Empire Petroleum Announces Record Date for Proposed Rights Offering

Rhea-AI Summary

Empire Petroleum (NYSE American: EP) has announced a subscription rights offering to raise up to $10 million. The company will distribute one subscription right for each share of common stock held as of the record date of September 30, 2024. Each right allows the purchase of 0.063 shares at $5.05 per share, potentially issuing 1.98 million new shares if fully subscribed.

The offering is set to expire on October 16, 2024. Shareholders can over-subscribe for additional shares, subject to proration. The rights are non-transferable and won't be listed for trading. Detailed information will be provided in a prospectus supplement filed with the SEC. Securities Transfer will act as the subscription and information agent for the offering.

Positive

• Potential to raise up to $10 million in gross proceeds
• Existing shareholders have the opportunity to maintain their ownership percentage
• Over-subscription rights allow for potential additional share acquisition

Negative

• Potential dilution of existing shareholders if they don't participate
• Non-transferable rights may limit flexibility for shareholders

Insights

Financial Analyst

Empire Petroleum's proposed Rights Offering is a strategic move to raise capital, but it comes with potential dilution for existing shareholders. The company aims to raise up to $10 million by offering existing shareholders the right to purchase additional shares at $5.05 per share. This could result in the issuance of approximately 1.98 million new shares, representing a significant increase in the company's outstanding stock.

The pricing at $5.05 per share and the 0.063 ratio suggest the company is offering a slight discount to encourage participation. However, the non-transferability of the rights limits shareholders' options. The oversubscription privilege is a positive feature, allowing committed investors to potentially acquire more shares. The success of this offering will depend on current market conditions and investor confidence in Empire's growth prospects. It's important for investors to carefully evaluate the company's financial position and growth strategy before deciding to participate.

Oil and Gas Industry Expert

Empire Petroleum's decision to raise capital through a Rights Offering reflects the capital-intensive nature of the oil and gas industry. With assets spread across five states (New Mexico, North Dakota, Montana, Texas and Louisiana), the company likely needs funds for exploration, development, or acquisition activities. The $10 million target, while modest for the industry, could be significant for Empire's operations.

The timing of this offering is interesting, given the current volatility in oil prices and the industry's focus on capital discipline. Investors should consider how Empire plans to utilize these funds to generate returns in a challenging market environment. The company's ability to effectively deploy this capital across its diverse asset base will be crucial. Additionally, the success of this offering could indicate investor sentiment towards small-cap oil and gas companies in the current market.

Corporate Finance Specialist

Empire Petroleum's Rights Offering is a textbook example of how smaller public companies can raise capital while giving existing shareholders the opportunity to maintain their proportional ownership. The 0.063 ratio means shareholders need to own about 16 shares to buy one new share, which could be challenging for smaller investors. The oversubscription right is a smart addition, potentially allowing the company to raise the full $10 million even if some shareholders don't participate.

The fixed $5.05 subscription price carries risks for both the company and investors. If the stock price falls below this level before the October 16 expiration, the offering might struggle. Conversely, if the stock price rises significantly, the company might leave money on the table. The non-transferability of the rights further emphasizes the importance of the stock's performance leading up to the offering. Investors should closely monitor the stock price and company announcements as the Record Date approaches.

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 its Board of Directors has fixed the close of business on September 30, 2024 as the record date (the “Record Date”) for a subscription rights offering (“Rights Offering”) pursuant to which it intends to raise gross proceeds of up to approximately $10 million. The Company will distribute at no charge to holders of its common stock, par value $0.001 per share (“Common Stock”), as of the close of business on the Record Date one subscription right for each share of Common Stock held. Each subscription right will entitle the holder to purchase 0.063 shares of Common Stock at a subscription price of $5.05 per share. If fully subscribed, this would result in the issuance of an aggregate of approximately 1.98 million shares 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 will be 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.

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 will be more fully described in the prospectus supplement filed with the Securities and Exchange Commission (“SEC”) on or about the Record Date. Once available, 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/20240920563292/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 record date for Empire Petroleum's (EP) rights offering?

The record date for Empire Petroleum's (EP) rights offering is September 30, 2024.

How many shares can be purchased with each subscription right in Empire Petroleum's (EP) offering?

Each subscription right allows the purchase of 0.063 shares of Empire Petroleum (EP) common stock.

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

The subscription price is $5.05 per share in Empire Petroleum's (EP) rights offering.

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

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

How much does Empire Petroleum (EP) aim to raise through this rights offering?

Empire Petroleum (EP) intends to raise gross proceeds of up to approximately $10 million through this rights offering.