A month after launching a nearly $22 million drilling program in North Dakota, Empire Petroleum released its third quarter financial report showing a $2.7 million net loss in revenue.
The Tulsa company reported product revenue of $10.3 million compared to $9.8 million in the second quarter, but still had a net loss of $2.7 million or 12 cents a share. The firm blamed the loss on lower sales volumes for crude oil and natural gas as well as lower NGLs ralized pricing.
The company’s adjusted net loss was $1.5 million and 6 cents a share. Its adjusted EBITDA was $0.1 million and the company ended the third quarter with approximately $11.3 million of liquidity.
Empire’s production also was down compared to the second quarter. The firm posted net sales volumes of 2,048 barrels of oil equivalent a day compared to 2,135 Boe/d in the previous quarter.
Still, the timing of the company’s Starbuck Drilling program launched last month in North Dakota’s Bakken shale sparks optimism among company leaders.
“We were pleased to see improvement in commodity prices during the third quarter. This timing is ideal as we continue to progress through our development campaign that began in the latter part of 2022 on our North Dakota assets and materially expanded in the second half of 2023 with the recent kick off of the Starbuck Drilling Program,” said Mike Morrisett, President and Chief Executive Officer of Empire.
The company announced last month it intends to drill 10 to 14 wells in North Dakota with an average $1.6 to $1.8 million capital per well. Morrisett indicated the early signs indicated the company was on the right track to increase production levels and cash flow.
“A lot of time and effort was spent developing the programs and the positive initial results from the well logs on our first two wells being drilled is another clear indicator that all of the planning was well worth the effort,” he added.
Empire stock shot up more than 10% on the day’s trading, perhaps in response to the positive news about the North Dakota drilling program. Trading ended at $7.03 with a gain of 64 cents or 10.02% on Monday.
“We are clearly encouraged with the initial well log results from the first two wells of the Starbuck Drilling Program. We look forward to drilling targeted laterals of 5,000 to 6,500 feet within the target Upper Charles Formation.”
Empire has producing assets in New Mexico, North Dakota, Montana, Texas and Louisiana.