Empire Petroleum Reports 2025 Loss but Expands Hedging and Gas Development Plans
Empire Petroleum Company indicated it’s taking advantage of the high crude oil prices with increased hedging while at the same time making plans for natural gas production gains. At the same time, the Oklahoma energy company admitted it faced some challenges in 2025.
The Tulsa company released its fourth quarter and full year 2025 earnings report this week showing total product revenue of $34.2 million but also a net loss of $72.1 million or $2.12 per share. The firm’s adjusted EBITDA from $0.7 million in 2024 to a loss of $5.4 million in all of 2025.
Lower Oil Prices, Production Issues Impact Earnings
Empire blamed the losses on lower average oil and NGLs realized pricing, lower than expected oil production and redrilling efforts in North Dakota. To counter the losses, the firm said that early this year, it “strengthened forward cash-flow visibility by locking in crude oil swap contracts by hedging roughly 90% of estimated oil production for the remaining three quarters of 2026 at a blended price in excess of $72 per barrel verses roughly $54 realized price per barrel in Q4-2025.”
Phil Mulacek, Chairman of the Board of Empire said the company will take advantage of stronger natural gas prices.
“The natural gas market is entering a period of renewed strength, and Empire is positioning itself to benefit from that shift with a disciplined, multi-step plan in Texas.”
He said because of the global conflicts pushing oil prices higher, the company implemented a disciplined hedging strategy, securing volumes from the high $60s a barrel up to more than $90 per barrel. It compared to the $54 realized price per barrel realized by the company in the fourth quarter of 2025.
Company Looks to 2026 for Production Growth
Mulacek says the lessons learned from 2025 should help the company in 2026.
“These insights helped refine our technical approach and reinforced the deeper-gas potential we are now developing. The key is to stay ahead on gas compression to accelerate cash flow, and we are targeting more than 600% gas takeaway capacity during the second quarter of 2026.”
Empire President and CEO Mike Morrisett agreed and stated, “Our operational progress in early 2026 reflects deliberate execution across our Texas natural gas program. We are restoring productive capacity, expanding our inventory of recompletions, and enhancing the systems that will support higher volumes as market conditions continue to improve.”
Cold Weather Also Hurt Operations
The company also revealed in its report that one thing that affected its operations and earnings in 2025 was the extreme cold weather. It experienced steam unit closures in the fourth quarter of 2025 and the first quarter of 2026 “due to extreme cold weather” and the shut-ins cut production by more than 25%.
“Empire is currently working on upgrades to the thermal insulation on its steam units, focusing on improved protection and performance within the combustion chamber and coil assemblies to enhance heat-transfer efficiency and injection-system reliability,” stated the company in the earnings report.
Fourth Quarter and Full Year 2025 Highlights
Produced full year 2025 net production volumes of 2,242 barrels of oil equivalent per day (“Boe/d”) including 1,437 barrels of oil per day (“Bbl/d”);
Boe/d is comprised of 64% oil, 18% natural gas liquids (“NGLs”), and 18% natural gas;
During Q4-2025, Empire initiated a program to re-activate and work over what was originally planned as 10-12 wells in 2026, and as the Company advanced its multi-phase Texas gas development program, the 2026 outlook now includes 12-30 wells designed to unlock incremental production, enhance system reliability, and position the field for scalable long-term growth;
Three-Phase Development Plan
The Company’s three phase development program consists of the following steps:
Reactivating multiple wells to restore baseline production and re establish stable field deliverability, with operations currently active on 10 wells;
Executing targeted recompletions and well-deepening operations to bring additional pay zones online across the Glen Rose, Rodessa, James Lime, Travis Peak, and the Haynesville-Bossier formations;
Evaluating deeper gas potential, including a planned 17,000-21,000 foot cleanout and technical evaluation to determine the viability of deeper targets and to refine opportunities within both established and emerging zones in the consolidated Cotton Valley-Bossier and Western Haynesville intervals supported by existing seismic coverage;
Initial wells from this program have now begun flowing during cleanup, marking the start of early production response across the area;
Empire currently has one active workover rig in the field, with ongoing progress across workovers, recompletions, and facility optimization efforts as the staged reactivation program advances;
The Company is executing a broad field program, including ongoing flowline construction and repair work, new location and pad development, and tie-in preparation activities to support sustained deliverability and system readiness for upcoming development phases;
In Q2-2026, Empire plans to progress its Texas development program with a dedicated drilling rig to deepen wells from 3,500 to 7,000 feet in depth, increasing the Company’s 2026 development plan to 12-30 new wells.