U.S. Energy Corp. Completes Deleveraging Transaction
December 29 2017 - 6:00AM
U.S. Energy Corp. (NASDAQ:USEG) (“U.S. Energy” or
the “Company”) today announced that it has closed its previously
announced agreement to substantially reduce the Company’s
outstanding debt through an exchange transaction (the
“Transaction”) with APEG Energy II, L.P., the sole lender of its
Senior Secured Credit Facility (“Credit Facility”). The Transaction
was approved by the Company’s shareholders at a special meeting
held December 27, 2017.
Highlights
- U.S. Energy has exchanged $4.5 million of the $6.0 million of
outstanding borrowings on its Credit Facility for 5,819,270 shares
of common stock.
- U.S. Energy has made a cash paydown of its Credit Facility of
$0.6 million.
- $0.9 million remains on the Credit Facility as U.S. Energy’s
only remaining debt.
- Represents an 84% reduction in annual interest payments.
- Provides the Company flexibility to increase its capital budget
out of operating cash flow and participate in production
growth.
- Increases the Company’s financing and strategic abilities by
removing a substantial portion of existing secured debt.
- Aligns the Company’s sole secured lender and strategic partner
with existing Company shareholders.
Additionally, U.S. Energy received shareholder
approval to implement, at the discretion of the Board of Directors,
a reverse split of the Company’s outstanding Common Stock. As
previously announced, the Company has regained full compliance with
Nasdaq listing standards and as such, the Company’s Board of
Directors have elected not to implement a reverse split of the
Company’s stock at this time.
Management Comment
David Veltri, Chairman and CEO of U.S. Energy,
stated, “The closing of the Transaction represents a significant
milestone for U.S. Energy. The Transaction reduces the
Company’s outstanding debt by 84% while saving the Company more
than $0.4 million in annual cash interest payments. We believe the
Transaction has already begun unlocking shareholder value in the
Company while restoring access to outside capital and allowing the
Company to resume participating in growth initiatives. U.S.
Energy will enter 2018 with low leverage and a strong liquidity
profile which will enable the Company to grow our asset base both
through the drill bit and acquisitions. We look forward to
working with our strategic partner APEG Energy II in the upcoming
year to create value for all shareholders.”
About U.S. Energy Corp.
We are an independent energy company focused on
the lease acquisition and development of oil and gas producing
properties in the continental United States. Our business is
currently focused in the Williston Basin of North Dakota and South
Texas. We continue to focus on increasing production, reserves, and
cash flow from operations while pro-actively managing our debt
levels. More information about U.S. Energy Corp. can be found at
www.usnrg.com.
Forward-Looking Statements
This press release may include “forward-looking
statements” within the meaning of the securities laws. All
statements other than statements of historical facts included
herein may constitute forward-looking statements. Forward-looking
statements in this document may include statements regarding the
Company’s expectations regarding the Company’s operational,
exploration and development plans; expectations regarding the
nature and amount of the Company’s reserves; and expectations
regarding production, revenues, cash flows and recoveries. When
used in this press release, the words "will," "potential,"
"believe," "estimate," "intend," "expect," "may," "should,"
"anticipate," "could," "plan," "predict," "project," "profile,"
"model," or their negatives, other similar expressions or the
statements that include those words, are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. Such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the Company, which may cause
actual results to differ materially from those implied or expressed
by the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to,
fluctuations in oil and natural gas prices, uncertainties inherent
in estimating quantities of oil and natural gas reserves and
projecting future rates of production and timing of development
activities, competition, operating risks, acquisition risks,
liquidity and capital requirements, the effects of governmental
regulation, adverse changes in the market for the Company’s oil and
natural gas production, dependence upon third-party vendors, and
other risks detailed in the Company’s periodic report filings with
the Securities and Exchange Commission.
Corporate Contact:
U.S. Energy Corp. Ryan SmithChief Financial Officer(303)
993-3200www.usnrg.com
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