Empire Petroleum Receives Favorable Ruling for Oil Project in New Mexico

Empire Petroleum has won a favorable ruling from the New Mexico Oil Conservation Commission, allowing it to proceed with a CO2 enhanced oil recovery pilot project in the Eunice Monument South Unit. The company's stock score is Neutral according to TipRanks' AI Analyst, Spark, due to weak financial performance and concerning valuation metrics. The recent corporate event does not offset these challenges. Empire Petroleum focuses on organic growth and targeted acquisitions of proved developed assets.

Empire Petroleum (NYSE American: EP) has received a favorable ruling from the New Mexico Oil Conservation Commission (NMOCD) to advance its CO2 enhanced oil recovery (EOR) plans. The commission affirmed the existence of a residual oil zone (ROZ) in the Eunice Monument South Unit (EMSU) and confirmed Empire's exclusive rights to produce the ROZ. The ruling also denied new injection well applications from Goodnight Midstream Permian, LLC, suspended operations on existing wells, and granted Empire the opportunity to implement a CO2 EOR pilot project over the next three years.

The decision, announced on August 14, 2025, follows four years of expenditures and affirmations of the existence of the ROZ in the Grayburg and San Andres formations within the EMSU. The commission confirmed Empire's exclusive rights to produce the ROZ under the 1984 Commission Order [1]. The ruling also denied five new injection well applications from Goodnight Midstream Permian, LLC, denied an application for increased injection, suspended injection operations on four existing Goodnight injection wells, and denied all pending motions attached to these cases [1].

While Empire did not prove immediate correlative rights impairment in the Grayburg from neighboring operators' injection activities, the company presented compelling evidence of possible future impairment or waste. Following this outcome, Empire plans to proceed with motions to revoke existing permits granted to third-party saltwater disposal operators disposing wastewater into the EMSU and Unitized Interval of the Arrowhead Grayburg Unit, while concurrently advancing litigation for trespass and damages [1].

Phil Mulacek, Chairman of the Board, expressed his satisfaction with the decision, stating, "We are extremely pleased with this unanimous decision, which marks a significant regulatory win for Empire and reinforces our position in New Mexico. It paves the way for us to move forward with CO₂ development to unlock the capacity for sustained production in the ROZ and upper zones, while also safeguarding our assets from activities that threaten their value" [1].

Mike Morrisett, President and CEO, added, "This outcome reflects years of dedicated work by our employees, legal team, and consultants, and I want to thank them for their tireless efforts in protecting and advancing our New Mexico position. We also want to thank the NMOCD for its thorough review of the facts and its unanimous decision. We take seriously our fiduciary responsibility to our shareholders and remain committed to realizing the long-term value we see in the EMSU assets. This decision gives us a clear path forward to responsibly develop these resources and position Empire for sustained growth and returns" [1].

The full text of the Commission's decision will be available on the NMOCD website in the coming days [1].

References:
[1] https://www.stocktitan.net/news/EP/empire-petroleum-secures-unanimous-victory-to-advance-co2-vaqnjk1xocvf.html