Empire Petroleum Corp (EP, Financial) released its 8-K filing on November 15, 2024, detailing its financial performance for the third quarter of 2024. The company, a conventional oil and natural gas producer with assets in the US onshore regions, reported a mixed set of results as it navigates through operational challenges and strategic developments.
Company Overview
Empire Petroleum Corp is focused on long-life, mature, producing assets with slow decline profiles in the Permian Basin, Bakken region, and central Gulf Coast region. The company operates in New Mexico, North Dakota, Montana, Louisiana, and Texas, with production from both operated and non-operated wells.
Performance and Challenges
In Q3 2024, Empire Petroleum Corp reported net equivalent sales of 2,460 Boe/d, a 7% decrease from the previous quarter but a 20% increase year-over-year. The decline in quarter-over-quarter sales was attributed to lower realized prices, which fell by 10% to $48.12 per Boe. Despite the challenges, the company achieved a 20% increase in net oil sales volumes year-over-year, driven by new wells in North Dakota and additional working interest acquisitions in New Mexico.
Financial Achievements
Empire Petroleum Corp's total product revenue for Q3 2024 was $10.9 million, a 6% increase from Q3 2023. This growth was primarily due to higher sales volumes of oil, natural gas, and NGLs, although it was partially offset by lower realized prices. The company's lease operating expenses decreased to $6.7 million from $7.1 million in Q3 2023, reflecting increased production and reduced workover expenses.
Key Financial Metrics
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Equivalent Sales (Boe/d) | 2,460 | 2,638 | 2,048 |
| Realized Price ($/Boe) | $48.12 | $53.26 | $54.75 |
| Product Revenue ($M) | $10.9 | $12.8 | $10.3 |
| Net Loss ($M) | ($3.6) | ($4.4) | ($2.7) |
Analysis of Financial Statements
Empire Petroleum Corp's balance sheet showed total assets of $121.2 million as of September 30, 2024, up from $92.6 million at the end of 2023. This increase was largely due to investments in oil and natural gas properties. The company's cash position stood at $3.1 million, with $0.2 million available on its credit facility.
Despite reporting a net loss of $3.6 million for Q3 2024, the company managed to reduce its net loss from the previous quarter by 18%. However, the adjusted net loss widened significantly year-over-year, highlighting ongoing financial pressures.
Strategic Developments and Outlook
"In recent months, Empire has been focused on its capital expenditures program, while simultaneously advancing its projects and infrastructure development in North Dakota," said Phil Mulacek, Chairman of the Board of Empire.
The company is optimistic about its enhanced oil recovery (EOR) injections in Starbuck and potential developments in Texas, which are expected to drive future growth. Empire's strategic focus on leveraging historical knowledge and expertise aims to expand operations and improve efficiency.
Empire Petroleum Corp's Q3 2024 results reflect both the challenges and opportunities within the oil and gas industry. While the company faces headwinds from fluctuating commodity prices, its strategic initiatives and operational improvements position it for potential growth in the coming quarters.
Explore the complete 8-K earnings release (here) from Empire Petroleum Corp for further details.
