ROYLOTCCrude Petroleum & Natural GasUS GAAP · USD

Royale Energy, Inc.

Royale Energy, Inc. is a U.S.-based independent oil and natural gas producer focused on acquiring, developing, and operating producing and non-producing properties. Its business also includes drilling exploratory and development wells and selling fractional working interests in wells to outside participants, with a long operating history in California and Texas.

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Revenue1.9m USD
−12.6 %y/y
Operating profit (EBIT)-0.9m USD
+52.4 %y/y
EBIT margin-46.9%
+39.2 ppy/y
Net income-1.3m USD
+42.0 %y/y
Free cash flow-4.2m USD
−77.7 %y/y

Fiscal year 2025 · change from previous year

Development 2020–2025

-4-2024m USD2020: 1.6 m USD2020: EBIT -2.7 m USD20202021: 1.7 m USD2021: EBIT -3.7 m USD20212022: 2.6 m USD2022: EBIT -0.73 m USD20222023: 2.2 m USD2023: EBIT -1.9 m USD20232024: 2.2 m USD2024: EBIT -1.9 m USD20242025: 1.9 m USD2025: EBIT -0.91 m USD20251.9-0.91
RevenueOperating profit (EBIT)
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Business

Share of revenue
Oil and gas production70 %

Production and sale of crude oil, condensate, and natural gas from operated properties.

Turnkey drilling and participation interests20 %

Drilling of wells and sale of fractional working interests to partners and investors.

Lease and reserve acquisitions10 %

Purchase and development of oil and gas lease interests and proved reserves.

Products

Reported · share of revenue
98.9%FY2025100 %
  • Oil and Gas98.9 %
  • Supervisory Services1.1 %

Source: 10-K FY2025, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

Royale sells produced hydrocarbons into the oil and gas market and also raises capital from working-interest participants who fund drilling and lease activity. Its customer base therefore includes commodity buyers, joint-interest partners, and industry counterparties involved in property and reserve transactions.

Oil and gas purchasers

Buy crude oil, condensate, and natural gas produced from Royale-operated properties.

Working-interest participants

Provide capital for drilling and lease programs in exchange for fractional well interests.

Joint venture and industry partners

Co-invest in drilling and operating activities, including billing and cost-sharing arrangements.

Property sellers and reserve sellers

Counterparties that sell lease interests, producing properties, or proved reserves.

Strategy

Royale’s strategy centers on increasing production and cash generation through participation in drilling programs, workovers, and development of existing fields. It also uses property acquisitions and working-interest sales to expand its asset base and share capital requirements with partners.

Increase drilling participation in the Permian BasinShort term

Adds exposure to a prolific oil province and can expand reserves and production.

Develop and work over the Texas Jameson fieldShort term

Supports incremental production from existing operated assets.

Use partner funding and participation interestsMedium term

Helps finance drilling and spreads project risk across investors.

Geography

Royale has historically concentrated its operations in California, where it has acquired and developed natural gas properties since 1993. It also operates an oil and gas property in Texas, including activity in the Permian Basin and the Jameson field, which broadens its exposure to U.S. onshore production regions.

Risks

Royale is exposed to commodity price volatility, reserve replacement risk, and the operational uncertainty of drilling and workover programs. The company also faces going-concern and liquidity risk because its cash generation depends on production levels, drilling proceeds, asset sales, and external financing, while well abandonment obligations can increase future costs.

Sorted by severity
Liquidity and going-concern riskCritical

Operations depend on sufficient cash from production, asset sales, and financing.

Exposure: Working capital and financing capacity

Commodity price volatilityHigh

Revenue is tied to market prices for oil and natural gas, which can change quickly.

Exposure: Oil and gas sales

Production and reserve declineHigh

Mature fields require ongoing drilling and workovers to offset natural decline.

Exposure: California and Texas producing assets

Well abandonment obligationsHigh

Future plugging and abandonment costs can increase as the asset base matures.

Exposure: Asset retirement obligations

Drilling execution riskMedium

Exploratory and development wells may underperform or exceed budgeted costs.

Exposure: Turnkey drilling and participation programs

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Accounting

Judgemental items
Reserve estimates and depletion

Depletion expense is tied to expected recoverable reserves, so reserve revisions change earnings.

Impact: A higher reserve estimate lowers depletion rate and vice versa

Asset retirement obligations

Future abandonment costs are estimated for wells and can materially affect liabilities.

Impact: Changes in expected plugging costs alter the balance sheet and expense recognition

Oil and gas revenue timing

Revenue is recognized as production is sold, making volumes and pricing critical.

Impact: Quarterly results can swing with production levels and realized commodity prices

Joint-interest billing receivables

Working-interest participants reimburse costs, creating receivables that depend on collection.

Impact: Affects operating cash flow and short-term liquidity

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Last updated: 24/09/2026

Royale Energy, Inc. (OTC) – Crude Petroleum & Natural Gas | Financial Analysis – Clarifo