Empire Petroleum Boosts Rights Offering to $10M with Insider Backing

TULSA, OK – February 25, 2026 – Empire Petroleum Corporation (NYSE American: EP) has significantly modified the terms of its ongoing subscription rights offering, increasing the potential capital raise to approximately $10 million and extending the deadline for investors. The move is bolstered by strong signals of support from its largest shareholder and its chairman, signaling deep-seated confidence in the oil and gas producer's strategic direction.

In an announcement today, the Tulsa-based firm detailed changes to the offering first announced earlier this month. The revised plan aims to secure more substantial funding for operational activities, a decision that comes at a pivotal time for independent energy companies navigating a complex market. This adjustment suggests a strategic pivot to capitalize on investor interest and fortify the company's balance sheet for upcoming projects.

Decoding the Modified Terms

Under the newly revised terms, Empire Petroleum is increasing the aggregate value of the offering from its original target of approximately $6.0 million to a more ambitious $10.0 million. To achieve this, the company has adjusted the subscription ratio. Each subscription right, distributed at no charge to shareholders as of the February 2, 2026 record date, now entitles the holder to purchase 0.095 shares of common stock. This is a substantial increase from the original ratio of 0.057 shares per right.

The subscription price remains fixed at an attractive $2.99 per whole share, a figure below the stock's recent trading price, which hovered around $3.05 on Wednesday morning. However, the new ratio means a stockholder must now hold at least 11 shares to receive rights sufficient to purchase one new share of common stock.

Crucially for retail investors, the rights remain non-transferable. This means shareholders cannot sell their rights on a public market if they choose not to participate. Their only options are to exercise the rights to buy new shares or let them expire worthless. To provide shareholders with more time to evaluate these updated terms, Empire has extended the offering's expiration date from February 27 to 5:00 p.m. Eastern Time on March 18, 2026.

Holders who fully exercise their basic subscription rights will also be granted over-subscription privileges, allowing them to purchase additional shares left unsubscribed by other stockholders, subject to proration. This feature provides committed investors an opportunity to increase their stake in the company.

A Vote of Confidence From Within

Perhaps the most significant aspect of the announcement is the staunch commitment from Empire's key stakeholders. Energy Evolution Master Fund, Ltd., the company's largest shareholder with a pre-offering stake of approximately 32.1%, has formally indicated its intent to fully exercise its subscription rights. Furthermore, the fund plans to fully utilize its over-subscription privilege to purchase its pro rata portion of any remaining shares.

This is not the first time Energy Evolution Master Fund has provided critical capital to Empire. The fund has a history of supporting the producer, including providing a $5.0 million promissory note in early 2024 to fund drilling programs. This continued financial backing from a major, informed investor serves as a powerful endorsement of management's strategy and the perceived value in the offering.

Adding to this signal of internal confidence, Phil E. Mulacek, Empire's Chairman of the Board, has also stated his intent to participate in the offering. Such concerted participation from top-level insiders is often interpreted by the market as a bullish indicator, suggesting they believe the stock is undervalued and the company's prospects are strong.

Fueling Growth Amid Financial Headwinds

The capital injection is earmarked for “current and future drilling and workover activity and general corporate purposes.” This points directly to a need to fund the company’s core operational growth. A review of Empire's recent financial health underscores the importance of this raise. The company has reported negative profit margins and a trailing twelve-month cash flow of approximately negative $9.95 million.

With total cash of around $4.6 million and total debt of $16.35 million on its recent balance sheet, the successful completion of the $10 million rights offering would significantly bolster its financial position. The infusion would provide the necessary liquidity to ramp up development on its assets across New Mexico, North Dakota, Montana, Texas, and Louisiana without taking on additional debt, which aligns with its recent extension of a $20 million revolving loan facility through 2028.

For existing shareholders, the offering presents a classic dilemma. If fully subscribed, the issuance of approximately 3.34 million new shares would result in a potential ownership dilution of around 9.5% for those who do not participate. The decision to invest more capital or accept dilution hinges on their confidence in the company’s ability to generate value from the new funds.

Navigating the Broader Energy Landscape

Empire's capital raise is occurring within a dynamic global energy market. While upstream investment in oil and gas is projected to rise, capital has become increasingly selective. Investors are prioritizing companies with clear execution strategies and resilient financial structures. For smaller independent producers like Empire, demonstrating a clear path to growth funded by a stable capital base is paramount.

Unlike industry giants that can self-fund massive capital expenditures from free cash flow, companies in Empire's weight class often rely on capital markets to fuel expansion. This rights offering, structured to favor existing shareholders and strongly backed by insiders, is a strategic maneuver to secure that necessary growth capital.

The funds will be critical as Empire pursues its stated strategy of organic growth combined with targeted acquisitions of proved developed assets. In a sector where scale and operational efficiency are key, this capital could enable the company to enhance production from its current portfolio and strategically acquire synergistic assets, strengthening its competitive position for the years ahead.