The New Mexico Oil Conservation Commission has given unanimous and favorable approval of Empire Petroleum’s request for rights to the Residual Oil Zone in the Eunic Monument South Unit Unitized INterval in Lea County, New Mexico.
After four years of expenditures, Empire, the Tulsa company, received the Commission’s unanimous decision at a public hearing on August 14, 2025, affirming the existence of a ROZ in the Grayburg and San Andres formations within the EMSU and confirming Empire’s exclusive rights to produce the ROZ under the 1984 Commission Order. The Commission is allowing Empire the opportunity to implement a CO₂ enhanced oil recovery (“EOR”) pilot project over the next three years.
As defined, “Residual oil is oil found in low concentrations naturally or in exhausted oil fields. Often mixed with water, it cannot be recovered by conventional techniques. However, part of it can be recovered using carbon dioxide-enhanced oil recovery (CO2 EOR) which involves injecting carbon dioxide into the well reducing viscosity and enhancing flow of the oil. The technique is not new but has not been used extensively on residual oil zones, low-grade deposits of petroleum such as the 40 square miles in the Permian Basin of Texas leased by Tiny Kamalabo.”
In addition to the findings noted above, the Commission unanimously ordered the following actions:
- Deny five new injection well applications from Goodnight Midstream Permian, LLC (“Goodnight”);
- Deny application for increased injection from Goodnight;
- Suspend injection operations on four existing Goodnight injection wells; and
- Deny all pending motions attached to these cases.
The Commission further found that, while Empire did not prove immediate correlative rights impairment in the Grayburg from neighboring operators’ injection activities, the Company presented compelling evidence of possible future impairment or waste.
Following this outcome, Empire intends to proceed with Motions to Revoke existing permits granted to the remaining third-party saltwater disposal operators disposing wastewater into the EMSU and Unitized Interval of the Arrowhead Grayburg Unit, while concurrently advancing litigation for trespass and damages.
“We are extremely pleased with this unanimous decision, which marks a significant regulatory win for Empire and reinforces our position in New Mexico,” said Phil Mulacek, Chairman of the Board. “It paves the way for us to move forward with CO₂ development to unlock the capacity for sustained production in the ROZ and upper zones, while also safeguarding our assets from activities that threaten their value.”
Mike Morrisett, President and CEO, added, “This outcome reflects years of dedicated work by our employees, legal team, and consultants, and I want to thank them for their tireless efforts in protecting and advancing our New Mexico position. We also want to thank the NMOCD for its thorough review of the facts and its unanimous decision. We take seriously our fiduciary responsibility to our shareholders and remain committed to realizing the long-term value we see in the EMSU assets. This decision gives us a clear path forward to responsibly develop these resources and position Empire for sustained growth and returns.”
The full text of the Commission’s decision will be available on the NMOCD website in the coming days.
Empire Petroleum Corporation is a publicly traded, Tulsa-based oil and gas company with current producing assets in New Mexico, North Dakota, Montana, Texas, and Louisiana. Management is focused on organic growth and targeted acquisitions of proved developed assets with synergies with their existing portfolio of wells.