,006 ft.
Empire intends to advance IPZ and DPZ development strategies over coming quarters, leveraging over 100 existing Fort Trinidad wellbores.
The Company expects to generate revenue from its Louisiana program for the remainder of 2026.
Steam injection from the newly retrofitted thermal unit in North Dakota is expected to initiate in Q3 2026.
Additional well reactivations and completion enhancements are scheduled for the second half of 2026 in North Dakota.
Final resolution of the New Mexico Residual Oil Zone matter is expected to result in a meaningful reduction in operating expenses.

Texas: First drilling rig arrived in June 2026; five wells placed online through reactivations, recompletions, and well-deepening; four additional wells advanced toward first production.
Texas Infrastructure: Compression capacity increased to approximately 700% of initial levels, raising system throughput to 9.5 MMcfd to eliminate stranded gas risk.
Texas Deep Targets: Successfully logged, cored, and underreamed the Wakefield-Harrison GU B #1 well to 21,006 ft, confirming hydrocarbons from 10,000 ft to 21,006 ft.
North Dakota: Completed a major retrofit milestone for the Starbuck Drilling Program to improve heat delivery and oil performance in the Upper Charles interval.
North Dakota: Acquired three federal lease parcels between January and July 2026, adding approximately 1,200 gross acres.
Louisiana: Advanced participation in a three-well development program with a 25% working interest; funding was provided via issuance of 1.8 million shares at $3.00 per share.
Louisiana: Wells were drilled and uncompleted (DUCs) with completion operations targeted for Q4 2026; one well was deepened to evaluate additional reserve potential.
New Mexico: Continued engagement with the State of New Mexico regarding rights to the Residual Oil Zone in the Eunice Monument South Unit.

Empire is the first microcap energy company to successfully log open-hole intervals across the Travis Peak, Cotton Valley Sand, Bossier, and Haynesville formations to a depth of 21,006 ft.
Energy markets are defined by persistent demand for reliable natural gas supply and the importance of assets capable of scalable, repeatable development.
Recent acquisitions provide access to acreage previously off-limits, creating new development opportunities.

Net sales volumes decreased year-over-year primarily due to natural decline and wells in North Dakota being down for steam unit performance enhancement projects.
Workover expenses increased to approximately $0.7 million in Q2 2026 from $0.5 million in Q2 2025, primarily in New Mexico.
Log data, sidewall core recovery, and hydrocarbon shows are not measurements of producible reserves or indicative of commercial flow rates.
Forward-looking statements involve risks including future commodity prices, ability to acquire properties, successful drilling/completion, economic conditions, inflation, tariffs, interest rates, and regulatory uncertainties.

Phil Mulacek, Chairman, expressed confidence that the long-term need for dependable domestic energy will support value creation, citing the record 21,006 ft achievement and pre-investment in gas compression.
Mike Morrisett, President & CEO, stated the focus was on converting project work into measurable operational progress and turning the corner financially.
Management emphasized disciplined execution and positioning assets to benefit from stronger market prices and forward development conditions.

In May 2026, Empire entered into a sales agreement with Roth Capital Partners for an at-the-market offering of up to $7.5 million; no shares have been issued as of the report date.
Empire successfully completed a Rights Offering in March 2026, raising approximately $10.0 million in gross proceeds.
Louisiana program participation was funded by issuing approximately 1.8 million shares of common stock at $3.00 per share.
The Company recorded a loss on derivatives of $1.6 million in Q2 2026.
Net cash used in operating activities was $2.8 million for the three months ended June 30, 2026.
Net cash used in investing activities was $2.7 million for the three months ended June 30, 2026.
Net cash provided by financing activities was $9.9 million for the six months ended June 30, 2026, driven by the Rights Offering.