~ Strategic Initiatives Executed in Q3 Further Position Empire for Long-Term Success ~

~ Continuing to Make Significant Progress on Starbuck Drilling Program ~

Empire Petroleum (NYSE American: EP) (“Empire” or the “Company”), an oil and gas company with producing assets in New Mexico, North Dakota, Montana, Texas and Louisiana, today announced operational and financial results for the third quarter of 2023. In addition, the Company provided an update on its targeted drilling program underway at its Starbuck field in North Dakota (the “Starbuck Drilling Program”).

KEY THIRD QUARTER 2023 AND RECENT HIGHLIGHTS

• Posted net sales volumes of 2,048 barrels of oil equivalent per day (“Boe/d”) (64% oil, 19% natural gas liquids (“NGLs”) and 17% natural gas) compared to 2,135 Boe/d (66% oil, 16% NGLs, and 18% natural gas) for the second quarter of 2023. Sales volumes for the third quarter of 2022 were 2,232 Boe/d (60% oil, 21% NGLs, and 19% natural gas);
• Reported product revenue of $10.3 million, a net loss of $2.7 million, or $0.12 per diluted share, and an Adjusted Net Loss¹ of $1.5 million, or $0.06 per diluted share;
• Generated Adjusted EBITDA¹ of $0.1 million;
• Ended the third quarter of 2023 with approximately $11.3 million of liquidity;
• Executed on a number of strategic initiatives designed to support the capital structure and near to mid-term asset development plans for the Company, including:
  • The Company and an indirect wholly-owned subsidiary of Energy Evolution Master Fund, Ltd. (“EEMF”) – Empire’s largest shareholder – collectively acquired strategic additional working interests in August in the Company’s three properties located in Lea County, New Mexico, including Eunice Monument South Unit A, Eunice Monument South Unit B, and Arrowhead Grayburg Unit;
  • Secured bridge loans in September collectively totaling $10 million, including $5 million each from Phil Mulacek, Empire’s Chair of the Board of Directors, and EEMF, with the primary purpose of funding the Company’s targeted Starbuck Drilling Program; and
• Commenced the targeted Starbuck Drilling Program in October during which the Company expects to drill 10 to 14 wells at an estimated total cost of $20 million to $22 million.
  • Initial well log results on the first two wells that have been drilled to target depth have shown positive indicators that materially exceed Empire’s initial expectations as to the targeted reservoir’s porosity and thickness.

MANAGEMENT COMMENTARY

Mike Morrisett, President and Chief Executive Officer of Empire, commented, “We were pleased to see improvement in commodity prices during the third quarter. This timing is ideal as we continue to progress through our development campaign that began in the latter part of 2022 on our North Dakota assets and materially expanded in the second half of 2023 with the recent kick off of the Starbuck Drilling Program.”

Mr. Morrisett continued, “Our capital development programs are designed to drive a meaningful increase in production levels and cash flow for the near and long-term benefit of our shareholders. A lot of time and effort was spent developing the programs and the positive initial results from the well logs on our first two wells being drilled is another clear indicator that all of the planning was well worth the effort. I want to thank everyone involved for their hard work and dedication as we continue to successfully execute our targeted development activities.”

Phil Mulacek, Chair of the Board of Empire, further commented, “We are clearly encouraged with the initial well log results from the first two wells of the Starbuck Drilling Program. We look forward to drilling targeted laterals of 5,000 to 6,500 feet within the target Upper Charles Formation. Loans have been advanced to the Company to fund the drilling and completion activities. As we move through our drilling program, we will continue to apply the lessons learned to improve overall performance of a target production growth.”

FINANCIAL AND OPERATIONAL RESULTS FOR THIRD QUARTER 2023

Net sales volumes were 2,048 Boe/d, including 1,306 barrels of oil per day; 387 barrels of NGLs per day, and 2,129 thousand cubic feet per day (“Mcf/d”), or 355 Boe/d, of natural gas. This is compared to net sales volumes for the second quarter of 2023 of 2,135 Boe/d, including 1,411 barrels of oil per day; 337 barrels of NGLs per day, and 2,322 thousand cubic feet per day (“Mcf/d”), or 387 Boe/d, of natural gas. Primarily driving the quarterly sequential decrease was lower oil sales volumes associated with Empire’s assets in New Mexico due to an annual turnaround of the Eunice Monument South Unit waterflood central facility. The Company looks forward to increasing its North Dakota asset production profile over the near to mid-term through its Starbuck Drilling Program currently underway that is targeted to drill up to 14 high rate-of-return wells.

Empire reported $10.3 million of product revenue versus $9.8 million for the second quarter of 2023. Offsetting the increase in realized crude oil and natural gas sales pricing, was lower sales volumes for crude oil and natural gas as well as lower NGLs realized pricing. This was partially offset by a 16% increase in sequential NGLs sales volumes primarily associated with the Company’s New Mexico assets due to increasing gas well output to capitalize on higher natural gas pricing.

Lease operating expenses were $7.1 million in both the third and second quarter of 2023. On a Boe basis, third quarter lease operating expenses were $37.42 per Boe versus $36.54 per Boe for the second quarter.

Production and ad valorem taxes were $0.8 million, which was a slight increase from $0.7 million for the second quarter of 2023, and were 7.7% and 7.4% of total product revenue, respectively, for the third and second quarters of 2023.

General and administrative (“G&A”) expense, excluding share-based compensation expense, was $2.6 million ($13.70 per Boe) versus $1.9 million ($9.75 per Boe) for the second quarter of 2023.

Empire recorded a net loss of $2.7 million, or $0.12 per diluted share, compared to a net loss of $2.5 million, or $0.11 per diluted share, for the second quarter of 2023. The Company posted an Adjusted Net Loss for the third quarter of $1.5 million, or $0.06 per diluted share, versus an Adjusted Net Loss of $2.4 million, or $0.11 per diluted share, in the second quarter of 2023.

Adjusted EBITDA was $0.1 million versus $0.2 million for the second quarter of 2023.

CAPITAL SPENDING, BALANCE SHEET & LIQUIDITY

For the three months and nine months ended September 30, 2023, the Company invested approximately $2.5 million and $5.6 million, respectively, in capital expenditures primarily related to recompletion and other activities in multiple states as Empire seeks to bring production online from existing wells, as well as expenditures related to the Company’s new horizontal drilling in North Dakota.

Total liquidity at the end of the third quarter of 2023 was $11.3 million, including $11.0 million of cash and $0.3 million of availability on the Company’s credit facility. Empire remains squarely focused on continuing to execute on its strategy to remain financially conservative and target opportunities that provide long-term value for the Company’s shareholders.

DEVELOPMENT PROGRAM UPDATE

The Company is drilling the first two of ten to 14 wells to begin the 2023-2024 Starbuck Drilling Program. The first well was spud on October 11, 2023 and drilled to a depth of approximately 3,600 feet, thereby penetrating the targeted Upper Charles Formation.

• The development plan is to drill and log a vertical well, then build a radius and cement casing across the vertical and radius, and lastly a horizontal section is drilled and completed. The post drill results to date indicate the reservoir at three times thicker than pre-drill estimates and porosities that are three to six times better than pre-drill estimates. Oil and gas was observed at surface with higher than expected pore pressures. The Company expects the first well to be completed in the next 15 to 20 days.
• The Company looks forward to keeping investors apprised of its progress.

ABOUT EMPIRE PETROLEUM

Empire Petroleum Corporation is a publicly traded, Tulsa-based oil and gas company with current producing assets in Texas, Louisiana, North Dakota, Montana, and New Mexico. Management is focused on organic growth and targeted acquisitions of proved developed assets with synergies with its existing portfolio of wells. More information about Empire can be found at www.empirepetroleumcorp.com.

SAFE HARBOR STATEMENT

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve a wide variety of risks and uncertainties, and include, without limitations, statements with respect to the Company’s estimates, strategy and prospects. Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2022, and its other filings with the SEC. Readers and investors are cautioned that the Company’s actual results may differ materially from those described in the forward-looking statements due to a number of factors, including, but not limited to, the Company’s ability to acquire productive oil and/or gas properties or to successfully drill and complete oil and/or gas wells on such properties, general economic conditions both domestically and abroad, and other risks and uncertainties related to the conduct of business by the Company. Other than as required by applicable securities laws, the Company does not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations, or otherwise.

Empire Petroleum Corporation

Non-GAAP Information

Certain financial information included in Empire’s financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures include “Adjusted Net Income (Loss)”, “EBITDA” and “Adjusted EBITDA”. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be reported by other companies. Adjusted Net Income (Loss) is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods.

The Company defines Adjusted EBITDA as net income (loss) plus net interest expense, depreciation, depletion and amortization (“DD&A”), accretion, amortization of right of use assets and other non-cash items. Company management believes this presentation is relevant and useful because it helps investors understand Empire’s operating performance and makes it easier to compare its results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use.

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