EP

Empire Petroleum($EP) Director Loads Up With $185K Purchase Over Four Straight Days As Stock Hits Multi-Month Lows Despite Ongoing Losses

05/23/2025 21:14

Phil Mulacek, a director at small-cap oil producer Empire Petroleum ($EP), has made a significant series of stock purchases over four consecutive days amid a sharp decline in the company's share price. This insider buying spree came shortly after the company reported disappointing Q1 results in mid-May, sending a signal that Wall Street analysts are watching closely. According to recent SEC filings, Director Mulacek purchased a total of 45,799 shares worth approximately $185,000 between May 19 and May 22. The average price paid was about $4.04 per share, representing a nearly 48% discount from $EP's 52-week high of $7.78 reached on January 3 this year. The purchases occurred while Empire Petroleum's stock has been on a steep downward trajectory since early April. In May, the share price fell to around $4, hitting a five-month low. This represents a dramatic 42% decline from mid-March when the stock traded at $6.88. Behind this share price weakness lies persistent underperformance in the company's financial results. On May 14, Empire Petroleum reported Q1 2025 results showing a net loss of $4.22 million and revenue of $8.99 million. This represents a year-over-year revenue decline, with adjusted EBITDA deteriorating to negative $553,000. The company has now posted losses for four consecutive quarters. Notably, Mulacek's buying activity isn't an isolated incident. The director also purchased 2,400 shares in early April, along with 2,114 shares last September and 38,543 shares in June 2024. This consistent pattern of accumulation suggests a long-term confidence in the company's value proposition despite recent struggles. Large insider purchases are generally viewed as positive signals to the market. When a board member commits significant personal capital after a post-earnings decline, it often indicates a belief that the stock is trading below its intrinsic value. Energy sector analysts suggest this insider buying could signal positive long-term business prospects for Empire Petroleum. However, they also caution that continued weak performance and broader U.S. economic uncertainties could hinder short-term stock recovery. Indeed, the broader U.S. market has experienced increased volatility due to Moody's downgrade of the U.S. credit rating (from Aaa to Aa1) and ongoing trade tariff concerns. Following Moody's announcement on May 19, markets weakened, with small-caps and energy sector stocks facing particular pressure. While insider buying doesn't always predict an immediate stock rebound, it serves as an important indicator for long-term investors. For small-cap companies like Empire Petroleum, significant board member purchases can send a particularly strong signal. Currently valued at approximately $210 million market capitalization, Empire Petroleum operates oil and natural gas assets across several U.S. regions, including Texas, New Mexico, Louisiana, and Kansas. As a small oil producer, the company faces challenges related to oil price volatility and production maintenance, yet the insider buying suggests internal confidence in long-term value despite these hurdles. Investors should monitor Empire Petroleum's Q2 performance, production metrics, and any additional insider trading patterns. If sustained insider buying coincides with signs of performance improvement, the current share price weakness could present an opportunity for patient investors.

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