EMPIRE PETROLEUM CORP Leases Disclosure
Note 8 - Leases
As a lessee, the Company leases its corporate office headquarters in Tulsa, Oklahoma, and one field office. The leases expire between 2026 and 2027. The corporate office has an option to renew for an additional five-year term. The option to renew the lease is generally not considered reasonably certain to be exercised. Therefore, the period covered by such optional period is not included in the determination of the term of the lease and the lease payments during these periods are similarly excluded from the calculation of right-of-use lease asset and lease liability balances.
The Company also leases vehicles primarily used in our field operations. These vehicle leases typically have a three-year life.
The Company recognizes right-of-use lease expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved, typically during the period in which they are paid. Variable right-of-use lease payments typically include charges for property taxes, insurance, and variable payments related to non-lease components, including common area maintenance.
Right-of-use lease expense was approximately $0.5 million for both the years ended December 31, 2025 and 2024, respectively. Cash paid for right-of-use lease was approximately $0.4 million and $0.5 million for the respective periods.
Supplemental balance sheet information related to the right-of-use leases is as follows:
| As of December 31, | |||||
2025 | | 2024 | ||||
$ | 328 | $ | 604 | |||
Current portion of lease liability | $ | 286 | $ | 400 | ||
Long-term lease liability |
| 12 |
| 144 | ||
Total right-of-use lease liabilities | $ | 298 | $ | 544 | ||
The weighted-average remaining term is 0.9 years, and the weighted-average discount rate is 7.58% for Empire’s right-of-use leases as of December 31, 2025.
Maturities of lease liabilities as of December 31, 2025, are as follows:
December 31, | ||
2025 | ||
Year 1 | $ | 296 |
Year 2 |
| 12 |
Year 3 |
| — |
Year 4 |
| — |
Year 5 |
| — |
Total lease payments |
| 308 |
Less: imputed interest |
| (10) |
Total lease obligation | $ | 298 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 30, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2017 | Apr 2, 2018 | |
| 2016 | Mar 31, 2017 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.