Empire Petroleum Reports Results for Fourth Quarter and Full Year 2024 and Provides Operational Updates

About this update from Empire Petroleum Corporation

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 reported operational and financial results for the fourth quarter and full year 2024, including year-end 2024 proved reserves. FOURTH QUARTER AND FULL YEAR 2024 HIGHLIGHTS Produced Q4-2024 net production volumes of 2,356 barrels of oil equivalent per day (“Boe/d”) including 1,581 barrels of oil per day (“Bbl/d”); 22% increase of BBl/d comparing Q4-2024 vs. Q4-2023; Boe/d is comprised of 67% oil, 17% natural gas liquids (“NGLs”), and 16% natural gas; Since initiating phase one of Enhanced Oil Recovery (“EOR”) efforts in the Starbuck Drilling Program (“Starbuck”) in North Dakota, Empire remains committed to leveraging advanced recovery technologies to optimize production and convert additional wells into injectors; In Q4-2024, Empire secured approval from the North Dakota Industrial Commission (“NDIC”) to convert two more oil wells into injectors, further advancing its EOR strategy; Converting three wells lowered the Company’s short-term production, while better positioning Empire for long-term production growth; In Q4-2024, Empire officially filed a provisional patent application with the United States Patent and Trademark Office in connection with a technology it developed in relation to hydrocarbon vaporization; The Company continues to advance the final design of the patent in preparation for field deployment; Initial results from the 30-day peak period showed more than a 700% increase in Starbuck production, achieved using only temporary solutions at that time; Final fabrication was 30% complete to the target design and Empire expects the intellectual property (“IP”) to be developed over the next 90-120 days; As Empire continues to expand its technical focus into its Texas region, the Company successfully completed initial infrastructure to begin a new drilling program in Texas, which is expected to begin in 2025; Year-end 2024 proved reserves were approximately 9.2 million barrels of oil equivalent (“MMBoe”), and the standardized measure of SEC proved reserves discounted at 10% was $98.4 million; At year-end 2024, future net cash flows without the 10% discount applied was approximately $156.4 million; Empire successfully completed two rights offerings in 2024, both anchored by its largest shareholders and bolstered by additional shareholder participation, reflecting optimism in Empire’s long-term growth strategy; In Q1-2024, Empire launched a $20.7 million rights offering (“April Rights Offering”) at $5.00 per share, and due to strong demand, the offering was ultimately oversubscribed upon its conclusion in Q2-2024; Following this success, the Company completed a second rights offering (“November Rights Offering”) in Q4-2024, raising an additional $10.0 million at $5.05 per share, which was also oversubscribed, underscoring shareholder confidence in the Company’s operational and financial outlook; In Q4-2024, Empire increased its revolving credit facility with Equity Bank from $10.0 million to $20.0 million, with the expansion immediately providing over $11.0 million in additional capacity, which highlights the strong relationship with Equity Bank and the financial institution’s continued confidence in the Company’s performance and growth trajectory; and Reported full year 2024 total product revenue of $44.0 million, a net loss of $16.2 million, or ($0.54) per diluted share; Adjusted EBITDA of $0.7 million for full year 2024 compared to ($2.4) million in 2023; Loss is primarily related to operational challenges on the initial production optimization associated with the EOR in North Dakota. Empire anticipates resolving these non-recurring production issues in Q2-2025. 2025 OUTLOOK “As an emerging, agile company, Empire Petroleum has a unique ability to pivot quickly as we receive new data and insights. This flexibility is a tremendous advantage in the dynamic energy sector, allowing us to efficiently allocate capital and resources to the most promising opportunities where they will have the greatest impact,” said Phil Mulacek, Chairman of the Board of Empire. “Each new set of data and developments strengthens our confidence in our forward plan, ensuring the best results for our shareholders.” Mike Morrisett, President and CEO, added “with assets spanning multiple regions, Empire has the ability to shift our focus based on the latest geological, operational, and technical information. We continue to build on our progress in Starbuck and drive responsible energy development. At the same time, we are actively integrating new information to refine our approach ensuring that we adapt to evolving conditions while optimizing our performance. We are confident this level of adaptability positions us well for long-term success.” North Dakota – Williston Basin: Empire anticipates completing the final equipment portion of the first EOR phase, which should allow the Company to increase production to its original levels, and as the technology is implemented, Empire anticipates production growth; and In February 2025, Empire secured NDIC approval for five new drilling permits for horizontal wells, as the Company continues to advance its growth strategy. New Mexico – Permian Basin: From Q4-2024 to Q1-2025, Empire completed 19 workovers in the region, underscoring the Company’s commitment to maximizing well productivity, extending asset life, and optimizing operational output; The work completed during this period ensures continued production and mitigates a potential decline; and Empire continues the legal and regulatory actions against a third-party trespassing on the New Mexico water floods. Texas – East Texas Basin: Empire will continue to use new technology, including the technical IP developed in other areas, which will allow the Company to expand its capacity for potential new joint ventures benefiting Empire and the companies it partners with.   FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL AND OPERATIONAL RESULTS Q4-24 Q3-24 % Change Q4-24 vs. Q3-24 Q4-23 % Change Q4-24 vs. Q4-23           Net equivalent sales (Boe/d) 2,356 2,460 -4% 2,011 17% Net oil sales (Bbls/d) 1,581 1,573 1% 1,294 22% Realized price ($/Boe) $46.48 $48.12 -3% $53.50 -13% Product Revenue ($M) $10,076 $10,892 -7% $9,898 2% Net Loss ($M) ($4,193) ($3,640) -15% ($4,797) 13% Adjusted Net Loss ($M) 1 ($4,193) ($3,829) -10% ($5,753) 27% Adjusted EBITDA ($M) 1 ($260) ($56) -362% ($2,917) 91% __________________________________ 1 Adjusted net loss and adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Information” section later in this release for more information, including reconciliations to the most comparable GAAP measure. Net sales volumes for Q4-2024 were 2,356 Boe/d, including 1,581 barrels of oil per day; 397 barrels of NGLs per day, and 2,268 thousand cubic feet per day (“Mcf/d”) or 378 Boe/d of natural gas. Oil sales volumes for 2024 increased compared to prior year by approximately 93,000 barrels or 19% primarily due to new wells completed in North Dakota during Q3-2024 as well as the acquisition of additional working interest in New Mexico. Empire reported 2024 total product revenue of $44.0 million versus $40.1 million in 2023. Contributing to the increase were higher oil sales volumes in North Dakota due to the Company’s Starbuck Drilling Program offset by a slight decline in commodity prices. Lease operating expenses in 2024 decreased to $27.5 million versus $28.6 million for 2023, primarily due to lower workover activities of $5.9 million in 2024 compared to $12.0 million for 2023, partially offset by higher expenses related to an increase in production. Higher workover expense in 2023 was primarily related to work performed on wells in New Mexico to workover wells in the region to enhance and maintain production. These costs are part of the damages Empire seeks to recover under litigation. Production and ad valorem taxes for 2024 were $3.8 million versus $3.0 million in 2023, as a result of higher product revenues. Depreciation, Depletion, and Amortization (“DD&A”) and Accretion for 2024 was $11.3 million versus $4.9 million for 2023. The increase in DD&A reflects higher production, the acquisition of additional working interest in New Mexico and the impact of the capitalized costs associated with new drilling activity in North Dakota. Accretion increased slightly due to new drilling activity related to the Starbuck Drilling Program. General and administrative expenses, excluding share-based compensation expense, was $12.6 million, or $14.23 per Boe in 2024 versus $12.0 million, or $15.71 per Boe in 2023. The slight increase in expenses was primarily due to an increase in salaries and benefits associated with an increase in employee headcount. Interest expense for 2024 was $1.5 million compared to $1.0 million for 2023, a slight increase due to a higher outstanding balance under the Company’s credit facility offset by lower interest rates. Empire recorded a net loss of $16.2 million in 2024, or ($0.54) per diluted share, versus a 2023 net loss of $12.5 million, or ($0.55) per diluted share. Adjusted EBITDA was $0.7 million for 2024 compared to Adjusted EBITDA of ($2.4) million in 2023. YEAR-END 2024 PROVED RESERVES The Company’s year-end 2024 SEC proved reserves were 9.2 MMBoe compared to 9.1 MMBoe at year-end 2023. The Company recorded 0.4 MMBoe for acquisitions/revisions and (0.3) MMBoe for extensions/production. Year-end 2024 SEC proved reserves were comprised of approximately 76% crude oil, 13% NGLs, and 11% natural gas. Oil (MMBbls) Gas (MMcf) NGLs MBOE Balance, December 31, 2022 8,826   12,937   2,262   13,244   Acquisition of Reserves 36   19   5   44   Revisions (1,625 ) (5,998 ) (960 ) (3,585 ) Extensions 175   -   -   175   Production (488 ) (854 ) (136 ) (766 ) Balance, December 31, 2023 6,924   6,104   1,171   9,112   Acquisition of Reserves 198   240   35   274   Revisions (90 ) 637   159   175   Extensions 550   -   -   550   Production (581 ) (917 ) (150 ) (884 ) Balance, December 31, 2024 7,001   6,064   1,215   9,227   The acquisition of reserves for 2024 and 2023 primarily relate to additional working interests in certain of the Company’s New Mexico properties. The revisions for 2024 and 2023 primarily relate to changes in pricing and the extensions relate to increased volumes from our Starbuck Drilling Program. The standardized measure of the Company’s reported SEC proved reserves, discounted at 10%, at year-end 2024 was $98.4 million. As of December 31 for each year:   2024     2023   Future cash inflows $ 537,303,424   $ 543,067,776   Future production costs   (324,214,760 )   (350,439,800 ) Future development costs   (38,681,208 )   (42,475,160 ) Future income tax expense   (18,019,644 )   (25,201,886 ) Future net cash flows   156,387,812     124,950,930   10% annual discount for estimated timing of cash flows   (58,022,633 )   (41,934,370 ) Standardized measure $ 98,365,179   $ 83,016,560   The 12-month average prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive at realized sales prices used to estimate the properties' reserves. The prices for the properties’ reserves were as follows: 2024 2023 Oil (Bbl) $71.66 $75.45 Natural gas (MMBtu) $0.95 $1.51 NGLs (Bbl) $24.54 $9.82   Changes in the Standardized Measure of Discounted Future Net Cash Flows at 10% per annum are as follows as of December 31 for each year:   2024     2023   Beginning of year $ 83,016,560   $ 147,667,413   Net change in prices and production costs   (5,842,745 )   (71,619,375 ) Net change in future development costs   220,549     3,314,220   Oil and gas net revenue   (9,381,470 )   (6,256,366 ) Extensions   11,255,319     4,684,473   Acquisition of reserves   1,890,863     526,848   Revisions of previous quantity estimates   6,675,903     (55,329,684 ) Net change in taxes   4,274,178     33,317,731   Accretion of discount   9,746,049     19,542,907   Changes in timing and other   (3,490,026 )   7,168,393   End of year $ 98,365,179   $ 83,016,560     CAPITAL SPENDING, BALANCE SHEET & LIQUIDITY For 2024, Empire invested approximately $42.2 million in capital expenditures, primarily related to the continued drilling and completions activity in North Dakota. As of December 31, 2024, Empire had approximately $2.3 million in cash on hand and approximately $8.7 million available on its credit facility. Successful completion of the November Rights Offering in November 2024 with Empire receiving gross proceeds of $10.0 million at $5.05 per share. UPDATED PRESENTATION An updated Company presentation will be posted to the Company’s website under the Investor Relations section. ABOUT EMPIRE PETROLEUM Empire Petroleum Corporation is a publicly traded, Tulsa-based oil and gas company with current producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana. Management is focused on organic growth and targeted acquisitions of proved developed assets with synergies with their 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, 2024, 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, uncertainties associated with legal and regulatory matters, 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 Condensed Consolidated Statements of Operations (Unaudited)   Three Months Ended   Year Ended December 31,   September 30,   December 31,   December 31, 2024   2024   2023   2024   2023 Revenue: Oil Sales $ 9,445,145 $ 10,341,280 $ 9,106,041 $ 41,515,661 $ 36,684,494 Gas Sales   73,659   8,547   410,816   343,503   1,726,754 Natural Gas Liquids ("NGLs") Sales   557,671   541,755   381,497   2,132,666   1,660,256 Total Product Revenues   10,076,475   10,891,582   9,898,354   43,991,830   40,071,504 Other   10,766   15,269   15,705   47,348   70,480 Gain (Loss) on Derivatives   -   470,717   1,253,708   (388,886)   (65,693) Total Revenue   10,087,241   11,377,568   11,167,767   43,650,292   40,076,291   Costs and Expenses: Lease Operating Expense   5,881,309   6,733,611   7,956,264   27,545,028   28,625,481 Production and Ad Valorem Taxes   886,838   984,075   772,781   3,770,078   3,044,411 Depletion, Depreciation & Amortization   2,492,783   2,596,360   1,035,059   9,256,254   3,096,533 Accretion of Asset Retirement Obligation   519,827   509,131   478,881   2,006,756   1,756,022 General and Administrative Expense: General and Administrative   3,712,825   3,635,917   4,536,237   12,581,859   12,034,184 Stock-Based Compensation   519,060   335,077   855,514   2,155,774   3,144,751 Total General and Administrative Expense   4,231,885   3,970,994   5,391,751   14,737,633   15,178,935   Total Cost and Expenses   14,012,642   14,794,171   15,634,736   57,315,749   51,701,382   Operating Loss   (3,925,401)   (3,416,603)   (4,466,969)   (13,665,457)   (11,625,091)   Other Income and (Expense): Interest Expense   (268,694)   (196,306)   (328,445)   (1,515,269)   (1,000,427) Other Income (Expense)   687   (26,705)   465   (1,017,263)   23,721 Loss before Taxes   (4,193,408)   (3,639,614)   (4,794,949)   (16,197,989)   (12,601,797)   Income Tax (Provision) Benefit   -   -   (2,528)   -   132,192   Net Loss $ (4,193,408) $ (3,639,614) $ (4,797,477) $ (16,197,989) $ (12,469,605)   Net Loss per Common Share: Basic $ (0.13) $ (0.12) $ (0.20) $ (0.54) $ (0.55) Diluted $ (0.13) $ (0.12) $ (0.20) $ (0.54) $ (0.55) Weighted Average Number of Common Shares Outstanding: Basic   33,034,333   31,619,333   23,912,271   30,064,856   22,718,890 Diluted   33,034,333   31,619,333   23,912,271   30,064,856   22,718,890     EMPIRE PETROLEUM CORPORATION Condensed Operating Data (Unaudited)   Three Months Ended   Year Ended December 31,   September 30,   December 31,   December 31, 2024   2023   2023   2024   2023   Net Sales Volumes: Oil (Bbl)   145,442   144,674   119,022   581,159   487,869 Natural gas (Mcf)   208,698   255,195   215,855   916,955   854,274 Natural gas liquids (Bbl)   36,556   39,137   30,011   150,091   136,013 Total (Boe)   216,781   226,344   185,009   884,076   766,261   Average daily equivalent sales (Boe/d)   2,356   2,460   2,011   2,416   2,099   Average Price per Unit: Oil ($/Bbl) $ 64.94 $ 71.48 $ 76.51 $ 71.44 $ 75.19 Natural gas ($/Mcf) $ 0.35 $ 0.03 $ 1.90 $ 0.37 $ 2.02 Natural gas liquids ($/Bbl) $ 15.26 $ 13.84 $ 12.71 $ 14.21 $ 12.21 Total ($/Boe) $ 46.48 $ 48.12 $ 53.50 $ 49.76 $ 52.29   Operating Costs and Expenses per Boe: Lease operating expense $ 27.13 $ 29.75 $ 43.00 $ 31.16 $ 37.36 Production and ad valorem taxes $ 4.09 $ 4.35 $ 4.18 $ 4.26 $ 3.97 Depreciation, depletion, amortization and accretion $ 13.90 $ 13.72 $ 8.18 $ 12.74 $ 6.33 General & administrative expense: General & administrative expense (excluding stock-based compensation) $ 17.13 $ 16.06 $ 24.52 $ 14.23 $ 15.71 Stock-based compensation $ 2.39 $ 1.48 $ 4.62 $ 2.44 $ 4.10 Total general & administrative expense $ 19.52 $ 17.54 $ 29.14 $ 16.67 $ 19.81     EMPIRE PETROLEUM CORPORATION Condensed Consolidated Balance Sheets December 31,   December 31,   2024       2023     ASSETS Current Assets: Cash $ 2,251,464   $ 7,792,508   Accounts Receivable   8,154,433     8,354,636   Derivative Instruments   -     406,806   Inventory   1,304,699     1,433,454   Prepaids   640,349     757,500   Total Current Assets   12,350,945     18,744,904     Property and Equipment: Oil and Natural Gas Properties, Successful Efforts   140,675,399     93,509,803   Less: Accumulated Depreciation, Depletion and Impairment   (31,974,184 )   (22,996,805 ) Total Oil and Gas Properties, Net   108,701,215     70,512,998   Other Property and Equipment, Net   1,391,113     1,883,211   Total Property and Equipment, Net   110,092,328     72,396,209     Other Noncurrent Assets   1,425,198     1,474,503     TOTAL ASSETS $ 123,868,471   $ 92,615,616     LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 10,452,237   $ 16,437,219   Accrued Expenses   10,347,990     7,075,302   Current Portion of Lease Liability   400,692     432,822   Current Portion of Note Payable - Related Party   -     1,060,004   Current Portion of Long-Term Debt   69,552     44,225   Total Current Liabilities   21,270,471     25,049,572     Long-Term Debt   11,266,127     4,596,775   Term Note Payable - Related Party   -     -   Long-Term Lease Liability   143,689     544,382   Asset Retirement Obligations   28,423,000     27,468,427   Total Liabilities   61,103,287     57,659,156     Stockholders' Equity: Series A Preferred Stock - $.001 Par Value, 10,000,000 Shares Authorized, 6 and 6 Shares Issued and Outstanding, Respectively   -     -   Common Stock - $.001 Par Value, 190,000,000 Shares Authorized, 33,667,132 and 25,503,530 Shares Issued and Outstanding, Respectively   93,188     85,025   Additional Paid-in-Capital   143,488,803     99,490,253   Accumulated Deficit   (80,816,807 )   (64,618,818 ) Total Stockholders' Equity   62,765,184     34,956,460     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 123,868,471   $ 92,615,616       EMPIRE PETROLEUM CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited)   Three Months Ended   Year Ended December 31,   September 30,   December 31,   December 31,   December 31,   2024       2024       2023       2024       2023     Cash Flows From Operating Activities: Net Loss $ (4,193,408 ) $ (3,639,614 ) $ (4,797,477 ) $ (16,197,989 ) $ (12,469,605 )   Adjustments to Reconcile Net Loss to Net Cash Provided By (Used In) Operating Activities: Stock-Based Compensation   519,060     335,077     855,513     2,155,774     3,144,750   Amortization of Right of Use Assets   133,199     135,735     135,733     540,401     423,689   Depreciation, Depletion and Amortization   2,492,783     2,596,360     1,035,059     9,256,254     3,096,533   Accretion of Asset Retirement Obligation   519,827     509,131     478,881     2,006,756     1,756,022   (Gain) Loss on Derivatives   -     (470,717 )   (1,253,708 )   388,886     65,693   Settlement on or Purchases of Derivative Instruments   -     281,530     (266,653 )   18,200     (353,695 ) Loss on Financial Derivatives   -     -     -     998,000     -   Amortization of Debt Discount on Convertible Notes   -     -     -     500,382     -   (Gain) Loss on Extinguishment of Debt   -     26,705     -     10,094     -   Change in Operating Assets and Liabilities: Accounts Receivable   (2,004,722 )   2,277,310     (1,128,490 )   (357,473 )   (2,700,528 ) Inventory, Oil in Tanks   194,507     (48,011 )   131,230     128,755     (160,827 ) Prepaids, Current   (64,009 )   211,733     (165,768 )   607,925     745,648   Accounts Payable   (7,254,138 )   10,419,209     556,917     5,019,857     751,355   Accrued Expenses   1,073,329     41,175     649,185     2,144,204     (3,082,928 ) Other Long Term Assets and Liabilities   (176,799 )   135,172     (160,691 )   (1,063,023 )   (1,103,607 ) Net Cash Provided By (Used In) Operating Activities   (8,760,371 )   12,810,795     (3,930,269 )   6,157,003     (9,887,500 )   Cash Flows from Investing Activities: Acquisition of Oil and Natural Gas Properties   -     -     -     -     (2,094,419 ) Additions to Oil and Natural Gas Properties   (4,460,338 )   (18,615,643 )   (8,950,338 )   (53,219,169 )   (14,546,873 ) Purchase of Other Fixed Assets   (12,157 )   (19,590 )   (173,337 )   (151,638 )   (352,851 ) Cash Paid for Right of Use Assets   (122,943 )   (125,236 )   (124,485 )   (498,654 )   (552,196 ) Sinking Fund Deposit   -     -     -     -     2,779,000   Net Cash Used In Investing Activities   (4,595,438 )   (18,760,469 )   (9,248,160 )   (53,869,461 )   (14,767,339 )   Cash Flows from Financing Activities: Borrowings on Credit Facility   2,700,000     -     4,492,484     6,650,000     4,492,484   Proceeds from Promissory Note - Related Party   -     -     -     5,000,000     -   Proceeds from Rights Offerings, net of transaction costs   9,972,959     -     -     30,484,488     -   Proceeds from Bridge Loans from Related Parties   -     -     -     -     10,000,000   Principal Payments of Debt   (215,400 )   (158,383 )   (4,517,576 )   (591,975 )   (6,450,774 ) Proceeds from Stock Issuance and Warrant Exercises   (2 )   -     9,961,195     628,901     12,461,195   Net Cash Provided By Financing Activities   12,457,557     (158,383 )   9,936,103     42,171,414     20,502,905     Net Change in Cash   (898,252 )   (6,108,057 )   (3,242,326 )   (5,541,044 )   (4,151,934 )   Cash - Beginning of Period   3,149,716     9,257,773     11,034,834     7,792,508     11,944,442     Cash - End of Period $ 2,251,464   $ 3,149,716   $ 7,792,508   $ 2,251,464   $ 7,792,508     Supplemental Cash Flow Information: Cash Paid for Interest $ 894,282   $ 650,637           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 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 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. Three Months Ended   Year Ended December 31,   September 30,   December 31,   December 31,   December 31,   2024       2024       2023       2024       2023     Net Loss $ (4,193,408 ) $ (3,639,614 ) $ (4,797,477 ) $ (16,197,989 ) $ (12,469,605 )   Adjusted for: (Gain) loss on derivatives   -     (470,717 )   (1,253,708 )   388,886     65,693   Settlement on or purchases of derivative instruments   -     281,530     (266,653 )   18,200     (353,695 ) (Gain) loss on financial derivatives   -     -     -     998,000     -   CEO severance (including employer taxes)   -     -     -     -     374,820   COO severance (including employer taxes)   -     -     -     -     145,319   Professional fees for potential financing transactions   -     -     564,588     -     564,588     Adjusted Net Loss $ (4,193,408 ) $ (3,828,801 ) $ (5,753,250 ) $ (14,792,903 ) $ (11,672,880 )   Diluted Weighted Average Shares Outstanding   33,034,333     31,619,333     23,912,271     30,064,856     22,718,890     Adjusted Net Loss Per Share $ (0.13 ) $ (0.12 ) $ (0.24 ) $ (0.49 ) $ (0.51 )       The Company defines adjusted EBITDA as net loss plus net interest expense, depreciation, depletion, and amortization (“DD&A”) and accretion, amortization of right of use assets, income tax (provision) benefit, and other adjustments. 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 (loss), 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. Three Months Ended   Year Ended December 31,   September 30,   December 31,   December 31,   December 31,   2024       2024       2023       2024       2023     Net Loss $ (4,193,408 ) $ (3,639,614 ) $ (4,797,477 ) $ (16,197,989 ) $ (12,469,605 )   Add Back: Interest expense   268,694     196,306     328,445     1,515,269     1,000,427   DD&A   2,492,783     2,596,360     1,035,059     9,256,254     3,096,533   Accretion   519,827     509,131     478,881     2,006,756     1,756,022   Amortization of right of use assets   133,199     135,735     135,733     540,401     423,689   Income taxes   -     -     2,528     -     (132,192 ) EBITDA $ (778,905 ) $ (202,082 ) $ (2,816,831 ) $ (2,879,309 ) $ (6,325,126 )   Adjustments: Stock based Compensation   519,060     335,077     855,514     2,155,774     3,144,751   (Gain) loss on derivatives   -     (470,717 )   (1,253,708 )   388,886     65,693   Settlement on or purchases of derivative instruments   -     281,530     (266,653 )   18,200     (353,695 ) (Gain) Loss on financial derivatives   -     -     -     998,000     -   CEO severance (including employer taxes)   -     -     -     -     374,820   COO severance (including employer taxes)   -     -     -     -     145,319   Professional fees for potential financing transactions   -     -     564,588     -     564,588     Adjusted EBITDA $ (259,845 ) $ (56,192 ) $ (2,917,090 ) $ 681,551   $ (2,383,650 )       View source version on businesswire.com: https://www.businesswire.com/news/home/20250327909010/en/

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