Empire Petroleum (EP) Q3 2024 earnings summary

Executive summary

• Completed a 13-well drilling program in North Dakota's Starbuck Field, converting three wells to injectors for EOR and temporarily shutting in three wells, positioning for future production gains.

• Expanded technical focus to Texas, implementing advanced strategies to maximize production efficiency and resource recovery.

• Filed a provisional patent application for a novel EOR technology, with official filing in Q4-2024.

• Revenue for Q3 2024 was $11.4 million, up from $9.1 million in Q3 2023, driven by higher oil and NGL sales volumes, though partially offset by lower realized prices.

• Continued legal and regulatory actions in New Mexico, with significant costs incurred but large potential resource upside.

Financial highlights

• Q3 2024 total product revenue was $10.9 million, up 6% year-over-year; nine-month revenues were $33.9 million, up 12% year-over-year.

• Net loss for Q3 2024 was $3.6 million, compared to $2.7 million in Q3 2023; net loss for the nine months ended September 30, 2024, was $12.0 million.

• Lease operating expenses for Q3 2024 decreased to $6.7 million from $7.1 million year-over-year.

• Cash on hand as of 9/30/2024 was $3.1 million, with $0.2 million available on the credit facility.

• Capital spend for the nine months ended 9/30/2024 totaled $38.3 million, primarily for drilling and completions in North Dakota.

Outlook and guidance

• EOR equipment commissioning in North Dakota expected to reach steady state in Q1-2025, with second stage of EOR program and infrastructure on track for 2025-2026.

• New horizontal laterals planned for Starbuck and other North Dakota fields.

• Exploring further growth through 2D and 3D seismic activities to guide future development.

• Evaluating in-field locations in Texas for 2025, with a well activation program underway.

• Management expects continued capital spending for drilling and acquisitions in core areas, funded by a mix of debt, equity, and operating cash flows.