Empire Petroleum Corporation confirms the acquisition of Texas Petroleum and Gas assets

On 16^th April, Empire Petroleum Corporation has announced that it has acquired oil and gas production facilities and associated midstream facilities located in Houston, Madison, and Leon Counties, Texas, through its wholly-owned subsidiary, Empire Texas LLC (“Empire Texas”). The properties were purchased by Pardus Oil & Gas, LLC, and Pardus Oil & Gas Operating GP, LLC (“Sellers”) in a transaction previously announced by Empire in its filings with the Securities and Exchange Commission.

In connection with the purchase of the Seller’s properties, Empire Texas made a contingency value agreement ('CVP’) with the Sellers instead of a final cash payment. The quarterly CVP is focused on cumulative oil output over a certain minimum amount of average daily production from the Sellers’ properties, and an average realized oil price of USD 40 or more per barrel of oil up to 31 December 2022.

The acquired production assets consist of 139 gross oil and gas wells with numerous stacked-pay formations in northeast Eagle Ford. They comprise approximately 30,397 net acres of contract, of which about 18,000 net acres comprise Ft. The Trinity Field. The assets are distinguished by around 91 % rest and 83 % net income interest. More than 400 BOEPD (Barrels of Oil Equivalent Per Day) have recently been produced mainly by Woodbine, Buda, Georgetown, and Edwards. Empire Texas will run the wells and initially use the transition services arrangement with the same highly skilled sales team.

Empire Texas also purchased the associated midstream assets at Ft. Trinidad, which consists of approximately 77 miles of lines, pipelines, and related infrastructure and services. These midstream assets would allow the Empire to monitor the marketing of its generated natural gas and natural gas liquids, as well as to maximize its oil production operations. The network also has sufficient excess capacity to accommodate potential growth in the region.

Mike Morrisett, President of the Empire, assume the Ft of the Empire. Trinidad Field has an immense pay opportunity and a reliable resource base. In company opinion, these assets, including proprietary 3D seismic data and a comprehensive library of geological and geophysical research, combined with a better outlook for oil prices resulting from the unprecedented slowdown of COVID-19, would dramatically increase Empire’s inventory of growth opportunities.

CEO Tommy Pritchard added that this acquisition enables continued balanced growth strategy, at the right price, and maintain mature oil-producing assets with stable, long-term production. Such assets have abundant well-controlled subsurfaces to allow us to minimize geological risk in the future, and a proprietary 3D seismic survey of a significant portion of the acquired acreage confirms natural fracturing throughout the region. Empire’s growth opportunities pipeline remains robust, and are currently reviewing deal flow with a building scale emphasis on a range of traditional assets.