~ Making Continued Progress on Targeted Full Year 2023 Capital Spending Program ~

Empire Petroleum (NYSE American: EP) (“Empire” or the “Company”), today announced operational and financial results for the first quarter of 2023.

KEY FIRST QUARTER HIGHLIGHTS

• Increased year-over-year per day sales volumes by 4% to 2,206 barrels of oil equivalent per day (“Boe/d”) (61% oil, 19% natural gas liquids (“NGLs”) and 20% natural gas) from 2,112 Boe/d (60% oil, 19% NGLs, and 21% natural gas) for the first quarter of 2022;
• Reported revenue of $10.1 million, a net loss of $2.5 million, or $0.11 per diluted share, and an Adjusted Net Loss¹ of $1.9 million, or $0.08 per diluted share;
• Generated Adjusted EBITDA¹ of $0.2 million;
• Ended first quarter of 2023 with $7.1 million of liquidity (including $6.8 million of cash) and working capital of $2.3 million; and
• Leveraging lessons learned in 2022 from the Empire-operated Starbuck Field Pilot Project Program (the “Starbuck Program”) in North Dakota, during the first quarter of 2023 the Company made further progress on its development program. Empire owns a 96% working interest and 82.6% net revenue interest in the Starbuck Program.

MANAGEMENT COMMENTARY

Mike Morrisett, President and Chief Executive Officer of Empire, commented, “While we clearly would have liked to see higher sequential pricing for crude oil and natural gas, the first quarter marked a solid start to 2023 on multiple fronts. We were pleased to record higher sales volumes both year-over-year and sequentially, as well as keep LOE and G&A per Boe substantially level excluding non-recurring items. As in the past, I want to thank our employees and business partners for their hard work and strong dedication as we continue to execute on our targeted business plan to drive organic production growth in 2023 that increases long-term cash flow generation and shareholder value.”

Mr. Morrisett concluded, “Through our pilot program in North Dakota that was executed in 2022 and into 2023, we have come away with a clear direction on how to best tailor our 2023 capital spending program. This includes a combination of activities, including drilling and completions, workovers, recompletions and related infrastructure. To ensure enhancement of our development efforts, we have focused on adding depth to our technical, operations and administrative teams. All of these experienced professionals were targeted to join Empire based on their respective proven histories of success, and we feel fortunate to have them as part of our expanded team. The future of Empire is bright, and we look forward to further steady execution of our 2023 business plan that is squarely focused on driving increased value for our shareholders.”

FINANCIAL AND OPERATIONAL RESULTS FOR FIRST QUARTER 2023

Net sales for the fourth quarter of 2022 were 2,206 Boe/d, including 1,336 barrels of oil per day; 442 barrels of NGLs per day, and 2,569 thousand cubic feet per day (“Mcf/d”), or 428 Boe/d, of natural gas. Contributing to the sequential increase from the fourth quarter of 2022 was an 8% increase in production for Empire’s assets in North Dakota.

Empire reported $10.1 million of revenue for the first quarter of 2023 versus $10.7 million for the fourth quarter of 2022. Contributing to the decline was lower realized pricing as compared to the fourth quarter and a lower sequential loss on derivates, which was partially offset by higher sales volumes.

Lease operating expenses for the first quarter of 2023 were $6.5 million, which was a slight decrease from $6.6 million for the fourth quarter of 2022 despite increased sales volumes.

Production and ad valorem taxes for the first quarter of 2023 were $0.8 million and essentially flat with the fourth quarter 2022, and were 7.5% and 7.2% of total product revenue, respectively, for the first quarter of 2023 and fourth quarter of 2022.

General and administrative expenses, excluding share-based compensation expense, were $3.0 million, or $15.23 per Boe, in the first quarter of 2023 versus $2.7 million, or $13.65 per Boe, for the fourth quarter of 2022. Included in the first quarter of 2023 was $0.4 million, or $1.89 per Boe, of cash severance costs associated with departure of the Company’s previous Chief Executive Officer. Excluding these costs, Empire’s cash general and administrative expenses per Boe declined slightly.

Empire recorded a net loss for the first quarter 2023 of $2.5 million, or $0.11 per diluted share, versus a net loss of $2.3 million, or $0.10 per diluted share, in the fourth quarter of 2022. The Company posted an Adjusted Net Loss for the first quarter of 2023 of $1.9 million, or $0.08 per diluted share, versus an Adjusted Net Loss of $0.9 million, or $0.04 per diluted share, in the fourth quarter of 2022. The sequential quarterly decrease was primarily due to lower realized pricing partially offset by higher sales volumes during first quarter 2023.

Adjusted EBITDA was $0.2 million for the first quarter of 2023 compared to $1.3 million in the fourth quarter of 2022.

CAPITAL SPENDING, BALANCE SHEET & LIQUIDITY

For the three months ended March 31, 2023, the Company invested approximately $2.2 million in capital expenditures primarily related to the well enhancement project in North Dakota.

Total liquidity at the end of the first quarter of 2023 was $7.1 million, including $6.8 million of cash and approximately $0.3 million available on the Company’s Credit Facility. As of March 31, 2023, the Company had total debt of $7.1 million and working capital of $2.3 million. Empire remains squarely focused on continuing to execute on its proven strategy to remain financially conservative as it executes on its 2023 development program for its current business and will continue to evaluate opportunities to expand through targeted acquisitions that provide long-term value for the Company’s shareholders.

UPDATED PRESENTATION

An updated Company presentation will be posted by Friday, May 19 to the Company’s website under the Investors Relations section.

ABOUT EMPIRE PETROLEUM

Empire Petroleum Corporation is a publicly traded, Tulsa-based oil and gas company with current producing assets in Texas, Louisiana, North Dakota, Montana, and New Mexico. 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, 2022, 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.

Empire Petroleum Corporation

Non-GAAP Information

Certain financial information included in Empire’s financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures include “Adjusted Net Income (Loss)”, “EBITDA” and “Adjusted EBITDA”. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be reported by other companies.

Adjusted Net Income (Loss) is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods.

The Company defines Adjusted EBITDA as net income (loss) plus net interest expense, depreciation, depletion and amortization (“DD&A”), accretion, amortization of loan issuance costs, right of use assets and discount on convertible notes, income tax (benefit) expense, and other non-cash items.

Company management believes this presentation is relevant and useful because it helps investors understand Empire’s operating performance and makes it easier to compare its results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use.

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