Executive Summary

Q1 2025 results reflected weather and operational disruptions in North Dakota EOR, driving net production down 13% q/q and 7% y/y, product revenue to $8.99M (-11% q/q, -12% y/y), and a net loss of $4.22M ($-0.12/diluted share) .
Lease operating expense improved meaningfully (LOE $5.77M vs $7.39M in Q1 2024) as workover costs fell ($0.4M vs $2.0M), partially offsetting lower volumes; adjusted EBITDA was negative at -$0.55M .
EOR progress: initial operations lifted Starbuck daily production from ~80 bbl/d to >1,200 bbl/d before a pipeline failure and EOR unit defects caused a temporary ~75% net production drop; infrastructure has been repaired and all three units returned to service, with recovery expected over 3–5 quarters .
Strategic catalysts ahead: finalize patented hydrocarbon vaporization design by end of Q2 2025, initiate Texas horizontal program in H2 2025, and continued regulatory/litigation actions in New Mexico with potential to lower operating costs post-resolution; cash $1.08M and ~$7.8M credit availability at quarter-end .
No Wall Street consensus estimates were available via S&P Global for EPS/revenue; earnings call transcript was not found for Q1 2025, limiting beat/miss assessment versus Street [GetEstimates]*; earnings press release and operational updates are the primary sources .

What Went Well and What Went Wrong

What Went Well

LOE and workover cost control: LOE fell to $5.77M in Q1 2025 (vs $7.39M in Q1 2024) as workovers decreased to $0.4M (vs $2.0M), supporting margins amidst volume pressure .
EOR initial uplift and restoration: Starbuck’s initial EOR operations drove production from ~80 bbl/d to >1,200 bbl/d; failed pipeline replaced and EOR units restored, with ~70% production improvement since partial restart, setting the stage for phased recovery .
Strategic pipeline: “We remain focused on allocating capital where it can deliver the greatest long-term value… With multiple stacked pays… our Texas assets are well-positioned to capitalize on [natural gas price momentum] over the next one to five years.” — Chairman Phil Mulacek .

What Went Wrong

Volume declines: Net equivalent sales fell 13% q/q and 7% y/y to 2,049 Boe/d; oil sales decreased 16% q/q and 7% y/y to 1,329 bbl/d, driven by severe winter conditions, pipeline failure, EOR unit defects, and five ND wells down for redrill .
Profitability headwinds: Product revenue dropped to $8.99M (-11% q/q, -12% y/y) and adjusted EBITDA remained negative (-$0.55M), with net loss widening y/y to $4.22M .
Legal/regulatory overhang: New Mexico SWD litigation has imposed >$30M in additional costs since May 2021, elevating operating expenses; resolution is expected to reduce OpEx meaningfully but timing remains dependent on regulators and courts .

Financial Results

Summary Performance vs Prior Periods

Metric	Q1 2024	Q4 2024	Q1 2025
Net equivalent sales (Boe/d)	2,207	2,356	2,049
Net oil sales (Bbl/d)	1,437	1,581	1,329
Realized price ($/Boe)	$50.96	$46.48	$48.76
Product Revenue ($USD Millions)	$10.24	$10.08	$8.99
Net Loss ($USD Millions)	$(3.97)	$(4.19)	$(4.22)
Adjusted Net Loss ($USD Millions)	$(3.87)	$(4.19)	$(4.25)
Adjusted EBITDA ($USD Millions)	$(0.73)	$(0.26)	$(0.55)

EPS

Metric	Q1 2024	Q4 2024	Q1 2025
Diluted EPS ($USD)	$(0.15)	$(0.13)	$(0.12)

Margins (S&P Global values)

Metric	Q1 2024	Q4 2024	Q1 2025
EBITDA Margin (%)	-23.6%*	-7.0%*	-13.4%*
Net Income Margin (%)	-38.8%*	-32.3%*	-46.9%*
EBIT Margin (%)	-42.9%*	-30.3%*	-43.9%*
Values retrieved from S&P Global.*

Operating Costs and Efficiency KPIs

KPI	Q1 2024	Q4 2024	Q1 2025
LOE ($USD Millions)	$7.39	$5.88	$5.77
Workover Expense ($USD Millions)	$2.00	—	$0.40
DD&A + Accretion ($USD Millions)	$1.98	$3.01	$2.75
G&A ex SBC ($USD Millions)	$2.88	$3.71	$3.20

Product Mix and Prices

Metric	Q1 2024	Q4 2024	Q1 2025
Oil (Bbl)	130,760	145,442	119,635
NGL (Bbl)	34,785	36,556	31,453
Gas (Mcf)	211,820	208,698	199,868
Avg oil price ($/Bbl)	$72.21	$64.94	$67.28
Avg NGL price ($/Bbl)	$11.97	$15.26	$12.56
Avg gas price ($/Mcf)	$1.78	$0.35	$2.74

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EOR steady-state operations (ND Starbuck)	2025	Expected Q1 2025 steady-state commissioning	Recovery/performance over next 3–5 quarters; dependent on technical/seasonal stability	Lowered (timeline extended)
Hydrocarbon vaporization patent final design	Q2 2025	IP development over 90–120 days (filed Q4 2024)	Finalize patented design specs, sustained 550–650°F target by end of Q2 2025	Maintained/clarified timeline
Texas drilling start (East Texas Basin)	H2 2025	Infrastructure completed; drilling expected to begin in 2025	Preparing to initiate drilling in H2 2025; horizontal designs across 6–7 pay zones	Maintained with added detail
NDIC permits (ND horizontal wells)	2025	NDIC approval for 5 new permits in Feb 2025	Continuing EOR optimization; restoration progress and production improvement ~70% post-restart	Operational progress update
OpEx trajectory (post-litigation resolution)	2025+	Litigation ongoing; elevated costs	>$30M costs since May 2021; expect meaningful OpEx reduction upon resolution	Maintained with quantified impact

No formal quantitative guidance for revenue, margins, OpEx lines, OI&E, tax rate, or dividends was provided in Q1 2025 materials .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was found; thematic tracking is based on recent press releases.

Topic	Previous Mentions (Q4 2024, Q3 2024)	Current Period (Q1 2025)	Trend
ND EOR program	Injectors conversion; patent filed; commissioning to steady state expected Q1 2025	EOR initial uplift, then disruptions; repairs done, units restored; recovery expected over 3–5 quarters	Recovery path extended; operational stabilization in progress
Hydrocarbon vaporization IP	Provisional patent filed; 30% fabrication toward target design; 700% 30-day peak uplift noted	Final design specs targeted by end Q2 2025; sustained 550–650°F	Design completion near-term; implementation readiness
Texas program	Infrastructure ready; drilling expected in 2025	Preparing for H2 2025 start; horizontal targets in 6–7 pay zones	Advancing toward execution
New Mexico litigation	Ongoing actions vs. third-party SWD; significant costs	>$30M cumulative costs since May 2021; expect OpEx reduction post-resolution	Legal nearing regulatory resolution; financial relief likely thereafter
LOE/workovers	LOE elevated in 2023; focus on reductions	LOE/workover materially lower in Q1 2025 vs Q1 2024	Cost structure improving

Management Commentary

“Despite these short-term impacts, our flexible structure and multi-basin footprint allow us to quickly adapt… With multiple stacked pays of oil and gas, our Texas assets are well-positioned to capitalize on [natural gas price] momentum over the next one to five years.” — Chairman Phil Mulacek .
“We entered 2025 with clear strategic priorities… responding dynamically to new data… fine-tune our approach… Our operational agility remains a core advantage.” — President & CEO Mike Morrisett .
North Dakota: “Since restoring partial operations, production has already increased nearly 70%… expectations are to reach recovery and performance over the next 3–5 quarters.” .
New Mexico: “Long-standing litigation has negatively impacted… by over $30.0 million in additional costs… Upon final resolution, we expect a meaningful reduction in operating expenses.” .
Capital & liquidity: Q1 capex ~$2.7M (Starbuck drilling); cash ~$1.1M; credit availability ~$7.8M .

Q&A Highlights

No Q1 2025 earnings call transcript was located; therefore, Q&A themes and guidance clarifications are unavailable for this quarter (we searched earnings-call-transcript and found 0 documents) [ListDocuments: earnings-call-transcript 2025-01-01 to 2025-06-30].

Estimates Context

S&P Global consensus was not available for Q1 2025 EPS or revenue (no estimates coverage returned; only actual revenue was captured) [GetEstimates]*.
Without Street consensus, we benchmarked performance vs prior quarter/year and operational objectives; given extended EOR recovery timeline and temporary disruptions, near-term estimate revisions (if coverage initiates) would likely reflect lower volumes and ongoing cost controls .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Near-term: Expect production normalization over 3–5 quarters as ND EOR operations stabilize; monitor monthly restoration progress and LOE/workover trend improvements as cost offsets .
Medium-term: Texas H2 2025 drilling launch with horizontal targets across 6–7 pay zones is a key growth catalyst; IP finalization enables broader EOR deployment .
Litigation resolution in New Mexico is a potential OpEx inflection; >$30M cumulative costs provide a tangible lever to margin improvement post-resolution .
Liquidity remains modest but adequate with $1.08M cash and ~$7.8M credit availability; subsequent rights offering record date (July 10, 2025) seeks up to ~$5.0M gross (including warrants), implying additional capital and potential dilution near term .
Absent coverage, focus on internal KPIs: Boe/d trajectory, oil mix %, realized prices, LOE per Boe, and adjusted EBITDA path back to positive as EOR/operations stabilize .
Risk factors: Technical reliability of EOR systems, weather seasonality in ND, regulatory timelines in NM, commodity price volatility (management cites NG price rebound) .
Catalyst calendar: Q2 2025 IP design completion, Texas program kickoff H2 2025, litigation milestones; each could re-rate operating outlook and capital needs .

Additional Relevant Press Releases and Prior Quarters

Rights Offering Record Date set for July 10, 2025; proposed raise up to ~$5.0M gross at $5.30/unit with associated warrants (non-transferable) .
Q4 2024: Product revenue $10.08M; net loss $(4.19)M; NDIC permits for five new horizontal wells; EOR steady-state commissioning anticipated for early 2025; year-end proved reserves 9.23 MMBoe, standardized measure $98.37M .
Q3 2024: Product revenue $10.89M; net loss $(3.64)M; initial injector conversions and patent filing preparations; LOE reductions vs 2023 .

EMPIRE PETROLEUM CORP (EP)·Q1 2025 Earnings Summary