Royale Energy Restructures for Growth: Recapitalization and Future Opportunities

Royale Energy Inc., a Delaware-based corporation, has recently announced the successful completion of a series of strategic financial transactions aimed at simplifying its capital structure and aligning stakeholder interests. This comprehensive effort positions Royale to pursue future growth opportunities and potentially relist on a major exchange.

As part of this recapitalization initiative, Royale Energy has executed key agreements that include the issuance of common stock, stock options, and Series 2024 Senior Unsecured Promissory Notes in exchange for all of the outstanding Series B Preferred Stock. This transaction has resolved over $24 million of Series B Preferred liquidation preference value and approximately $3 million of pre-merger liabilities. As a result, Royale now has one class of equity outstanding, its common stock.

The elimination of Series B Preferred Stock and pre-merger liabilities significantly improves Royale's balance sheet. By addressing these outstanding claims, Royale has strengthened its financial position and reduced potential liabilities, making it better equipped to pursue new growth opportunities.

The issuance of common stock, stock options, and promissory notes as part of the recapitalization initiative not only strengthens Royale's financial position but also ensures that the interests of all stakeholders are more closely aligned with the Company's long-term objectives. This alignment fosters a collaborative environment that encourages collective efforts towards growth and value creation.

The simplification of Royale's capital structure facilitates access to new growth opportunities. With a single class of equity outstanding, Royale can more effectively raise capital from investors and access traditional sources of funding. This, in turn, enables Royale to explore strategic partnerships and invest in high-potential projects that align with its growth strategy.

Royale Energy's strategic vision involves executing targeted growth initiatives and leveraging strategic partnerships to drive growth and create shareholder value. By simplifying its capital structure and aligning stakeholder interests, Royale is well-positioned to capitalize on new opportunities and deliver enhanced value to its shareholders.