TULSA, Okla. - Empire Petroleum Corporation (NYSE American: EP), an oil and gas company with producing assets across multiple states, has initiated a subscription rights offering aimed at raising approximately $10 million. As of the close of business on September 30, 2024, common stockholders have been granted one subscription right per share owned, allowing them to purchase additional shares at $5.05 each.
The offering, which is non-transferable and will not be listed on any exchange, requires stockholders to own at least 16 shares to be eligible to purchase one whole share. Those fully exercising their rights are also entitled to over-subscribe for additional shares, subject to availability.
Empire's Chairman, Phil E. Mulacek, and Energy Evolution Fund, Ltd., the company's largest shareholders, have both expressed their intention to fully subscribe to their rights and to additionally exercise their over-subscription rights.
The rights offering is detailed in a prospectus supplement filed with the SEC and is expected to conclude by 5:00 p.m., Eastern Time, on October 16, 2024, unless it is extended or terminated earlier. Stockholders holding shares directly will receive a prospectus, a prospectus supplement, and a subscription rights certificate with instructions for participation.
This announcement does not constitute a sale offer or the solicitation of an offer to buy any securities. The offering is subject to registration or qualification under the securities laws of any state where such an offer or sale would be unlawful.
Empire Petroleum focuses on organic growth and strategic acquisitions that align with its current portfolio. The company's operations span New Mexico, North Dakota, Montana, Texas, and Louisiana. The information in this article is based on a press release statement.
InvestingPro Insights
Empire Petroleum's recent rights offering comes at a critical time for the company, as revealed by InvestingPro data. With a market capitalization of $164.75 million, Empire is currently operating in a challenging financial environment. The company's revenue for the last twelve months as of Q2 2024 stood at $42.87 million, with a quarterly revenue growth of 29.58% in Q2 2024, indicating some positive momentum despite overall challenges.
InvestingPro Tips highlight that Empire Petroleum is "quickly burning through cash" and that "short term obligations exceed liquid assets." These factors likely contribute to the company's decision to initiate the rights offering to raise approximately $10 million. The offering price of $5.05 per share is slightly below the previous closing price of $5.25, potentially making it attractive for existing shareholders to participate.
Another InvestingPro Tip notes that Empire Petroleum "operates with a moderate level of debt." This moderate debt level, combined with the company's cash burn rate, underscores the importance of this capital raise for strengthening the company's financial position.
It's worth noting that Empire Petroleum has shown strong returns over the last five years, according to InvestingPro Tips. This historical performance may provide some confidence to shareholders considering participation in the rights offering.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing Empire Petroleum's financial health and growth prospects.
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