Empire Petroleum Announces Full Subscription of Rights Offering

Rhea-AI Summary

Empire Petroleum (EP) successfully completed its fully subscribed rights offering, exceeding the target with over 100% subscriptions. The offering is expected to generate approximately $20.66 million in gross proceeds for the company, which will be used for drilling activities, 3D seismic, land and lease purchases, enhanced oil recovery facilities, and general corporate purposes.

Insights

Financial Analyst

The successful subscription of Empire Petroleum Corporation's Rights Offering is a positive signal for the company's liquidity and investor confidence. With subscriptions exceeding the available shares, there is a clear indication of strong demand and backing from the investor community. It is noteworthy that the Rights Offering is expected to generate approximately $20.66 million in gross proceeds, which can significantly bolster the company's capital for planned expansions and operations.

From a financial perspective, the use of these funds for drilling activity, 3D seismic analysis, land and lease acquisitions and enhanced oil recovery facilities is a strategic investment into the company's core business. This capital injection should ideally lead to increased production capacity and potentially higher future revenues. However, investors should monitor how effectively the funds are utilized, as mismanagement could dilute the value of their investment.

Energy Sector Analyst

Empire Petroleum's focus on using the proceeds for current and future drilling activity, as well as for 3D seismic technology, suggests a commitment to advanced exploration techniques and resource optimization. 3D seismic technology is a critical tool in the energy sector, enabling more accurate imaging of subsurface geology to identify potential hydrocarbon reservoirs. This could lead to more efficient drilling and higher success rates in finding oil and gas deposits.

Furthermore, the investment in enhanced oil recovery (EOR) facilities represents a long-term strategic move. EOR technologies can significantly increase the amount of crude oil that can be extracted from an oil field. As the industry faces challenges such as declining conventional oil reserves and increasing environmental concerns, EOR presents an opportunity to maximize output from existing assets and extend the life of mature fields.

Market Research Analyst

Empire Petroleum's Rights Offering also reflects broader market trends, where energy companies are seeking to strengthen their balance sheets and invest in technology to stay competitive. The proactive participation of major stockholders, including the Chairman and Energy Evolution Master Fund, suggests a vote of confidence in the company's strategic direction and management. This could be a positive indicator for potential investors.

However, it's important to consider the dilutive effect of the Rights Offering on current shareholders. While it is a common fundraising approach, the introduction of additional shares can lead to a reduction in existing shareholders' percentage of ownership. This is somewhat mitigated by the pro-rata allocation of unsubscribed shares to oversubscribing stockholders, which aims to maintain a fair balance of ownership post-offering.

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 its previously announced rights offering (the “Rights Offering”) was fully subscribed. The subscription period for the Rights Offering expired at 5:00 p.m., New York City time, on April 10, 2024.

The Company received subscriptions for more than 100% of the shares available in the Rights Offering. Accordingly, stockholders will receive their basic subscription privilege but, because there are not enough shares to satisfy all oversubscriptions, remaining shares will be allocated pro-rata, after eliminating all fractional shares, among oversubscribing stockholders.

As previously indicated, our largest stockholders, Phil E. Mulacek, Chairman of the Board of the Company, and Energy Evolution Master Fund, Ltd., a Cayman Islands exempted company, participated in the Rights Offering and fully subscribed to the shares of common stock corresponding to their subscription rights, as well as fully exercising their over-subscription rights to purchase their pro rata share of the underlying securities related to the rights offering that remain unsubscribed.

The Rights Offering is expected to result in gross proceeds, before expenses, to the Company of approximately $20.66 million. The Company will use the proceeds from the Rights Offering for current and future drilling activity, 3D seismic, land and lease purchases, enhanced oil recovery facilities and general corporate purposes.

The Rights Offering is more fully described in the prospectus supplement filed with the Securities and Exchange Commission (“SEC”) on March 7, 2024, as supplemented by the prospectus supplement filed with the SEC on March 28, 2024.

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.

Forward-Looking Statements

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/20240411778107/en/

Empire Petroleum Corporation:

Mike Morrisett, President and CEO

539-444-8002

info@empirepetrocorp.com

Securities Transfer Corporation, as rights agent:

(469) 633-0101

stc@stctransfer.com

Source: Empire Petroleum Corporation

FAQ

What is the outcome of Empire Petroleum 's rights offering (EP)?

Empire Petroleum 's rights offering was fully subscribed, with subscriptions exceeding 100% of available shares. The company expects to generate approximately $20.66 million in gross proceeds.

How will Empire Petroleum utilize the proceeds from the rights offering (EP)?

Empire Petroleum plans to use the proceeds from the rights offering for current and future drilling activity, 3D seismic, land and lease purchases, enhanced oil recovery facilities, and general corporate purposes.

Who participated in Empire Petroleum 's rights offering (EP)?

Phil E. Mulacek, Chairman of the Board of the Company, and Energy Evolution Master Fund, , a Cayman Islands exempted company, participated in the rights offering and fully subscribed to the shares of common stock corresponding to their subscription rights.