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Organization and Basis of Presentation | 6 Months Ended
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Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Organization and Basis of Presentation | Note 1 - Organization and Basis of Presentation Empire 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:
| ● | Empire New Mexico, LLC (“Empire New Mexico”)
| o | Empire New Mexico LLC d/b/a Green Tree New Mexico
| o | Empire EMSU LLC
| o | Empire EMSU-B LLC
| o | Empire AGU LLC
| o | Empire NM Assets LLC
| ● | Empire Rockies Region
| o | Empire North Dakota LLC (“Empire North Dakota”)
| o | Empire North Dakota Acquisition LLC (“Empire NDA”)
| ● | Empire Texas (“Empire Texas”), consisting of the following entities:
| o | Empire Texas LLC
| o | Empire Texas Operating LLC
| o | Empire Texas GP LLC
| o | Pardus Oil & Gas Operating, LP (owned 1% by Empire Texas GP LLC and 99% by Empire Texas LLC)
| ● | Empire Louisiana LLC (“Empire Louisiana”)
Empire 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 accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company's financial position, the results of operations, and the cash flows for the interim period are included. All adjustments are of a normal, recurring nature. Certain amounts in prior periods have been reclassified to conform to current presentation. Operating results for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The information contained in this Form 10-Q should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2023 which are contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2024. Liquidity and Going Concern The Company determined that it was not in compliance with the current ratio covenant contained in its revolving line of credit agreement as of June 30, 2024 (see Note 8). Upon discovering this issue, the Company notified the lender to request a waiver. The noncompliance is due to a higher level of payables related to the capital spending program in North Dakota. On August 12, 2024, the Company obtained a compliance waiver from the lender for June 30, 2024. The Company will require funds to be in compliance with debt covenants and satisfy the payables discussed above which are greater than estimated cash flows from operations over the next 12 months. The Company has initiated a plan to raise additional funds for the payables discussed above as well as the additional capital spending in 2024 in an anticipated form of either a subscription rights equity offering, related party warrants, or a related party note payable that may or may not have conversion rights into shares of common stock of the Company. These fundraising forms are supported through committed financial support from Phil Mulacek and Energy Evolution Master Fund, Ltd ("Energy Evolution"), both related parties of the Company (see Note 14) and our largest stockholders collectively holding 51% of the common shares outstanding. Mr. Mulacek and Energy Evolution have indicated and are willing and able to provide these additional funds, if required, for the Company to continue to meet its obligations over the next 12 months. Management has considered these plans, including if they are within the control of the Company, in evaluating ASC 205-40, Presentation of Financial Statements-Going Concern. Management believes the above actions are sufficient to allow the Company to meet its obligations as they become due for a period of at least 12 months from the issuance of these financial statements. Management believes that its plans, and support from the existing related-party stockholders discussed above, is probable and has alleviated the substantial doubt regarding the Company's ability to continue as a going concern.

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