Empire Petroleum Announces Commencement of Previously Announced Rights Offering

Rhea-AI Summary

Empire Petroleum (NYSE American: EP) has commenced its previously announced subscription rights offering to raise up to $10.0 million. The company is distributing one subscription right for each share of common stock held as of September 30, 2024. Each right allows the purchase of 0.063 shares at $5.05 per share. Stockholders must hold at least 16 shares to receive rights to purchase one whole share. The offering includes over-subscription rights and is set to expire on October 16, 2024. Chairman Phil E. Mulacek and Energy Evolution Fund, , the largest shareholders, have indicated their intention to fully participate and exercise over-subscription rights. The offering is described in detail in the prospectus supplement filed with the SEC on October 1, 2024.

Positive

• Potential to raise up to $10.0 million in gross proceeds
• Major shareholders intend to fully participate in the rights offering
• Over-subscription rights available for additional share purchases

Negative

• Potential dilution for shareholders who do not participate in the rights offering
• Minimum of 16 shares required to purchase one whole new share

Insights

Financial Analyst

Empire Petroleum's rights offering aims to raise up to $10 million by allowing existing shareholders to purchase additional shares at a discounted price of $5.05 per share. This move is significant for several reasons:

• It provides an opportunity for current shareholders to increase their stake in the company without diluting their ownership.
• The commitment from the Chairman and largest shareholder to fully participate signals confidence in the company's future.
• The additional capital could be used to fund operations, reduce debt, or pursue growth opportunities in Empire's producing assets across multiple states.

However, investors should note that if not all rights are exercised, there could be some dilution for non-participating shareholders. The 6.3% subscription ratio (0.063 shares per existing share) is relatively modest, which may limit the immediate impact on the company's capital structure. The non-transferability of rights may also affect their value to some shareholders.

Overall, this rights offering appears to be a strategic move to strengthen Empire's financial position while giving existing shareholders preferential treatment. The success of this offering could indicate investor confidence in the company's prospects in the oil and gas sector.

TULSA, Okla.--(BUSINESS WIRE)-- Empire Petroleum Corporation (NYSE American: EP) ("Empire" or the "Company"), an oil and gas company with current producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana, announced today that it has commenced its previously announced subscription rights offering (“Rights Offering”) pursuant to which it intends to raise gross proceeds of up to approximately $10.0 million. The Company is distributing at no charge to holders of its common stock, par value $0.001 per share (“Common Stock”), as of the close of business on September 30, 2024 (the record date for the Rights Offering), one subscription right for each share of Common Stock held. Each subscription right entitles the holder to purchase 0.063 shares of Common Stock at a subscription price of $5.05 per share per one whole share of Common Stock. As a result, a stockholder must hold at least 16 shares of Common Stock to receive subscription rights to purchase at least one share of Common Stock. The subscription rights are non-transferable, and will not be listed for trading on any stock exchange or market. In addition, holders of subscription rights who fully exercise their subscription rights are entitled to over-subscribe for additional shares of Common Stock, subject to proration.

The Rights Offering is expected to expire at 5:00 p.m., Eastern Time, on October 16, 2024 (“Expiration Date”), subject to extension or earlier termination.

Phil E. Mulacek, Chairman of the Board of Empire, and Energy Evolution Fund, Ltd., our largest shareholders, have indicated that they intend to participate in the Rights Offering and fully subscribe to the shares of Common Stock corresponding to their subscription rights. They have each also indicated that they intend to fully exercise their over-subscription rights to purchase their pro rata share of the underlying securities related to the Rights Offering that remain unsubscribed at the Expiration Date.

Holders of subscription rights who hold their shares directly will receive a prospectus, a prospectus supplement, a letter from Empire describing the Rights Offering, and a subscription rights certificate. Those holders who intend to exercise their subscription rights and over-subscription rights should review all of these materials, properly complete and execute the subscription rights certificates, and deliver the subscription rights certificates and full payment to Securities Transfer Corporation, the subscription agent for the Rights Offering, at the address set forth in the prospectus supplement.

The Rights Offering is more fully described in the prospectus supplement filed with the Securities and Exchange Commission (“SEC”) on October 1, 2024. A copy of the prospectus, prospectus supplement or further information with respect to the Rights Offering may be obtained by contacting Securities Transfer Corporation, the subscription and information agent for the Rights Offering, at (469) 633-0101.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

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 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, 2023, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240930429943/en/

Empire Petroleum Corporation:

Mike Morrisett

President and CEO

539-444-8002

info@empirepetrocorp.com



Kali Carter

Communications & Investor Relations Manager

918-995-5046

IR@empirepetrocorp.com

Source: Empire Petroleum Corporation

FAQ

What is the subscription price for Empire Petroleum's (EP) rights offering?

The subscription price for Empire Petroleum's (EP) rights offering is $5.05 per share per one whole share of Common Stock.

When does Empire Petroleum's (EP) rights offering expire?

Empire Petroleum's (EP) rights offering is expected to expire at 5:00 p.m., Eastern Time, on October 16, 2024, subject to extension or earlier termination.

How many subscription rights will Empire Petroleum (EP) shareholders receive?

Empire Petroleum (EP) shareholders will receive one subscription right for each share of Common Stock held as of the close of business on September 30, 2024.

Are the subscription rights in Empire Petroleum's (EP) offering transferable?

No, the subscription rights in Empire Petroleum's (EP) offering are non-transferable and will not be listed for trading on any stock exchange or market.