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Empire Petroleum Second Quarter 2022 Results

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Empire Petroleum announced the Company’s financial results for the second quarter of 2022, ended June 30, 2022.

2Q 2022 Financial Highlights:

• Revenue from oil, natural gas, and natural gas liquids sales was $16.5 million for the second quarter, triple the $4.9 million revenue reported in the 2021 comparable period.
• Net income for the quarter was $5.5 million compared to a net loss of $5.3 for the second quarter of 2021, a positive swing of $10.8 million.
• The over 300% increase in revenue was due to successful execution of the Company’s strategy to cost effectively produce more volume combined with a favorable pricing environment in the Company’s core operating areas.
• Average oil prices received for second quarter 2022 production realized $109/barrel compared to $62/barrel in the second quarter of 2021 and $91/barrel in the first quarter of 2022.

2Q 2022 Production Accomplishments:

• Increased average daily production by 87.5% to over 195,000 BOE compared to 104,000 BOE in the second quarter of 2021.
• Empire’s assets continue to provide accretive cash flow and increased scale with minimal incremental overhead.

Additional 2Q 2022 Highlights:

• Closed the acquisition of operated and non-operated oil and natural gas assets in the Landa Madison, Landa West Madison and Birdbear Areas in North Dakota, all funded with cash on hand.
• Kicked off the Starbuck Field Enhancement Program, a $10 million investment with a targeted multiple increase in production.
• Elected to participate in four non-op horizontal wells in the Bakken to begin drilling in the third quarter directly offsetting the Sundance Kid wells in Montana, which Empire participated in the fourth quarter of 2021. The Sundance Kid four (4) well Bakken tests have produced over 350,000 barrels of oil in approximately 220 production days, resulting in a production increase of approximately 115 barrels of oil per day net to Empire's interests in the wells.
• Added to the Russell 3000^® and Russell 2000^® Indexes in June 2022.
• Received approximately $3 million in new capital from the successful exercise of legacy warrants.
• Appointed Vice Admiral Andrew Lewis to the Company’s Board of Directors and to serve on the Board’s Audit Committee.

Six Months Financial Results:

• Revenue from oil, natural gas, and natural gas liquids sales was $29.7 million for the first six months of 2022 compared to $7.3 million in the 2021 comparable period, an increase of approximately 308%.
• Net income for the first six months ending June 30, 2022, was $9.2 million compared to a net loss of $6.3 for the same period ending June 30, 2021, a positive swing of $15.5 million.
• Realized oil pricing for the six months ended June 30, 2022, was $101 per barrel, while realized pricing for the same period in the prior year was $58, an increase in price of approximately 74%.

Tommy Pritchard, Chief Executive Officer of Empire, commented, “The second quarter was a record period for Empire. We reported revenue of $16.5 million, three-times higher than last year, driven by increased production from Empire’s assets including the recent acquisition of North Dakota properties that we completed during the second quarter. Continued high commodity prices coupled with optimization of marketing contracts contributed to higher operating nets as well. We also launched our Starbuck Field enhancement program, a $10 million capital investment with targeted multiple increases in production and reserves that we expect to complete by year-end."

Mike Morrisett, President of Empire, added, “In June, Empire’s common stock was added to the Russell 3000® and Russell 2000® Indexes, reflecting the increased liquidity and significant growth of our market valuation since we uplisted to the NYSE American last quarter. We also continued to strengthen our balance sheet with the nearly $3 million we received from the conversion of all legacy warrants. Empire continues to have strong resources, including over $12 million in cash and a low debt level, to continue to execute its strategic plans that are focused on organic growth and the addition of incremental long-life and low-decline reserves that generate strong cash flow.”