Empire Petroleum (EP) Q2 2024 earnings summary

Executive summary

• Q2 2024 net production rose 24% year-over-year to 2,638 Boe/d, with oil comprising 67% of the mix, driven by North Dakota operations and new wells.

• Average daily oil sales volumes increased 25% year-over-year, with the largest gains from the Starbuck field.

• Revenues for Q2 2024 increased 31% year-over-year to $12.8 million, supported by higher oil sales volumes and prices.

• Net loss for Q2 2024 was $4.4 million ($0.15/share), reflecting higher operating and interest expenses.

• Rights offering in April 2024 raised ~$20.66 million, and a $5 million promissory note was converted to equity.

Financial highlights

• Q2 2024 total product revenue was $12.8 million, up from $9.8 million in Q2 2023.

• Adjusted EBITDA for Q2 2024 was $1.7 million, a significant improvement from prior quarters.

• Cash on hand as of June 30, 2024, was $9.3 million, with $0.7 million available on the credit facility.

• Capital spend for H1 2024 totaled $26 million, primarily for drilling and completions in North Dakota.

• Operating loss narrowed to $1.9 million in Q2 2024 from $4.4 million in Q1 2024.

Outlook and guidance

• Production expected to ramp in H2 2024 with four new wells and EOR injection starting in North Dakota.

• North Dakota development to drive further gains through 2024-2025, with EOR infrastructure completion by end of Q3 2024.

• Focus to shift to Permian assets in New Mexico in 2025, with continued waterflood optimization and CO2 EOR potential.

• 3D & 2D seismic survey completed in May 2024; data analysis to finish by end of Q3 2024.

• Additional funds required to meet debt covenants and payables over the next 12 months; largest shareholders committed to support fundraising.