Note 3 – Property

The aggregate capitalized costs of oil and natural gas properties are as follows:

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Depletion and amortization expense related to oil and gas properties for the three months ended June 30, 2026 and 2025, was approximately $1.3 million and $2.5 million, respectively. Depletion and amortization expense related to oil and gas properties for the six months ended June 30, 2026 and 2025, was approximately $2.6 million and $4.6 million, respectively.

Proved oil and natural gas properties are reviewed for impairment at least annually, or as indicators of impairment arise. There were no indicators of impairment identified during the six months ended June 30, 2026.

On May 1, 2025, the Company extended its option to purchase certain New Mexico interests from Energy Evolution which also allowed for payment for such extension to be made in cash in lieu the issuance of common shares, due and payable on or before September 30, 2025. The Company made a cash payment to Energy Evolution on September 30, 2025 to extend the purchase option for an additional year.

On December 10, 2025, the Company entered into a letter agreement with Energy Evolution to acquire the remaining 40% of certain New Mexico interests and closed on the transaction on January 5, 2026. As consideration, Empire issued 562,500 shares of common stock based on an agreed upon price of $3.20 per share for an aggregate agreed upon value of $1.8 million.

In January 2026, Empire paid approximately $0.1 million for certain interests in undeveloped properties in North Dakota. The transaction was subject to customary regulatory procedures and finalized in the second quarter of 2026.

On March 18, 2026, Empire elected to participate in a three-well oil and natural gas development program with various related parties in Louisiana for a 25% working interest. Participation was funded by issuance of approximately 1.8 million shares of Empire common stock at a price of $3.00 per share issued in the second quarter of 2026. As of June 30, 2026, we have accrued approximately $1.0 million of additional costs incurred related to the gas development program reflected within accounts payable – related party on the unaudited interim condensed consolidated balance sheets.

Other property and equipment consists of operating lease assets, vehicles, office furniture, and equipment with lives ranging from three to five years. The capitalized costs of other property and equipment are as follows:

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Depreciation expense related to other property and equipment for the three months ended June 30, 2026 and 2025, was approximately $0.1 million for both periods. Depreciation expense related to other property and equipment for the six months ended June 30, 2026 and 2025, was approximately $0.2 million for both periods.