Empire Petroleum Announces Extension of Previously Announced Rights Offering

Rhea-AI Summary

Empire Petroleum (NYSE American: EP) has extended the expiration date of its previously announced subscription rights offering to October 24, 2024. The company aims to raise gross proceeds of up to $10.0 million. The extension allows stockholders more time to consider participation and arrange finances, partly due to disruption caused by Hurricane Milton.

Key points:

• One subscription right distributed for each share of Common Stock held as of September 30, 2024
• Each right allows purchase of 0.063 shares at $5.05 per whole share
• Minimum 16 shares required to purchase at least one new share
• Over-subscription rights available for full subscribers
• Chairman Phil E. Mulacek and largest shareholder Energy Evolution Fund, intend to fully participate

Positive

• Potential to raise up to $10.0 million in gross proceeds
• Major shareholders (Chairman and largest shareholder) intend to fully participate in the offering
• Over-subscription rights available for full subscribers, potentially increasing capital raised

Negative

• Extension of offering expiration date may indicate lower than expected initial participation
• Disruption caused by Hurricane Milton affecting stockholder participation
• Potential dilution for existing shareholders who do not participate fully

Insights

Financial Analyst

The extension of Empire Petroleum's rights offering is a strategic move that could impact the company's capital structure and liquidity. The potential to raise up to $10 million in gross proceeds is significant for a company with a market cap of $162 million. This additional capital could be used for debt reduction, exploration, or acquisition opportunities in the oil and gas sector.

The subscription price of $5.05 per share and the 0.063 shares offered per existing share suggest a slight discount to encourage participation. The commitment from the Chairman and largest shareholder to fully subscribe and potentially over-subscribe is a positive signal of insider confidence.

However, the need for an extension, partly due to Hurricane Milton, may indicate some hesitation among shareholders. Investors should closely monitor the subscription rate as it will reveal market sentiment towards Empire's future prospects and current valuation.

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 extended the expiration date of 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 has extended the Expiration Date in order to allow its stockholders to have more time to consider their participation and arrange finances for the Rights Offering. A contributing factor is requests by Company stockholders as a result of the recent disruption caused by Hurricane Milton.

The Company has distributed 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 now expected to expire at 5:00 p.m., Eastern Time, on October 24, 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 have received a prospectus, a prospectus supplement, a letter from Empire describing the Rights Offering, and a subscription rights certificate. Empire will also be providing an additional prospectus supplement regarding the updated terms noted in this news release. 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 supplements referenced below.

The Rights Offering is more fully described in the prospectus supplement filed with the Securities and Exchange Commission (“SEC”) on September 30, 2024, as supplemented by the prospectus supplement field with the SEC on October 10, 2024. A copy of the prospectus, prospectus supplements 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/20241009883426/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 new expiration date for Empire Petroleum's (EP) rights offering?

The new expiration date for Empire Petroleum's (EP) rights offering is October 24, 2024, at 5:00 p.m. Eastern Time.

How much is Empire Petroleum (EP) aiming to raise through the rights offering?

Empire Petroleum (EP) is aiming to raise gross proceeds of up to approximately $10.0 million through the rights offering.

What is the subscription price per share in Empire Petroleum's (EP) rights offering?

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

How many subscription rights are needed to purchase one whole share of Empire Petroleum (EP) stock?

A stockholder must hold at least 16 shares of Empire Petroleum (EP) Common Stock to receive subscription rights to purchase at least one whole share.