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Property

9 Months Ended

Sep. 30, 2025

Note 3 – Property

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


		September 30,			December 31,
		2025			2024
Proved properties		$	140,333		$	134,239
Unproved properties			3,941			3,858
Work in process			121			2,578
Gross capitalized costs			144,395			140,675
Accumulated depletion, amortization and impairment			(39,237)			(31,974)
Total Oil and gas properties, net		$	105,158		$	108,701

Depletion and amortization expense related to oil and gas properties for the three months ended September 30, 2025 and 2024, was approximately $2.7 million and $2.5 million, respectively. Depletion and amortization expense related to oil and gas properties for the nine months ended September 30, 2025 and 2024, was approximately $7.3 million and $6.6 million, respectively.

Proved 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 nine months ended September 30, 2025.

On April 9, 2024, Empire acquired 60% of certain New Mexico interests from Energy Evolution. As consideration, 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. On August 8, 2024, Empire extended its right to acquire the remaining interest for an exercise price of $2.0 million (the “Purchase Option”) by one year with the issuance of 16,800 shares of common stock (the “Option Shares”) to Energy Evolution.

On May 1, 2025, the Company amended its ability to further extend the Purchase Option to allow for payment for such extension to be made in cash in lieu of the Option Shares, due and payable on or before September 30, 2025. The Company made a cash payment to Energy Evolution on September 30, 2025 to extend the Purchase Option for an additional year.

Net proceeds for the sale of certain non-core oil and natural gas properties totaled approximately $0.4 million and $0.6 million during the three and nine months ended September 30, 2025, respectively, resulting in losses of approximately $0.1 million and gains of approximately $0.2 million during the same periods which are reflected within other income (expense) on the unaudited interim condensed consolidated statements of operations.

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:


		September 30,			December 31,
		2025			2024
Other property and equipment, at cost		$	4,188		$	3,304
Less: accumulated depreciation			(2,491)			(1,913)
Total Other property and equipment, net		$	1,697		$	1,391

Depreciation expense related to other property and equipment for the three months ended September 30, 2025 and 2024, was approximately $0.1 million for both periods. Depreciation expense related to other property and equipment for the nine months ended September 30, 2025 and 2024, was approximately $0.3 million and $0.2 million, respectively.