EP

Empire Petroleum($EP) Insiders Split: Director Buys $800K While President Sells Entire $700K Position

11/07/2025 21:51

Intriguing insider trading patterns are emerging at Empire Petroleum ($EP), as the small-cap energy company's stock trades around $4.05, down 47% from its late 2024 peak of $7.60. The stark divergence in trading behavior among insiders presents a compelling case study for investors. Empire Petroleum is a U.S.-based oil and natural gas exploration and production company, primarily operating in Texas and North Dakota. With a market capitalization of approximately $106.7 million, this small-cap energy firm is highly sensitive to commodity price fluctuations. The company is currently implementing Enhanced Oil Recovery technology and pursuing a rights offering to strengthen its financial structure. The most notable development occurred on November 5, 2025, when President Michael Morrisett sold his entire position of 187,084 shares at $3.77 per share (approximately $700,000), while Director Phil Mulacek purchased exactly the same quantity at the identical price on the same day. This synchronized yet opposite transaction suggests a clear difference of opinion within management regarding the company's prospects. Mulacek's buying pattern is particularly compelling. He aggressively accumulated shares in May 2025 when the stock plummeted to the low-$4 range, and continued his buying spree in September as shares remained weak in the $4-4.50 range. His total purchases this year exceed $800,000, indicating strong conviction in a potential bottom. Conversely, CAO Matthew Watson took some profits in early September with modest sales. This mixed signal within the executive team creates an interesting dynamic for investors to monitor. Financially, the company continues to struggle with its fourth consecutive quarterly loss. Q2 2025 net loss widened to $5.1 million despite a 15% increase in production volumes. However, management expects commodity prices to trend upward over the next 4-6 quarters, and Enhanced Oil Recovery installations in North Dakota are scheduled to become operational by Q4 2025, potentially boosting production levels within 6-9 months. Technically, the stock appears to have found support around the May low of $3.89, currently trading in a $4-5 range. Mulacek's consistent buying in this zone suggests this price level may approximate fundamental value. Key indicators for investors to monitor include: positive signals such as WTI crude maintaining above $70 and quarterly production growth exceeding 5% quarter-over-quarter; warning signs include crude oil falling below $60 or additional executive selling. In an optimistic scenario, rising oil prices combined with increased production could improve profitability and drive shares back to $7-8 levels. The base case scenario involves continued range-bound trading while awaiting operational improvements. The risk scenario could see shares decline to the low-$3 range if oil prices collapse or production issues arise. Overall, Empire Petroleum appears to be trading near trough levels, with the director's aggressive buying providing a potentially bullish signal. However, given the inherent volatility of small-cap energy stocks, a measured approach with proper risk management is advisable.