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 UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM

 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)

 OF
THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2024

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from _____________ to _____________

 Commission
File Number 001-16653

 (Exact
name of registrant as specified in its charter)

 _________________

 delaware

 73-1238709

 (State
 or Other Jurisdiction

 (I.R.S.
 Employer

 of
 Incorporation or Organization)

 Identification
 No.)

 2200
S. Utica Place, Suite 150, Tulsa, OK 74114
 (Address of Principal Executive Offices) (Zip Code)

 Registrant's
telephone number, including area code: ( 539) 444-8002

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 Stock $0.001 par value

 EP

 NYSE
 American

 Securities
registered pursuant to 12(g) of the Act: None

 (Title
of class)

 ______________________

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
 No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
 No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of the voting and non-voting common equity held
by non-affiliates, computed by reference to the closing sales price of such common equity as of the last business day of the registrant's
most recently completed second fiscal quarter, was $ 72,446,281.

 The number of shares of the
registrant's common stock, $0.001 par value, outstanding as of March 25, 2025 was 33,700,234.

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions of the registrant's definitive Proxy Statement relating to
the registrant's 2025 annual meeting of stockholders have been incorporated by reference into Part III of this Annual Report on
Form 10-K.

 EMPIRE PETROLEUM CORPORATION

 FORM 10-K

 PAGE
 NO.

 Forward-Looking Statements

 Glossary of Terms

 Item 1.

 Business

 Item
 1A.

 Risk
 Factors

 Item
 1B.

 Unresolved
 Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal
 Proceedings

 Item
 4.

 Mine
 Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance

 Item
 11.

 Executive
 Compensation

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain
 Relationships and Related Transactions and Director Independence

 Item
 14.

 Principal
 Accountant Fees and Services

 Item 15.

 Exhibits
 and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 Signatures

 FORWARD-LOOKING
STATEMENTS

 Certain
statements in this Annual Report on Form 10-K constitute "forward-looking statements" within the meaning Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Additionally, forward-looking statements may be made orally or in press releases, conferences, reports,
on our website or otherwise, in the future by us or on our behalf. All statements, other than statements of historical facts, which address
activities, events, or developments that Empire expects, believes, or anticipates will or may occur in the future, including future sources
of financing and other possible business developments, are forward-looking statements.

 By
their very nature, forward-looking statements require management to make assumptions that may not materialize or that may not be accurate.
Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results,
levels of activity and achievements to differ materially from those expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially from the results discussed in such forward-looking statements include, but are not
limited to, those discussed in Item 1A ("Risk Factors") and elsewhere in this Form 10-K and in other documents that we file
with or furnish to the Securities and Exchange Commission (the "SEC"), and the following:

 changes
 in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and
 natural gas liquids;

 our
 ability to replace reserves and efficiently develop current reserves;

 uncertainties
 inherent in estimating oil and gas reserves;

 management's
 ability to execute our business plan;

 delays
 and other difficulties related to producing oil, natural gas and natural gas liquids;

 delays
 and other difficulties related to regulatory and governmental approvals and restrictions;

 availability
 of sufficient capital to execute management's business plan, including future cash
 flows from operations, available borrowing capacity under revolving credit facilities, from
 our two largest stockholders and otherwise;

 management's
 ability to make acquisitions on economically acceptable terms and management's ability to
 integrate acquisitions;

 weather
 and environmental conditions;

 unforeseen
 engineering, mechanical or technological difficulties in working over wells;

 costs
 of operations and operating hazards;

 competition
 from other natural resource companies;

 unanticipated
 reductions in the borrowing base under the revolving credit facility we are party to;

 the
 availability of sufficient pipeline and other transportation facilities and equipment to
 carry our production to market and the impact of these facilities on our realized prices;

 our
 ability to retain key members of senior management and key technical and financial employees;

 the
 identification of and severity of adverse events and governmental responses to these or other
 environmental events;

 future
 Environmental, Social and Governance compliance developments and increased attention to such
 matters which could adversely affect our ability to raise equity and debt capital;

 the
 effect of our derivative activities;

 impacts
 of public health crises, pandemics and epidemics, such as the coronavirus pandemic ("COVID-19");

 A
 cyber incident involving our information systems and related infrastructure, or that of our
 business partners;

 the
 effects of governmental and environmental regulation; and

 general
 economic conditions including inflation, tariffs and interest rates.

 All
forward-looking statements are expressly qualified in their entirety by the cautionary statements in this section and elsewhere in this
Form 10-K. Other than as required by applicable securities laws, we undertake no duty to update these forward-looking statements, whether
as a result of new information, subsequent events or circumstances, changes in expectations, or otherwise. Readers should not place undue
reliance on these forward-looking statements. All forward-looking statements speak only as of the date of this report or, if earlier,
as of the date they were made.

 GLOSSARY
OF TERMS

 The
following are abbreviations and definitions of certain terms used within this Annual Report on Form 10-K.

 ASC
– Accounting Standards Codification.

 ASU
– Accounting Standards Update.

 Basin
 – A large natural depression on the earth's surface in which sediments, generally brought by water, accumulate.

 Bbl
 – One barrel or 42 U.S. gallons liquid volume of oil or other liquid hydrocarbons.

 Boe
 – Barrel of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent. The ratio
does not assume price equivalency and, given price differentials, the price for a barrel of oil equivalent for natural gas differs significantly
from the price for a barrel of oil. A barrel of NGLs also differs significantly in price from a barrel of oil.

 CG&A
 – Cawley, Gillespie & Associates, Inc.

 Completion
 – The process of treating a drilled well followed by the installation of permanent equipment for the production of oil or natural
gas, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.

 DD&A
 – Depreciation, depletion and amortization.

 Development
Well – A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be
productive.

 EPA
 – United States Environmental Protection Agency.

 ESG
 – Environmental, Social and Governance.

 Exploratory
Well – A well drilled to find and produce oil or gas in an unproved area, to find a new reservoir in a field previously found
to be productive of oil or gas in another reservoir, or to extend a known reservoir. Generally, a well that is not a development well,
a service well, or a stratigraphic test well.

 FASB
 – Financial Accounting Standards Board.

 Federal
Deposit Insurance Corporation or FDIC – An independent agency created by the Congress to maintain stability and public
confidence in the nation's financial system. The FDIC insures deposits; examines and supervises financial institutions for safety,
soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships.

 Field
 – An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological
structural feature and/or stratigraphic condition.

 GHG
 – Greenhouse gas.

 LOE
 – Lease Operating Expense, a current period expense incurred to operate a well.

 MBbls
 – One thousand barrels of crude oil or other liquid hydrocarbons.

 MBoe
 – One thousand barrels of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent.

 MMBoe
 – One million barrels of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent.

 Mcf
 – One thousand cubic feet.

 MMcf
 – One million cubic feet.

 National
Institute of Standards and Technology or NIST – An agency of the United States Department of Commerce whose mission is to promote
American innovation and industrial competitiveness.

 Net
acres or net wells – The sum of the fractional working interests owned in gross acres or gross wells.

 New
York Mercantile Exchange – A commodity futures exchange owned and operated by CME Group of Chicago.

 NYSE
American – NYSE American Stock Exchange.

 NGLs
 – Natural gas liquids measured in barrels. NGLs are made up of ethane, propane, isobutane, normal butane and natural gasoline,
each of which have different uses and different pricing characteristics.

 Net
revenue interest or NRI –The total revenue interest controlled by an entity in a specific oil or gas production unit,
including a well, lease, or drilling unit.

 New
Mexico Oil Conservation Division – The New Mexico Oil Conservation Division regulates oil and gas activity in New Mexico.
The Division gathers well production data, permits new wells, enforces the division's rules and the state's oil and gas statutes,
makes certain abandoned wells are properly plugged, and ensures the land is responsibly restored.

 Operator
 – An oil and gas joint venture participant that manages the joint venture, pays venture costs, and bills the venture's
non-operators for their share of venture costs. The operator is also responsible to market all oil, gas, and NGLs production, except
for those non-operators who take their production in-kind.

 OTCQB
 – The over-the-counter ("OTC") market exchange for the middle tier of three marketplaces for trading OTC stocks.

 Overriding
Royalty Interest or ORRI – A royalty interest that is created out of the operating or working interest. Unlike a royalty
interest, an overriding royalty interest terminates with the operating interest from which it was created or carved out of.

 Plugging
and abandonment or P&A – Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids
from one stratum will not escape into another stratum or to the surface.

developed producing reserves or PDP – Reserves that can be expected to be recovered from existing wells and completions
with existing equipment and operating methods.

undeveloped reserves – Reserves that are expected to be recovered from new wells on undrilled acreage, or from existing
wells where a relatively major expenditure is required.

 PV-10
 – The present value, discounted at 10% per annum, of future net revenues (estimated future gross revenues less estimated future
costs of production, development, and asset retirement costs) associated with reserves and is not necessarily the same as market value.
PV-10 does not include estimated future income taxes. Unless otherwise noted, PV-10 is calculated using the pricing scheme required by
the SEC. PV-10 of proved reserves is calculated the same as the standardized measure of discounted future net cash flows, except that
the standardized measure of discounted future net cash flows includes future estimated income taxes discounted at 10% per annum.

 Reasonable
Certainty – A high degree of confidence.

 Recompletion
 – The process of re-entering an existing wellbore that is either producing or not producing and completing in new reservoirs
in an attempt to establish or increase existing production.

 Reservoir
 – A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that
is confined by impermeable rock or water barriers and is separate from other reservoirs.

 Royalty
Interest or RI – The mineral owner's share of production, free of costs, but subject to severance taxes unless
the lessor is a government.

 SEC
 – United States Securities and Exchange Commission.

 Standardized
Measure – The present value of estimated future net revenue to be generated from the production of proved reserves, determined
in accordance with the rules and regulations of the SEC (using prices and costs in effect as of the date of estimation), less future
development, production and income tax expenses, and discounted at 10% per annum to reflect the timing of future net revenue.

 Undeveloped
acreage – Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial
quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

 Working
interest or WI – The ownership interest, generally defined in a Joint Operating Agreement ("JOA"), that
gives the owner the right to drill, produce and/or conduct operating activities on the property and share in the sale of production,
subject to all royalties, overriding royalties and other burdens and obligates the owner of the interest to share in all costs of exploration,
development operations and all risks in connection therewith.

 Workover
 – Operations on a producing or injection well to restore or increase production.

 WTI
 – West Texas Intermediate.

 XTO
 – XTO Holdings, LLC, a subsidiary of ExxonMobil.

 Energy
equivalent is determined by using the ratio of one barrel of crude oil, condensate or NGLs to six Mcf of natural gas.

 PART
I

 ITEM
1. BUSINESS.

 In
this Form 10-K, references to "Empire", the "Company", "we", "our", and "us"
refer to Empire Petroleum Corporation and its wholly-owned subsidiaries, unless context indicates otherwise.

 Overview

Petroleum Corporation is an independent energy company that engages in unlocking value in developed assets. Empire operates the following
wholly-owned subsidiaries in its areas of operations:

 New Mexico LLC ("Empire New Mexico"), consisting of the following entities:

 New Mexico LLC d/b/a Green Tree New Mexico

 Empire EMSU LLC

 Empire EMSU-B LLC

 Empire AGU LLC

 Empire NM Assets LLC

 Empire North Dakota ("Empire North Dakota"), consisting of the following entities:

 North Dakota LLC ("Empire North Dakota")

 ND Acquisition LLC ("Empire NDA")

 Texas ("Empire Texas"), consisting of the following entities:

 Texas LLC

 Texas Operating LLC

 Texas GP LLC

 Pardus
 Oil & Gas Operating, LP (owned 1% by Empire Texas GP LLC and 99% by Empire Texas LLC)

 Louisiana LLC ("Empire Louisiana")

was incorporated in the state of Delaware in 1985. The consolidated financial statements of Empire Petroleum Corporation and subsidiaries
include the accounts of the Company and its wholly-owned subsidiaries.

 Our
mission is to increase shareholder value by building oil and natural gas reserves in strategic plays in the United States. To accomplish
its mission, we plan to execute the following business strategies:

 Cost-effectively
 optimize well production

 Reduce
 unit operating costs and improve margins

 Target
 proved developed producing acquisitions in predictable fields that have historically had
 low production decline and long lives

 Focus
 on high-quality assets that add scale and provide synergies to our existing portfolio and
 core areas of operation

 We
operate as a single operating segment. For additional information, see Note 18 – Segment Reporting of Notes to Consolidated Financial
Statements.

 Available
Information

 Our
Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as well as proxy statements and other information we file with,
or furnish to, the SEC are available free of charge on our website at www.empirepetroleumcorp.com. We make these documents available
as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. The information contained on our
website, or available by hyperlink from our website, is not incorporated into this Form 10-K or other documents we file with, or furnish
to, the SEC. We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure
obligations under Regulation Fair Disclosure. Such disclosures will be included on our website in the "Investor Relations"
sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings
and public conference calls and webcasts.

 In
addition, we use social media to communicate with our investors and the public about our company, our businesses and our results of operations.
The information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media and
others interested in our company to review the information we post on the social media channels listed in the "Investor Relations"
section of our website.

 Properties

 We
are an independent operator in four geographic areas in the United States. For our operated properties, we manage and influence production
using a combination of experienced field personnel and third-party service providers to execute our mission. Our producing properties
have reasonably predictable production profiles and cash flows, subject to commodity price and cost fluctuations.

 As
is common in the industry in which we operate, we selectively participate in drilling and developmental activities in non-operated properties.
Decisions to participate in non-operated properties are made after technical and economic analysis of the projects which also considers
the operating expertise and historical track record of the operators.

New Mexico

New Mexico was formed when we purchased producing assets from XTO in May 2021. These assets are located in Lea County, New Mexico, and
include approximately 714 gross (529 net) producing and injection wells on a contiguous and consolidated acreage position consisting
of 48,000 gross (41,000 net). We also have 15 royalty interest ("RI") wells with an average overriding royalty interest ("ORRI")
of 0.6%. Empire New Mexico's assets primarily produce oil with accompanying natural gas and NGLs production. Empire New Mexico's
properties are located in Grayburg/San Andres (primary source of production), Queen-Seven Rivers-Yates, Devonian,
Abo, Blineberry, Tubb, and Drinkard formations.

North Dakota

North Dakota includes approximately 232 gross (108 net) producing or injection wells on 24,480 gross (18,480 net) acres in North Dakota
and western Montana. We also have smaller nonoperating interests in 106 gross (less than 1 net) vertical wells. These properties primarily
produce oil with some related gas production. Assets are located in Madison (primary source of production), Bakken, Duperow,
Red River, and Ratcliffe/Mission Canyon formations.

 The
existing producing properties have experienced near-flat production rates over the last five years. We have been able to capitalize on
operational improvements to allow a more immediate recovery of reserves.

 In
the fourth quarter of 2023, the Company commenced a program to further develop its Starbuck Field located in North Dakota (the "Starbuck
Drilling Program"). The Starbuck Drilling Program's first well came online in December 2023 and a total of 13 wells in the
Upper Charles formation have been placed in production as of the filing date of this report. The Company is currently optimizing completions
while increasing the core production through its enhanced oil recovery ("EOR") program.

 As
the Starbuck Field is strategically designed for EOR production, the Company has experienced an increase in production throughout 2024
which is anticipated to continue into 2025.

has also logged five vertical pilot wells to help identify additional pay and extend existing reservoirs, which has confirmed three additional
primary zones of interest and two secondary zones of interest. In addition, the Company has drilled a vertical appraisal well in the
Starbuck Field to core two new target zones for development. The two new primary target zones of development have been successfully cored
and the cores are under analysis. The data will then be added to a future development plan while the vertical wells have been placed
in production during 2024.

Texas

Texas includes approximately 119 gross (106 net) producing wells on approximately 43,000 gross (30,000 net) acres as well as 77 miles
of gathering lines and pipelines with related facilities and equipment. Empire Texas owns concentrated acreage and stacked pay in the
historically prolific East Texas Basin. Assets are concentrated in the Fort Trinidad Field in Houston and Madison Counties with high
working interest and historical production from eight separate formations. We have begun technical work for uplift opportunities
in Texas.

 In
the fourth quarter of 2024, the Company initiated a return-to-production program on four wells primarily focused on facility work on
the existing saltwater disposal system.

Louisiana

Louisiana includes 7 gross (5 net) producing wells and three saltwater disposal wells in the Miocene, Frio, Cockfield, and Wilcox formations.
Empire Louisiana's assets primarily produce oil.

and Operating Data

 The
following table sets forth a summary of our production and operating data. Because of normal production declines, increased or decreased
production due to future acquisitions, divestitures, and development, fluctuations in commodity prices and the effects of acquisitions
or divestitures, the historical information presented below should not be interpreted as being indicative of future results.

 2024

 2023

 Production and operating data:

 Net sales volumes:

 Oil (Bbl)

 581,159

 487,869

 Natural gas (Mcf)

 916,955

 854,274

 Natural gas liquids (Bbl)

 150,091

 136,013

 Total (Boe)

 884,076

 766,261

 Average price per unit:

 Oil (1)

 $
 71.44

 $
 75.19

 Natural gas

 $
 0.37

 $
 2.02

 Natural gas liquids

 $
 14.21

 $
 12.21

 Total (Boe)

 $
 49.76

 $
 52.29

 Operating costs and expenses per Boe:

 Lease operating expense (excluding workovers)

 $
 24.46

 $
 21.70

 Workovers

 $
 6.71

 $
 15.65

 Total Lease operating expense

 $
 31.16

 $
 37.36

 Production and ad valorem taxes

 $
 4.26

 $
 3.97

 Depreciation, depletion, amortization and accretion

 $
 12.74

 $
 6.33

 General & administrative (excluding stock-based compensation)

 $
 14.23

 $
 15.71

 Stock-based compensation

 $
 2.44

 $
 4.10

 Total General & administrative

 $
 16.67

 $
 19.81

 (1) Excludes the effect of net cash receipts from (payments on) derivatives.

 At
December 31, 2024 and 2023, we had approximately 1,072 gross (748 net) producing and injection wells.

 We
have no firm delivery commitments for oil or natural gas.

 Oil
and Natural Gas Reserves

 Our
primary mission is to optimize existing producing properties; as such, there are no reserves estimated for undeveloped properties, though
we own acreage that can be drilled in the future and are also a non-operator WI owner on acreage subject to future drilling activities.
The following table represents our oil and natural gas reserves:

 Oil

 Natural
 Gas

 NGLs

 Total

 (MBbl)

 (MMcf)

 (MBbl)

 MBoe

 Proved developed at December
 31, 2024

 7,001

 6,064

 1,215

 9,227

 Proved developed at December
 31, 2023

 6,924

 6,104

 1,171

 9,112

 Net
proved reserves were calculated using an unweighted arithmetic average of the first-day-of-the-month price within the 12-month period
for the year. All prices and costs associated with operating wells were held constant in accordance with SEC guidelines. Prices of $71.66
per barrel of oil, $0.95 per Mcf and $24.54 per barrel of NGLs were utilized at December 31, 2024. Prices of $75.45 per barrel of oil,
$1.51 per Mcf and $9.82 per barrel of NGLs were utilized at December 31, 2023.

 Reserve
Estimation Process

 Reserve
estimation is a subjective process as the underground accumulations of crude oil and natural gas cannot be measured in an exact manner,
and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation
and judgment. Estimates of economically recoverable oil and natural gas reserves depend on several variable factors, including but not
limited to historical production from the area compared with production from other producing areas, and assumptions about: reservoir
size; the effects of regulations by governmental agencies; future oil and natural gas prices; future operating costs; severance and excise
taxes; operational risks; development costs; and workover and remedial costs.

 Some
or all of these assumptions may vary considerably from actual results. For these and other reasons, estimates of the economically recoverable
quantities of oil and natural gas attributable to any group of properties, classifications of those oil and natural gas reserves based
on the risk of recovery, and estimates of the future net cash flows from oil, and natural gas reserves prepared by different engineers
or by the same engineers but at different times may vary substantially. Such estimates may be subject to periodic downward or upward
adjustments. Actual production, revenues, and expenditures regarding our oil, NGLs, and natural gas reserves will likely vary from estimates,
and those variances may be material.

 We
engage and consult with an independent petroleum engineering firm, CG&A, to prepare our annual reserve estimates and rely on CG&A's
expertise to ensure that reserve estimates are prepared in accordance with SEC guidelines. The technical person primarily responsible
for the preparation of the reserve report is Zane Meekins, Executive Vice President. Mr. Meekins has been with CG&A since 1989 and
graduated from Texas A&M University in 1987 with a bachelor's degree in petroleum engineering. He is a registered professional
engineer in Texas and has more than 30 years of experience in the estimation and evaluation of oil and natural gas reserves. He is also
a member of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers.

 The
primary inputs to the reserve estimation process are technical information, financial data, ownership interest and production data. The
relevant field and reservoir technical information, which is updated at least annually, is assessed for validity when CG&A has technical
meetings with our personnel. Our accounting records, operational data and well information used in the reserve estimation process are
subject to internal and external quarterly reviews, annual audits, and internal controls over financial reporting. Our reserves database
is updated and maintained by our Senior Reserves Engineer who has the appropriate technical qualifications to maintain and assist in
the preparation of reserve estimates. The Senior Reserves Engineer has over 40 years of industry experience, a degree in engineering
from Tulane University in 1978, a licensed professional, and holds several memberships in professional petroleum engineer organizations.
Once the reserves database has been appropriately updated, Empire will meet with CG&A who will then review the relevant information
and validate the estimates. CG&A will work with the Senior Reserves Engineer to resolve any differences in reserve estimates. CG&A
will then finalize the reserve report once any differences are resolved and provide a final report to the Company.

 Marketing
Arrangements

 We
market our oil and natural gas in accordance with standard energy industry practices. This marketing effort endeavors to obtain the combined
highest netback and most secure market available at that time.

 We
sell oil production at the lease locations to third-party purchasers via truck transport or pipeline. We do not transport, refine or
process the oil we produce. We sell our produced oil under contracts using market-based pricing, which is adjusted for differentials
based upon oil quality.

 We
sell our natural gas and NGLs under purchase contracts using market-based pricing, which is primarily sold at the lease location.

 Principal
Customers

 We
sell our oil, natural gas, and NGLs production to marketers which is transported by truck or pipeline to storage facilities arranged
by the marketers. Our marketing of oil and natural gas can be affected by factors beyond our control, the effects of which cannot be
accurately predicted.

 For
2024, 78% of revenues from oil, natural gas, and NGLs sales were to four customers. For 2023, 70% of revenues from oil, natural gas,
and NGLs sales were to four customers. No other purchaser accounted for more than 10% of our total revenues during the respective periods.
While the loss of these purchasers may result in a temporary interruption in sales of, or a lower price for, our production, we believe
that the loss of these purchasers would not have a material adverse effect on our operations, as there are alternative purchasers in
our producing regions.

 Competition

 The
oil and natural gas industry in the areas in which we operate is highly competitive. We encounter strong competition from numerous parties,
ranging generally from small independent producers to major integrated companies. We primarily encounter significant competition in acquiring
properties. At higher commodity prices, we also face competition in contracting for oil field services, rigs, pressure pumping and workover
equipment, and securing trained personnel. Many of these competitors have financial, technical and personnel resources substantially
larger than ours. As a result, our competitors may be able to pay more for desirable properties, or to evaluate, bid for and purchase
a greater number of properties or prospects than our financial or personnel resources will permit.

 In
addition to competition for drilling, pressure pumping and workover equipment, we are also affected by the availability of related equipment
and materials. The oil and natural gas industry periodically experiences shortages of drilling and workover rigs, equipment, pipe, materials,
and personnel, which can delay workover and exploration activities and cause significant price increases. We are unable to predict the
timing or duration of any such shortages.

 Seasonality
of Business

 Weather
conditions often affect the demand for, and prices of, natural gas and can also delay oil and natural gas production. Demand for natural
gas is traditionally higher in the winter, resulting in higher natural gas prices during the first and fourth quarters. Due to these
seasonal fluctuations, results of operations for individual quarterly periods may not be indicative of the results realized on an annual
basis.

 Markets
and Price Volatility

 The
market price of oil and natural gas is volatile, subject to speculative movement and depends upon numerous factors beyond our control,
including expectations regarding inflation, global and regional demand, political and economic conditions and production costs. Future
profitability, if any, will depend substantially upon the prevailing prices for oil and natural gas. If the market price for oil
and natural gas remains depressed in the future, it could have a material adverse effect on our ability to raise the additional capital
necessary to finance operations. Lower oil and natural gas prices may also reduce the amount of oil and natural gas, if any, that can
be produced economically from our properties. We anticipate that the prices of oil and natural gas will fluctuate in the near future.

 Title
to Properties

 Our
title to properties are subject to royalty, overriding royalty, carried, net profits, working and other similar interests and contractual
arrangements customary in the oil and natural gas industry, to liens for current taxes not yet due and to other encumbrances. As is customary
in the industry in the case of undeveloped properties, only cursory investigation of record title is made at the time of acquisition.
Drilling title opinions are usually prepared before commencement of drilling operations. We believe we have satisfactory title to substantially
all of our active properties in accordance with standards generally accepted in the natural gas and oil industry. Nevertheless, we are
involved in title disputes from time to time that may result in litigation.

 Regulation

 The
oil and natural gas industry is subject to extensive federal, state and local laws and regulations governing the production, transportation
and sale of hydrocarbons as well as the taxation of income resulting therefrom. Legislation affecting the oil and natural gas industry
is constantly changing. Numerous federal and state departments and agencies have issued rules and regulations applicable to the
oil and natural gas industry. In general, these rules and regulations regulate, among other things, the extent to which acreage
may be acquired or relinquished; spacing of wells; measures required for preventing waste of oil and natural gas resources; and, in some
cases, rates of production. The heavy and increasing regulatory burdens on the oil and natural gas industry increase our cost of
doing business and, consequently, affect profitability.

 The
Comprehensive Environmental, Response, Compensation, and Liability Act ("CERCLA"), also known as the Superfund law, and comparable
state statutes impose strict, joint and several liabilities on owners and operators of sites and on persons who disposed of or arranged
for the disposal of "hazardous substances" found at such sites. These persons include the owner or operator of the site where
the release occurred, persons who disposed or arranged for the disposal of hazardous substances at the site, and any person who accepted
hazardous substances for transportation to the site. CERCLA authorizes the EPA, state environmental agencies, and in some cases third
parties, to take actions in response to threats to the public health or the environment and to seek to recover from the responsible classes
of persons the costs they incur. It is not uncommon for the neighboring landowners and other third parties to file claims for personal
injury and property damage allegedly caused by the hazardous substances released into the environment. Although CERCLA currently excludes
petroleum from its definition of "hazardous
substance," state laws affecting our operations may impose clean-up liability relating to petroleum and petroleum related products.

 Our
oil and natural gas operations are also subject to numerous federal, state and local laws and regulations relating to environmental protection.
These laws govern, among other things, the amounts and types of substances and materials that may be released into the environment, the
issuance of permits in connection with exploration, drilling and production activities, the reclamation and abandonment of wells and
facility sites and the remediation of contaminated sites. These laws and regulations may impose substantial liabilities if we fail
to comply or if any contamination results from our operations.

 Various
state governments and regional organizations comprising state governments have enacted legislation and promulgated rules restricting GHG emissions or promoting the use of renewable energy, and additional such measures are frequently
under consideration. Although it is not possible at this time to estimate how potential future requirements addressing GHG emissions
would impact operations on the Company properties and revenue, either directly or indirectly, any future federal, state or local laws
or implementing regulations that may be adopted to address GHG emissions could require the operators of our properties to incur new or
increased costs to obtain permits, operate and maintain equipment and facilities, install new emission controls, acquire allowances to
authorize GHG emissions, pay taxes related to GHG emissions or administer a GHG emissions program. Regulation of GHGs could also result
in a reduction in demand for and production of oil and natural gas. Additionally, to the extent that unfavorable weather conditions are
exacerbated by global climate change or otherwise, the Company properties may be adversely affected to a greater degree than previously
experienced.

 Our
sales of crude oil are affected by the availability, terms, and cost of transportation. The transportation of oil in common carrier pipelines
is also subject to rate regulation. The Federal Energy Regulatory Commission ("FERC"), regulates interstate oil pipeline
transportation rates under the Interstate Commerce Act. Intrastate oil pipeline transportation rates are subject to regulation by state
regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to
intrastate oil pipeline rates, varies from state to state. Insofar as effective interstate and intrastate rates are equally applicable
to all comparable shippers, we believe that the regulation of oil transportation rates will not affect our operations in any way that
is of material difference from those of our competitors. Further, interstate and intrastate common carrier oil pipelines must provide
service on a non-discriminatory basis. Under this open access standard, common carriers must offer service to all shippers requesting
service on the same terms and under the same rates. When oil pipelines operate at full capacity, access is governed by pro-rationing
provisions set forth in the pipelines' published tariffs. Accordingly, we believe that access to oil pipeline transportation services
generally will be available to us to the same extent as to our competitors.

 Employees

 At
December 31, 2024, we had 63 full-time employees, not including contract personnel and outsourced service providers. Our team is broadly
experienced in oil and natural gas operations and follows a strategy of outsourcing most accounting, human resources, and other non-core
functions.

 Office
Locations

 Our
corporate headquarters are at 2200 South Utica Place, Suite 150, Tulsa, Oklahoma, with field offices in North Dakota, Texas, and New
Mexico.

 ITEM
1A. RISK FACTORS.

 Our
operations are subject to various risks and uncertainties in the ordinary course of business. The following summarizes significant risks
and uncertainties that may adversely affect our operations or financial position. Risks and uncertainties discussed below are not a comprehensive
listing of those faced by us. Additional risks not presently known or that are deemed immaterial may also affect us. Readers should carefully
consider the risk factors included below and other information included and incorporated by reference into this Annual Report on Form
10-K.

 Reserves

 The
Standardized Measure of estimated reserves may not be accurate estimates of the current fair value of estimated proved oil and natural
gas reserves.

 Standardized
Measure is a reporting convention that provides a common basis for comparing oil and natural gas companies subject to the rules and regulations
of the SEC. This measure requires the use of operating and development costs prevailing as of the date of computation. Consequently,
it will not reflect the prices ordinarily received or that will be received for oil and natural gas production because of varying market
conditions, nor may they reflect the actual costs that will be required to produce or develop the oil and natural gas properties. Accordingly,
estimates included in this report of future net cash flows may be materially different from the future net cash flows that are ultimately
received. In addition, the 10 percent discount factor, which is required by the rules and regulations of the SEC to be used in calculating
discounted future net cash flows for reporting purposes, may not be the most appropriate discount factor based on interest rates in effect
from time to time and risks associated with us or the oil and natural gas industry in general.

 Therefore,
the Standardized Measure included in this report should not be construed as an accurate estimate of the current market value of our proved
reserves.

 Estimates
of proved reserves and future net cash flows are not precise. The actual quantities of our proved reserves and future net cash flows
may prove to be lower than estimated.

 Numerous
uncertainties exist in estimating quantities of proved reserves and future net cash flows therefrom. Estimates of proved reserves and
related future net cash flows are based on various assumptions, which may ultimately prove to be inaccurate. Petroleum engineering is
a subjective process of estimating accumulations of oil and natural gas that cannot be measured in an exact manner. Estimates of economically
recoverable oil and natural gas reserves and of future net cash flows depend upon a number of variable factors and assumptions, including
the following:

 historical
 production from the area compared with production from other producing areas;

 the
 assumed effects of regulations by governmental agencies;

 the
 quality, quantity and interpretation of available relevant data;

 assumptions
 concerning future commodity prices; and

 assumptions
 concerning future operating costs, severance and ad valorem taxes, development costs and
 workover costs including remediation.

 Because
all reserve estimates are to some degree subjective, each of the following items, or other items not identified below, may differ materially
from those assumed in estimating reserves:

 the
 quantities of oil and natural gas that are ultimately recovered;

 the
 production and operating costs incurred;

 the
 amount and timing of future development expenditures; and

 future
 commodity prices.

 Furthermore,
different reserve engineers may make different estimates of reserves and cash flows based on the same data. Our actual production, revenues
and expenditures with respect to reserves will likely be different from estimates and the differences may be material.

 As
required by the SEC, the estimated discounted future net cash flows from proved reserves are based on the average previous twelve months
first-of-month prices preceding the date of the estimate and costs as of the date of the estimate, while actual future prices and costs
may be materially higher or lower. Actual future net cash flows also will be affected by factors such as:

 the
 amount and timing of actual production;

 levels
 of future capital spending;

 increases
 or decreases in the supply of or demand for oil, natural gas, and NGLs; and

 changes
 in governmental regulations or taxation.

 Accordingly,
estimates included in this report of future net cash flows may be materially different from the future net cash flows that are ultimately
received. Therefore, the estimates of discounted future net cash flows in this report should not be construed as accurate estimates of
the current market value of our proved reserves.

 Unless
reserves are replaced, production and estimated reserves will decline, which may adversely affect our financial condition, results of
operations and/or cash flows.

 Producing
oil and natural gas reservoirs are generally characterized by declining production rates that may vary depending upon reservoir characteristics
and other factors. Estimates of the decline rate of an oil or natural gas well are inherently imprecise and may be less precise with
respect to new or emerging oil and natural gas formations with limited production histories than for more developed formations with established
production histories. Estimated future oil and natural gas reserves and production and, therefore, cash flows and results of operations
are highly dependent upon our success in efficiently developing and exploiting current properties and economically finding or acquiring
additional recoverable reserves. We may not be able to develop, find or acquire additional reserves to replace our current and future
production at acceptable costs. If we are unable to replace our current and future production, cash flows and the value of reserves may
decrease, adversely affecting our business, financial condition and results of operations.

 New
technologies may cause our exploration and development methods to become obsolete, causing an adverse effect on our production.

 Our
industry is subject to rapid and significant technological advancements, including the introduction of new products and services using
new technologies. As competitors use or develop new technologies, we may be at a competitive disadvantage, and competitive pressures
may force us to implement new technologies at a substantial cost. In addition, our competitors may have greater financial, technical,
and personnel resources that allow them to enjoy technological advantages and may allow them to implement new technologies before we
can. We cannot be sure that we can implement technologies timely or at an acceptable cost. One or more technologies we use or that we
may implement may become obsolete or may not work as we expected, and we may be hurt financially and operationally as a result.

 Financing

 We
have indebtedness and may incur substantially more debt. Higher levels of indebtedness make us more vulnerable to economic downturns
and adverse business developments.

 Our
total indebtedness at December 31, 2024, was $11.3 million. At December 31, 2024, commitments from a financial institution under a Revolving
Credit Facility (the "Credit Facility") with Empire North Dakota and Empire NDA were approximately $19.8 million, of which
approximately $8.7 million was unused and approximately $11.1 million was outstanding. Management continues to review existing indebtedness,
and may seek to repay, refinance, repurchase, redeem, exchange or otherwise terminate existing indebtedness. If we do seek to refinance
existing indebtedness, there can be no guarantee that we would be able to execute the refinancing on favorable terms or at all.

 As
a result of indebtedness, we use a portion of our cash flow to pay interest, which reduces the amount available to fund operations and
other business activities and could limit flexibility in planning for or reacting to changes in the business and the industry in which
we operate. Indebtedness under the Credit Facility is at a variable interest rate, and so a rise in interest rates will generate greater
interest expense.

 We
may incur substantially more debt in the future. The Credit Facility contains restrictions on the incurrence of additional indebtedness.

 Increases
in the level of indebtedness could have adverse effects on our financial condition and results of operations, including:

 imposing
 additional cash requirements on us in order to support interest payments, which reduces the
 amount we have available to fund our operations and other business activities;

 increasing
 the risk that we may default on our debt obligations;

 increasing
 our vulnerability to adverse changes in general economic and industry conditions, economic
 downturns and adverse developments in our business;

 limiting
 our ability to sell assets, engage in strategic transactions or obtain additional financing
 for working capital, capital expenditures, general corporate and other purposes;

 limiting
 our flexibility in planning for or reacting to changes in our business and the industry in
 which we operate; and

 increasing
 our exposure to a rise in interest rates, which will generate greater interest expense.

 Our
ability to meet our debt obligations and reduce our level of indebtedness depends on future performance, which is affected by general
economic conditions and financial, business and other factors, many of which are outside of the scope of management's control.

 Our
business requires substantial capital expenditures. Management may be unable to obtain needed capital or financing on satisfactory terms
or at all, which could lead to a decline in oil and natural gas reserves.

 The
oil and natural gas industry is capital intensive. Management makes and expects to continue to make substantial capital expenditures
for the acquisition and development of reserves. We intend to finance future capital expenditures through cash flow from operations,
incurring additional indebtedness, or capital raises. However, cash flow from operations and access to capital are subject to a number
of variables, including:

 the
 volume of oil, natural gas, and NGLs we are able to produce from existing wells;

 ability
 to transport oil and natural gas to market;

 the
 prices at which commodities are sold;

 the
 costs of producing oil and natural gas;

 global
 and domestic demand for oil and natural gas;

 global
 credit and securities markets;

 the
 ability and willingness of lenders and investors to provide capital and the cost of the capital;

 ability
 to acquire, locate and produce new reserves;

 the
 impact of potential changes in our credit ratings; and

 proved
 reserves.

 We
may not generate expected cash flows and obtain the capital necessary to sustain our operations at current or anticipated levels. A decline
in cash flow from operations or our financing needs may require management to revise our capital program or alter or increase capitalization
substantially through the issuance of debt or equity securities. The issuance of additional equity securities could have a dilutive effect
on the value of our common stock. Additional borrowings under the Credit Facility or the issuance of additional debt securities will
require that a greater portion of cash flow from operations be used for the payment of interest and principal on debt, thereby reducing
our ability to use cash flow to fund working capital, capital expenditures and acquisitions. Additional financing also may not be available
on acceptable terms or at all. In the event additional capital resources are unavailable, management may curtail activities or be forced
to sell some assets on an untimely or unfavorable basis.

 The
loss or unavailability of capital provided by our two largest stockholders could have a material adverse effect on our business.

 Our
two largest stockholders, Energy Evolution Master Fund, Ltd. ("Energy Evolution") and Phil Mulacek, have been a
significant source of capital for our acquisitions of oil and natural gas properties and the development of our oil and natural gas
reserves. We have been dependent on this capital to fund our growth plans, including our current drilling programs. The loss of this
capital could have a material adverse effect on our business, especially our growth plans.

 If
we are unable to comply with the covenants in our agreements governing our indebtedness, including the Credit Facility, there could be
a default under the terms of such agreements, which could result in an acceleration of payment of funds that we have borrowed.

 Our
ability to meet our debt obligations and other expenses will depend on our future performance, which will be affected by financial, business,
economic, regulatory and other factors, many of which management is unable to control. If our cash flow is not sufficient to service
our debt, we may be required to refinance debt, sell assets or sell additional equity on terms that we may not find attractive if it
may be done at all. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required
payments of principal, premium, if any, and interest, if any, on our indebtedness, or if we otherwise fail to comply with the various
covenants, including financial and operating covenants, in the agreements governing our indebtedness, including the Credit Facility,
we could be in default under the terms of the agreements governing such indebtedness. In the event of such default:

 the
 holders of such indebtedness could elect to declare all the funds borrowed thereunder to
 be due and payable, together with accrued and unpaid interest;

 the
 lenders could elect to terminate their commitments thereunder and cease making further loans;
 and

 we
 could be forced into bankruptcy or liquidation.

 If
our operating performance declines, we may need to obtain waivers under the Credit Facility, and have done so in the past, to avoid being
in default. If we breach our covenants and cannot obtain a waiver from the required lender, we would be in default and the lender could
exercise its rights, as described above, and we could be forced into bankruptcy or liquidation.

 A
negative shift in stakeholder sentiment towards the oil and natural gas industry and increased attention to ESG matters and conservation
matters could adversely affect our ability to raise equity and debt capital.

 Much
of the investor community has developed negative sentiment towards investing in our industry over the past few years. Recent equity returns
in the sector versus other industry sectors have led to lower oil and gas representation in certain key equity market indices. Some investors,
including certain public and private fund management firms, pension funds, university endowments and family foundations, have stated
policies to reduce or eliminate their investments in the oil and natural gas sector based on environmental, social and governance considerations.
Certain other stakeholders have pressured private equity firms and commercial and investment banks to stop funding oil and gas projects.
Such developments have resulted and could continue to result in downward pressure on the stock prices of oil and natural gas companies,
including ours. This may also result in a reduction of available capital funding for potential development projects, further impacting
our future financial results.

 Increasing
attention to climate change, societal expectations on companies to address climate change, investor and societal expectations regarding
voluntary ESG disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our
products, reduced profits, increased investigations and litigation, and negative impacts on our stock price and access to capital markets.
Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for oil and natural gas
products and additional governmental investigations and private litigation against us or our operators. To the extent that societal pressures
or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or
contribution to the asserted damage, or to other mitigating factors.

 Moreover,
while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary
disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or
events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily
uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established
single approach to identifying, measuring and reporting on many ESG matters.

 In
addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes
for evaluating companies on their approach to ESG matters. Currently, there are no universal standards for such scores or ratings, but
the importance of sustainability evaluations is becoming more broadly accepted by investors and stockholders. Such ratings are used by
some investors to inform their investment and voting decisions. Unfavorable ESG ratings and recent activism directed at shifting funding
away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to
the diversion of investment to other industries, which could have a negative impact on our access to and costs of capital. Also, institutional
lenders may decide not to provide funding for fossil fuel energy companies based on climate change related concerns, which could affect
our access to capital for potential growth projects.

 General
Operations

 The
oil and natural gas industry is highly competitive, and our size may put us at a disadvantage in competing for resources.

 The
oil and natural gas industry is highly competitive where our properties and operations are concentrated. We compete with major integrated
and larger independent oil and natural gas companies in seeking to acquire desirable oil and natural gas properties and leases and for
the equipment and services required to develop and operate properties. Many of our competitors have financial and other resources that
are substantially greater than ours, which makes acquisitions of acreage or producing properties at economic prices difficult. Significant
competition also exists in attracting and retaining technical personnel, including geologists, geophysicists, engineers, landmen and
other specialists, as well as financial and administrative personnel. Hence, we may be at a competitive disadvantage to companies with
larger financial resources than ours.

 A
substantial or extended decline in oil and natural gas prices may adversely affect our business, financial condition or results of operations
and our ability to meet our capital expenditure obligations and financial commitments.

 The
price we receive for our oil and natural gas production heavily influences our revenue, profitability, access to capital and future rate
of growth. Oil and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively
minor changes in supply and demand. Historically, the markets for oil and natural gas have been volatile. These markets will likely continue
to be volatile in the future. The prices we receive for our production, and the levels of our production, depend on numerous factors
beyond our control. These factors include, but are not limited to, the following:

 changes
 in global supply and demand for oil and natural gas, which could be negatively affected by
 concerns about public health crises, pandemics and epidemics, such as the COVID-19 pandemic;

 the
 price and quantity of imports of foreign oil and natural gas;

 political
 conditions, including trade or other economic sanctions, armed conflict in Ukraine and the
 Middle East, the price cap on Russian oil and embargoes, in or affecting other oil-producing
 activity;

 the
 level of global oil and natural gas exploration and production activity;

 the
 level of global oil and natural gas inventories;

 weather
 conditions, including extreme climatic events;

 technological
 advances affecting energy consumption; and

 the
 price and availability of alternative fuels.

 Lower
oil and natural gas prices may not only decrease our revenues on a per unit basis but also may reduce the amount of oil and natural gas
that we can produce economically. Lower prices also negatively impact the value of our proved reserves. Volatility in the price of oil
could force us, as well as other operators, to re-evaluate our current capital expenditure budget and make changes accordingly that we
believe are in the best interest of us and our stockholders. A substantial or extended decline in oil or natural gas prices may materially
and adversely affect our future business, financial condition, results of operations, liquidity or ability to finance planned capital
expenditures.

 Our
producing properties and proved reserves are concentrated in New Mexico, North Dakota, Montana, Texas, and Louisiana, making us vulnerable
to risks associated with operating in limited major geographic areas.

 Our
producing properties are geographically concentrated in New Mexico, North Dakota, Montana, Texas, and Louisiana. At December 31, 2024,
all of our total estimated proved reserves were attributable to properties located in these areas. As a result of this concentration,
we are exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in these areas caused
by governmental regulation, processing or transportation capacity constraints, market limitations, severe weather events, water shortages
or other drought related conditions or interruption of the processing or transportation of oil or natural gas.

 This
concentration of assets exposes us to additional risks, such as changes in field-wide rules and regulations that could cause us to permanently
or temporarily shut-in all of our wells within a field.

 A
significant portion of our oil, natural gas, and NGLs sales are concentrated in only a few purchasers, which increases our exposure to
substantial sales interruptions.

 For
the year ended December 31, 2024, the Company sold 78% of its oil, natural gas, and NGLs revenues to four customers. No other customer
made up more than 10%. As a result of this concentration, we are exposed to the impact of our sales if one of these customers fails to
meet their obligations or ceases its relationship with the Company. The loss in revenues may result in a disruption in the Company's
cash flows limiting the ability to meet its obligations or investing in capital projects.

 Our
insurance policies may not adequately protect us against certain unforeseen risks.

 In
accordance with customary industry practice, we maintain insurance against some, but not all, of the risks described in this report.
There can be no assurance that any insurance will be adequate to cover our losses or liabilities. We cannot predict the continued availability
of insurance, or its availability at premium levels that justify its purchase.

 Hedging
transactions may expose us to risk of financial loss or limit participation in commodity price increases and involve other risks.

 While
intended to reduce the effects of volatile oil and natural gas prices, derivative contracts designed as hedges expose us to risk of financial
loss in some circumstances, including when there is a change in the expected differential between the underlying price in the derivative
contract and actual prices received, or when the counterparty to the derivative contract defaults on its contractual obligations. It
is also possible that sales volumes fall below the hedged volumes leaving a portion of our position uncovered.

 Alternatively,
to the extent that we engage in price risk management activities to protect ourselves from commodity price declines, we may be prevented
from fully realizing the benefits of commodity price increases above the prices established by our derivative contracts. Moreover, many
of our contract counterparties have become subject to increasing governmental oversight and regulations in recent years, which could
adversely affect the cost and availability of our hedging arrangements.

 We
are subject to various environmental risks, and governmental regulation relating to environmental matters.

 We
are subject to a variety of federal, state and local governmental laws and regulations related to the storage, use, discharge and disposal
of toxic, volatile or otherwise hazardous materials. These regulations subject us to increased operating costs and potential liability
associated with the use and disposal of hazardous materials. Although these laws and regulations have not had a material adverse effect
on our financial condition or results of operations, there can be no assurance that we will not be required to make material expenditures
in the future. Moreover, we anticipate that such laws and regulations will become increasingly stringent in the future, which could
lead to material costs for environmental compliance and remediation by us. Any failure by us to obtain required permits for, control
the use of, or adequately restrict the discharge of hazardous substances under present or future regulations could subject us to substantial
liability or could cause our operations to be suspended. Such liability or suspension of operations could have a material adverse effect
on our business, financial condition and results of operations.

 Our
activities are subject to extensive governmental regulation. Oil and natural gas operations are subject to various federal, state and
local governmental regulations that may be changed from time to time in response to economic or political conditions. From time to time,
regulatory agencies have imposed price controls and limitations on production in order to conserve supplies of oil and natural gas. In
addition, the production, handling, storage, transportation and disposal of oil and natural gas, by-products thereof and other substances
and materials produced or used in connection with oil and natural gas operations are subject to regulation under federal, state and local
laws and regulations primarily relating to protection of human health and the environment. To date, expenditures related to complying
with these laws and for remediation of existing environmental contamination have not been significant in relation to our operations.
There can be no assurance that the trend of more expansive and stricter environmental legislation and regulations will not continue.

 If
forecasted prices for oil, natural gas, and NGLs decrease, we may be required to take significant future write-downs of the financial
carrying values of our properties in the future.

 Accounting
rules require that we periodically review the carrying value of our proved and unproved properties for possible impairment. Based on
prevailing commodity prices and specific market factors and circumstances at the time of prospective impairment reviews, and the continuing
evaluation of development plans, production data, economics and other factors, we may be required to significantly write-down the financial
carrying value of our oil and natural gas properties, which constitutes a non-cash charge to earnings. We may incur impairment charges
in the future, which could have a material adverse effect on our results of operations for the periods in which such charges are recorded.

 A
write-down could occur when oil and natural gas prices are low or if we have substantial downward adjustments to our estimated proved
oil and natural gas reserves, or if operating costs or development costs increase over prior estimates.

 The
capitalized costs of our oil and natural gas properties, on a field-by-field basis, may exceed the estimated future net cash flows of
that field. If so, we would record impairment charges to reduce the capitalized costs of such field to our estimate of the field's
fair market value. Unproved properties are evaluated at the lower of cost or fair market value. These types of charges will reduce our
earnings and stockholders' equity and could adversely affect our stock price.

 We
periodically assess our properties for impairment based on future estimates of proved and unproved reserves, oil and natural gas prices,
production rates and operating, development and reclamation costs based on operating budget forecasts. Once incurred, an impairment charge
cannot be reversed at a later date even if price increases of oil and/or natural gas occur and in the event of increases in the quantity
of our estimated proved reserves.

 If
oil, natural gas and NGLs prices fall below current levels for an extended period of time and all other factors remain equal, we may
incur impairment charges in the future. Such charges could have a material adverse effect on our results of operations for the periods
in which they are recorded.

 Properties
we acquire may not produce as projected and we may be unable to determine reserve potential, identify liabilities associated with the
properties that we acquire or obtain protection from sellers against such liabilities.

 Acquiring
oil and natural gas properties requires us to assess reservoir and infrastructure characteristics, including recoverable reserves, development
and operating costs and potential environmental and other liabilities. Such assessments are inexact and inherently uncertain and include
properties with which we do not have a long operational history. In connection with the assessments, we perform a review of the subject
properties, but such a review will not reveal all existing or potential problems. In the course of our due diligence, we may not inspect
every well or pipeline. We cannot necessarily observe structural and environmental problems, such as pipe corrosion, when an inspection
is made. We may not be able to obtain contractual indemnities from the seller for liabilities created prior to our purchase of a property.
We may be required to assume the risk of the physical condition of properties in addition to the risk that they may not perform in accordance
with our expectations. If properties we acquire do not produce as projected or have liabilities we were unable to identify, we could
experience a decline in our reserves and production, which could adversely affect our business, financial condition and results of operations.

 Many
of our properties are in areas that may have been partially depleted or drained by offset wells and certain of our wells may be adversely
affected by actions we or other operators may take when drilling, completing, or operating wells that we or they own.

 Many
of our properties are in reservoirs that may have already been partially depleted or drained by earlier offset drilling. The owners of
leasehold interests adjoining any of our properties could take actions, such as drilling and completing additional wells, which could
adversely affect our operations. When a new well is completed and produced, the pressure differential in the vicinity of the well causes
the migration of reservoir fluids toward the new wellbore and potentially away from existing wellbores. As a result, the drilling and
production of these potential locations by us or other operators could cause depletion of our proved reserves and may inhibit our ability
to further develop our proved reserves. In addition, completion operations and other activities, including water disposal activities,
conducted on adjacent or nearby wells could cause production from our wells to be shut in for indefinite periods of time, could result
in increased lease operating expenses and could adversely affect the production and reserves from our wells after they re-commence production.
We have no control over the operations or activities of offsetting operators.

 Acquisitions
involve a number of risks, including the risk that we will discover unanticipated liabilities or other problems associated with the acquired
business or property.

 In
assessing potential acquisitions, we consider information available in the public domain and information provided by the seller. In the
event publicly available data is limited, then, by necessity, we may rely to a large extent on information that may only be available
from the seller, particularly with respect to drilling and completion costs and practices, geological, geophysical and petrophysical
data, detailed production data on existing wells, and other technical and cost data not available in the public domain. Accordingly,
the review and evaluation of businesses or properties to be acquired may not uncover all existing or relevant data, obligations or actual
or contingent liabilities that could adversely impact any business or property to be acquired and, hence, could adversely affect us as
a result of the acquisition. These issues may be material and could include, among other things, unexpected environmental liabilities,
title defects, unpaid royalties, taxes or other liabilities.

 The
success of any acquisition that we complete will depend on a variety of factors, including our ability to accurately assess the reserves
associated with the acquired properties, assumptions related to future oil and natural gas prices and operating costs, potential environmental
and other liabilities and other factors. These assessments are often inexact and subjective. As a result, we may not recover the purchase
price of a property from the sale of production from the property or recognize an acceptable return from such sales or operations.

 Our
ability to achieve the benefits that we expect from an acquisition will also depend on our ability to efficiently integrate the acquired
operations. Management may be required to dedicate significant time and effort to the integration process, which could divert its attention
from other business opportunities and concerns. The challenges involved in the integration process may include retaining key employees
and maintaining employee morale, addressing differences in business cultures, processes and systems and developing internal expertise
regarding acquired properties.

 Our
operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs,
limit the areas in which we may conduct oil, natural gas, and NGLs exploration and production activities, and reduce demand for the oil,
natural gas, and NGLs we produce.

 In
the United States, no comprehensive climate change legislation has been implemented at the federal level. However, following the U.S.
Supreme Court finding that GHG emissions constitute a pollutant under the Clean Air Act, the EPA has adopted regulations that, among
other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the
monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, impose new
standards reducing methane emissions from oil and gas operations through limitations on venting and flaring and the implementation of
enhanced emission leak detection and repair requirements, and together with the United States Department of Transportation, implement
GHG emissions limits on vehicles manufactured for operation in the United States. The federal regulation of methane emissions from oil
and natural gas facilities has been subject to considerable attention in recent years. In December 2023, the EPA finalized new and updated
rules for both new and existing sources. The final rules make existing regulations more stringent, expand the scope of source types covered
by the rules and require states to develop plans to reduce methane and volatile organic compound emissions from existing sources. These
new rules have been subject to legal challenges. The Trump Administration may seek to revise or repeal these rules. As a result, we cannot
predict the scope of any final methane regulatory requirements or the cost to comply with such requirements. However, given the long-term
trend toward increasing regulation, future federal GHG regulations of the oil and natural gas industry remain a significant possibility.

 Governmental,
scientific, and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks
in the United States, including climate change related pledges made by certain candidates elected to public office. Former President
Biden issued several executive orders focused on addressing climate change, including items that may impact costs to produce, or demand
for, oil and gas. There are also increasing financial risks for fossil fuel producers as shareholders currently invested in fossil-fuel
energy companies may elect in the future to shift some or all of their investments into other sectors. Institutional lenders who provide
financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect
not to provide funding for fossil fuel energy companies. There is also a risk that financial institutions will be pressured or required
to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. Former President Biden signed an executive
order calling for the development of a "climate finance plan" and, separately, the Federal Reserve has joined the Network
for Greening the Financial System ("NGFS"), a consortium of financial regulators focused on addressing climate-related risks
in the financial sector. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction,
delay or cancellation of drilling programs or development or production activities.

 Policy
makers have also advocated for expanding existing, or creating new, reporting and disclosure requirements regarding GHG emissions and
other climate-related matters. For example, the EPA adopted amendments in May 2024 to its GHG Reporting Program, which, among other things,
added well blowouts and other abnormal events as new categories of sources for GHG emissions reporting. In addition, the SEC finalized
rules in March 2024 that require public companies to include extensive climate-related disclosures in their SEC filings, such as new
disclosures on (i) material Scope 1 and 2 GHG emissions, including an independent assurance report, which currently would not apply to
Empire given its size, and (ii) financial statement information regarding the effects of severe weather events and other natural conditions.
In April 2024, the SEC stayed the effectiveness of these rules pending the completion of a judicial review of certain legal challenges.
While we are still awaiting resolution of the review of the SEC climate change rules, we are continuing to assess its potential impact
and expect heightened disclosure requirements given that reporting frameworks on GHG emissions and other climate-related metrics are
still maturing and often require the use of numerous assumptions and judgments.

 The
adoption and implementation of new or more stringent international, federal or state legislation, regulations or other regulatory initiatives
that impose more stringent standards for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this
sector may produce oil and natural gas or generate GHG emissions could result in increased costs of compliance or costs of consuming,
and thereby reduce demand for, oil and natural gas. Additionally, political, litigation and financial risks may result in us restricting
or cancelling production activities, incurring liability for infrastructure damages as a result of climatic changes, or having an impaired
ability to continue to operate in an economic manner. One or more of these developments could have a material adverse effect on our business,
financial condition and results of operations.

 In
addition to regulatory risk, other market and social initiatives relating to climate change present risks for our business. For example,
in an effort to promote a lower-carbon economy, there are various public and private initiatives subsidizing or otherwise encouraging
the development and adoption of alternative energy sources and technologies, including by mandating the use of specific fuels or technologies.
These initiatives may reduce the competitiveness of carbon-based fuels, such as oil and gas. Moreover, an increasing number of financial
institutions, funds and other sources of capital have restricted or eliminated their investment in oil and natural gas activities due
to their concern regarding climate change. Such restrictions in capital could decrease the value of our business and make it more difficult
to fund our operations. In addition, governmental entities and other plaintiffs have brought, and may continue to bring, claims against
us and other oil and gas companies for purported damages caused by the alleged effects of climate change. The increasing attention to
climate change may result in further claims or investigations against us, and heightened societal or political pressures may increase
the possibility that liability could be imposed on us in such matters without regard to our causation of, or contribution to, the asserted
damage or violation, or to other mitigating factors.

 As
a final note, climate change could have an effect on the severity of weather (including hurricanes, droughts and floods), sea levels,
water availability and quality, and meteorological patterns. If such effects were to occur, our development and production operations
have the potential to be adversely affected.

 Potential
adverse effects could include damage to our facilities from powerful winds, extreme temperatures, or rising waters in low-lying areas,
disruption of our production activities either because of climate related damages to our facilities or in our costs of operation potentially
arising from such climatic effects, less efficient or non- routine operating practices necessitated by climate effects or increased costs
for insurance coverage in the aftermath of such effects. Significant physical effects of climate change could also have an indirect effect
on our financing and operations by disrupting the transportation or process-related services provided by midstream companies, service
companies or suppliers with whom we have a business relationship. Additionally, changing meteorological conditions, particularly temperature,
may result in changes to the amount, timing, or location of demand for energy or the products we produce. We may not be able to recover
through insurance some or any of the damages, losses or costs that may result from potential physical effects of climate change. At this
time, we have not developed a comprehensive plan to address the legal, economic, social or physical impacts of climate change on our
operations.

 The
marketability of our production is dependent upon gathering systems, transportation facilities and processing facilities that we do not
own or control. If these facilities or systems are unavailable, our oil and natural gas production can be interrupted and our revenues
reduced.

 The
marketability of our oil and natural gas production is dependent upon the availability, proximity and capacity of pipelines, natural
gas gathering systems, transportation and processing facilities owned by third parties. In general, we will not control these facilities,
and our access to them may be limited or denied due to circumstances beyond our control. A significant disruption in the availability
of these facilities could adversely impact our ability to deliver to market the hydrocarbons we produce and thereby cause a significant
interruption in our operations. In some cases, our ability to deliver to market our hydrocarbons is dependent upon coordination among
third parties that own transportation and processing facilities we use, and any inability or unwillingness of those parties to coordinate
efficiently could also interrupt our operations. The lack of availability or the lack of capacity on these systems and facilities could
result in the curtailment of production or the delay or discontinuance of drilling plans. These are risks for which we generally will
not maintain insurance.

 We
operate or participate in oil and natural gas leases with third-parties who may not be able to fulfill their commitments to our projects.

 In
some cases, we operate but own less than 100% of the working interest in the oil and natural gas leases on which we conduct operations,
and other parties own the remaining portion of the working interest. Financial risks are inherent in any operation where the cost of
drilling, equipping, completing and operating wells is shared by more than one person. We could be held liable for joint activity obligations
of other working interest owners, such as nonpayment of costs and liabilities arising from the actions of other working interest owners.
In addition, declines in oil, natural gas and NGLs prices may increase the likelihood that some of these working interest owners, particularly
those that are smaller and less established, are not able to fulfill their joint activity obligations. A partner may be unable or unwilling
to pay its share of project costs, and, in some cases, a partner may declare bankruptcy. In the event any of our project partners do
not pay their share of such costs, we would likely have to pay those costs, and we may be unsuccessful in any efforts to recover these
costs from our partners, which could materially adversely affect our financial position.

 Because
we cannot control activities on properties we do not operate, we cannot directly control the timing of exploration. If we are unable
to fund required capital expenditures with respect to non-operated properties, our interests in those properties may be reduced or forfeited.

 Our
ability to exercise influence over operations and costs for the properties we do not operate is limited. Our dependence on the operators
and other working interest owners for these projects and our limited ability to influence operations and associated costs could prevent
the realization of our targeted returns on capital with respect to acquisition, exploration and development activities. The success and
timing of development, exploitation and exploration activities on properties operated by others depend upon a number of factors that
may be outside our control, including but not limited to the timing and amount of capital expenditures; the operator's expertise
and financial resources; the approval of other participants in drilling wells; and the selection of technology.

 Where
we are not the majority owner or operator of a particular oil and natural gas project, we may have no control over the timing or amount
of capital expenditure associated with the project. If we are not willing or able to fund required capital expenditures relating to a
project when required by the majority owner(s) or operator, our interests in the project may be reduced or forfeited. Also, we could
be responsible for plugging and abandonment costs, as well as other liabilities in excess of our proportionate interest in the property.

 We
could be adversely affected by increased costs of service providers utilized by us.

 In
accordance with customary industry practice, we have relied and will rely on independent third-party service providers to provide most
of the services necessary to operate. The industry has experienced significant price fluctuations for these services during the last
year and this trend is expected to continue into the future. These cost uncertainties could, in the future, significantly increase
our production costs.

 Our
ability to use our existing net operating loss carryforwards or other tax attributes could be further limited.

 In
the event that an entity has an "ownership change" (as defined in Section 382 of the Internal Revenue Code of 1986, as amended
(the "Code")), an entity's federal net operating loss carryforwards ("NOLs") generated prior to an ownership
change would be subject to annual limitations, which could defer or eliminate our ability to utilize these tax losses against future
taxable income. Generally, an "ownership change" occurs if one or more stockholders, each of whom owns 5% or more in value
of a corporation's stock, increase their aggregate percentage ownership by more than 50% over the lowest percentage of stock owned
by those stockholders at any time during the preceding three-year period. A full Section 382 analysis was prepared in 2024, and it was
determined that our NOLs were subject to limitations under Section 382.

 At
December 31, 2024, we had approximately $35.8 million of federal NOLs generated in prior years that could offset against future taxable
income, however, $2.4 million of the NOLs were limited as of December 31, 2024 due to ownership changes. NOLs created prior to 2018 have
a 20-year expiration period and NOLs arising after 2017 have an indefinite life. Additionally, utilization of any NOL depends on many
factors, including our ability to generate future taxable income, which cannot be assured. At December 31, 2024, we had a full tax valuation
allowance recorded on the NOLs.

 In
the event that we were to undergo any further "ownership change", our NOLs generated prior to an ownership change would be
subject to further annual limitations, which could defer or eliminate our ability to utilize these tax losses against future taxable
income.

 Legislation

 Climate
change legislation, regulations restricting emissions of GHG's or legal or other action taken by public or private entities related
to climate change could result in increased operating costs and reduced demand for the oil and natural gas that we produce.

 The
threat of climate change continues to attract considerable attention in the United States and around the world. Numerous proposals have
been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit
existing emissions of GHGs as well as to restrict or eliminate such future emissions. These efforts have included consideration of cap-and-trade
programs, carbon taxes, GHG disclosure obligations and regulations that directly limit GHG emissions from certain sources. Moreover,
Former President Biden highlighted addressing climate change as a priority of his administration, issued several executive orders related
to climate change and recommitted the United States to long-term international goals to reduce emissions, and continues to require the
incorporation of climate change considerations into executive agency decision-making. In recent years, Congress has considered legislation
to reduce emissions of GHGs, including methane, a primary component of natural gas, and carbon dioxide, a byproduct of the burning of
natural gas. For example, the Inflation Reduction Act of 2022, which appropriates significant federal funding for renewable energy initiatives
and, for the first time, imposes a fee on GHG emissions from certain facilities, was signed into law in August 2022. The emissions fee
and funding provisions of the law could increase operating costs within the oil and natural gas industry and accelerate the transition
away from fossil fuels, which could in turn adversely affect our business and results of operations.

 At
the international level, the United Nations ("UN") sponsored the "Paris Agreement" requires member states to submit
non-binding, individually-determined reduction goals known as Nationally Determined Contributions every five years after 2020. Former
President Biden recommitted the United States to the Paris Agreement and, in April 2021, announced a goal of reducing the United States'
emissions by 50 to 52% below 2005 levels by 2030. Subsequent UN climate conferences have called for additional action to transition away
from fossil fuels or otherwise reduce GHG emissions. Various states and local governments have also publicly committed to furthering
the goals of the Paris Agreement. In January 2025, the Trump Administration re-withdrew the United States from the Paris Agreement, and
the United States' participation in future UN climate related efforts is unclear. The full impact of these actions is uncertain
at this time, and it is unclear what additional initiatives may be adopted or implemented that may have adverse effects upon our operations.

 The
adoption of legislation or regulatory programs to reduce emissions of GHGs could require us to incur increased operating costs, such
as costs to purchase and operate emissions control systems, to acquire emissions allowances or to comply with new regulatory or reporting
requirements. Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, the
oil and natural gas we produce. Consequently, legislation and regulatory programs to reduce emissions of GHGs could have an adverse effect
on our business, financial condition and results of operations. Reduced demand for the oil and natural gas that we produce could also
have the effect of lowering the value of our reserves. It should also be noted that some scientists have concluded that increasing concentrations
of GHGs in the earth's atmosphere may produce climate changes that have significant physical effects, such as increased frequency
and severity of storms, droughts, and floods and other climatic events. If any such effects were to occur, they could have an adverse
effect on our financial condition and results of operations. In addition, there have also been efforts in recent years to influence the
investment community, including investment advisors and certain sovereign wealth, pension and endowment funds promoting divestment of
fossil fuel equities and pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel reserves. Such environmental
activism and initiatives aimed at limiting climate change and reducing air pollution could interfere with our business activities, operations
and ability to access capital. Finally, increasing attention to the risks of climate change has resulted in an increased possibility
of lawsuits or investigations brought by public and private entities against oil and natural gas companies in connection with their GHG
emissions. Should we be targeted by any such litigation or investigations, we may incur liability, which, to the extent that societal
pressures or political or other factors are involved, could be imposed without regard to the causation of or contribution to the asserted
damage, or to other mitigating factors. The ultimate impact of GHG emissions-related agreements, legislation and measures on our company's
financial performance is highly uncertain because we are unable to predict with certainty, for a multitude of individual jurisdictions,
the outcome of political decision-making processes and the variables and tradeoffs that inevitably occur in connection with such processes.

 Any
change to government regulation or administrative practices may have a negative impact on our ability to operate and our profitability.

 Oil
and natural gas operations are subject to substantial regulation under federal, state and local laws relating to the exploration for,
and the development, upgrading, marketing, pricing, taxation, and transportation of, oil and natural gas and related products and other
associated matters. Amendments to current laws and regulations governing operations and activities of oil and natural gas exploration
and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax
laws, royalty regulations and government programs related to our oil and natural gas properties and the oil and natural gas industry
generally will not be changed in a manner which may adversely affect our progress or cause delays.

 Permits,
leases, licenses, and approvals are required from a variety of regulatory authorities at various stages of exploration and development.
There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted in respect of our
activities or, if granted, will not be cancelled or will be renewed upon expiration. There is no assurance that such permits, leases,
licenses, and approvals will not contain terms and provisions which may adversely affect our exploration and development activities.

 Other

 A
cyber incident could result in information theft, data corruption, operational disruption and/or financial loss.

 The
oil and natural gas industry has become increasingly dependent on digital technologies to conduct day-to-day operations including certain
exploration, development and production activities. We are dependent on digital technologies including information systems and related
infrastructure, to process and record financial and operating data, communicate with our employees, business partners, and stockholders,
analyze 3-D seismic and drilling information, estimate quantities of oil and natural gas reserves as well as other activities related
to our business.

 As
dependence on digital technologies has increased, cyber incidents, including deliberate attacks or unintentional events, have also increased.
A cyber-attack could include gaining unauthorized access to digital systems for the purposes of misappropriating assets or sensitive
information, corrupting data, causing operational disruption, or result in denial-of-service on websites.

 Our
technologies, systems, networks, and those of our business partners may become the target of cyber-attacks or information security
breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other
information, or other disruption of our business operations. In addition, certain cyber incidents, such as surveillance, may remain
undetected for an extended period of time. In particular, our implementation of various procedures and controls to monitor and
mitigate security threats and to increase security for our information, data, facilities and infrastructure may result in increased
capital and operating costs. Costs for insurance may also increase as a result of security threats, and some insurance coverage may
become more difficult to obtain, if available at all. Moreover, there can be no assurance that such procedures and controls will be
sufficient to prevent security breaches from occurring. As cyber threats continue to evolve, we may be required to expend
significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any
information security vulnerabilities. A cyber incident involving our information systems and related infrastructure, or that of our
business partners, could disrupt our business plans and negatively impact our operations.

 The
loss or unavailability of any of our executive officers or other key employees could have a material adverse effect on our business.

 We
depend greatly on the efforts of our executive officers and other key employees to manage our operations. The loss or unavailability
of any of our executive officers or other key employees could have a material adverse effect on our business.

 We
have had material weaknesses in our internal control over financial reporting in prior fiscal years. Failure to maintain effective internal
control over financial reporting could adversely affect our ability to report our financial condition and results of operations accurately
and on a timely basis. As a result, our business, operating results and liquidity could be harmed.

 As
disclosed in our prior annual reports on Form 10-K, we identified a material weakness in internal controls over financial reporting as
of December 31, 2022, and 2021. We believe that this material weakness has been successfully remediated.

 Our
failure to maintain effective internal control over financial reporting could adversely affect our ability to report our financial results
on a timely and accurate basis, which could result in a loss of investor confidence in our financial reports or have a material adverse
effect on our ability to operate our business or access sources of liquidity. Furthermore, because of the inherent limitations of any
system of internal control over financial reporting, including the possibility of human error, the circumvention or overriding of controls
and fraud, even effective internal controls may not prevent or detect all misstatements.

 We
do not expect to declare or pay any dividends in the foreseeable future.

 We
have not declared or paid any dividends on our common stock. We currently intend to retain future earnings to fund the development and
growth of our business, to repay indebtedness and for general corporate purposes, and therefore, do not anticipate paying any cash dividends
on our common stock in the foreseeable future.

 The
price of our common stock may fluctuate significantly, which could negatively affect us and the holders of our common stock.

 Our
common stock trades on the NYSE American. The trading price of our common stock may fluctuate significantly in response to a number of
factors, many of which are beyond our control. Adverse events including changes in production volumes, worldwide demand and prices for
crude oil and natural gas, regulatory developments, and changes in any securities analysts' estimates of our financial performance
could negatively impact the market price of our common stock. General market conditions, including the level of, and fluctuations in,
the trading prices of stocks generally could also have a similar negative impact. The stock markets regularly experience price and volume
volatility that affects many companies' stock prices without regard to the operating performance of those companies. Volatility
of this type may affect the trading price of our common stock.

 Provisions
of our certificate of incorporation and bylaws and Delaware law may inhibit a takeover, which could limit the price investors might be
willing to pay in the future for our common stock.

 Provisions
in our certificate of incorporation and bylaws may have the effect of delaying or preventing an acquisition of us or a merger in which
we are not the surviving company and may otherwise prevent or slow changes in our board of directors and management. In addition, because
we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware,
which provides certain restrictions on business combinations involving interested parties. These provisions could discourage an acquisition
of us or other change in control transactions and thereby negatively affect the price that investors might be willing to pay in the future
for our common stock.

 Holders
of our outstanding Series A Voting Preferred Stock have effective control of our board of directors.

 We
have six shares of Series A Voting Preferred Stock currently issued and outstanding. The Series A Voting Preferred Stock was issued
in connection with the strategic investment in us by Energy Evolution. For so long as the Series A Voting Preferred
Stock is outstanding, our board of directors will consist of six directors. Three of the directors are designated as the Series A
Directors and the three other directors (each, a "common director") are elected by the holders of common stock and/or
any preferred stock (other than the Series A Voting Preferred Stock) granted the right to vote on the common directors. Any Series A
Director may be removed with or without cause but only by the affirmative vote of the holders of a majority of the Series A Voting
Preferred Stock voting separately and as a single class. The holders of the Series A Voting Preferred Stock have the exclusive
right, voting separately and as a single class, to vote on the election, removal and/or replacement of the Series A Directors.
Holders of common stock or other preferred stock have no right to vote on the Series A Directors. In addition, in the case of any
tie vote or deadlock of the board of directors, our current Chairman of the Board, a Series A Director, has the deciding,
tiebreaking vote. Accordingly, the holder(s) of our Series A Voting Preferred Stock have effective control of our board of directors
for so long as the voting rights of the Series A Voting Preferred Stock remain in effect.

 Our
bylaws provide that the Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, the federal
district court for the District of Delaware) will be the exclusive forum for certain legal actions between us and our stockholders. These
provisions could increase costs to bring a claim, discourage claims or limit the ability of our stockholders to bring a claim in a judicial
forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees.

 Our
bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware
(or if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and
exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary
duty owed by any director, officer, stockholder, employee or agent to us or our stockholders, (c) any action asserting a claim arising
pursuant to any provision of the General Corporation Law of the State of Delaware, our certificate of incorporation or our bylaws, or
(d) any action asserting a claim governed by the internal affairs doctrine, in each case subject to the court having personal jurisdiction
over the defendants. This exclusive forum provision is intended to apply to claims arising under Delaware state law and is not intended
to apply to claims arising under the Securities Act or the Exchange Act. The choice of forum provisions may increase costs to bring a
claim, discourage claims or limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with
us or our directors, officers or employees, which may discourage such lawsuits against us or our directors, officers and employees. Alternatively,
if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may
incur additional costs associated with resolving such action in other jurisdictions.

 The
credit risk of our counterparties could adversely affect us.

 We
enter into a variety of transactions that expose us to counterparty credit risk. For example, we have exposure to financial institutions
and insurance companies through our hedging arrangements, our Credit Facility and our insurance policies. Disruptions in the financial
markets or otherwise may impact these counterparties and affect their ability to fulfill their existing obligations and their willingness
to enter into future transactions with us.

 In
addition, we are exposed to the risk of financial loss from trade, joint interest billing and other receivables. We sell our oil, gas
and NGLs to a variety of purchasers, and, as an operator, we pay expenses and bill our non-operating partners for their respective share
of costs. Certain of these counterparties or their successors may experience insolvency, liquidity problems or other issues and may not
be able to meet their obligations owed to us, particularly during a depressed or volatile commodity price environment. Any such default
may result in us being forced to cover the costs of those obligations and liabilities.

 ITEM
1B. UNRESOLVED STAFF COMMENTS.

 None.

 ITEM
1C. CYBERSECURITY.

 The
Company continues to implement policies, standards, processes and practices for assessing, identifying, and managing material risks from
cybersecurity threats. We employ a variety of tools designed to identify, assess and maintain security measures to meet regulatory requirements,
and possess technical personnel to maintain the security of our data and cybersecurity infrastructure. There can be no guarantee that
our policies and procedures will be properly followed in every instance or that those policies and procedures will be effective. Our
risk factors, which can be found in Item 1A. "Risk Factors," include further detail about the material cybersecurity risks
we face. There can be no assurance that there will not be incidents in the future or that they will not materially affect us, including
our business strategy, results of operations, or financial condition.

 Risk
Management and Strategy Overview

 We
continue the process of designing and implementing a formal risk-based approach to cybersecurity which aligns with corporate strategy,
risk management and governance, and adaptable information technology ("IT") infrastructure. Our cybersecurity program consists
of policies, procedures, systems, controls and technology designed to help prevent, identify, detect and mitigate cybersecurity risk
and will be based on a cybersecurity framework, such as the National Institute of Standards and Technology ("NIST") Cybersecurity
framework.

 To
protect our IT systems and information from cybersecurity risks, we use and continue to implement various security tools that help prevent,
identify, escalate, investigate, resolve, and recover from identified cybersecurity vulnerabilities and incidents in a timely manner.
These include monitoring and detection programs, network security measures, firewall monitoring devices and multi-factor authentication
which are all overseen by our IT Director, who possesses the necessary expertise to implement the appropriate tools and processes to
effectively manage cybersecurity risks. With over 30 years of experience in the oil and natural gas industry, our IT Director has 12
years of cybersecurity experience where he has led several teams introducing cybersecurity initiatives and implementing robust frameworks
and response plans against cyber threats.

 We
are actively assessing the technological risks to our key IT systems and information and are implementing controls to identify and manage
cybersecurity risks associated with all third-party service providers. These include, but are not limited to, an understanding of access
controls, a records and information management policy, change control procedures, risk and control registry, and configuration standards.

 Employee
awareness of cybersecurity risks and threats is also an important part of an effective control environment. We periodically communicate
to employees about this cybersecurity awareness. We are working on an implementation plan to require each of our employees to complete
an annual information security training course, in addition to other training requirements. This should lead to an educated, informed,
and prepared workforce, with an awareness of potential cybersecurity threats, how they may occur, and how to report and escalate such
matters.

 Our
cybersecurity strategy focuses on implementing effective and efficient controls, technologies, and other processes to assess, identify,
and manage material cybersecurity risks to our IT systems and information. As a part of this process, we engaged and worked
with an independent third-party specialist to review our cybersecurity environment, which included a formal review and assessment, and determined
specific, actionable recommendations for improvement and implementation.

 While
we have not, as of the date of this Annual Report on Form 10-K, experienced a cybersecurity incident that has materially impacted our
business or operations, there can be no guarantee that we will not experience such a threat or incident in the future. A material cybersecurity
threat or incident could adversely impact our operations, our sales or financial and administrative functions, or result in the compromise
of personal or other confidential information of our employees, customers, or suppliers. For this reason, we maintain cybersecurity liability
insurance to provide additional support, expertise, and resources to help ensure the integrity of our cybersecurity processes and to
provide a level of financial protection in the event of cybersecurity incident related costs and losses.

 Governance

 Our
Audit Committee has oversight of our cybersecurity risk processes, as part of its overall oversight of our risk management program. Our
Chief Executive Officer is informed about and facilitates prevention, detection, mitigation, and remediation efforts through regular
communication and reporting from our IT Director. In addition, we have an escalation process in place to inform our Chief Executive Officer
and other members of our senior management and, if necessary, the Audit Committee and Board of Directors, of important issues or events.

 ITEM
2. PROPERTIES.

 Information
regarding our properties is included in Item 1 above and in our consolidated financial statements, which is incorporated herein by reference.

 ITEM
3. LEGAL PROCEEDINGS.

 For information regarding legal proceedings, see Note 15 in our consolidated financial statements.

 ITEM
4. MINE SAFETY DISCLOSURES.

 Not
applicable.

 PART
II

 ITEM 5.
 MARKET
FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 Market
Information

 Our
common stock is traded on the NYSE American under the symbol "EP".

 Stockholders

 At
March 25, 2025, there were approximately 1,350 stockholders of record of our common stock.

 Dividends

 We
have never paid cash dividends on our common stock. We intend to retain future earnings for use in our business and, therefore, do not
anticipate paying cash dividends on our common stock in the foreseeable future. Future payment of dividends will depend upon, but not
be limited to, our financial condition, funds available for operations, the amount of anticipated capital and other expenditures, future
business prospects and any restrictions imposed by present or future financing arrangements.

 Issuer
Repurchase of Equity Securities

 No
private or open market repurchases of common stock were made by us during the fourth quarter of 2024.

 Unregistered
Sales of Equity Securities

 No
such sales that have not been previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

 ITEM 6.
 RESERVED.

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 The
following discussion and analysis presents management's perspective of our business, financial condition and overall performance.
This information is intended to provide investors with an understanding of our past performance, current financial condition and outlook
for the future and should be read in conjunction with the consolidated financial statements and notes to consolidated financial statements,
which are included in this Annual Report on Form 10-K in Item 8, Financial Statements and Supplementary Data, and the information set
forth in Part I, Item 1A – Risk Factors.

 Overview

 Our
primary business is the optimization and development of oil and gas interests. We have incurred losses from operations in 2024 and 2023.
There is no assurance that we will be profitable or obtain funds necessary to finance our future operations.

 We
seek to increase shareholder value by growing reserves, production, revenues, and cash flow from operating activities by executing our
mission to use highly-skilled personnel to thoughtfully and expertly spend capital to realize reserves on producing properties as well
as further develop fields.

 Management
places emphasis on operating cash flow in managing our business, as operating cash flow considers the cash expenses incurred during the
period and excludes non-cash expenditures not related directly to our operations.

 Inflation

 The
effect of inflation on the Company has generally been to increase its cost of operations, general and administrative costs and direct
costs associated with oil and natural gas production.

 Business
Strategy

 Our
business strategy is to obtain long-term growth in reserves and cash flow on a cost-effective basis. Management regularly evaluates potential
acquisitions of properties that would enhance current core areas of operation.

 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 December
31, 2024, the Company was in compliance with all required covenants and projected to be in compliance with all debt covenants over the
next 12 months. However, the Company was in default of its covenants in the third quarter of 2024 but obtained a waiver on November 12,
2024, to alleviate all prior defaults. The Company carried a negative working capital of approximately $8.9 million as of December 31,
2024, an overall decline of approximately $2.6 million from the previous year. Cash on hand also declined approximately $5.5 million during
the same period. The overall decline in working capital and cash is primarily driven by the Starbuck Drilling Program in North Dakota
which incurred substantial capital spend. Additionally, the Company initiated a return-to-production program in Texas which incurred additional
unforeseen operational costs. The additional production from these projects did not fully offset the costs incurred and contributed to
the overall negative financial trend. To meet its obligations, the Company increased its revolver commitment to $20.0 million in November
2024 and had two rights offerings in April and November of 2024 which raised approximately $30.5 million of capital, net of transaction
costs, to help fund the capital spend projects. Additionally, as a result of increasing its revolver commitment, the Company had approximately
$8.7 million remaining unused commitment as of December 31, 2024, which can be used for future obligations. However, the revolver commitment
is reduced monthly by $0.25 million commencing on December 31, 2024 (See Note 7), limiting future access to capital. While these debt
and equity transactions provided additional funding towards these projects and other obligations, the Company still carried approximately
$8.9 million of negative working capital at period end 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.

has committed financial support from Phil Mulacek who owns approximately 21.2% of our common stock outstanding as of December 31,
2024, and Energy Evolution, our largest stockholder who owns approximately 31.9% of our common stock outstanding as of December 31,
2024. Both are related parties of the Company (see Note 14). Mr. Mulacek and Energy Evolution are willing and able to provide these
additional funds, if required, 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 in evaluating
FASB 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 within one year after the date the financial statements are issued. 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.

 Recent
Developments

has completed 13 wells in North Dakota related to our Starbuck Drilling Program during the year ended December 31, 2024.

 On
February 16, 2024, Empire issued a Promissory Note to Energy Evolution, a related party. Energy Evolution advanced Empire $5.0 million.
On May 24, 2024, Energy Evolution elected to convert the Note to shares of common stock of Empire and received 800,000 shares under the
terms of the Promissory Note. See Note 7 for further details.

 In
April 2024, the Company completed a subscription rights offering (the "April Rights Offering") which raised gross proceeds
of approximately $20.7 million. Each subscription right entitled the holder to purchase 0.161 shares of common stock at a subscription
price of $5.00 per share per one whole share of common stock. The subscription rights were non-transferable and not listed for trading
on any stock exchange or market.

 On
April 9, 2024, Empire partially exercised a purchase option originally issued on August 9, 2023, (the "Purchase Option") to
acquire additional working interests in certain of Empire's New Mexico properties from Energy Evolution. The additional assets
acquired represent approximately 60% of the total assets collectively acquired by Empire and Energy Evolution in the third quarter of
2023 (the "Option Assets"). As consideration, upon closing of the partial exercise of the Purchase Option, Empire issued Energy
Evolution 600,000 shares of common stock of Empire based on an agreed upon price of $5.00 per share for an aggregate agreed upon value
of $3.0 million which was 60% of the purchase price of $5.0 million under the Purchase Option.

 On
August 8, 2024, Empire successfully extended the Purchase Option with the issuance of 16,800 shares of common stock to Energy Evolution
to obtain the right to acquire the remaining Option Assets for an exercise price of $2.0 million subject to certain adjustments and payable
in cash, unless the parties agree that some or all may be paid by issuance of common stock to Energy Evolution. The Purchase Option expires
on August 9, 2026.

 In
November 2024, Empire completed a subscription rights offering (the "November Rights Offering") which raised gross proceeds
of $10.0 million. Each subscription right entitled the holder to purchase 0.063 shares of common stock at a subscription price of $5.05
per share per one whole share of common stock. The subscription rights were non-transferable and not listed for trading on any stock
exchange or market.

 On
November 18, 2024, the Company entered into the First Amendment to the Credit Facility (the "First Amendment") to increase
the initial maximum revolver commitment to $20.0 million through December 29, 2026. See Note 7 for further details.

and Operating Data

 The
following table sets forth a summary of our production and operating data:

 2024

 2023

 Production and operating data:

 Net sales volumes:

 Oil (Bbl)

 581,159

 487,869

 Natural gas (Mcf)

 916,955

 854,274

 Natural gas liquids (Bbl)

 150,091

 136,013

 Total (Boe)

 884,076

 766,261

 Average price per unit:

 Oil (1)

 $
 71.44

 $
 75.19

 Natural gas

 $
 0.37

 $
 2.02

 Natural gas liquids

 $
 14.21

 $
 12.21

 Total (Boe)

 $
 49.76

 $
 52.29

 Operating costs and expenses per Boe:

 Lease operating expense (excluding workovers)

 $
 24.46

 $
 21.70

 Workovers

 $
 6.71

 $
 15.65

 Total Lease operating expense

 $
 31.16

 $
 37.36

 Production and ad valorem taxes

 $
 4.26

 $
 3.97

 Depreciation, depletion, amortization and accretion

 $
 12.74

 $
 6.33

 General & administrative (excluding stock-based compensation)

 $
 14.23

 $
 15.71

 Stock-based compensation

 $
 2.44

 $
 4.10

 Total General & administrative

 $
 16.67

 $
 19.81

 (1) Excludes the effect of net cash receipts from (payments on) derivatives.

 Results
of Operations

 The
following table reflects our summary of operating information. Because of normal production declines, increased or decreased drilling
activity and the effects of acquisitions, the historical information presented below should not be interpreted as indicative of future
results.

 Percent

 2024

 2023

 Change

 Oil revenues

 $
 41,515,661

 $
 36,684,494

 13%

 Natural gas revenues

 343,503

 1,726,754

 -80%

 NGL revenues

 2,132,666

 1,660,256

 28%

 Total product revenues

 43,991,830

 40,071,504

 Lease operating expense

 27,545,028

 28,625,481

 -4%

 Production and ad valorem taxes

 3,770,078

 3,044,411

 24%

 Depreciation, depletion, amortization and accretion

 11,263,010

 4,852,555

 132%

 General and administrative expense (excluding
 stock-based compensation)

 12,581,859

 12,034,185

 5%

 Stock-based compensation

 2,155,774

 3,144,750

 -31%

 Cash-based interest expense

 894,282

 650,637

 37%

 Non-cash interest expense

 620,987

 349,790

 78%

 Operating Loss

 (13,665,457
)

 (11,625,091
)

 18%

 (16,197,989
)

 (12,469,605
)

 30%

 Revenues

 Revenues
for 2024 increased compared to prior year primarily due to higher oil volumes in North Dakota due to our Starbuck Drilling Program
partially offset by a slight overall decline in commodity prices.

 Realized
oil prices for 2024 were approximately $71.44 per barrel, while realized prices for the prior year were approximately $75.19 per barrel,
a decrease in price of approximately 5%. Oil volumes were higher by approximately 93,000 barrels or 19% primarily due to new wells completed
in North Dakota during the third quarter of 2024 as well as the acquisition of additional working interest in New Mexico.

 Realized
natural gas prices for 2024 were approximately $0.37 per Mcf, while realized prices for the prior year were approximately $2.02 per Mcf,
a decrease in price of approximately 82%. This is primarily due to the depressed natural gas prices in the third quarter of 2024 in New
Mexico.

 Realized
NGLs prices for 2024 were approximately $14.21 per barrel, while realized prices for the prior year were approximately $12.21 per barrel,
an increase in price of approximately 16%.

 Lease
Operating Expense and Production Taxes

 Lease
operating expense was lower in 2024 primarily due to lower workover activities partially offset by higher expenses related to an increase
in production. Lease operating expense includes approximately $5.9 million of total workover expense for 2024 as compared to approximately
$12.0 million for 2023. The higher workover expense in 2023 was primarily in New Mexico as Empire continued to work over wells in the
region to enhance and maintain production.

taxes were higher for 2024 compared to 2023 as a result of the higher product revenues discussed above.

 Depreciation,
Depletion, Amortization, Accretion and Impairment

 The
higher DD&A in 2024 as compared to 2023 is due in part to the increase in production, the acquisition of additional working interest
in New Mexico as well as the impact of the capitalized costs associated with the new drilling activity as part of our Starbuck Drilling
Program in North Dakota. Accretion also increased slightly from prior period due to the new drilling activity.

 We
assess our oil and gas properties for impairment when circumstances indicate the carrying value may be greater than its estimated future
net cash flows. There was no impairment recorded during the years ended December 31, 2024 and 2023.

 General
and Administrative Expense (excluding stock-based compensation)

 General
and Administrative Expense (excluding stock-based compensation) increased primarily due to an increase in salaries and benefits associated
with an increase in employee headcount.

 Stock-based
Compensation

 We
utilize stock-based compensation to compensate members of management and retain talented personnel. Our stock-based compensation decreased
in 2024 due to a lower number of awards in 2024. We anticipate stock-based compensation to continue to be utilized in 2025 and beyond
to attract and retain talented personnel and compensate our board members and consultants.

 Interest
Expense

 Cash-based
interest expense increased slightly due to a higher outstanding balance under our Credit Facility partially offset by lower interest
rates. We have minimal interest-bearing vehicle and equipment notes payable.

 Non-cash
interest expense is primarily attributable to the conversion to equity of the related party note payable as described in Note 7 of Notes
to Consolidated Financial Statements.

 Income
taxes

 We
have generated net operating losses since inception, which would normally reflect a tax benefit in the consolidated statement of operations
and a deferred asset on the consolidated balance sheet. However, because of the current uncertainty as to our ability to achieve sustained
profitability and the potential limitation of NOL carryforwards, a full valuation allowance has been established that offsets the amount
of any tax benefit available for each period presented in the consolidated statements of operations.

 We
had a loss before income taxes for 2024 and 2023, respectively, which the tax benefit was offset by a change in the valuation allowance.
For 2024 and 2023, our effective tax rates were 0% and 1%, respectively.

 Liquidity

 As
noted below, our working capital is negative as of December 31, 2024, which is primarily the result of a lower cash balance due to capital
spending as part of our Starbuck Drilling Program and return-to-production efforts in Texas. As of December 31, 2024, we had approximately
$2.3 million in cash on hand and approximately $8.7 million available under our Credit Facility. Empire will require additional funds
to satisfy the payables discussed above which are greater than estimated cash flows from operations over the next 12 months. Phil Mulacek
and Energy Evolution, both related parties of Empire and our largest two stockholders, owning 21.2% and 31.9%, respectively, of the common
shares outstanding as of December 31, 2024, have indicated that they will, and have the ability to, provide sufficient support to sustain
the operating, investing, and financing activities of Empire, as necessary. In addition to the April Rights Offering and November Rights
Offering, management continues to seek additional sources of capital via the debt or equity markets to improve liquidity going forward.
See Liquidity and Going Concern in Note 1 of Notes to Consolidated Financial Statements for further discussion of management's
plans.

expects to continue to incur costs related to drilling activities in core areas as well as future oil and natural gas acquisitions in
core areas. During 2024, Empire has incurred approximately $42.2 million of additions to oil and natural gas properties, primarily related
to the drilling program in the Starbuck field of North Dakota. It is expected that Empire will use a combination of debt or equity issuances,
cash on hand, and cash flows from operations to fund capital programs, ongoing operations, and any potential acquisitions.

 Working
Capital

 Working
capital is presented in the table below. The decrease of approximately $2.6 million was primarily driven by a lower cash balance due
to increased capital spending related to the Starbuck Drilling Program in North Dakota.

 2024

 2023

 Current Assets

 $
 12,350,945

 $
 18,744,904

 Current Liabilities

 21,270,471

 25,049,572

 Working Capital

 $
 (8,919,526
)

 $
 (6,304,668
)

 Cash
Flows

 The
following table summarizes our statements of cash flows:

 Cash flows provided by (used in):

 2024

 2023

 Change

 Operating activities

 $
 6,157,003

 $
 (9,887,500
)

 $
 16,044,503

 Investing activities

 (53,869,461
)

 (14,767,339
)

 (39,102,122
)

 Financing activities

 42,171,414

 20,502,905

 21,668,509

 Cash
Flows from Operating Activities

 The
impact of higher oil production and lower workover expenses in 2024 compared to 2023 contributed to the increase in cash flows from operating
activities.

 Cash
Flows from Investing Activities

 Cash
flows from investing activities in 2024 include approximately $42.2 million of additions to oil and gas properties compared to approximately
$25.0 million in 2023 primarily due to the development of our operations as part of our Starbuck Drilling Program in North Dakota.

 In
2023, we received approximately $2.8 million due to the release of a negotiated sinking fund requirement and acquired additional interest
in our New Mexico oil and gas properties for approximately $2.0 million.

 Cash
Flows from Financing Activities

 Cash
flow from financing activities in 2024 include proceeds from the April Rights Offering and the November Rights Offering of approximately
$30.5 million, net of transaction costs (see Note 9). In addition, cash flows from financing activities in 2024 include $5.0 million
from a promissory note issued by the Company to a related party and approximately $6.7 million borrowed on the Credit Facility (see Note
7).

 In
2024, we received approximately $0.6 million from stock issuances and warrant exercises. In 2023, we received approximately $12.5 million
from stock issuances and warrant exercises.

 Capital
Resources

 General

 Empire's
primary sources of short-term liquidity are cash and cash equivalents, net cash provided by operating activities, and issuance of debt
or equity securities. Empire's short- and long-term liquidity requirements consist primarily of capital expenditures, acquisitions
of oil and natural gas properties, payments of contractual obligations, and working capital obligations. Funding for these requirements
may be provided by any combination of Empire's sources of liquidity. Although Empire expects that its sources of funding will be
adequate to fund its liquidity requirements, no assurance can be given that such funding sources will be adequate to meet Empire's
future needs.

 Capital
Expenditures

 For
2024, Empire incurred approximately $42.2 million of additions to oil and natural gas properties which primarily reflects continued drilling
and completions activity related to our Starbuck Drilling Program in North Dakota. For 2023, additions to oil and natural gas properties
totaled $27.0 million including $2.1 million related to acquisitions. The approximate $25.0 million not related to acquisitions primarily
reflects development of our North Dakota operations.

 Related
Party Transactions

 At
times the Company may enter into transactions with related parties. These transactions primarily occur with our two largest shareholders,
Phil Mulacek and Energy Evolution, and are approved by the board of directors. See Note 14 for further discussion on related party activity
during the year.

 Off-Balance
Sheet Arrangements

 We
do not have any off-balance sheet arrangements.

 Critical
Accounting Estimates

 The
preparation of financial statements in conformity with accounting principles generally accepted in the United States ("US GAAP")
requires management to use judgment to make estimates and assumptions that affect certain amounts reported in the consolidated financial
statements. As additional information becomes available, these estimates and assumptions are subject to change and thus impact amounts
reported in the future. Because estimates and assumptions require significant judgment, future actual results could differ from those
estimates and could have a significant impact on our results of operations, financial position and cash flows. We re-evaluate our estimates
and assumptions at least on a quarterly basis and periodically update the estimates used in the preparation of the financial statements
based on management's latest assessment of the current and projected business and general economic environment. There have been
no significant changes to Empire's critical accounting estimates during the year ended December 31, 2024. In our management's
opinion, the more significant reporting areas impacted by management's judgments and estimates are as follows:

 Successful
Efforts Method of Accounting for Oil and Natural Gas Activities

 We
use the successful efforts method of accounting for oil and natural gas operations. Under this method, costs to acquire oil and natural
gas properties, drill successful exploratory wells, drill and equip development wells, and install production facilities are capitalized.
Estimated proved oil and natural gas reserves, management's outlook on commodity prices and projected future cash flows of oil
and natural gas reserves are a significant part of our financial calculations. The following are examples of how these estimates affect
financial results:

 an
 increase (decrease) in estimated proved oil, natural gas and NGLs reserves can reduce (increase)
 our unit-of-production depletion and amortization rates; and

 changes
 in the oil, natural gas and NGLs reserves and the projected future cash flows from our properties
 can impact our periodic impairment analysis.

oil and natural gas reserves are the estimated quantities of oil, natural gas and NGLs which geological and engineering data demonstrate
with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions.
Reserve quantities and future cash flows included in this report are prepared in accordance with guidelines established by the SEC and
the FASB. The accuracy of reserve estimates is a function of:

 The
 quality and quantity of available data;

 The
 interpretation of that data;

 The
 accuracy of various mandated economic assumptions; and

 The
 judgments of the persons preparing the estimates.

reserves information included in this report is based on estimates prepared by independent petroleum engineers, CG&A. The independent petroleum engineers evaluated 100% of our estimated proved producing reserve quantities and their
related future net cash flows as of December 31, 2024. Estimates prepared by others may be higher or lower than these estimates.
Because these estimates depend on many assumptions, all of which may differ substantially from actual results, reserve estimates may
be different from the quantities of oil and natural gas that are ultimately recovered. Management may make revisions to reserve
estimates throughout the year as additional information becomes available. Such changes could trigger an impairment of our oil and
natural gas properties and have an impact on our depletion expense prospectively. For example, a change of 10 percent in our total
proved reserves could change our annual depletion expense by approximately $0.9 million. The actual impact would depend on the
specific areas impacted.

 Impairment
of Oil and Gas Properties

 We
assess our proved properties for impairment using estimates of future undiscounted cash flows. This assessment requires significant judgment
and assumptions including commodity price outlooks, estimates of reserve quantities, expected lease operating costs and capital costs.
An impairment expense could result if oil and gas prices decline in the future as it may not be economic to develop some of these unproved
properties. We performed an assessment as of December 31, 2024 and 2023, and did not identify any impairments, respectively.

 Asset
Retirement Obligation

 Asset
retirement obligations ("ARO") consist primarily of estimated future costs associated with the plugging and abandonment of
oil and natural gas wells, removal of equipment and facilities from leased acreage, and land restoration in accordance with applicable
local, state and federal laws. The discounted fair value of an ARO liability is required to be recognized in the period in which it is
incurred, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and natural gas asset. The recognition
of an ARO requires that management make numerous assumptions regarding such factors as the estimated probabilities, amounts and timing
of settlements; the credit-adjusted risk-free rate to be used; inflation rates; and future advances in technology. In periods subsequent
to the initial measurement of the ARO, we must recognize period-to-period changes in the liability resulting from the passage of time
and revisions to either the timing or the amount of the original estimate of undiscounted cash flows.

 Stock-Based
Compensation

 We
recognize stock-based compensation expense associated with restricted stock units and options. We account for forfeitures of equity-based
incentive awards as they occur. Stock-based compensation expense related to time-based restricted stock units is based on the price of
our common stock on the grant date. Stock-based compensation related to options is the fair value of the option recognized over the vesting
period. The fair value of an option is determined using the Black-Scholes option valuation with the following assumption inputs: dividend
yield, expected annual volatility, risk free interest rate and an expected life.

 Income
Taxes and Uncertain Tax Positions

 Our
tax provision is based upon the tax laws and rates in effect in the applicable jurisdiction in which operations are conducted and income
is earned. As part of the process of preparing the consolidated financial statements, management is required to estimate the income tax
provision. This process involves estimating the actual current tax exposure together with assessing temporary differences resulting from
differing treatment of items, such as depreciation, amortization and certain accrued liabilities for tax and accounting purposes.

 Deferred
tax expense or benefit represents the change in the balance of deferred tax assets or liabilities. Valuation allowances are established
to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
At December 31, 2024 and 2023, a full valuation allowance for deferred tax assets was recorded.

 Management
applies the accounting standards related to uncertainty in income taxes. This accounting guidance clarifies the accounting for uncertainties
in income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the
consolidated financial statements. It requires that we recognize in the consolidated financial statements the financial effects of a
tax position, if that position is more likely than not of being sustained upon examination, including resolution of any appeals or litigation
processes, based upon the technical merits of the position. It also provides guidance on measurement, classification, interest, penalties
and disclosure. We had no uncertain tax positions at December 31, 2024, or December 31, 2023.

 ITEM 7A.
 QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide this information.

 ITEM 8.
 FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.

 The
financial statements of the Company are set forth at the end of this Form 10-K.

 ITEM 9.
 CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 None.

 ITEM 9A.
 CONTROLS
AND PROCEDURES.

 Evaluation
of Disclosure Controls and Procedures

 As
of the end of the period covered by this report, the Company carried out an evaluation under the supervision and participation of the
Company's Principal Executive Officer/Principal Financial Officer, along with our management, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on this
evaluation, the Company's Principal Executive Officer/Principal Financial Officer concluded that the disclosure controls and procedures
were effective, as of the end of the period covered by this report, in ensuring the information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's
Chief Executive Officer (Principal Executive Officer/Principal Financial Officer), to allow timely decisions regarding required disclosure.

 Inherent
Limitations on Effectiveness of Controls

 The
Company's disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance
of achieving their desired objectives. Management recognizes that a control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because
of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect
all errors or misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect
to financial statement preparation and presentation.

 Management's
Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange
Act Rule 13a-15(f). The Company's internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.

 Under
the supervision and with the participation of the Company's management, including its Principal Executive Officer/Principal Financial
Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework
established by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") as set forth in Internal Control
- Integrated Framework. Based on our evaluation under that framework, our management concluded that our internal control over financial
reporting is effective as of December 31, 2024.

 Changes
in Internal Control over Financial Reporting

 While
we continue to implement design enhancements to our internal control procedures, we believe that, there were no changes to our
internal control over financial reporting which were identified in connection with the evaluation required by
Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the fourth quarter of 2024 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Attestation
Report of Registered Public Accounting Firm

 This
report does not contain an attestation report of our independent registered public accounting firm related to internal control over financial
reporting because the rules for smaller reporting companies provide an exemption from the attestation requirement.

 ITEM 9B.
 OTHER INFORMATION.

 The
Company was not informed by any of its directors or Section 16 officers of the adoption or termination of a "Rule 10b5-1 trading
arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Item 408 of Regulation S-K, during
the fourth quarter of 2024.

 ITEM 9C.
 DISCLOSURE
REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 Not
applicable.

 PART
III

 ITEM 10.
 DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 The
information called for by this Item 10 is incorporated herein by reference to our definitive Proxy Statement for 2025 annual meeting
of stockholders ("2025 Proxy Statement") to be filed with the SEC no later than 120 days following the fiscal year ended
December 31, 2024.

 ITEM 11.
 EXECUTIVE
COMPENSATION.

 The
information called for by this Item 11 is incorporated herein by reference to our 2025 Proxy Statement to be filed with the SEC no later
than 120 days following the fiscal year ended December 31, 2024.

 ITEM 12.
 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 The
information called for by this Item 12 is incorporated herein by reference to our 2025 Proxy Statement to be filed with the SEC no later
than 120 days following the fiscal year ended December 31, 2024.

 ITEM 13.
 CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

 The
information called for by this Item 13 is incorporated herein by reference to our 2025 Proxy Statement to be filed with the SEC no later
than 120 days following the fiscal year ended December 31, 2024.

 ITEM 14.
 PRINCIPAL
ACCOUNTANT FEES AND SERVICES.

 The
information called for by this Item 14 is incorporated herein by reference to our 2025 Proxy Statement to be filed with the SEC no later
than 120 days following the fiscal year ended December 31, 2024.

 PART
IV

 ITEM 15.

 EXHIBITS
 AND FINANCIAL STATEMENT SCHEDULES.

 (a)

 (1) Financial
 Statements

 The
financial statements under this item are included in Item 8 of Part II of this Annual Report on Form 10-K.

 (2) Schedules

 NONE

 (3) Exhibits

 Exhibit
 No.

 Description

 2.1

 Purchase and Sale Agreement dated as of March 12, 2021, by and between Empire New Mexico LLC and XTO Holdings, LLC (incorporated herein by reference to Exhibit 2.1 to the Company's Form 8-K dated May 14, 2021, which was filed on May 17, 2021).

 3.1

 Amended and Restated Certificate of Incorporation of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 3.1 to the Company's Form 8-K dated March 4, 2022, which was filed on March 9, 2022).

 3.2

 Certificate of Designation of Series A Voting Preferred Stock of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 3.2 to the Company's Form 8-K dated March 4, 2022, which was filed on March 9, 2022).

 3.3

 Amended and Restated Bylaws of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 3.3 to the Company's Form 8-K dated March 4, 2022, which was filed on March 9, 2022).

 4.1

 Description of the Common Stock of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 4.1 to the Company's Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022).

 4.2

 Common Share Warrant Certificate No. Energy Evolution-2 dated May 31, 2024 (incorporated herein by reference to Exhibit 4 to the Company's Form 8-K dated May 24, 2024, which was filed on May 31, 2024).

 10.1*

 Empire Petroleum Corporation 2019 Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated April 3, 2019, which was filed on April 9, 2019).

 10.2*

 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K dated April 3, 2019, which was filed on April 9, 2019).

 10.3

 Loan Agreement dated as of August 6, 2020, by and between Empire Texas LLC and Petroleum Independent & Exploration LLC (incorporated herein by reference to Exhibit 10.6 to the Company's Form 8-K dated August 6, 2020, which was filed on August 11, 2020).

 10.4*

 Employment Agreement dated as of August 18, 2021, by and between Empire Petroleum Corporation and Michael R. Morrisett (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K dated August 18, 2021, which was filed on August 24, 2021).

 10.5

 Loan Modification Agreement dated as of September 29, 2021, by and among Empire New Mexico LLC d/b/a Green Tree New Mexico, Empire Petroleum Corporation and Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated September 29, 2021, which was filed on October 5, 2021).

 10.6

 Common Share Warrant Certificate dated as of September 30, 2021 issued by Empire Petroleum Corporation in favor of Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.3 to the Company's Form 8-K dated September 29, 2021, which was filed on October 5, 2021).

 10.7*

 Empire Petroleum Corporation 2021 Stock and Incentive Compensation Plan (incorporated herein by reference to the Company's Information Statement on Schedule 14C filed August 31, 2021).

 10.8*

 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.24 to the Company's Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022).

 10.9*

 Form of Restricted Stock Units Award Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.25 to the Company's Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022).

 10.10*

 Form of Restricted Stock Units Award Agreement (Executive Officers) (incorporated herein by reference to Exhibit 10.26 to the Company's Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022).

 10.11*

 Empire Petroleum Corporation 2022 Stock and Incentive Compensation Plan (incorporated herein by reference to Annex A to the Company's Proxy Statement on Schedule 14A filed on July 27, 2022).

 10.12*

 Empire Petroleum Corporation 2023 Stock and Incentive Compensation Plan (incorporated herein by reference to Annex A to the Company's Proxy Statement on Schedule 14A filed on May 1, 2023).

 10.13

 Shared Services Agreement, dated as of August 1, 2023, by and between PIE Operating, LLC and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10.8 to the Company's Form 10-Q for the quarter ended September 30, 2023, which was filed on November 13, 2023).

 10.14

 Empire North Dakota LLC Promissory Note Due October 31, 2023 in the original aggregate principal amount of $5.0 million in favor of Phil Mulacek (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated September 19, 2023, which was filed on September 25, 2023).

 10.15

 Empire North Dakota LLC Promissory Note Due October 31, 2023 in the original aggregate principal amount of $5.0 million in favor of Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K dated September 19, 2023, which was filed on September 25, 2023).

 10.16

 Commercial Guaranty Agreement, dated as of September 19, 2023, issued by Empire Petroleum Corporation in favor of Phil Mulacek (incorporated herein by reference to Exhibit 10.3 to the Company's Form 8-K dated September 19, 2023, which was filed on September 25, 2023).

 10.17

 Commercial Guaranty Agreement, dated as of September 19, 2023, issued by Empire Petroleum Corporation in favor of Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.4 to the Company's Form 8-K dated September 19, 2023, which was filed on September 25, 2023).

 10.18

 Letter Agreement amending Senior Revolver Loan Agreement, dated as of September 19, 2023, by and among Empire Louisiana LLC and Empire North Dakota LLC, as borrowers, Empire Petroleum Corporation, as guarantor, and CrossFirst Bank, as lender (incorporated herein by reference to Exhibit 10.5 to the Company's Form 8-K dated September 19, 2023, which was filed on September 25, 2023).

 10.19

 Subordination Agreement, dated as of September 19, 2023, by and among Phil Mulacek, Energy Evolution Master Fund, Ltd. and Empire North Dakota LLC in favor of CrossFirst Bank (incorporated herein by reference to Exhibit 10.6 to the Company's Form 8-K dated September 19, 2023, which was filed on September 25, 2023).

 10.20

 Letter Amendment amending the Empire North Dakota LLC Promissory Notes Due October 31, 2023, dated as of October 31, 2023, by and among Phil Mulacek and Energy Evolution Master Fund, Ltd., as investors, Empire North Dakota LLC, as borrower, and Empire Petroleum Corporation, as guarantor (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated October 31, 2023, which was filed on November 1, 2023).

 10.21

 Empire North Dakota LLC Amended and Restated Promissory Note Due December 31, 2024 in the original aggregate principal amount of $5.0 million in favor of Phil Mulacek (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated November 9, 2023, which was filed on November 13, 2023).

 10.22

 Empire North Dakota LLC Amended and Restated Promissory Note Due December 31, 2024 in the original aggregate principal amount of $5.0 million in favor of Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K dated November 9, 2023, which was filed on November 13, 2023).

 10.23

 Securities Purchase Agreement, dated as of November 29, 2023, by and between Phil Mulacek and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated November 29, 2023, which was filed on November 29, 2023).

 10.24

 Letter Amendment to Securities Purchase Agreement, dated as of December 1, 2023, by and between Phil Mulacek and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10 to the Company's Form 8-K dated December 1, 2023, which was filed on December 1, 2023).

 10.25

 Securities Purchase Agreement, dated as of November 29, 2023, by and between Energy Evolution Master Fund, Ltd. and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K dated November 29, 2023, which was filed on November 29, 2023).

 10.26

 Revolver Loan Agreement, dated as of December 29, 2023, by and between Empire North Dakota LLC and Empire ND Acquisition LLC, as borrowers, and Equity Bank, as lender (incorporated herein by reference to Exhibit 10 to the Company's Form 8-K dated December 29, 2023, which was filed on January 5, 2024).

 10.27

 Empire Petroleum Corporation Promissory Note Due February 15, 2026 in the aggregate principal amount of $5.0 million in favor of Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10 to the Company's Form 8-K dated February 16, 2024, which was filed on February 21, 2024).

 10.28*

 Empire Petroleum Corporation 2024 Stock and Incentive Compensation Plan (incorporated herein by reference to Annex A to the Company's Proxy Statement on Schedule 14A, filed on April 29, 2024).

 10.29

 Note Repayment and Loan Termination Agreement dated as of July 31, 2024, by and among Petroleum Independent & Exploration, LLC, Empire Texas LLC and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10 to the Company's Form 8-K dated July 31, 2024, which was filed on August 6, 2024).

 10.30

 First Amendment to Revolver Loan Agreement dated as of November 18, 2024, by and between Empire North Dakota LLC and Empire ND Acquisition LLC, as borrowers, and Equity Bank, as lender (incorporated herein by reference to Exhibit 10 to the Company's Form 8-K dated November 18, 2024, which was filed on November 22, 2024).

 Petroleum Corporation Insider Trading Policy (submitted herewith).

 Subsidiaries
 of Empire Petroleum Corporation (submitted herewith).

 23.1

 Consent
 of Grant Thornton LLP (submitted herewith).

 23.2

 Consent
 of Cawley, Gillespie & Associates, Inc. (submitted herewith).

 31.1

 Rule
 13a – 14(a)/15d – 14(a) Certification of Michael R. Morrisett, Chief Executive Officer
 (submitted herewith).

 31.2

 Rule
 13a – 14(a)/15d – 14(a) Certification of Michael R. Morrisett, Principal Financial Officer
 (submitted herewith).

 32.1

 Section
 1350 Certification of Michael R. Morrisett, Chief Executive Officer (submitted herewith).

 32.2

 Section
 1350 Certification of Michael R. Morrisett, Principal Financial Officer (submitted herewith).

 97*

 Petroleum Corporation Policy for the Recovery of Erroneously Awarded Compensation (incorporated herein
 by reference to Exhibit 97 to the Company's Form 10-K for the fiscal year ended December 31, 2023,
 which was filed on March 28, 2024).

 99.1

 Cawley,
 Gillespie & Associates, Inc. Summary Report (submitted herewith).

 Financial

 Cover Page

 *Indicates
a management contract or compensatory plan or arrangement identified under the requirements of Item 15 of Form 10-K.

 ITEM
 16.
 FORM
 10-K SUMMARY.

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 Petroleum Corporation

 Date: March 27, 2025

 By:

 /s/ Michael
 R. Morrisett

 Name:
 Michael R. Morrisett

 Title:
 President and Chief Executive Officer

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Michael R. Morrisett

 Director,
 President and Chief Executive Officer

 March

 MICHAEL
 R. MORRISETT

 (Principal
 Executive Officer and Principal Financial Officer)

 /s/
 Matthew E. Watson

 Chief
 Accounting Officer

 March

 MATTHEW
 E. WATSON

 (Principal
 Accounting Officer)

 /s/
 Phil E. Mulacek

 and Chairman of the Board

 March

 PHIL
 E. MULACEK

 /s/
 Andrew L. Lewis

 March

 ANDREW
 L. LEWIS

 /s/
 Mason H. Matschke

 March

 MASON
 H. MATSCHKE

 /s/
 Benjamin J. Marchive II

 March

 BENJAMIN
 J. MARCHIVE II

 /s/
 J. Kevin Vann

 March

 J.
 KEVIN VANN

FINANCIAL STATEMENTS

 TABLE
OF CONTENTS

 Page
 No.

 Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID Number 248)

 Consolidated
 Balance Sheets as of December 31, 2024 and 2023

 Consolidated
 Statements of Operations for the years ended December 31, 2024 and 2023

 Consolidated
 Statements of Changes in Stockholders' Equity for the years ended December 31, 2024 and 2023

 Consolidated
 Statements of Cash Flows for the years ended December 31, 2024 and 2023

 Notes
 to Consolidated Financial Statements

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 Board
of Directors and Stockholders

Petroleum Corporation

 Opinion
on the financial statements

 We
have audited the accompanying consolidated balance sheets of Empire Petroleum Corporation (a Delaware corporation) and subsidiaries (the
"Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred
to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and
its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted
in the United States of America.

 Basis
for opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
audit matters

 Critical
audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 /s/
 GRANT THORNTON LLP

 We
have served as the Company's auditor since 2022.

 Tulsa,
Oklahoma

 March

BALANCE SHEETS

 2024

 2023

 ASSETS

 Current Assets:

 Cash

 $
 2,251,464

 $
 7,792,508

 Accounts Receivable

 8,154,433

 8,354,636

 Derivative Instruments

 —

 406,806

 Inventory

 1,304,699

 1,433,454

 Prepaids

 640,349

 757,500

 Total Current Assets

 12,350,945

 18,744,904

 Property and Equipment:

 Oil and Natural Gas Properties, Successful Efforts

 140,675,399

 93,509,803

 Less: Accumulated Depreciation, Depletion and Impairment

 ( 31,974,184
)

 ( 22,996,805
)

 Total Oil and Gas Properties, Net

 108,701,215

 70,512,998

 Other Property and Equipment, Net

 1,391,113

 1,883,211

 Total Property and Equipment, Net

 110,092,328

 72,396,209

 Other Noncurrent Assets

 1,425,198

 1,474,503

 Total Assets

 $
 123,868,471

 $
 92,615,616

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities:

 Accounts Payable

 $
 10,452,237

 $
 16,437,219

 Accrued Expenses

 10,347,990

 7,075,302

 Current Portion of Lease Liability

 400,692

 432,822

 Current Portion of Note Payable - Related Party (Note 7)

 —

 1,060,004

 Current Portion of Long-Term Debt

 69,552

 44,225

 Total Current Liabilities

 21,270,471

 25,049,572

 Long-Term Debt

 11,266,127

 4,596,775

 Long Term Lease Liability

 143,689

 544,382

 Asset Retirement Obligations

 28,423,000

 27,468,427

 Total Liabilities

 61,103,287

 57,659,156

 Commitments and Contingencies (Note 15)

 —

 Stockholders' Equity:

 Series A Preferred Stock - $ 0.001 Par Value, 10,000,000 Shares Authorized,

 6 and 6 Shares Issued and Outstanding, Respectively

 —

 —

 Common Stock - $ 0.001 Par Value 190,000,000 Shares Authorized,

 33,667,132 and 25,503,530 Shares Issued and Outstanding, Respectively

 93,188

 85,025

 Additional Paid-in-Capital

 143,488,803

 99,490,253

 Accumulated Deficit

 ( 80,816,807
)

 ( 64,618,818
)

 Total Stockholders' Equity

 62,765,184

 34,956,460

 Total Liabilities and Stockholders' Equity

 $
 123,868,471

 $
 92,615,616

 The
accompanying notes are an integral part of these consolidated financial statements.

STATEMENTS OF OPERATIONS

 2024

 2023

 Revenue:

 Oil Sales

 $
 41,515,661

 $
 36,684,494

 Gas Sales

 343,503

 1,726,754

 NGL Sales

 2,132,666

 1,660,256

 Total Product Revenues

 43,991,830

 40,071,504

 Other

 47,348

 70,480

 Loss on Derivatives

 ( 388,886
)

 ( 65,693
)

 Total Revenue

 43,650,292

 40,076,291

 Costs and Expenses:

 Lease Operating Expense

 27,545,028

 28,625,481

 Production and Ad Valorem Taxes

 3,770,078

 3,044,411

 Depletion, Depreciation & Amortization

 9,256,254

 3,096,533

 Accretion of Asset Retirement Obligation

 2,006,756

 1,756,022

 General and Administrative:

 General and Administrative

 12,581,859

 12,034,185

 Stock-Based Compensation

 2,155,774

 3,144,750

 Total General and Administrative

 14,737,633

 15,178,935

 Total Cost and Expenses

 57,315,749

 51,701,382

 Operating Loss

 ( 13,665,457
)

 ( 11,625,091
)

 Other Income and (Expense):

 Interest Expense

 ( 1,515,269
)

 ( 1,000,427
)

 Other Income (Expense)

 ( 1,017,263
)

 23,721

 Loss Before Taxes

)

 ( 12,601,797
)

 Income Tax Benefit

 —

 132,192

 $
)

 $
)

 Net Loss per Common Share:

 Basic

 $
 ( 0.54
)

 $
 ( 0.55
)

 $
 ( 0.54
)

 $
 ( 0.55
)

 Weighted Average Number of Common Shares Outstanding:

 Basic

 30,064,856

 22,718,890

 30,064,856

 22,718,890

 The
accompanying notes are an integral part of these consolidated financial statements.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 Common Stock

 Preferred Stock

 Shares

 Par Value

 Shares

 Par Value

 Additional
 Paid-in-Capital

 Accumulated Deficit

 Total

 Balances as of December 31, 2022

 22,093,503

 $
 81,615

 $
 —

 $
 75,303,479

 $
 ( 52,149,213
)

 $
 23,235,881

 —

 —

 —

 —

 —

)

)

 Impact of Former CEO Settlement

 —

 —

 —

 —

 ( 2,126,131
)

 —

 ( 2,126,131
)

 Stock Issued for Purchase Option (Note 3)

 67,000

 —

 —

 600,990

 —

 601,057

 Warrants Exercised

 500,000

 —

 —

 2,499,500

 —

 2,500,000

 Issuance of Shares for Redemption of Notes

 1,263,664

 1,264

 —

 —

 10,108,048

 —

 10,109,312

 Issuance of Shares in Private Transaction

 1,234,013

 1,234

 —

 —

 9,959,962

 —

 9,961,196

 Stock-Based Compensation

 345,350

 —

 —

 3,144,405

 —

 3,144,750

 Balances as of December 31, 2023

 25,503,530

 $
 85,025

 $
 —

 $
 99,490,253

 $
 ( 64,618,818
)

 $
 34,956,460

 —

 —

 —

 —

 —

)

)

 Rights Offerings (Note 9)

 6,112,430

 6,112

 —

 —

 30,478,376

 —

 30,484,488

 Partial Conversion of Option to Purchase (Note 3)

 616,800

 —

 —

 3,231,655

 —

 3,232,272

 Warrants Exercised

 128,800

 —

 —

 949,642

 —

 949,771

 Conversion of Related-Party Note (Note 7)

 1,005,427

 1,005

 —

 —

 7,246,605

 —

 7,247,610

 Stock-Based Compensation

 300,145

 —

 —

 2,092,272

 —

 2,092,572

 Balances as of December 31, 2024

 33,667,132

 $
 93,188

 $
 —

 $
 143,488,803

 $
 ( 80,816,807
)

 $
 62,765,184

 The
accompanying notes are an integral part of these consolidated financial statements.

STATEMENTS OF CASH FLOWS

 2024

 2023

 Cash Flows From Operating Activities:

 $
)

 $
)

 Adjustments to Reconcile Net Loss to Net Cash

 Provided By (Used In) Operating Activities:

 Stock-Based Compensation

 2,155,774

 3,144,750

 Amortization of Right of Use Assets

 540,401

 423,689

 Depreciation, Depletion and Amortization

 9,256,254

 3,096,533

 Accretion of Asset Retirement Obligation

 2,006,756

 1,756,022

 Loss on Commodity Derivatives

 388,886

 65,693

 Settlement on or Purchases of Derivative Instruments

 18,200

 ( 353,695
)

 Loss on Financial Derivatives (See Note 7)

 998,000

 —

 Amortization of Debt Discount on Convertible Notes

 500,382

 —

 Loss on Extinguishment of Debt

 10,094

 —

 Change in Operating Assets and Liabilities:

 Accounts Receivable

 ( 357,473
)

 ( 2,700,528
)

 Inventory, Oil in Tanks

 128,755

 ( 160,827
)

 Prepaids, Current

 607,925

 745,648

 Accounts Payable

 5,019,857

 751,355

 Accrued Expenses

 2,144,204

 ( 3,082,928
)

 Other Long Term Assets and Liabilities

 ( 1,063,023
)

 ( 1,103,607
)

 Net Cash Provided By (Used In) Operating Activities

 6,157,003

 ( 9,887,500
)

 Cash Flows From Investing Activities:

 Acquisition of Oil and Natural Gas Properties

 —

 ( 2,094,419
)

 Capital Expenditures - Oil and Natural Gas
 Properties (1)

 ( 53,219,169
)

 ( 14,546,873
)

 Purchase of Other Fixed Assets

 ( 151,638
)

 ( 352,851
)

 Cash Paid for Right of Use Assets

 ( 498,654
)

 ( 552,196
)

 Sinking Fund Deposit

 —

 2,779,000

 Net Cash Used In Investing Activities

 ( 53,869,461
)

 ( 14,767,339
)

 Cash Flows From Financing Activities:

 Borrowings on Credit Facility

 6,650,000

 14,492,484

 Proceeds from Promissory Note - Related Party (Note 7)

 5,000,000

 —

 Proceeds from Rights Offerings, net of transaction costs (Note 9)

 30,484,488

 —

 Principal Payments of Debt

 ( 591,975
)

 ( 6,450,774
)

 Proceeds from Stock Issuance and Warrant Exercises

 628,901

 12,461,195

 Net Cash Provided By Financing Activities

 42,171,414

 20,502,905

 Net Change in Cash

 ( 5,541,044
)

 ( 4,151,934
)

 Cash - Beginning of Period

 7,792,508

 11,944,442

 Cash - End of Period

 $
 2,251,464

 $
 7,792,508

 Supplemental Cash Flow Information:

 Cash Paid for Interest

 $
 894,282

 $
 650,637

 (1)
 Incurred capital
expenditures were $42,214,332 and $25,053,107 for the respective periods. The differences between incurred and cash capital expenditures
is due to changes in related accounts payable.

 The
accompanying notes are an integral part of these consolidated financial statements.

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 Note
1 - Organization and Basis of Presentation

Petroleum Corporation (the "Company", 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 the following wholly-owned subsidiaries in its areas of operations:

 New Mexico LLC ("Empire New Mexico"), consisting of the following entities:

 New Mexico LLC d/b/a Green Tree New Mexico

 Empire EMSU LLC

 Empire EMSU-B LLC

 Empire AGU LLC

 Empire NM Assets LLC

 Empire North Dakota ("Empire North Dakota"), consisting of the following entities:

 North Dakota LLC ("Empire North Dakota")

 ND Acquisition LLC ("Empire NDA")

 Texas ("Empire Texas"), consisting of the following entities:

 Texas LLC

 Texas Operating LLC

 Texas GP LLC

 Pardus
 Oil & Gas Operating, LP (owned 1% by Empire Texas GP LLC and 99% by Empire Texas LLC)

 Louisiana LLC ("Empire Louisiana")

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

 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 December
31, 2024, the Company was in compliance with all required covenants and projected to be in compliance with all debt covenants over the
next 12 months. However, the Company was in default of its covenants in the third quarter of 2024 but obtained a waiver on November 12,
2024, to alleviate all prior defaults. The Company carried a negative working capital of approximately $8.9 million as of December 31,
2024, an overall decline of approximately $2.6 million from the previous year. Cash on hand also declined approximately $5.5 million during
the same period. The overall decline in working capital and cash is primarily driven by the Starbuck Drilling Program in North Dakota
which incurred substantial capital spend. Additionally, the Company initiated a return-to-production program in Texas which incurred additional
unforeseen operational costs. The additional production from these projects did not fully offset the costs incurred and contributed to
the overall negative financial trend. To meet its obligations, the Company increased its revolver commitment to $20.0 million in November
2024 and had two rights offerings in April and November of 2024 which raised approximately $30.5 million of capital, net of transaction
costs, to help fund the capital spend projects. Additionally, as a result of increasing its revolver commitment, the Company had approximately
$8.7 million remaining unused commitment as of December 31, 2024, which can be used for future obligations. However, the revolver commitment
is reduced monthly by $0.25 million commencing on December 31, 2024 (See Note 7), limiting future access to capital. While these debt
and equity transactions provided additional funding towards these projects and other obligations, the Company still carried approximately
$8.9 million of negative working capital at period end 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 Phil Mulacek who owns approximately
21.2% of our common stock outstanding as of December 31, 2024, and Energy Evolution, our largest stockholder who owns approximately 31.9%
of our common stock outstanding as of December 31, 2024. Both are related parties of the Company (see Note 14). Mr. Mulacek and Energy
Evolution are willing and able to provide these additional funds, if required, 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 in evaluating FASB 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 within one year after the date the financial statements are issued. 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.

 Note
2 – Summary of Significant Accounting Policies

 Principles
of Consolidation

 The
consolidated financial statements include the accounts and balances of the Company and have been prepared in accordance with US GAAP.
All intercompany accounts and transactions have been eliminated in consolidation.

 Use
of Estimates

 The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 Estimated
quantities of crude oil, natural gas and NGLs reserves are the most significant of the Company's estimates. All reserve data used
in the preparation of the consolidated financial statements, including depletion estimates, and information included in Note 19 - Supplemental
Information of Oil and Natural Gas Producing Activities (Unaudited), are based on estimates. Reservoir engineering is a subjective process
of estimating underground accumulations of crude oil, natural gas and NGLs. There are numerous uncertainties inherent in estimating quantities
of proved crude oil, natural gas and NGLs reserves. The accuracy of any reserve estimate is a function of the quality of available data
and of engineering and geological interpretation and judgment. As a result, reserve estimates may be different from the quantities of
crude oil, natural gas and NGLs that are ultimately recovered.

 Other
items subject to estimates and assumptions include, but are not limited to, the carrying amounts of property, plant and equipment, asset
retirement obligations, valuation allowances for deferred income tax assets, and valuation of derivative instruments. Management evaluates
estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity
price environment. The volatility of commodity prices results in increased uncertainty inherent in such estimates and assumptions.

 Although
management believes these estimates are reasonable, actual results may differ from estimates and assumptions of future events and these
revisions could be material. Future production may vary materially from estimated oil and natural gas proved reserves. Actual future
prices may vary significantly from price assumptions used for determining proved reserves and for financial reporting.

 Out
of Period Adjustments

 In
the third quarter of 2022, the Company identified and recorded an out-of-period adjustment related to the joint development agreement
("JDA") discussed in Note 7. In 2023, the impact of recording this adjustment reduced other noncurrent assets and increased
lease operating expense by approximately $1.3 million of which $0.8 million related to prior to 2023. The impact of the adjustment was
immaterial to the prior period financial statements and thus corrected in 2023. No adjustments were made in 2024.

 Accounts
Receivable

 Accounts
receivable include estimated amounts due from crude oil, natural gas, and NGLs purchasers and from non-operating working interest owners.
Accrued revenue related to product sales from purchasers and operators are due under normal trade terms, generally requiring payment
within 60 days of production. For receivables from joint interest owners, the Company generally has the ability to withhold future revenue
disbursements to recover any non-payment of joint interest billings.

 Receivables
are stated at amounts due, net of an allowance for credit losses, if necessary and are considered past due if full payment is not received
by the contractual due date. The Company estimates uncollectible amounts based on the length of time that the accounts receivable has
been outstanding, historical collection experience and current and future economic and market conditions, if failure to collect is expected
to occur. Past due accounts are generally written off against the allowance for credit losses account only after all collection attempts
have been exhausted. The Company did not have an allowance for credit losses at either December 31, 2024 or 2023.

 The
Company's accounts receivable are as follows:

 Schedule of account receivable

 2024

 2023

 Oil, Gas and NGLs receivables

 $
 2,627,885

 $
 2,784,745

 Joint interest billings

 5,071,508

 4,549,331

 Joint interest billings - related party

 394,311

 895,000

 Other

 60,729

 125,560

 Total Accounts receivable

 $
 8,154,433

 $
 8,354,636

 Concentrations
of Credit Risk

Empire's accounts receivable are primarily receivables from oil and natural gas purchasers and joint interest owners. The oil and
natural gas purchasers consist primarily of independent marketers, major oil and natural gas companies and gas pipeline companies. Historically,
the Company has not experienced any significant losses from uncollectible accounts from its oil and natural gas purchasers. The Company
operates a substantial portion of its oil and natural gas properties. As the operator of a property we make full payments for costs associated
with the property and seek reimbursement from the other working interest owners in the property for their share of those costs. Joint
operating agreements govern the operations of an oil or natural gas well and, in most instances, provide for the offsetting of amounts
payable or receivable between the Company and its joint interest owners. Our joint interest partners consist primarily of independent
oil and natural gas producers. If the oil and natural gas exploration and production industry in general were adversely affected, the
ability of the joint interest partners to reimburse Empire could be adversely affected.

 Convertible
Debt and Derivative Instruments

 During
the year ended December 31, 2024, Empire added the following significant accounting policy and estimate relating to convertible debt
and derivative liability.

 In
connection with Empire's issuance of a promissory note in the first quarter of 2024, Empire bifurcated the embedded conversion
option and recorded the embedded conversion option as a long-term derivative liability in Empire's consolidated balance sheets
in accordance with FASB ASC 815, Derivatives and Hedging. The convertible debt and the derivative liability associated with the
promissory note were presented on the consolidated balance sheets as the long-term note payable – related party and long-term derivative
instruments. The convertible debt was carried at amortized cost. The derivative liability was remeasured at each reporting period using
a binomial lattice model with changes in fair value recorded in the consolidated statements of operations in other income (expense).
The conversion option related to the promissory note was exercised in the second quarter of 2024. See Note 7 for further details.

 The
Company enters into hedge agreements to manage its exposure to oil and natural gas price fluctuations. The fair value of derivative contracts
is recognized as an asset or liability on the Company's consolidated balance sheets. Realized gain or loss is recognized as a component
of revenue when the derivative contracts mature. For contracts which have not matured, an unrealized gain or loss is recorded based on
the change in the fair value of the outstanding contracts.

 Inventory

 Inventory
primarily consists of oil in tanks which has not been delivered and is valued at the lower of cost or net realizable value.

 Leases

 The
Company's right-of-use operating lease assets and lease liabilities are primarily for leased vehicles for field operations and
office spaces. Some of these lease agreements include variable payments for non-lease components such as common area maintenance.

 Oil
and Natural Gas and Other Properties

 The
Company uses the successful efforts method of accounting for its oil and gas activities. Costs incurred are deferred until exploration
and completion results are evaluated. At such time, costs of activities with economically recoverable reserves are capitalized as proven
properties, and costs of unsuccessful or uneconomical activities are expensed.

 Capitalized
drilling costs are reviewed periodically for impairment. Costs related to impaired prospects or unsuccessful exploratory drilling are
charged to expense. Management's assessment of the results of exploration activities, commodity price outlooks, planned future sales
or expiration of all or a portion of such leaseholds impact the amount and timing of impairment provisions. An impairment expense could
result if oil and gas prices decline in the future as it may not be economical to develop some of these unproved properties.

 Lease
options are capitalized as unproved property acquisition costs and are reviewed for impairment if indicators exist that the carrying
value of the lease option may not be recoverable. If the lease options become impaired, expire or are abandoned, the options will
be expensed. If proved reserves are discovered after the options are exercised, these costs will be reclassified as proved property.

 Depletion
and amortization of producing properties is computed on the units-of-production method on a property-by-property basis. The units-of-production
method is based primarily on estimates of proved reserve quantities. Due to uncertainties inherent in this estimation process, it is
at least reasonably possible that reserve quantities will be revised in the near term. Changes in estimated reserve quantities are applied
to depletion and amortization computations prospectively.

 Other property
and equipment is depreciated on the straight-line method.

 Segment
Reporting

 The
Company operates as one operating segment and one reportable segment which is engaged in the exploration, development, and production of oil, gas, and NGLs in New
Mexico, North Dakota, Montana, Texas, and Louisiana, from which all of its revenues are derived and expenses incurred. All financial
results are reviewed by the Chief Executive Officer ("CEO"), the Company's Chief Operating Decision Maker ("CODM"),
on a consolidated basis to evaluate performance of the Company. The single segment constitutes all of the consolidated entity and the
accompanying consolidated financial statements and the notes to the accompanying consolidated financial statements are representative
of such amounts. Refer to Note 18 for further discussion.

 Debt
Issuance Costs

 Debt
issuance fees, which are recorded at cost, net of amortization, are amortized over the life of the respective debt agreements utilizing
the straight-line method. We had approximately $0.2 million and $0.1 million of unamortized debt issuance costs as of year-end December
31, 2024 and 2023, respectively. Unamortized debt issuance costs related to the Company's credit facility are recorded in other
noncurrent assets on the Company's consolidated balance sheets.

 Asset
Retirement Obligations

 The
Company records the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding
increase in the carrying amount of the related oil and natural gas property asset. Subsequently, the asset retirement cost included in
the carrying amount of the related asset is allocated to expense through depletion of the asset. Changes in the liability due to passage
of time are recognized as an increase in the carrying amount of the liability through accretion expense. Based on certain factors, including
commodity prices and costs, the Company may revise its previous estimates of the liability, which would also increase or decrease the
related oil and natural gas property asset.

 Revenue
Recognition

 The
Company's revenues are comprised solely of revenues from customers and include the sale of oil, natural gas and NGLs. The Company
believes that the disaggregation of revenue into these three major product types, as presented in the consolidated statements of operations,
appropriately depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors based
on its single geographic region, the continental United States. Revenues are recognized at a point in time when production is sold to
a purchaser at a determinable price, delivery has occurred, control has transferred and it is probable substantially all of the consideration
will be collected. The Company fulfills its performance obligations under its customer contracts through delivery of oil, natural gas
and NGLs and revenues are recorded on a monthly basis. The Company receives payment from one to three months after delivery. Generally,
each unit of product represents a separate performance obligation. The prices received for oil, natural gas and NGLs sales under the
Company's contracts are generally derived from stated market prices which are then adjusted to reflect deductions including transportation,
fractionation and processing. As a result, revenues from the sale of oil, natural gas and NGLs will decrease if market prices decline.
The sales of oil, natural gas and NGLs, as presented on the consolidated statements of operations, represent the Company's share
of revenues net of royalties and excluding revenue interests owned by others. When selling oil, natural gas and NGLs on behalf of royalty
or working interest owners, the Company is acting as an agent and thus reports the revenue on a net basis. To the extent actual volumes
and prices of oil and natural gas sales are unavailable for a given reporting period because of timing or information not received from
third parties, the expected sales volumes and prices for those properties are estimated and recorded. Variances between the Company's
estimated revenue and actual payment are recorded in the month the payment is received. Historically, these differences have been insignificant.

 At
the end of each month when the performance obligation is satisfied, the variable consideration can be reasonably estimated and amounts
due from customers are recorded in accounts receivable on the consolidated balance sheets. Taxes assessed by governmental authorities
on oil, natural gas and NGLs sales are presented separately from such revenues in the consolidated statements of operations.

 Oil
Sales

 Oil
production is transported from the wellhead to tank batteries or delivery points through flow-lines or gathering systems. Purchasers
of the oil take delivery at the tank batteries and transport the oil by truck or at a pipeline delivery point and the Company collects
a market price, net of pricing differentials. Revenue is recognized when control transfers to the purchaser at the net price received
by the Company.

 Natural
Gas and NGLs Sales

 Under
the Company's natural gas sales arrangements, the purchaser takes control of wet gas at a delivery point near the wellhead or at
the inlet of the purchaser's processing facility. The purchaser gathers and processes the wet gas and remits proceeds to the Company
for the resulting natural gas and NGLs sales. Based on the nature of these arrangements, the purchaser
is the Company's processor, thus, the Company recognizes natural gas and NGLs sales based on the net amount of proceeds received
from the purchaser.

 Transaction
Price Allocated to Remaining Performance Obligations

 Substantially
all of the Company's product sales are short-term
in nature with a contract term of one year or less. For these contracts, the Company has utilized the practical expedient in ASU 2024,
 Revenue from Contracts with Customers ("Topic 606") which exempts the Company from the requirements to disclose the
transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original
expected duration of one year or less.

 For
the Company's product sales that have a contract term greater than one year, the Company has utilized the practical expedient in
Topic 606 which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if
the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these contracts, each unit of
product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied, and disclosure of the
transaction price allocated to remaining performance obligations is not required.

 Prior-Period
Performance Obligations

 The
Company records revenue in the month that product is delivered to the purchaser. Settlement statements for certain natural gas and NGLs
sales, however, may not be received for 30 to 90 days after the date the product is delivered, and as a result the Company is required
to estimate the amount of product delivered to the purchaser and the price that will be received for the sale of the product. In these
situations, the Company records the differences between its estimates and the actual amounts received for product sales in the month
that payment is received from the purchaser. Any identified differences between the Company's revenue estimates and actual revenue
received have historically been insignificant. For the years ended December 31, 2024 and 2023, revenue recognized in the reporting period
related to performance obligations satisfied in prior reporting periods was not material.

 Stock-Based
Compensation

 The
Company recognizes stock-based compensation expense associated with equity-based incentive awards consisting of stock options and restricted
stock units. The Company accounts for forfeitures of equity-based incentive awards as they occur. Stock-based compensation expense related
to equity-based awards is generally recognized as vesting occurs. See Note 10 for further discussion.

 Income
Taxes

 The
Company accounts for income taxes in accordance with the asset and liability method of accounting for income taxes. Under the asset
and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the
taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established
if management determines it is more likely than not that some portion of a deferred tax asset will not be realized. Interest and penalties,
if any, related to accrued liabilities for potential tax assessments are included in income tax benefit (expense) on the consolidated
statements of operations.

 Per
Share Amounts

 The
Company calculates and discloses basic earnings per share ("Basic EPS") and diluted earnings per share ("Diluted EPS").
The computation of basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average
number of outstanding common shares during the period.

EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume
conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses. As a result, if there
is a loss from continuing operations, Diluted EPS is computed in the same manner as Basic EPS.

 Fair
Value Measurements

 The
FASB ASC 820, Fair Value Measurement ("Topic 820") standards define fair value, establish a consistent framework for
measuring fair value and establish a fair value hierarchy based on the observability of inputs used to measure fair value.

 The
three-level fair value hierarchy for disclosure of fair value measurements defined by Topic 820 is as follows:

 Level
1 – Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets
or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency
and volume to provide pricing information on an ongoing basis.

 Level
2 – Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable for the asset or liability
through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.

 Level
3 – Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable.
Valuation under Level 3 generally involves a significant degree of judgment from management.

 A
financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the
fair value measurement. Where available, fair value is based on observable market prices or parameters or derived from such prices or
parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some
level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market
and the instrument's complexity. The Company reflects transfers between the three levels at the beginning of the reporting period
in which the availability of observable inputs no longer justifies classification in the original level. There were no transfers between
fair value hierarchy levels for the years ended December 31, 2024 and 2023. See Note 17.

 Related
Party Transactions

 Transactions
between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB
ASC 850, Related Party Disclosures ("Topic 850") requires that transactions with related parties that would
have influence in decision making shall be disclosed so that users of the financial statements can evaluate their significance. Related
party transactions typically occur within the context of the following relationships: affiliates of the entity; entities for which investments
in their equity securities is typically accounted for under the equity method by the investing entity; trusts for the benefit of employees;
principal owners of the entity and members of their immediate families; management of the entity and members of their immediate families;
and other parties that can significantly influence the management or operating policies of the transacting parties and can significantly
influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate
interests.

 Recently
Issued Accounting Pronouncements

 The
FASB periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting.
The Company has reviewed the recently issued pronouncements and concluded that the following new accounting standards are applicable:

 In
June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses. This ASU, as further amended, affects
trade receivables, financial assets and certain other instruments that are not measured through net income. This ASU will replace the
currently required incurred loss approach with an expected loss model for instruments measured at amortized cost and is effective for
financial statements issued for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
The adoption of this ASU on January 1, 2023, by the Company did not have a material impact on the Company's consolidated financial
statements as the Company does not have a history of credit losses.

 In
August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options ("Subtopic 470-20") and
 Derivatives and Hedging—Contracts in Entity's Own Equity: Accounting for Convertible Instruments and Contracts in an Entity's
Own Equity ("Subtopic 815-40"). The amendments in this ASU affect entities that issue convertible instruments and/or
contracts in an entity's own equity. The amendments in this ASU primarily affect convertible instruments issued with beneficial
conversion features or cash conversion features because the accounting models for those specific features are removed. However, all entities
that issue convertible instruments are affected by the amendments to the disclosure requirements of this ASU. For contracts in an entity's
own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives
under the current guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain
requirements of the settlement assessment. Also affected is the assessment of whether an embedded conversion feature in a convertible
instrument qualifies for the derivatives scope exception. Additionally, the amendments in this ASU affect the diluted EPS calculation
for instruments that may
be settled in cash or shares and for convertible instruments. The amendments in this ASU are effective for public business entities,
excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim
periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15,
2023, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning
of its annual fiscal year. The Company adopted this standard on January 1, 2024 through a modified retrospective method of transition
and determined it did not impact the prior period financials. The adoption also did not have a material impact on our current period
consolidated financial statements.

 In
November 2023, FASB issued ASU 2023-07, Segment Reporting ("Topic 280"). This update requires that a public entity,
including entities with a single reportable segment, disclose significant segment expenses that are regularly provided to the chief operating
decision maker, as well as other segment items that are included in the calculation of segment profit or loss. A public entity will also
be required to disclose all annual disclosures about a reportable segment's profit or loss currently required by Topic 280 in interim
periods. Although a public entity is permitted to disclose multiple measures of a segment's profit or loss, at least one of the reported
segment profit or loss measures should be consistent with the measurement principles used in measuring the corresponding amounts of the
public entity's consolidated financial statements. Further, a public entity must disclose the title and position of the CODM as well
as how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate
resources. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within
fiscal years beginning after December 15, 2024. See Note 18.

 In
December 2023, FASB, issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures ("Topic 740"). The guidance
in Topic 740 improves the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation
and income taxes paid disaggregated by jurisdiction. The standard is effective for public companies for fiscal years beginning after
December 15, 2024 with early adoption permitted and should be applied prospectively. The Company is currently evaluating the impact of
this standard on its consolidated financial statements and related disclosures.

 In
November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation
Disclosures ("Subtopic 220-40"), which expands disclosures around a public entity's costs and expenses of specific
items (i.e., employee compensation, DD&A), requires the inclusion of amounts that are required to be disclosed under US GAAP in the
same disclosure as other disaggregation requirements, requires qualitative descriptions of amounts remaining in expense captions that
are not separately disaggregated quantitatively, and requires disclosure of total selling expenses, and in annual periods, the definition
of selling expenses. The amendment does not change or remove existing disclosure requirements. The amendment is effective for fiscal
years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027. Early adoption is permitted,
and the amendment can be adopted prospectively or retrospectively to any or all periods presented in the financial statements. Empire
is currently assessing the impact of adopting this standard which is expected to only affect financial statement disclosures.

 Note
3 – Property

follows the successful efforts method of accounting for its oil and natural gas activities. Under this method, costs to acquire oil and
natural gas properties and costs incurred to drill and equip development and exploratory wells are deferred until exploration and completion
results are evaluated. Exploration drilling costs are expensed if recoverable reserves are not found. Upon sale or retirement of oil
and natural gas properties, the costs and related accumulated depletion and amortization are eliminated from the accounts and the resulting
gain or loss is recognized.

 Costs
incurred to maintain wells and related equipment and lease and well operating costs are charged to expense as incurred.

 Depletion
is calculated on a unit-of-production basis at the field level based on total proved developed reserves.

oil and natural gas properties are reviewed for impairment at least annually, or as indicators of impairment arise. There have been no
indicators of impairment during the years ended December 31, 2024 and 2023.

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

 2024

 2023

 Proved properties

 $
 134,239,227

 $
 75,346,623

 Unproved properties

 3,857,862

 3,245,431

 Work in process

 2,578,310

 14,917,749

 Gross capitalized costs

 140,675,399

 93,509,803

 Accumulated depletion, amortization and impairment

 ( 31,974,184
)

 ( 22,996,805
)

 Total Oil and gas properties, net

 $
 108,701,215

 $
 70,512,998

 Depletion
amortization expense related to oil and gas properties for the years ended December 31, 2024 and 2023, was approximately $ 9.0 million
and $ 2.8 million, respectively.

has completed 13 wells in North Dakota related to our Starbuck Drilling Program during the year ended December 31, 2024.

 On
August 9, 2023, the Company and a subsidiary of Energy Evolution, a related party,
collectively acquired additional working interests in certain of the Company's New Mexico properties. The Company paid $ 2.1
million in cash and acquired 10% of the
total acquired working interests in the transaction. The subsidiary of Energy Evolution acquired the other 90% of the acquired
working interest ("EEF Interest"). The Company has a one-year option
to acquire the EEF Interest for $ 5.0 million, subject to adjustments ("Purchase Option"). In exchange for the
Purchase Option, the Company issued 67,000 shares of common stock valued at approximately $ 0.6 million and reflected in other
noncurrent assets. The Company has the right to extend the initial one-year Purchase Option period for two successive one-year
periods by agreeing to issue an additional 42,000 shares of common stock prior to the end of the one-year period then in effect. The
Purchase Option may be exercised by the Company at any time during the one-year period then in effect by sending a written notice to
Energy Evolution prior to the expiration of such one-year period.

 On
April 9, 2024, Empire partially exercised the Purchase Option to acquire additional working interests in certain of Empire New Mexico's
properties from Energy Evolution, a related party. The additional assets acquired represent approximately 60% of the total assets collectively
acquired by Empire and Energy Evolution in the third quarter of 2023 (the "Option Assets"). As consideration, upon closing
of the partial exercise of the Purchase Option, Empire issued Energy Evolution 600,000 shares of common stock of Empire based on an agreed
upon price of $ 5.00 per share for an aggregate agreed upon value of $ 3.0 million which was 60% of the purchase price of $ 5.0 million
under the Purchase Option. Pursuant to the remaining unexercised portion of the Purchase Option, Empire had the right to extend the initial
one-year Purchase Option period for two successive one-year periods by agreeing to issue additional shares of common stock prior to the
end of the one-year period then in effect.

 On
August 8, 2024, Empire successfully extended the Purchase Option with the issuance of 16,800 shares of common stock to Energy Evolution,
and as such, Empire has the right to acquire the remaining Option Assets for an exercise price of $ 2.0 million, subject to certain adjustments
and payable in cash, unless the parties agree that some or all may be paid by issuance of common stock to Energy Evolution. The Purchase
Option expires on August 9, 2026.

 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:

 Schedule of other property plant and equipment

 2024

 2023

 Other property and equipment, at cost

 $
 3,303,829

 $
 2,998,018

 Less: accumulated depreciation

 ( 1,912,716
)

 ( 1,114,807
)

 Other property and equipment, net

 $
 1,391,113

 $
 1,883,211

 Depreciation
expense related to other property and equipment for the years ended December 31, 2024 and 2023, was approximately $ 0.3 million and $ 0.2
million, respectively.

 Note
4 - Asset Retirement Obligations

 The
Company's asset retirement obligations represent the estimated present value of the estimated cash flows the Company will incur
to plug, abandon and remediate its producing properties at the end of their productive lives, in accordance with applicable state laws.

 Market
risk premiums associated with asset retirement obligations are estimated to represent a component of the Company's credit-adjusted
risk-free rate that is utilized in the calculations of asset retirement obligations.

 The
Company's asset retirement obligation activities are summarized in the following table:

 2024

 2023

 Asset retirement obligations, beginning of period

 $
 28,168,427

 $
 25,000,740

 Liabilities incurred from drilling activity and assumed in acquisitions

 876,955

 72,000

 Revisions

 —

 2,303,938

 Liabilities settled

 ( 864,137
)

 ( 964,274
)

 Accretion expense

 2,006,755

 1,756,023

 Asset retirement obligation, end of period

 $
 30,188,000

 $
 28,168,427

 Less: current portion included in Accrued expenses

 1,765,000

 700,000

 Asset retirement obligation, long-term

 $
 28,423,000

 $
 27,468,427

 The liabilities incurred from drilling activity in 2024 primarily relate to the completion of new wells
as part of Empire's North Dakota Starbuck Drilling Program. The liabilities assumed in acquisitions in 2024 relate to additional
working interest acquired in New Mexico.

 Note
5 – Commodity Derivative Financial Instruments

 The
Company has used derivative financial instruments to manage its exposure to commodity price fluctuations in the past. Commodity derivative
instruments have been used to reduce the effect of volatility of price changes on the oil and natural gas the Company produces and sells.
The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company's derivative
financial instrument activity has consisted of swaps and put options.

 The
Company does not designate its derivative instruments to qualify for hedge accounting. Accordingly, the Company reflects changes in the
fair value of its derivative instruments in its consolidated statements of operations as they occur. These contracts are recognized and
recorded at fair value as an asset or liability on the Company's consolidated balance sheets. Cash receipts or payments upon settlement
of swaps and put options are reflected in the operating activities section of its consolidated statements of cash flows.

 The
following table summarizes the net realized and unrealized amounts reported in earnings related to the oil derivative instruments:

 2024

 2023

 Gain (loss) on derivatives, realized

 $
 18,200

 $
 ( 353,695
)

 Gain (loss) on derivatives, unrealized

 ( 407,086
)

 288,002

 Loss on derivatives, net

 $
 ( 388,886
)

 $
 ( 65,693
)

 The
following table represents the Company's net cash receipts from (payments on) derivatives:

 2024

 2023

 Cash receipts from (payments on) on oil derivatives, net

 $
 18,200

 $
 ( 353,695
)

 The
Company did not have any open commodity derivative positions as of December 31, 2024.

 Note
6 – Accrued Expenses

 The
following table represents the Company's accrued expenses:

 2024

 2023

 Accrued and suspended third-party revenue

 $
 5,986,597

 $
 4,049,984

 Accrued salaries and payroll taxes

 1,091,125

 1,059,295

 Accrued production taxes

 836,784

 829,226

 Asset retirement obligation - current

 1,765,000

 700,000

 Other

 668,484

 436,797

 Total Accrued Expenses

 $
 10,347,990

 $
 7,075,302

 Note
7 – Debt Including Debt with Related Parties

 The
following table represents the Company's outstanding debt:

 2024

 2023

 Equity Bank Credit Facility

 $
 11,088,647

 $
 4,492,484

 Note Payable – Related Party

 —

 1,060,004

 Equipment and vehicle notes, 0.00 % to 9.59 % interest rates, due in 2025 to 2029 with monthly payments ranging from $ 900 to $ 1,400 per month (1)

 247,032

 148,516

 Total Debt

 11,335,679

 5,701,004

 Less: Current Maturities

 ( 69,552
)

 ( 44,225
)

 Less: Note Payable – Related Party

 —

 ( 1,060,004
)

 Long-Term Debt

 $
 11,266,127

 $
 4,596,775

 (1)

 Weighted-average interest rate of 8.32%

 On
July 7, 2021, the Company entered into the Fourth Amendment to its Senior Revolver Loan Agreement with CrossFirst Bank ("CrossFirst")
as further amended by Letter Agreements in conjunction with redetermination dates (the "Amended Agreement"). The maximum
amount that could be advanced under the Amended Agreement was $ 20.0 million and the commitment amount following an August 9,
2023, amendment agreement was approximately $ 5.2 million. The Amended Agreement was subsequently retired with proceeds from the
new revolver loan agreement discussed below.

 On
December 29, 2023, Empire North Dakota and Empire NDA ("Borrowers"), entered into a revolver loan agreement with Equity Bank
(the "Credit Facility"). Pursuant to the Credit Facility (a) the initial revolver commitment amount is $10.0 million; (b)
the maximum revolver commitment amount is $15.0 million; (c) commencing on January 31, 2024, and occurring on the last day of each calendar
month thereafter, the revolver commitment amount is reduced by $150,000; (d) commencing on March 31, 2024, there are scheduled semiannual
collateral borrowing base redeterminations each year on March 31 and September 30; (e) the final maturity date is December 29, 2026;
(f) outstanding borrowings bear interest at a rate equal to the prime rate of interest plus 1.50%, and in no event lower than 8.50%;
(g) a quarterly commitment fee is based on the unused portion of the commitments; and (h) Borrowers have the right to prepay loans under
the Credit Facility at any time without a prepayment penalty.

 The
Credit Facility is guaranteed by the Company. Borrowers entered into a security agreement, pursuant to which the obligations under the
Credit Facility are secured by liens on substantially all of the assets of Borrowers. Furthermore, the obligations under the Credit Facility
are secured by a continuing, first priority mortgage lien, pledge of and security interest in not less than 80% of Borrowers' producing
oil, gas and other leasehold and mineral interests, including without limitation, those situated in the States of North Dakota and Montana.

 The
Credit Facility requires Borrowers to, commencing as of the fiscal quarter ended December 31, 2023, maintain (a) a current ratio of
1.0 to 1.0 or more and (b) a ratio of funded debt to EBITDAX (as defined in the Credit Facility), calculated quarterly and annually
based on a trailing twelve-month basis, of no more than 3.50 to 1.00. At December 31, 2024, the Borrowers were in compliance with
all required covenants under the Credit Facility.

 On
November 18, 2024, the Company entered into the First Amendment. Pursuant to the First Amendment (a) the maximum revolver commitment
amount is $20.0 million; and (b) commencing on December 31, 2024, and occurring on the last day of each calendar month thereafter, the
revolver commitment amount is reduced by $250,000.

 On
September 19, 2023, each of Phil Mulacek, a member of the Company's Board of Directors, and Energy Evolution made a bridge loan
to Empire North Dakota in the amount of $ 5.0 million (collectively, the "Bridge Loans"). These Bridge Loans were
subsequently converted to our common shares through entering into subsequent Securities Purchase Agreements. Mr. Mulacek and Energy Evolution
are each a related party of the Company. See Note 14 for additional information regarding the Securities Purchase Agreements and the
subsequent conversion to our common shares.

 Promissory
Note - Related Party

 On
February 16, 2024, Empire issued a promissory note in the aggregate principal amount of $ 5.0 million (the "Note") to Energy
Evolution. Energy Evolution advanced Empire $ 5.0 million under the Note. The proceeds of the Note were used by Empire to fund, in part,
its ongoing oil and gas drilling program and for working capital purposes.

 The
Note matures on February 15, 2026, (the "Maturity Date") and accrues interest at the rate of 7 % per annum. After the Maturity
Date, any principal balance of the Note remaining unpaid accrues interest at the rate of 9 % per annum. At the option of Energy Evolution,
interest payments will be paid either in cash or in shares of common stock of Empire on each of the following dates (or if any such date
is not a business day, the next following business day) (each an "Interest Payment Date"), except upon the occurrence of an
Event of Default, in which case interest will accrue and be paid in cash on demand: (i) March 31, 2024; (ii) June 30, 2024; (iii) September
30, 2024; (iv) December 31, 2024; (v) March 31, 2025; (vi) June 30, 2025; (vii) September 30, 2025; (viii) December 31, 2025; and (ix)
the Maturity Date. All or any portion of the outstanding principal amount of the Note may be converted into shares of common stock of
Empire at a conversion price of $6.25 per share (the "Conversion Price"), at the option of Energy Evolution, at any time and
from time to time. If the full principal amount of the Note is drawn and converted into shares of common stock of Empire, 800,000 shares
would be issued (without giving effect to any interest that may be converted). Accrued interest on the principal amount converted will
be due on the applicable date of conversion in cash or, at the option of Energy Evolution, by issuance of shares of common stock of Empire
in the manner set forth in the Note (where the date of conversion is the relevant Interest Payment Date). The Conversion Price is subject
to customary adjustments. The Note may be prepaid at any time or from time to time without the consent of Energy Evolution and without
penalty or premium, provided that Empire provides Energy Evolution with at least five business days prior written notice, each principal
payment is made in cash and all accrued interest is paid in cash, or at the option of Energy Evolution, the accrued interest may be paid
by issuance of shares of common stock of Empire in the manner set forth in the Note (where the Interest Payment Date is the date of prepayment).

determined that an embedded conversion feature included in the Note required bifurcation from the host contract that is recognized as
a separate derivative liability carried at fair value. The estimated fair value of the derivative liability, which represents a Level
3 valuation, was approximately $1.3 million as of March 31, 2024, and was determined using a binomial lattice model using certain assumptions
and inputs discussed in Note 17. Accordingly, Empire recognized a gain on the fair value adjustment of the derivative liability in the
amount of approximately $0.7 million in other income (expense) in the consolidated statements of operations for the year ended December
31, 2024. The conversion option was exercised by Energy Evolution on May 24, 2024, in exchange for 800,000 shares of common stock of
the Company under the terms of the Note and the fair value of the derivative was revalued as of that date resulting in a loss of $1.7
million in 2024. All of the other embedded features of the Note were clearly and closely related to the debt host and did not require
bifurcation as a derivative liability.

 Note
Payable - Related Party

 In
August 2020, Empire, through its wholly-owned subsidiary, Empire Texas, entered into a JDA with Petroleum & Independent Exploration,
LLC and related entities ("PIE"), a related party (see Note 14), dated August 1, 2020. Under the terms of the JDA, PIE performed
recompletion or workover on specified mutually agreed upon wells owned by Empire Texas. Concurrent with the JDA with PIE, Empire entered
into a term loan agreement dated August 1, 2020, whereby PIE will loan up to $ 2.0 million, at an interest rate of 6% per annum, maturing
August 6, 2024, unless terminated earlier by PIE. The loan proceeds were used for recompletion or workover of certain designated wells.
 In addition, Empire assigned 85% working and revenue interest to PIE in the designated wells which will be applied to repayment of the
loan.

 On
July 31, 2024, PIE, Empire Texas, and Empire entered into a note repayment and loan termination agreement providing for the payment
in full of the remaining outstanding amount of the approximate $ 1.1 million PIE loan and extending the loan maturity date to December
31, 2024, unless terminated earlier by PIE. As payment in full, Empire issued PIE 205,427 shares of common stock of Empire following
the approval of a supplemental listing application by the NYSE American stock exchange in the third quarter of 2024.

 Note
8 - Leases

 As
a lessee, the Company leases its corporate office headquarters in Tulsa, Oklahoma, and one field office. The leases expire between 2025
and 2027. The corporate office has an option to renew for an additional five -year term. The option to renew the lease is generally not
considered reasonably certain to be exercised. Therefore, the period covered by such optional period is not included in the determination
of the term of the lease and the lease payments during these periods are similarly excluded from the calculation of right-of-use lease
asset and lease liability balances.

 The
Company also leases vehicles primarily used in our field operations. These vehicle leases typically have a three -year life.

 The
Company recognizes right-of-use lease expense on a straight-line basis, except for certain variable expenses that are recognized when
the variability is resolved, typically during the period in which they are paid. Variable right-of-use lease payments typically include
charges for property taxes, insurance, and variable payments related to non-lease components, including common area maintenance.

 Right-of-use
lease expense was approximately $ 0.5 million and $ 0.4 million for the years ended December 31, 2024 and 2023, respectively. Cash paid
for right-of-use lease was approximately $ 0.5 million and $ 0.4 million for the same period.

 Supplemental
balance sheet information related to the right of use leases is as follows:

 Schedule of right of use leases

 2024

 2023

 Net operating lease asset (included in Other property and equipment)

 $
 603,611

 $
 1,077,031

 Current portion of lease liability

 $
 400,692

 $
 432,822

 Long-term lease liability

 143,689

 544,382

 Total right-of-use lease liabilities

 $
 544,381

 $
 977,204

 The
weighted average remaining term for the Company's right of use leases is 1.4 years. The weighted average discount rate is 8.26 %
in 2024.

 Maturities
of lease liabilities as of December 31, 2024, are as follows:

 2025

 $
 430,631

 2026

 136,545

 2027

 12,400

 2028

 —

 2029

 —

 Thereafter

 —

 Total lease payments

 579,576

 Less: imputed interest

 ( 35,195
)

 Total lease obligation

 $
 544,381

 Note
9 – Equity

 Pursuant
to the Company's Amended and Restated Certificate of Incorporation ("Charter"), effective as of March 4, 2022, the
total number of shares of all classes of stock that the Company has the authority to issue is 200,000,000, consisting of 190,000,000 shares of common stock, par value $ 0.001
per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share.

 Preferred
Stock

 Preferred
stock may be issued from time to time in one or more series at the direction of the Company's Board of Directors and the directors
also have the ability to fix dividend rates and rights, liquidation preferences, voting rights, conversion rights, rights and terms of
redemption and other rights, preferences, privileges and restrictions as determined by the Company's Board of Directors, subject
to certain limitations set forth in the Charter.

 Series
A Voting Preferred Stock

 On
March 8, 2022, the Company formalized the issuance of preferred stock as was required under the terms of the Company's May 2021 financing
agreements with Energy Evolution and issued six shares of Series A Voting Preferred Stock. The
Series A Voting Preferred Stock was issued in connection with the strategic investment in the Company by Energy Evolution. For so long
as the Series A Voting Preferred Stock is outstanding, the Company's Board of Directors will consist of six directors. Three of
the directors are designated as the Series A Directors and the three other directors (each, a "common director") are elected
by the holders of common stock and/or any preferred stock (other than the Series A Voting Preferred Stock) granted the right to vote
on the common directors. Any Series A Director may be removed with or without cause but only by the affirmative vote of the holders of
a majority of the Series A Voting Preferred Stock voting separately and as a single class. The holders of the Series A Voting Preferred
Stock have the exclusive right, voting separately and as a single class, to vote on the election, removal and/or replacement of the Series
A Directors. Holders of common stock or other preferred stock do not have the right to vote on the Series A Directors. The approval of
the holders of the Series A Voting Preferred Stock, voting separately and as a single class, is required to authorize any resolution
or other action to issue or modify the number, voting rights or any other rights, privileges, benefits, or characteristics of the Series
A Voting Preferred Stock, including without limitation, any action to modify the number, structure and/or composition of the Company's
current Board of Directors.

 The
Series A Voting Preferred Stock is held by Phil Mulacek, Chairman of the Board of Directors of the Company and one of the principals
of Energy Evolution, as Energy Evolution's designee (the "Initial Holder"). The Series A Voting Preferred Stock may
be transferred only to certain controlled affiliates of the Initial Holder ("Permitted Transferees"), and the voting rights
of the Series A Voting Preferred Stock are contingent upon the Initial Holder and Permitted Transferees (collectively, the "Series
A Holders") holding together at least 3,000,000 shares of the Company's outstanding common stock.

 The
Series A Voting Preferred Stock is not entitled to receive any dividends or distributions of cash or other property except in the event
of any liquidation, dissolution or winding up of the Company's affairs. In such event, before any amount is paid to the holders
of the Company's common stock but after any amount is paid to the holders of the Company's senior securities, the holders
of the Series A Voting Preferred Stock will be entitled to receive an amount per share equal to $1.00.

 Except
as discussed above or as otherwise set forth in the certificate of designation of the Series A Voting Preferred Stock, the holders of
the Series A Voting Preferred Stock have no voting rights.

 The
Series A Voting Preferred Stock is not redeemable at the Company's election or the election of any holder, except the Company may
elect to redeem the Series A Voting Preferred Stock for $1.00 per share following satisfaction of its notice and cure requirements in
the event that:

 any
 or all shares of Series A Voting Preferred Stock are held by anyone other than the Initial
 Holder or a Permitted Transferee; or

 the
 Series A Holders together hold less than 3,000,000 shares of the Company's outstanding
 common stock.

 The
Series A Voting Preferred Stock is not convertible into common stock or any other security.

 Common
Stock

 On
August 27, 2021, the Company's Board of Directors approved a one-for-four reverse stock split such that every holder of the Company's
common stock would receive one share of common stock for every four shares owned. The reverse stock split was effective as of 6:00 p.m.
Eastern Time on March 7, 2022, immediately prior to the Company's listing of its common stock on the NYSE American. All share amounts
have retrospectively been stated at post-reverse split amounts and pricing.

 The
holders of shares of common stock are entitled to one vote per share for all matters on which common stockholders are authorized to vote
on. Examples of matters that common stockholders are entitled to vote on include, but are not limited to, the election of three of the
six directors and other common voting situations afforded to common stockholders.

 In
July 2023, Energy Evolution exercised its remaining warrants under a Loan Modification Agreement between the Company and Energy Evolution
entered into in September 2021 for 500,000 shares of common stock for $5.00 per share. The Company received $2.5 million related to this
transaction.

 In
April 2024, Empire completed a subscription rights offering (the "April Rights Offering") which raised gross proceeds of
$ 20.7 million. Empire distributed at no charge to holders of its common stock, as of the close of business on March 7, 2024 (the
record date for the April Rights Offering), one subscription right for each share of common stock held. Each subscription right
entitled the holder to purchase 0.161 shares of common stock at a subscription price of $ 5.00 per share per one whole share of
common stock. The subscription rights were non-transferable and not listed for trading on any stock exchange or market.

 On
May 31, 2024, Empire issued Energy Evolution a warrant certificate granting them the right to purchase 128,800 shares of common stock
of Empire at $5.00 per share. On June 28, 2024, Energy Evolution exercised the warrants and received 128,800 shares in exchange for approximately
$0.6 million.

 In
November 2024, Empire completed a subscription rights offering (the "November Rights Offering") which raised gross proceeds
of $ 10.0 million. Empire distributed at no charge to holders of its common stock, as of the close of business on September 30, 2024 (the
record date for the November Rights Offering), one subscription right for each share of common stock held. Each subscription right entitled
the holder to purchase 0.063 shares of common stock at a subscription price of $ 5.05 per share per one whole share of common stock. The
subscription rights were non-transferable and not listed for trading on any stock exchange or market.

 See
Note 14 for information regarding other transactions where shares of common stock of the Company were issued.

 Note
10 – Stock Based Compensation

recognizes stock-based compensation expense associated with granted stock options and restricted stock units ("RSUs"). Empire
accounts for forfeitures of equity-based incentive awards as they occur. Stock-based compensation expense related to time-based restricted
stock units is based on the price of the common stock on the grant date and recognized as vesting occurs. For options, the fair value
is determined using the Black-Scholes option valuation assumptions on dividend yield, expected annual volatility, risk-free interest
rate and an expected useful life. Stock-based compensation expense for restricted stock units and stock options is included in general
and administrative expense in the consolidated statements of operations and is recorded with a corresponding increase in additional paid-in
capital within the consolidated balance sheets.

 On
April 3, 2019, the Board of Directors of the Company adopted the Empire Petroleum Corporation 2019 Stock Option Plan (the "2019
Stock Option Plan"). The total number of shares of common stock that may be issued pursuant to stock options under the 2019 Stock
Option Plan was 2,500,000. On August 27, 2021, the Board of Directors of the Company adopted the Company's 2021 Stock and Incentive
Compensation Plan (the "2021 Incentive Plan") which was subsequently approved by stockholders of the Company. As a result
of such approval, no further awards will be made under the 2019 Incentive Plan. The total number of shares of common stock that could
be issued pursuant to the 2021 Incentive Plan is 750,000. On August 26, 2022, the stockholders of the Company approved the Company's
2022 Stock and Incentive Compensation Plan (the "2022 Incentive Plan") which reserves 750,000 shares of the Company's
common stock for issuance thereunder. As a result of such approval, no further awards will be made under the 2021 Incentive Plan. On
June 9, 2023, the stockholders of the Company approved the Company's 2023 Stock and Incentive Compensation Plan (the "2023
Incentive Plan") which reserves 700,000 shares of the Company's common stock for issuance thereunder. As a result of such
approval, no further awards will be made under the 2022 Incentive Plan. On June 14, 2024, the Board of Directors adopted the Company's
2024 Stock and Incentive Compensation Plan (the "2024 Incentive Plan") which reserves 700,000 shares of the Company's
common stock for issuance thereunder. As a result of such approval no further awards will be made under the 2023 Incentive Plan. The
2024 Incentive Plan authorizes the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock
units, performance shares, performance units, cash-based awards and other stock-based awards (restricted stock awards, restricted stock
units, performance shares and performance units are collectively referred to as restricted stock units for purposes of this Note). At
December 31, 2024, 528,165 shares of our common stock were available for future grants.

 Restricted
Stock Units

 Each
RSU represents the contingent right to receive one share of common stock. The holders of outstanding RSUs do not receive dividends or
have voting rights prior to vesting and settlement. The Company determines the fair value of granted RSUs based on the market price of
the common stock on the date of the grant. Compensation expense for granted RSUs is recognized on a straight-line basis over the vesting
and is net of forfeitures, as incurred.

 RSUs
are generally granted with 12-month, 13-month, or 3-year service periods. Total value assigned to the RSUs granted in 2024 based on grant
date price approximated $ 0.6 million. For the years ended December 31, 2024 and 2023, approximately $ 0.9 million and $ 2.3 million of
compensation expense related to RSUs was recognized. At December 31, 2024, approximately $ 0.7 million of unrecognized compensation expense
remained and will be recognized on a straight-line basis depending on the service period of each grant.

 The
following summary reflects nonvested restricted stock unit activity and related information:

 Weighted-Average

 Shares

 Fair
 Value (1)

 Outstanding, December 31, 2022

 224,288

 $
 15.42

 Granted

 180,430

 10.33

 Vested

 ( 145,700
)

 16.20

 Forfeited

 ( 54,201
)

 14.57

 Outstanding, December 31, 2023

 204,817

 $
 10.61

 Granted

 106,260

 5.29

 Vested

 ( 162,034
)

 9.79

 Forfeited

 ( 22,500
)

 11.05

 Outstanding, December 31, 2024

 126,543

 $
 7.11

 (1)
 Shares are valued at the grant-date market price.

 2024

 Weighted-Average grant date fair value of restricted stock units

granted during the year, per share

 $
 5.29

 Total fair value of restricted stock units vested during the year

 $
 1,586,313

 Stock
Options

 Each
stock option award provides the opportunity in the future to purchase Empire common shares at the market price of our common stock on
the date the award is granted (the strike price). The options generally become exercisable in equal amounts over a three-year vesting
period or over one-year for options awarded to the Board of Directors of the Company; however, certain options become exercisable only
if certain performance criteria are met. Stock options have no financial statement effect on the date they are granted but rather are
reflected over time through recording stock-based compensation expense. The stock-based compensation expense is based on the estimated
fair value of the awards expected to vest, and that amount is amortized as compensation expense on a straight-line basis over the respective
vesting period and is net of forfeitures, as incurred.

 The
estimated fair value of an option is calculated using a Black-Scholes option valuation model with the following assumption inputs: dividend
yield, expected annual volatility, risk free interest rate and an expected life of the option. The following table summarizes the weighted-average
fair value and assumptions:

 2024

 2023

 Weighted-average grant-date fair value of stock options

 $
 3.25

 $
 4.52

 Stock Options Valuation Assumptions:

 Risk-free interest rate

 4.5 %

 3.9 %

 Dividend yield

 0.0 %

 0.0 %

 Expected volatility

 73.9 %

 64.9 %

 Expected option life (in years)

 5.00

 2.88

 Other pricing model inputs:

 Weighted average grant-date market prices of Empire stock (strike price)

 $
 5.12

 $
 10.07

 For
the years ended December 31, 2024 and 2023, approximately $ 1.1 million and $ 0.9 million of compensation expense related to stock options
was recognized. At December 31, 2024, approximately $ 1.0 million of unrecognized compensation expense remained and will be recognized
on a straight-line basis depending on the service period of each grant.

 The
following summary reflects stock option activity and related information:

 Weighted-Average

 Options

 Exercise Price

 Outstanding, December 31, 2022

 2,379,700

 $
 3.31

 Granted

 533,000

 10.07

 Exercised

 ( 355,000
)

 1.35

 Forfeited

 ( 492,319
)

 5.42

 Outstanding, December 31, 2023

 2,065,381

 $
 4.89

 Granted

 149,335

 5.12

 Exercised

 ( 193,866
)

 1.35

 Forfeited

 ( 135,000
)

 12.17

 Outstanding, December 31, 2024

 1,885,850

 $
 4.75

 The
following table summarizes information about stock options as of December 31, 2024:

 Schedule of summarizes information about stock options outstanding

 Range of Exercise Price

 $ 1.32 to $ 12.36

 Weighted-Average Remaining Contractual Life

 4.17 years

 Options Outstanding

 1,885,850

 Options Exercisable

 1,489,928

 Options Outstanding Aggregate Intrinsic Value

 $ 5,376,036

 Options Exercisable Aggregate Intrinsic Value

 $ 5,453,136

 Weighted-Average Outstanding Price

 $ 4.75

 Weighted-Average Exercise Price

 $ 3.94

 Note
11 – Income Taxes

 The
following table represents the current and deferred income tax provisions:

 2024

 2023

 Current

 $
 —

 $
 ( 132,192
)

 Deferred

 —

 —

 Income tax provision

 $
 —

 $
 ( 132,192
)

 In
the event that an entity has an "ownership change" (as defined in Section 382 of the Internal Revenue Code of 1986, as amended
("IRC"), an entity's federal net operating loss carryforwards ("NOLs") generated prior to an ownership
change would be subject to annual limitations, which could defer or eliminate the Company's ability to utilize these tax losses
against future taxable income. Generally, an "ownership change" occurs if one or more stockholders, each of whom owns 5%
or more in value of a corporation's stock, increase their aggregate percentage ownership by more than 50% over the lowest percentage
of stock owned by those stockholders at any time during the preceding three-year period. A full Section 382 analysis was prepared in
2024 and it was determined that our NOLs were subject to limitations under IRC Section 382. The Company's ability to use NOLs and other
tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions
involving the Company's stock including those outside of the Company's control could cause an IRC Section 382 ownership change resulting
in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the
previous IRC 382 limitation.

 At
December 31, 2024, the Company had approximately $ 35.8
million of federal NOLs generated in prior years available to offset against future taxable income, net of NOLs expected to expire
unused due to IRC Section 382 limitations. Of the $35.8 million NOLs, approximately $ 35.4
million relate to periods after 2017 and have an indefinite life. Additionally, approximately $ 0.5
million will begin to expire between 2024-2037 if not used. Approximately $2.4 million of the NOLs were limited as of December 31,
2024, due to previous ownership changes.

 Deferred
tax assets and liabilities are the result of temporary differences between the financial statement carrying values and the tax basis
of assets and liabilities. The Company's net tax position is as follows:

 2024

 2023

 Deferred tax assets:

 Loss carry-forwards

 $
 9,248,840

 $
 6,269,503

 Stock option grants

 2,527,263

 2,022,184

 Asset retirement obligation

 7,954,720

 7,433,670

 Other

 784,505

 526,873

 Total deferred tax assets

 20,515,328

 16,252,230

 Deferred tax liabilities:

 Oil and gas properties

 ( 7,863,169
)

 ( 7,327,620
)

 Other property and equipment

 ( 62,125
)

 ( 123,915
)

 Financial Derivatives

 —

 ( 104,956
)

 Lease liabilities

 ( 15,281
)

 ( 25,133
)

 Total deferred tax liabilities

 ( 7,940,575
)

 ( 7,581,624
)

 Net deferred tax asset before valuation allowance

 12,574,753

 8,670,606

 Valuation allowance

 ( 12,574,753
)

 ( 8,670,606
)

 Net deferred taxes

 $
 —

 $
 —

 Utilization
of the Company's loss carryforwards is dependent on realizing taxable income. The Company's recorded valuation allowances
of approximately $ 12.6 million and $ 8.7 million as of December 31, 2024 and 2023, respectively, are due to the uncertainty related to
its ability to utilize some of its deferred income tax assets, primarily consisting of net operating loss carryforwards prior to expiration
or the limitation under Section 382 as discussed above.

 For
2024 and 2023, our effective tax rates were 0 %
and 1 %, respectively. Other than the full year of 2022, Empire has generated net operating losses since inception, which would normally reflect
a tax benefit in the consolidated statements of operations and a deferred asset on the consolidated balance sheets. However, because
of the current uncertainty as to Empire's ability to achieve sustained profitability, a full valuation reserve has been
established that offsets the amount of any tax benefit available for each period presented in the consolidated statements of
operations.

 The
following table presents a reconciliation of its income tax (benefit) provision and effective income tax rate to the U.S. statutory income
tax rate:

 Schedule of reconciliation of effective income tax rate

 2024

 2023

 (Benefit) provision at statutory rate

 $
 ( 3,401,578
)

 21.0 %

 $
 ( 2,646,378
)

 21.0 %

 State Taxes (net of federal impact)

 ( 733,390
)

 4.5 %

 ( 598,191
)

 4.7 %

 Nondeductible Expenses

 ( 119,525
)

 0.7 %

 31,037

 - 0.2 %

 Return to Accrual

 35,686

 - 0.2 %

 ( 72,448
)

 0.6 %

 Derivative Liability, Promissory Note Conversion

 314,660

 -1.9%

 —

 0.0%

 NOLs Expected to Expire Unused Due to Section 382 Limitation

 —

 0.0 %

 1,877,230

 - 14.9 %

 Valuation Allowance

 3,904,147

 - 24.1 %

 1,276,558

 - 10.1 %

 Income tax (benefit) provision

 $
 —

 0.0 %

 $
 ( 132,192
)

 1.0 %

 The
Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken
would more likely than not be sustained by examination. Therefore, at December 31, 2024, the Company has not established any reserves
for, nor recorded any unrecognized benefits related to uncertain tax positions.

 The
Company's only taxing jurisdiction is the United States. The Company's tax years 2021 to present remain open for federal
examination. Additionally, tax years 2004 through 2020 remain subject to examination for the purpose of determining the amount of federal
NOL and other carryforwards. The number of years open for state tax audits varies, depending on the state, but is generally from three
to five years.

 Note
12 – Loss per Share

EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume
conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses. As a result, if there is
a loss from continuing operations, Diluted EPS is computed in the same manner as Basic EPS. In addition, approximately 647,000 options
were excluded in the current period Diluted EPS computation due to the option exercise price exceeding the weighted-average market price
of our common shares.

 The
following table summarizes the calculation of loss per share:

 2024

 2023

 $
)

 $
)

 Basic Weighted-Average Shares

 30,064,856

 22,718,890

 Effect of Dilutive Securities:

 Restricted Stock Units
 and Stock Options (1)

 —

 —

 Diluted Weighted-Average Shares

 $
 30,064,856

 $
 22,718,890

 Loss per Common Share

 Basic

 $
 ( 0.54
)

 $
 ( 0.55
)

 $
 ( 0.54
)

 $
 ( 0.55
)

 (1)
 At December 31,
2024 and 2023, respectively, the Company had approximately 981,314 and 1,361,200 RSUs and options that were excluded from the calculation
of net loss per share as their inclusion would be antidilutive due to a net loss for the period.

 Note
13 – Executive Management

 On
March 16, 2023, Thomas W. Pritchard resigned as Chief Executive Officer and a director of the Company to pursue other opportunities.
Although not required under Mr. Pritchard's Employment Agreement with the Company, in recognition of Mr. Pritchard's past
service to the Company, the Company will pay Mr. Pritchard severance benefits in the amount of approximately $ 0.4 million, as set forth
in Section 4.2 of his Employment Agreement, in one lump sum payment within 30 days after March 23, 2023, rather than in monthly installments.
This was accrued as of March 31, 2023, and payment was made in April 2023. The Company also extended the period under which Mr. Pritchard
has the right to exercise his outstanding vested non-qualified stock options from three months after the date of his termination of employment
to September 16, 2024. In addition, Mr. Pritchard has surrendered to the Company 340,234 RSUs and options as satisfaction
for the $ 2.1 million receivable that primarily resulted from incorrect withholdings associated with an April 2022 option exercise
by Mr. Pritchard. The Company also had a $ 2.1 million liability recorded at December 31, 2022, related to withholding payables that
were remitted in 2023.

 On
March 17, 2023, the Board of Directors of the Company appointed Michael R. Morrisett to the position of Chief Executive Officer. Mr.
Morrisett did not receive any additional compensation for assuming the role of Chief Executive Officer.

 In
July 2023, the Company's Chief Operating Officer separated from the Company and received a severance of approximately $ 0.1 million
over six months. Additionally, certain vested options were forfeited resulting in the reversal of $ 0.6 million of previously recorded
stock-based compensation.

 Note
14 – Related Party Transactions

 Energy
Evolution is a related party of the Company as it beneficially owns approximately 31.9 % of the Company's outstanding shares of
common stock as of December 31, 2024. In October 2021, a member of Energy Evolution and a board member of Energy Evolution were appointed
to the Company's Board of Directors. The board member of Energy Evolution separately beneficially owns approximately 21.2 % of the
Company's outstanding shares of common stock as of December 31, 2024 and is also a majority owner of PIE.

 In
July 2023, Energy Evolution exercised its warrants for 500,000 shares of common stock of the Company for $ 5.00 per share. See Note 9
for additional information.

 On
November 29, 2023, the Company converted its Bridge Loan (see Note 7) with Phil Mulacek into common shares through a Securities
Purchase Agreement which was amended on December 1, 2023, pursuant to which Mr. Mulacek purchased from the Company (a) 609,013 shares
of common stock of the Company for an aggregate purchase price of $5.0 million (or $8.21 per share) in cash and (b) 631,832 shares of
common stock of the Company for an aggregate purchase price of $5.1 million (or $8.00 per share) which was paid through cancellation
and extinguishment of the outstanding principal amount and all accrued interest thereon under that certain amended and restated promissory
note due December 31, 2024, in the original aggregate principal amount of $5.0 million issued by Empire North Dakota to Mr. Mulacek.

 On
November 29, 2023, the Company converted its Bridge Loan (see Note 7) with Energy Evolution into common shares through a Securities
Purchase Agreement, pursuant to which Energy Evolution purchased 1,256,832 shares of common stock of the Company for an aggregate purchase
price of $10.1 million (or $8.00 per share), of which $2.0 million was advanced in cash to the Company on November 22, 2023, $3.0
million was paid in cash to the Company and $5.1 million was paid through cancellation and extinguishment of the outstanding principal
amount and all accrued interest thereon under that certain amended and restated promissory note due December 31, 2024, in the original
aggregate principal amount of $5.0 million issued by Empire North Dakota to Energy Evolution.

 On
February 16, 2024, Empire issued the Note to Energy Evolution. Energy Evolution advanced Empire $ 5.0 million under the Note in the first
quarter of 2024. On May 24, 2024, Energy Evolution elected to convert the Note to shares of common stock of Empire and received 800,000
shares under the terms of the Note (see Note 7).

 The
Company had a JDA with PIE to perform recompletion or workover on specified mutually agreed upon wells (See Note 7). In the third quarter
of 2024, Empire issued PIE 205,427 shares of common stock of Empire as payment in full for this outstanding note balance of $ 1.1 million
(see Note 7).

 In
connection with the JDA, the Company also entered into a shared services agreement with PIE effective August 1, 2023, that includes access
to administrative, engineering and support services as well as building and insurance services. The agreement provides that the Company
will reimburse PIE for the out-of-pocket or actual costs incurred by PIE in providing such services to the Company.

elected to partially exercise a purchase option in the second quarter of 2024 and acquired 60% of certain New Mexico interests from Energy
Evolution. See Note 3 for additional information.

 On
June 28, 2024, Energy Evolution exercised its warrants of Empire and received 128,800 shares in exchange for approximately $ 0.6 million.
See Note 9 for additional information.

 Accounts
receivable on the consolidated balance sheet include approximately $ 0.4 million and $ 0.9 million receivable as of December 31, 2024 and
2023, respectively, from Energy Evolution. Accrued expenses on the consolidated balance sheet include approximately $ 0.1 million and
$ 0.5 million of revenue payable as of December 31, 2024 and 2023, respectively, to Energy Evolution.

 Note
15 – Commitments and Contingencies

 From
time to time, the Company is subject to various legal proceedings arising in the ordinary course of business, including proceedings for
which the Company may not have insurance coverage. While many of these matters involve inherent uncertainty, as of the date hereof, the
Company does not currently believe that any such legal proceedings will have a material adverse effect on the Company's business,
financial position, results of operations or liquidity.

 The
Company is subject to extensive federal, state, and local environmental laws and regulations. These laws, among other things, regulate
the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal
or release of petroleum or chemical substances at various sites. Management believes no materially significant liabilities
of this nature existed as of the balance sheet date.

 Agreed
Compliance Order

 In
January 2024, the Company deposited $ 1.0 million into an escrow account in accordance with an Agreed Compliance Order ("ACO")
with the New Mexico Oil Conservation Division for compliance work on certain inactive wells in New Mexico. Under the
terms of the ACO, the escrow funds will be returned to the Company at a rate of $ 0.01 million for each well as the compliance work is
completed. As of June 30, 2024, all work had been completed, and the Company expects to receive the remaining outstanding escrow amount
of $ 0.2 million in 2025.

 New
Mexico Trespass

 In
December 2023, the Company initiated a legal action in the Fifth Judicial District Court, Lea County, New Mexico, against a
saltwater company for trespassing within one of the New Mexico water flood units. This suit is currently being pursued by Empire; however, the
ultimate outcome of the litigation cannot be determined at this time, and no amount has been recognized due to the uncertainty of
any conclusions that may arise as a result of such action.

 Note
16 – Concentrations

 The
Company's producing properties and oil and natural gas reserves are all located in Louisiana, New Mexico, North Dakota, Montana,
and Texas. Because of the concentration, the Company is exposed to the impact of regional supply and demand factors, processing or transportation
capacity constraints, severe weather events, water shortages, and government regulations specific to the geographic area.

 For
the year ended December 31, 2024, the Company sold 78 % of its oil, natural gas, and NGLs to four customers. For the year ended December
31, 2023, the Company sold 70 % of its oil and natural gas production to four customers. No other purchaser accounted for more than 10%
of our total revenues during the respective periods. The loss of these purchasers could result in a temporary interruption in sales or
a lower price for production.

 The
Company's cash balances may at times exceed Federal Deposit Insurance Corporation ("FDIC") insurance limits. The Company
maintains cash accounts at reputable financial institutions.

 Note
17 – Fair Value Measurements

 The
following table provides the carrying value and fair value measurement information for certain financial assets and liabilities. The
carrying values of cash, accounts receivable, inventory, accounts payable, accrued expenses, lease liabilities, and equipment and vehicle
notes included in the accompanying consolidated balance sheets approximated fair value at December 31, 2024 and December 31, 2023, as
applicable, and generally represent Level 2 fair values due to their short-term nature. Therefore, such financial assets and liabilities
are not presented in the following table:

 Fair Value Measurements Using:

 Carrying

 Total Fair

 Level 1

 Level 2

 Level 3

 Amount

 Value

 Inputs

 Inputs

 Inputs

 December 31, 2024 assets (liabilities)

 Derivative instruments

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Debt - Credit Facility

 ( 11,088,647
)

 ( 11,088,647
)

 —

 ( 11,088,647
)

 —

 Debt - Promissory Note, Related Party

 —

 —

 —

 —

 —

 December 31, 2023 assets (liabilities)

 Derivative instruments

 406,806

 406,806

 —

 406,806

 —

 Debt - Credit Facility

 ( 4,492,484
)

 ( 4,492,484
)

 —

 ( 4,492,484
)

 —

 Debt - Promissory Note, Related Party

 ( 1,060,004
)

 ( 1,055,790
)

 —

 ( 1,055,790
)

 —

 The
following methods and assumptions were used to estimate the fair values in the table above and other fair value measurements.

 Level

 Derivatives
 – Derivative financial instruments are carried at fair value and measured on a recurring basis. The Company's commodity
price hedges are valued based on discounted future cash flow models that are primarily based on published forward commodity price curves.

 The
fair values of derivative instruments in asset positions include measures of counterparty nonperformance risk, and the fair values of
derivative instruments in liability positions include measures of the Company's nonperformance risk. These measurements were not
material to the consolidated financial statements.

 Debt
 – The fair value of our Credit Facility variable rate debt approximates the carrying value as the underlying prime rate changes
based on prevailing market rates. The fair value of the promissory note prior to when the conversion was triggered was determined using
a discounted cash flow model. See below for discussion on the fair value determination of the promissory note once conversion occurred.

 Level

 Impairment
of oil and natural gas properties – The fair value of proved and unproved oil and natural gas properties was measured using
valuation techniques that convert the future cash flows to a single discounted amount. Significant inputs to the valuation of proved
and unproved oil and natural gas properties include estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating
and development costs; (iv) future commodity prices; and (v) a market-based weighted-average costs of capital. The Company utilized a
combination of the New York Mercantile Exchange strip pricing and consensus pricing to value the reserves, then applied
various discount rates depending on the classification of reserves and other risk characteristics. For significant acquisitions, management
utilized the assistance of a third-party valuation expert to estimate the value of the oil and natural gas properties acquired.

 Asset
Retirement Obligation – The fair value of AROs is included in proved oil and natural gas properties with a corresponding liability.
The fair value was determined based on a discounted cash flow model, which included assumptions of the estimated current abandonment
costs, discount rate, inflation rate and timing associated with the incurrence of these costs.

 The
inputs used to value oil and natural gas properties for impairments and asset retirement obligations require significant judgment and
estimates made by management and represent Level 3 inputs.

applies the provisions of fair value measurement on a non-recurring basis to its non-financial assets and liabilities, including oil
and gas properties and asset retirement obligations. These assets and liabilities are not measured at fair value on an ongoing basis
but are subject to fair value adjustments if events or changes in certain circumstances indicate that adjustments may be necessary. No
triggering events that require assessment of such items were observed during the years ended December 31, 2024 and 2023.

 Assets
and Liabilities Measured at Fair Value on a Recurring Basis – In the determination of the fair value of the promissory note
including the embedded conversion feature, Empire uses a binomial lattice valuation model to value Level 3 derivative liabilities at
inception and on subsequent valuation dates. This model incorporates transaction details such as Empire's stock price, contractual
terms of the promissory note, and unobservable inputs classified as Level 3 including risk-free rate and expected volatility. Due to
the subjective nature of these inputs, the fair value measurement could differ materially under alternative assumptions. As of the conversion
option exercise date of May 24, 2024, these unobservable inputs were 5.0% and 46.9%, respectively.

 Note
18 – Segment Reporting

 The Company's operations are managed and reported to its CEO, the
Company's CODM, on a consolidated basis. The CEO uses consolidated net loss in assessing performance of capital spend projects to
allocate the appropriate resources to drive efficiencies and develop growth strategies. Under the organizational and reporting structure,
the Company has one operating segment and one reportable segment.

 The
 CODM is provided with the following significant segment expenses within lease operating expense on the consolidated statements of
 operations:

 2024

 2023

 Production costs

 $
 21,625,784

 $
 16,631,618

 Workover activity

 4,768,286

 10,161,285

 Plugging and abandonment activity

 1,150,958

 1,832,578

 Lease operating expense

 $
 27,545,028

 $
 28,625,481

 Other
segment items within consolidated net loss are all separately disclosed on the consolidated statements of operations. Segment asset information
is not presented to and used by the CODM to allocate resources, assess performance or make strategic decisions.

 Note
19 – Supplemental Information of Oil and Natural Gas Producing Activities (Unaudited)

 The
following reserve estimates present the Company's estimate of the proven natural gas and oil reserves and net cash flow of the Company's
properties, in accordance with the guidelines established by the Securities and Exchange Commission. The Company emphasizes that
reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing natural gas
and oil properties. Accordingly, the estimates are expected to change as future information becomes available. All the oil
and natural gas reserves are located in Louisiana, New Mexico, North Dakota, Montana and Texas.

 Costs
Incurred Related to Oil and Gas Activities

 Costs
incurred include capitalized costs of properties, equipment, and lease facilities for oil and natural gas producing activities.

 2024

 2023

 Acquisition

 $
 4,074,310

 $
 2,094,419

 Exploration

 —

 —

 Development

 42,214,332

 25,053,107

 Total costs incurred

 $
 46,288,642

 $
 27,147,526

 Reserve
Quantity Information

oil and natural gas reserves are those quantities of oil and gas, which by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic
conditions, operating methods, and government regulations. Proved developed reserves are proved reserves that can be expected to be recovered
through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor
compared to the cost of a new well. Proved undeveloped reserves are proved reserves that are expected to be recovered from new wells
on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. The information below
excludes proved undeveloped reserves. Below are the net quantities of net proved developed reserves of the Company's properties:

 Schedule
of net quantities of net proved developed reserves

 Oil
 (MBbls)

 Gas
 (MMcf)

 NGLs
 (MBbls)

 MBoe

 Balance, December 31, 2022

 8,826

 12,937

 2,262

 13,244

 Acquisition of Reserves

 Revisions

 ( 1,625)

 ( 5,998)

 ( 960)

 ( 3,585)

 Extensions

 —

 —

 ( 488)

 ( 854)

 ( 136)

 ( 766)

 Balance, December 31, 2023

 6,924

 6,104

 1,171

 9,112

 Acquisition of Reserves

 Revisions

 ( 90)

 Extensions

 —

 —

 ( 581)

 ( 917)

 ( 150)

 ( 884)

 Balance, December 31, 2024

 7,001

 6,064

 1,215

 9,227

 The acquisition of reserves for 2024 and 2023 primarily relate to additional
working interests in certain of the Company's New Mexico properties (See Note 3) during the respective periods. The revisions for
the respective periods primarily relate to changes in pricing and the extensions relate to increased volumes from our Starbuck Drilling
Program.

 Standardized
Measure of Discounted Future Net Cash Flows Relating to Oil and Natural Gas Reserves

 The
standardized measure of discounted future net cash flows relating to oil and natural gas reserves and associated changes in standard
measure amounts were prepared in accordance with the provision of FASB ASC 932-235-555, Extracting Activities – Oil and Gas
 ("Topic 932"). Future cash inflows were computed by applying average prices of oil and natural gas for the last
12 months to estimated future production. Future production and development costs were computed by estimating the expenditures
to be incurred in developing the oil and natural gas reserves at the end of the year, based on year-end costs and assuming continuation
of existing economic conditions. Future net cash flows are discounted at the rate of 10% annually to derive the standardized measure
of discounted cash flows. Actual future cash inflows may vary considerably, and the standardized measure does not necessarily represent
the fair value of the acquired properties' oil and natural gas reserves. Standard measure amounts are:

 Schedule
of fair value of the acquired properties' oil and natural gas reserves standard measure amounts

 2024

 2023

 Future cash inflows

 $
 537,303,424

 $
 543,067,776

 Future production costs

 ( 324,214,760
)

 ( 350,439,800
)

 Future development costs

 ( 38,681,208
)

 ( 42,475,160
)

 Future income tax expense

 ( 18,019,644
)

 ( 25,201,886
)

 Future net cash flows

 156,387,812

 124,950,930

 10% annual discount for estimated timing of cash flows

 ( 58,022,633
)

 ( 41,934,370
)

 Standardized measure

 $
 98,365,179

 $
 83,016,560

 The
12-month average prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive
at realized sales prices used to estimate the properties' reserves. T he prices for the properties' reserves were as follows:

 2024

 2023

 Oil (BBl)

 $
 71.66

 $
 75.45

 Natural gas (MMBtu)

 $
 0.95

 $
 1.51

 NGLs (BBl)

 $
 24.54

 $
 9.82

 Changes
in the Standardized Measure of Discounted Future Net Cash Flows at 10% per annum are as follows:

 2024

 2023

 Beginning of year

 $
 83,016,560

 $
 147,667,413

 Net change in prices and production costs

 ( 5,842,745
)

 ( 71,619,375
)

 Net change in future development costs

 220,549

 3,314,220

 Oil & Gas net revenue

 ( 9,381,470
)

 ( 6,256,366
)

 Extensions

 11,255,319

 4,684,473

 Acquisition of reserves

 1,890,863

 526,848

 Revisions of previous quantity estimates

 6,675,903

 ( 55,329,684
)

 Net change in taxes

 4,274,178

 33,317,731

 Accretion of discount

 9,746,049

 19,542,907

 Changes in timing and other

 ( 3,490,026
)

 7,168,393

 End of year

 $
 98,365,179

 $
 83,016,560

 Estimates
of economically recoverable natural gas and oil reserves and of future net revenues are based upon a number of variable factors and assumptions,
all of which are to some degree subjective and may vary considerably from actual results. Therefore, actual production, revenues,
development and operating expenditures may not occur as estimated. The reserve data are estimates only, are subject to many uncertainties,
and are based on data gained from production histories and on assumptions as to geologic formations and other matters. Actual quantities
of natural gas and oil may differ materially from the amounts estimated.