Empire Petroleum Reports Q2 2026 Results as Texas, North Dakota and Louisiana Operations Advance
Empire Petroleum Corporation (NYSE American: EP), an oil and gas company with producing assets across New Mexico, North Dakota, Montana, Texas and Louisiana, has reported its financial results for the second quarter of 2026 while providing an operational update on development programs across its portfolio.
The company’s latest results highlight continued investment in production infrastructure, well reactivation, recompletion and drilling activities, alongside progress on deeper formations in Texas, thermal recovery operations in North Dakota and a three-well development program in Louisiana. Empire said its second-quarter activities were focused on converting project work into operational progress while strengthening the foundation for future production and revenue growth.
Second-quarter production and financial performance
Empire reported net production of 1,825 barrels of oil equivalent per day (Boe/d) during the second quarter of 2026. Oil accounted for 1,278 barrels per day, with the overall production mix consisting of approximately 70% oil, 18% natural gas liquids and 12% natural gas.
Net sales volumes were lower than the 2,357 Boe/d reported in the second quarter of 2025, representing a year-over-year decline of approximately 23%. Oil sales volumes were also down from 1,493 barrels per day in Q2 2025 to 1,278 barrels per day in Q2 2026. Empire attributed the decline primarily to natural production decline and downtime involving certain North Dakota wells during steam-unit performance enhancement projects.
Despite lower production, Empire generated total product revenue of $11.1 million during Q2 2026, compared with $8.7 million in the same period of 2025. The company said the increase was primarily driven by higher realized oil pricing and partially offset by lower production volumes.
The company recorded a net loss of $1.9 million, or $0.05 per diluted share, compared with a net loss of $5.1 million, or $0.15 per diluted share, in Q2 2025. Adjusted EBITDA improved substantially to $0.4 million from a negative $1.2 million in the year-ago quarter.
Empire’s lease operating expenses also declined to $5.0 million from $6.4 million in Q2 2025, reflecting lower production and efforts to reduce overall operating costs. Workover expenses increased to approximately $0.7 million from $0.5 million, primarily because of increased activity in New Mexico.
Depreciation, depletion and amortization, together with accretion, fell to $2.0 million from $3.1 million a year earlier. The company attributed the decrease in DD&A primarily to the effect of impairments recorded in the fourth quarter of 2025 and lower production volumes.
Texas development gains momentum
Texas remained one of the most significant areas of operational activity during the quarter. Empire expanded its development and drilling program, with the first drilling rig arriving on location in June. The milestone marked the beginning of a broader effort involving well reactivations, recompletions, well deepening and new drilling.
The company has also invested in field infrastructure and gas compression during the previous two quarters. These investments were designed to reduce the risk of stranded gas and allow Empire to capture gas sales as additional wells are brought into production.
Compression capacity increased to approximately 700% of its initial level, while system throughput reached approximately 9.5 million cubic feet per day. The infrastructure upgrades are expected to support higher sustained gas production as the Texas development program expands.
During the quarter, five wells were brought online through reactivation, recompletion and well-deepening activities. Four additional wells moved closer to first production, expanding the contribution from multiple productive intervals.
Empire also advanced its evaluation of deeper targets. Following the quarter, the company re-entered, underreamed, logged and cored the Wakefield-Harrison GU B #1 well to a measured depth of 21,006 feet. The operation confirmed hydrocarbon C1 and C4-plus from approximately 10,000 feet through the 21,006-foot depth.
The company said the successful deepening work supports a phased development strategy that could leverage more than 100 existing wellbores and associated infrastructure across the Fort Trinidad field.
For the remainder of 2026, Empire plans to continue drilling and bring additional wells online through a combination of reactivations, recompletions and new drilling. The company is also progressing development across Intermediate Productive Zones and Deep Productive Zones, with future operations targeting multiple formations.
Louisiana program progresses toward revenue generation
Empire also advanced its participation in a Louisiana oil and natural gas development program during Q2 2026. Under amended terms, the company is participating with a 25% working interest across a three-well program involving various related parties.
The participation was funded through the issuance of approximately 1.8 million shares of Empire common stock at $3.00 per share during the second quarter.
Drilling, logging and evaluation activities continued across the three wells during the quarter. Empire reported substantial sand development, increased net pay thickness and reservoir continuity, which the company said strengthened its confidence in the broader resource potential and reduced development risk.
The wells were drilled and left uncompleted, with completion operations targeted for the fourth quarter of 2026. One well has already been deepened to assess additional reserve potential, while further activities are underway to position the program for cash flow later in the year. Empire expects to generate revenue from the Louisiana program during the remainder of 2026.
North Dakota thermal recovery program advances
In North Dakota’s Williston Basin, Empire continued development of its second-generation thermal recovery operations under the Starbuck Drilling Program.
During the second quarter, the company completed a major retrofit designed to improve heat delivery and strengthen oil performance within the Upper Charles interval. Empire also advanced targeted well work and downhole enhancement activities, positioning an additional well for reactivation and potential incremental oil production.
Surface production facilities were upgraded during the quarter as well. The improvements are intended to enhance crude oil separation and storage capabilities while creating opportunities to reduce operating and maintenance costs as production increases.
Empire expects to begin steam injection from the newly retrofitted thermal unit during the third quarter of 2026. Performance will then be monitored throughout the remainder of the year to evaluate production uplift and determine opportunities for further expansion.
Additional well reactivations and completion enhancements are planned for the second half of 2026. The company also expects continued improvements to surface facilities and production-handling systems as field throughput increases.
Between January and July 2026, Empire acquired three federal oil and gas lease parcels through the Bureau of Land Management Montana-Dakotas State Office. The acquisitions added approximately 1,200 gross acres to the company’s position within and adjacent to its Starbuck Unit.
The additional acreage gives Empire greater development flexibility and expands access to previously inaccessible areas within its Williston Basin asset base.
New Mexico operations remain under review
In New Mexico’s Permian Basin, Empire continues working with the State of New Mexico and the New Mexico Conservation Commission regarding its rights to the Residual Oil Zone in the Eunice Monument South Unit’s Unitized Interval.
The company expects a final resolution of the matter to reduce operating expenses and contribute to improved financial performance in New Mexico.
Financing and capital position
Empire entered into a sales agreement with Roth Capital Partners in May 2026 that allows the company to sell, from time to time, shares of common stock with an aggregate gross sales price of up to $7.5 million through an at-the-market offering.
As of the latest update, Empire had not issued any shares under the agreement.
The company’s second-quarter performance also reflected the impact of cost-control initiatives. General and administrative expenses excluding share-based compensation were $2.88 million, compared with $2.91 million during Q2 2025. Empire said the modest decline was primarily related to lower employee costs resulting from reduced headcount, partially offset by higher professional fees and rent expenses.
Outlook for the remainder of 2026
Empire expects activity to accelerate across several of its operating areas during the second half of 2026. In Texas, drilling and deepening programs are expected to expand, with additional wells targeted for production as infrastructure upgrades support increased gas throughput.
The company intends to continue developing its Intermediate Productive Zones, including the Lower Glen Rose, Rodessa, James Lime, Pettet and Upper Travis Peak formations. Its Deep Productive Zones strategy includes the Lower Travis Peak, Cotton Valley Sand, Bossier and Haynesville intervals. The company said its initial development phases are designed to leverage more than 100 existing Fort Trinidad wellbores and related infrastructure.
In North Dakota, Empire expects steam injection to begin during Q3 2026, followed by performance monitoring and additional well work. In Louisiana, completion activities are targeted for Q4 2026, with the company expecting revenue from the program later this year.
Commenting on the results, Chairman Phil Mulacek emphasized the company’s progress in Texas, particularly the deepening of the Wakefield-Harrison GU B #1 well to 21,006 feet and the associated logging and coring work. He also highlighted the company’s investment in compression infrastructure to support future production growth.
President and CEO Mike Morrisett said the quarter was focused on converting project activity into measurable operational progress and improving the company’s financial trajectory. He pointed to new Texas production, North Dakota thermal recovery upgrades and Louisiana drilling results as key developments supporting Empire’s next phase of growth.
With multiple programs advancing simultaneously, Empire enters the second half of 2026 focused on increasing production, improving infrastructure utilization, controlling operating costs and moving its Texas, North Dakota and Louisiana assets toward additional revenue generation.
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