Organization and Basis of Presentation	6 Months Ended
Jun. 30, 2026
Organization and Basis of Presentation
Organization and Basis of Presentation	Note 1 – Organization and Basis of Presentation Empire Petroleum Corporation (“Empire,” collectively with its subsidiaries) is an independent energy company operator engaged in optimizing developed production by employing field management methods to maximize reserve recovery while minimizing costs. Empire operates primarily from the following wholly-owned subsidiaries in its areas of operations: ●Empire New Mexico LLC (“Empire New Mexico”) ●Empire North Dakota LLC (“Empire North Dakota”) ●Empire Texas LLC (“Empire Texas”) ●Empire Louisiana LLC (“Empire Louisiana”) Empire was incorporated in the State of Delaware in 1985. The unaudited interim condensed consolidated financial statements include the accounts of Empire and its wholly-owned subsidiaries. The terms “Company,” “we,” “us,” “our,” and similar terms refer to Empire Petroleum Corporation and its subsidiaries. The accompanying unaudited interim condensed consolidated financial statements of Empire have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of Empire’s financial position, the results of operations, and the cash flows for the interim period are included. All intercompany accounts and transactions have been eliminated in consolidation. All adjustments are of a normal, recurring nature. Operating results for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The information contained in this Form 10-Q should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2025, which are contained in Empire’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2026. Liquidity and Going Concern The Company has a revolving line of credit agreement with Equity Bank which requires the Company to maintain compliance with certain financial covenants computed on a quarterly and annual basis. As of June 30, 2026, the Company was in compliance with all required covenants. However, the Company carried negative working capital of approximately $16.3 million as of June 30, 2026, from previous and unforeseen operational costs resulting in lower production volumes. A portion of the decline in operating cash flows from lower production volumes were offset during the second quarter of 2026 through commodity derivatives in place, but only a small fraction of our anticipated future production is currently hedged. To meet its obligations, the Company has a credit facility with remaining commitments of approximately $15.3 million as of June 30, 2026, however, only approximately $2.0 million is unused. Additionally, the commitment is reduced monthly by $0.25 million. The Company issued warrants to Phil Mulacek, a related party, in connection with a convertible note issued in September 2025. In March 2026 the Company raised approximately $10.0 million of gross proceeds from a subscription rights offering and in May 2026 entered into a sales agreement to sell up to an aggregate gross sales price of $7.5 million of shares of common stock through an at-the-market offering. While these transactions provide additional funding towards the Company’s obligations, the Company expects to have negative working capital for the remainder of 2026 and future expected operating cash flows do not sufficiently meet the Company’s obligations for the next 12 months. Given the negative working capital and insufficient expected operating cash flow there is substantial doubt about the Company’s ability to continue as a going concern. Empire has committed financial support from Energy Evolution Master Fund, Ltd. (“Energy Evolution”), our largest stockholder who owns approximately 33.1% of our common stock as of June 30, 2026, and Petroleum Independent & Exploration, LLC, which is majority owned by Mr. Mulacek, and owns approximately 2.3% of our common stock outstanding as of June 30, 2026. Both are related parties of the Company. Energy Evolution and Petroleum Independent & Exploration, LLC are willing and able to provide these additional funds for Empire to continue to meet its obligations over the next 12 months. These additional funds may be raised through related party warrants, or a related party note payable that may or may not have conversion rights into shares of common stock of Empire. Management has considered these plans, including if they are within the control of Empire, in evaluating Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements - Going Concern. Management believes the above actions are sufficient to allow Empire to meet its obligations as they become due for a period of at least 12 months from the issuance of these financial statements. Management believes that its plans, and support from the existing related-party stockholders discussed above, is probable and has alleviated the substantial doubt regarding Empire’s ability to continue as a going concern.

Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2026

Organization and Basis of Presentation

Note 1 – Organization and Basis of Presentation

Empire Petroleum Corporation (“Empire,” collectively with its subsidiaries) is an independent energy company operator engaged in optimizing developed production by employing field management methods to maximize reserve recovery while minimizing costs. Empire operates primarily from the following wholly-owned subsidiaries in its areas of operations:

●Empire New Mexico LLC (“Empire New Mexico”)

●Empire North Dakota LLC (“Empire North Dakota”)

●Empire Texas LLC (“Empire Texas”)

●Empire Louisiana LLC (“Empire Louisiana”)

Empire was incorporated in the State of Delaware in 1985. The unaudited interim condensed consolidated financial statements include the accounts of Empire and its wholly-owned subsidiaries. The terms “Company,” “we,” “us,” “our,” and similar terms refer to Empire Petroleum Corporation and its subsidiaries.

The accompanying unaudited interim condensed consolidated financial statements of Empire have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of Empire’s financial position, the results of operations, and the cash flows for the interim period are included. All intercompany accounts and transactions have been eliminated in consolidation. All adjustments are of a normal, recurring nature. Operating results for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

The information contained in this Form 10-Q should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2025, which are contained in Empire’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2026.

Liquidity and Going Concern

The Company has a revolving line of credit agreement with Equity Bank which requires the Company to maintain compliance with certain financial covenants computed on a quarterly and annual basis. As of June 30, 2026, the Company was in compliance with all required covenants. However, the Company carried negative working capital of approximately $16.3 million as of June 30, 2026, from previous and unforeseen operational costs resulting in lower production volumes. A portion of the decline in operating cash flows from lower production volumes were offset during the second quarter of 2026 through commodity derivatives in place, but only a small fraction of our anticipated future production is currently hedged. To meet its obligations, the Company has a credit facility with remaining commitments of approximately $15.3 million as of June 30, 2026, however, only approximately $2.0 million is unused. Additionally, the commitment is reduced monthly by $0.25 million. The Company issued warrants to Phil Mulacek, a related party, in connection with a convertible note issued in September 2025. In March 2026 the Company raised approximately $10.0 million of gross proceeds from a subscription rights offering and in May 2026 entered into a sales agreement to sell up to an aggregate gross sales price of $7.5 million of shares of common stock through an at-the-market offering. While these transactions provide additional funding towards the Company’s obligations, the Company expects to have negative working capital for the remainder of 2026 and future expected operating cash flows do not sufficiently meet the Company’s obligations for the next 12 months. Given the negative working capital and insufficient expected operating cash flow there is substantial doubt about the Company’s ability to continue as a going concern.

Empire has committed financial support from Energy Evolution Master Fund, Ltd. (“Energy Evolution”), our largest stockholder who owns approximately 33.1% of our common stock as of June 30, 2026, and Petroleum Independent & Exploration, LLC, which is majority owned by Mr. Mulacek, and owns approximately 2.3% of our common stock outstanding as of June 30, 2026. Both are related parties of the Company. Energy Evolution and Petroleum Independent & Exploration, LLC are willing and able to provide these additional funds for Empire to continue to meet its obligations over the next 12 months. These additional funds may be raised through related party warrants, or a related party note payable that may or may not have conversion rights into shares of common stock of Empire.

Management has considered these plans, including if they are within the control of Empire, in evaluating Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements - Going Concern. Management believes the above actions are sufficient to allow Empire to meet its obligations as they become due for a period of at least 12 months from the issuance of these financial statements. Management believes that its plans, and support from the existing related-party stockholders discussed above, is probable and has alleviated the substantial doubt regarding Empire’s ability to continue as a going concern.