Empire Petroleum Wins Unanimous Ruling, Advances CO2 Development and Protects EMSU Assets

Empire Petroleum has secured a unanimous ruling from the New Mexico Oil Conservation Commission to advance its CO₂ development project in the Eunice Monument South Unit. The Commission denied injection well applications from Goodnight Midstream and suspended operations on four existing wells. Empire plans to file motions to revoke permits for third-party saltwater disposal operators and pursue litigation for trespass and damages. The decision reinforces the company's operational strategy and protects its assets from devaluation risks.

Empire Petroleum (NYSE American: EP) has secured a significant victory with a unanimous ruling from the New Mexico Oil Conservation Commission (NMOCD) to advance its CO₂ development project in the Eunice Monument South Unit (EMSU). The decision, handed down on August 14, 2025, affirms the existence of a Residual Oil Zone (ROZ) in the Grayburg and San Andres formations within the EMSU and grants Empire exclusive rights to produce the ROZ under the 1984 Commission Order [1].

The Commission also allowed Empire to implement a CO₂ enhanced oil recovery (EOR) pilot project over the next three years. This decision marks a substantial regulatory win for the company, paving the way for sustained production in the ROZ and upper zones while safeguarding its assets from activities that could threaten their value [2].

In addition to the favorable ruling, the Commission took several actions to protect Empire's interests. It denied five new injection well applications from Goodnight Midstream Permian, LLC, denied an application for increased injection from Goodnight, suspended injection operations on four existing Goodnight injection wells, and denied all pending motions attached to these cases [3]. These actions aim to prevent potential impairment or waste of Empire's assets.

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. Concurrently, the company will pursue litigation for trespass and damages [1].

Phil Mulacek, Chairman of the Board, expressed his satisfaction with the decision, stating, "This unanimous decision 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, thanked the NMOCD for its thorough review of the facts and the unanimous decision. He highlighted the dedicated work of the company's employees, legal team, and consultants in protecting and advancing their New Mexico position. Morrisett emphasized the company's commitment to realizing the long-term value of the EMSU assets and positioning 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.

References:
[1] https://www.marketscreener.com/news/empire-petroleum-secures-unanimous-victory-to-advance-coa-development-and-protect-emsu-assets-ce7c51dedc89f022
[2] https://www.bakersfield.com/ap/news/empire-petroleum-secures-unanimous-victory-to-advance-co-development-and-protect-emsu-assets/article_2bc9fa95-7a1c-5afb-a43e-c903555463b2.html
[3] https://www.businesswire.com/news/home/20250815367884/en/Empire-Petroleum-Secures-Unanimous-Victory-to-Advance-CO-Development-and-Protect-EMSU-Assets