Phil E. Mulacek
About Phil E. Mulacek
Phil E. Mulacek (age 64) is Chairman of the Board and a Series A Director of Empire Petroleum (EP) since October 2021, with over 35 years in global oil and gas and LNG development, a B.S. in Petroleum Engineering from Texas Tech University, and a record of 1.6 billion boe discoveries in Papua New Guinea; he founded Petroleum Independent and Exploration Corporation in 1981 and previously founded, chaired and led InterOil Corporation to a market cap of over $5.6B before retiring in 2013 . The Board classifies him as an independent director under NYSE American standards (after considering his related-party transactions), and he chairs the Compensation and Operations Committees .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Empire Petroleum (EP) | Chairman of the Board; Series A Director | Director since April/October 2021; Chairman since October 2021 | Series A Director has tiebreaking vote in board deadlocks; effective control via Series A Voting Preferred structure |
| Petroleum Independent & Exploration Corporation (PIE) | Founder (private investment company established in 1981) | Established 1981 | U.S. royalty mineral acreage focus; engages in shared services and JDA with EP subsidiaries |
| InterOil Corporation (NYSE-listed) | Founder, Chairman & CEO (former) | Retired 2013 | Grew market cap from ~$10M to >$5.6B over 14 years |
| Energy Evolution Master Fund, Ltd. (EEF) | Principal (one of) | Not disclosed (principal at time of Series A issuance) | EEF is 31.84% holder of EP and has extensive financing and transactions with EP |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Energy Evolution Master Fund, Ltd. (EEF) | Principal (one of) | Not disclosed | EEF holds 31.84% of EP; EEF/PIE transactions and preferred voting rights create interlocks with EP governance |
Board Governance
- Independence: Board determined Mulacek is independent under NYSE American standards after reviewing “Certain Relationships and Related Transactions” .
- Committee assignments (2024): Compensation Committee (Chair); Operations Committee (Chair); not on Audit Committee .
- Board/Committee attendance: Board met 4 times in 2024; each director attended ≥75% of aggregate Board and committee meetings; all directors attended 2024 annual meeting .
- Executive sessions: Each regularly scheduled Board meeting includes executive sessions of non-management directors, chaired by the independent, non-executive Chairman .
- Risk oversight: Audit Committee oversees financial reporting, ICFR, auditor engagement, risk profile, legal/regulatory compliance, and related-party transaction approvals; held 4 meetings in 2024 .
- Board composition: Five independent directors and one non-independent (CEO Morrisett) .
- Series A Voting Preferred governance overlay: Three Series A Directors elected exclusively by Series A holders; Series A Co-Chair/Chairman holds tie-breaking vote; Series A holders have effective control while voting rights remain in effect .
Committee Roles Table
| Committee | Role (Mulacek) | 2024 Meeting Count | Notes |
|---|---|---|---|
| Compensation | Chair | 4 | Reviews CEO and exec officer comp; administers equity plan; recommends non-employee director comp; no comp consultant retained |
| Operations | Chair | Numerous | Oversees operations, HSE, reserves, and petroleum engineering firm |
| Audit | Member? | Not a member (Chair: J. Kevin Vann) | Audit Committee held 4 meetings in 2024; Vann is financial expert |
Fixed Compensation
- Structure (annual): Non-employee directors receive $80,000 annual cash retainer; $3,000 quarterly per committee; $2,500 per in-person Board meeting per quarter; Chairman (if non-employee) receives an additional $9,000 quarterly cash retainer (Mulacek waived this in 2023 and 2024) .
- 2024 total cash for Mulacek: $111,500; no equity awards in 2024 .
- 2023 total cash for Mulacek: $83,000 .
| Year | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 111,500 | — | — | — | 111,500 |
| 2023 | 83,000 | 118,300 | 473,200 | — | 674,500 |
Performance Compensation
- Equity grants (non-employee directors): 2023 RSUs for 10,000 shares and options for 40,000 shares at $11.83 strike; RSUs generally lapse forfeiture 13 months after grant; options vest in four equal quarterly installments beginning with the first quarter after grant . No director equity awards were made in 2024 .
| Grant Year | Instrument | Quantity | Strike/Value | Vesting/Forfeiture |
|---|---|---|---|---|
| 2023 | RSUs | 10,000 | $118,300 grant-date fair value | Forfeiture provisions lapse ~13 months post-grant |
| 2023 | Stock Options | 40,000 | $11.83 exercise price; $473,200 grant-date fair value | Vest in four equal quarterly installments starting first quarter post-grant |
| 2024 | RSUs/Options | — | — | No director equity awards granted in 2024 |
No explicit, objective performance metrics (e.g., revenue growth, EBITDA, TSR) are tied to director equity awards; vesting appears time-based .
Other Directorships & Interlocks
| Entity | Relationship | Interlock/Conflict Note |
|---|---|---|
| Energy Evolution Master Fund, Ltd. (EEF) | >5% holder of EP (31.84%); Mulacek is a principal; holds Series A Voting Preferred rights via Mulacek as designee | EEF financing and equity transactions with EP; effective control of board through Series A structure; Matschke (EP director) is Partner/CCO at EEF |
| Petroleum Independent & Exploration (PIE) | Controlled by Mulacek; JDA and loan with EP subsidiaries; shared services agreement | Related-party operational and services exposure (see RPT table) |
Expertise & Qualifications
- 35+ years in upstream development across drilling, completion, and production in North America and globally; founder/operator experience in building oil and gas companies .
- Technical credentials: B.S. Petroleum Engineering (Texas Tech University) .
- Leadership accomplishments: Grew InterOil to >$5.6B market cap; discovery track record of 1.6B boe .
Equity Ownership
- Beneficial ownership: 7,138,776 shares (21.14% of class) including options to purchase 40,000 shares and RSUs for 10,000 shares .
- Outstanding director options: 40,000 options at $11.83 per share (as of 12/31/2024) .
- Insider trading policy: Hedging transactions are not broadly prohibited; pledging/margin accounts require written pre-clearance if borrowing exceeds 10% of collateral value .
- Section 16(a) compliance: Company reported certain late filings by Mulacek (amended Form 3; corrected spouse’s rights offering shares on Form 4; one report 1 day late; one report 2 days late) .
| Holder | Shares Beneficially Owned | Percent of Class | Components Noted |
|---|---|---|---|
| Phil E. Mulacek | 7,138,776 | 21.14% | Includes 40,000 options and 10,000 RSUs |
Related Party Transactions (RPTs) and Conflicts
| Date | Counterparty | Instrument/Transaction | Key Terms | Board Oversight |
|---|---|---|---|---|
| Aug 2020 – Jul 2024 | PIE | JDA and $2,000,000 term loan to Empire Texas LLC (6% interest; matured Aug 6, 2024; ~$1.1M outstanding at 12/31/2023) | Repaid via issuance of 205,427 EP shares at $5.16/sh (agreed value $1,060,004); JDA and loan terminated upon share issuance (Q3 2024) | Approved by Board |
| Aug 1, 2023 – 2024 | PIE | Shared Services Agreement | Reimburse actual costs; reimbursements $266,749 (2024) and $53,500 (2023) | Approved by Board |
| Sep–Nov 2023 | Mulacek | $5,000,000 Bridge Loan to Empire North Dakota LLC (7% interest; fees $50,000; maturity extended to Dec 31, 2024; interest paid in shares on scheduled dates) | Nov 29, 2023 Securities Purchase: 609,013 shares for $5,000,000 cash ($8.21/sh) plus 631,832 shares via loan cancellation ($8.00/sh; $5,054,657.53) | Approved by Board |
| Sep–Nov 2023 | EEF | Parallel $5,000,000 Bridge Loan; then Securities Purchase Agreement for 1,256,832 shares (cash $5,000,000; loan cancellation $5,054,657.53; $8.00/sh) | Interest payable in shares on scheduled dates; resale registration covenant | Approved by Board |
| Aug 9, 2023 – Aug 8, 2024 | EEF | Acquisition of NM working interests (90% to EEF; 10% to EP); EP option to purchase EEF’s interest (initial $5,000,000; extended with additional EP shares) | Partial exercise Apr 25, 2024 for 60% of option: 600,000 EP shares ($5.00/sh; $3,000,000); extension issued 16,800 shares Aug 8, 2024 | Approved by Board |
| Feb–May 2024 | EEF | $5,000,000 Promissory Note (7% interest; convertible at $6.25/sh; 800,000 shares if fully converted) | Converted May 24, 2024 into 800,000 shares; accrued interest $95,277.78 paid in cash | Approved by Board |
| May–Jun 2024 | EEF | Warrant (128,800 shares @ $5.00; expiration July 31, 2024) issued due to rights offering pro rata provision | Exercised June 28, 2024 for $644,000 | Approved by Board |
RED FLAGS
- Effective Board Control: Series A Voting Preferred structure grants exclusive election/removal of three directors and assigns tie-breaking vote to the Series A Co-Chair/Chairman (Mulacek), leading to effective control of the Board for as long as voting rights remain active .
- Extensive Related-Party Dealings: Multiple financings, services, and asset transactions with entities controlled by or affiliated with Mulacek (PIE/EEF), including loan repayments via equity and optioned asset purchases, creating ongoing conflicts to be monitored by the Audit Committee .
- Hedging/Pledging Policy: Hedging not prohibited and pledging allowed with pre-clearance above thresholds, which can reduce alignment if used; no director-specific pledging disclosed .
- Section 16(a) Late Filings: Reported late/amended filings by Mulacek in 2024 (amended Form 3; corrected Form 4; one filing 1 day late; one 2 days late) .
Director Compensation & Incentives – Structure Analysis
- Year-over-year mix shift: 2023 compensation for Mulacek was heavily equity-driven (RSUs and options) versus 2024 which was solely cash (no equity grants) .
- Guarantees vs at-risk pay: Director comp features fixed cash retainers and time-based equity vesting; no disclosed performance-contingent metrics for director awards, reducing pay-for-performance linkage at the Board level .
- Compensation governance: Compensation Committee has authority to use consultants but did not retain one; recommends director pay levels to attract/retain qualified independent directors .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: ~93.8% of votes cast supported executive compensation approach, indicating strong shareholder support for EP’s current executive pay program .
Governance Assessment
- Positives:
- High ownership alignment: Mulacek beneficially owns ~21.14% of EP, aligning economic interests with shareholders .
- Active governance roles: Chairs Compensation and Operations Committees; Board maintains executive sessions and clear risk oversight via Audit Committee .
- Cash discipline and alignment signals: Waived Chairman’s quarterly cash retainer in 2023 and 2024 .
- Shareholder sentiment: Strong say-on-pay support (~93.8% in 2024) .
- Concerns:
- Control risk: Series A structure gives effective control and tie-break authority, potentially diluting common shareholder influence and independence perceptions despite Board’s formal independence determination .
- Related-party exposure: Frequent and material transactions with PIE/EEF (services, loans, securities purchases, asset options), necessitating robust and transparent Audit Committee oversight to mitigate conflicts .
- Process rigor: Absence of a Nominating Committee (independent directors perform the function) and no external comp consultant may raise process scrutiny for director/executive pay and board composition .
Overall implication: While Mulacek brings deep sector expertise and significant ownership alignment, the Series A voting structure and recurring related-party transactions introduce governance complexity and potential conflicts; monitoring Audit Committee processes, RPT approvals, and transparency around Board independence and decision-making is critical for investor confidence .