Royale Energy, Inc. SEC Filings

Royale Energy, Inc. completed a $1.5 million cash acquisition of additional non‑operated working and net revenue interests in seven horizontal oil and gas wells and about 382.9 net acres in the Pradera Fuego project in Ector County, Texas. The deal was effective July 1, 2025 and funded with cash on hand and an additional $500,000 borrowing, with a related increase in asset retirement obligations of $8,384.

For the Pradera Fuego Acquisition Properties, the year ended December 31, 2024 generated $1,154,219 in revenues and $219,413 in direct operating expenses, for an excess of revenues over direct operating expenses of $934,806. For the six months ended June 30, 2025, revenues were $553,634 and direct operating expenses were $120,325, yielding $433,309. These statements exclude depreciation, depletion and amortization, overhead, interest and income taxes.

Estimated proved reserves attributable to the acquired interests at December 31, 2024 were 109,625 barrels of oil and 221,997 MCF of natural gas, with a standardized measure of discounted future net cash flows of $3,096,601. On a pro forma basis, combining Royale and the acquisition, total assets at June 30, 2025 would have been $14,952,574 with total liabilities of $28,382,610 and a stockholders’ deficit of $13,430,036. Pro forma combined net losses were $729,992 for the six months ended June 30, 2025 and $1,624,013 for 2024.

Royale Energy, Inc. is a small independent oil and natural gas producer focused on Texas and California, with 11 employees and 96,600,302 common shares outstanding as of June 30, 2026. The company concentrates on producing and selling oil and gas, acquiring reserves, drilling development wells, and selling fractional working interests through turnkey programs.

In 2025, Royale generated $1,947,203 in total revenue, almost entirely from oil and gas sales of $1,926,442, and reported a net loss of $1,251,680, improving from a larger loss in 2024. Lease operating costs fell sharply, reducing lifting costs to $30.61 per BOE. Proved reserves grew significantly to 647,089 BBL of oil/NGL and 1,815,759 MCF of gas, with a reported PV-10 of $11,176,100, driven mainly by new proved undeveloped locations in the Jameson field.

Liquidity remains strained: at December 31, 2025, Royale had a working capital deficit of $11,550,839, cash and equivalents of $1,099,044, and relies on turnkey drilling investments and debt financing, including a term loan. The auditor’s report cites recurring losses and this deficit as raising substantial doubt about Royale’s ability to continue as a going concern. Internal control over financial reporting was deemed ineffective due to a material weakness, and remediation is ongoing.

Royale Energy, Inc. appointed Micheal McCaskey, age 71, to its Board of Directors, effective immediately. He brings decades of experience in petroleum geology, asset acquisition, and corporate governance, including long service with Matrix Oil entities prior to Royale’s 2018 merger with Matrix Oil Corp.

Mr. McCaskey currently serves on the board of RMX Resources, LLC and has been President of PEM Management Corporation, a family office consulting firm, since February 2002. His career spans more than thirty-five years in exploration and field development roles at ARCO Exploration, Union Oil of California, Venoco, and Matrix Oil.

Royale Energy, Inc. filed a Form 12b-25 notifying the SEC it cannot timely file its Form 10-K for the year ended December 31, 2025 because it needs additional time to complete accounting and disclosures related to its September 9, 2025 acquisition of certain non-operated working interests, which was determined to be an acquisition of a significant business pursuant to Regulation S-X Rule 1-02(w). The company provides a preliminary, unaudited estimate of a net loss of approximately $1.1 million for 2025 versus a $2.2 million net loss in 2024 and states the final audited results may differ materially.

Royale Energy, Inc. announced that its Board has launched a comprehensive Strategic Review aimed at strengthening the company’s financial position, improving its readiness for capital markets activity, and positioning the business for a potential relisting on a national exchange, subject to meeting listing requirements and market conditions.

The Board has engaged Roth Capital Partners as financial advisor to lead the review, which will consider alternatives such as balance sheet optimization, asset-level capital allocation strategies, and potential transactions to support greater scale, liquidity, and institutional visibility. The company, currently quoted on OTCQB and compliant with SEC reporting, has set no timetable for completing the review and does not plan further updates unless the Board approves a specific course of action.

Royale Energy, Inc. filed a current report to note that it has issued a new press release. The company states that on January 5, 2026 it released this communication and attached it as Exhibit 99.1, making it part of the official disclosure record.

The filing does not describe the contents of the press release itself, only that it has been furnished under Regulation FD, which is designed to ensure fair public access to important company information.

Royale Energy, Inc. reported another loss-making quarter and continues to face serious liquidity pressure. For the nine months ended September 30, 2025, the company posted a net loss of $1.65 million, narrower than the $2.07 million loss a year earlier, as lease operating, impairment, and credit loss expenses declined.

Oil and gas revenue for the nine-month period fell 21.5% to $1.37 million due to lower production volumes and weaker oil prices, though third-quarter production volumes improved year over year. At September 30, 2025, Royale had a working capital deficit of $12.23 million, an accumulated deficit of $95.16 million, and used $2.68 million of cash in operating activities, leading management to state there is substantial doubt about its ability to continue as a going concern.

The company relies on restricted turnkey drilling funds and a related-party secured term loan, which totaled $1.9 million of principal at a 15.0% interest rate after an additional $500,000 advance in August 2025. Royale also increased its stake in the Pradera Fuego field in the Permian Basin through a $1.5 million acquisition of additional non-operated working interests, while deferred drilling obligations grew to $13.98 million.

Royale Energy, Inc. reported a change in its independent auditor. After the partners and staff of Horne LLP joined BDO USA, P.C. on November 1, 2025, Horne resigned on October 31, 2025. With Audit Committee approval, the Company appointed BDO as its independent registered public accounting firm on November 3, 2025.

Horne’s reports for the fiscal years ended December 31, 2024 and December 31, 2023 contained no adverse opinions, disclaimers, or qualifications. The Company states there were no disagreements with Horne and no Item 304(a)(1)(v) matters. Royale also did not consult BDO on accounting or audit matters before engagement. A confirming letter from Horne is filed as Exhibit 16.1.